SME Scaleup Disorder (SSD) | Ziad Maalouf | TEDxPAU

Introduction and the Scaleup Deficit Disorder (SDD)

• The speaker introduces themselves as an Ebo Chief from Enugu, a house chief from Abuja, and soon to be a Euroba chief in Legos, emphasizing their Nigerian heritage (16s).
• They mention their intention to retire in Nigeria, having started a small company for post-retirement, and wanting to die and be buried in Nigeria (41s).
• The topic of discussion is the "Scaleup Deficit Disorder" (SDD), a concept identified after two to three months of research, which is not found anywhere else (1m32s).
• SDD is compared to other disorders, such as hyperactivity disorder, OCD, attention deficit disorder, and total disorder, which are relatively rare, affecting around 10% of the population (1m51s).
• In contrast, SDD affects 98% of Nigerian entrepreneurs, making it a significant issue, with the disorder functioning differently than other disorders, affecting the majority rather than the minority (3m48s).
• The high prevalence of SDD is attributed to the fact that it works on the other side of the curve, making the ordinary abnormal, and the extraordinary normal (4m42s).

The Prevalence and Misconceptions of SDD

• Data from around 850 entrepreneurs shows that 77% of entrepreneurs have been in business for more than 5 years, with 14% having been in business for 15 years, and 41% for 10 years (5m24s).
• When entrepreneurs are asked about their struggles, they often blame external factors such as the economy, policies, infrastructure, and people, rather than taking responsibility for their own problems (5m58s).
• Only 2% of entrepreneurs acknowledge that they are the problem, while the rest blame external factors for their failures (6m44s).

Case Study: Trolley Express and the Consequences of SDD

• The story of Trolley Express, a company that had the same concept as Amazon but failed, is used to illustrate the importance of taking responsibility for one's actions (6m59s).
• The founder of Trolley Express blamed everyone and everything for the company's failure, including the country, partners, employees, and even God (8m13s).
• After the company shut down, the founder went into a state of "scale up deficit disorder," feeling isolated and overwhelmed by debt (8m39s).
• The founder had to deal with the consequences of his failure, including a significant amount of personal debt and the loss of friends and partners (9m23s).
• In 2001, the founder had two options: to commit suicide or to take responsibility for his actions and make a change (9m52s).
• The founder chose to take responsibility and spent the next 8 years working to pay off his debts (10m4s).
• After paying off his debts, the founder spent several years studying and experimenting to understand what had gone wrong and how to improve (10m26s).
• The founder eventually found success and is now the managing director of 7Up, chairman of the food and beverage recycling alliance, and founder of a company called ScaleUp, which aims to create jobs for 1 million Nigerians (11m22s).

Understanding and Addressing SDD

• Scaleup deficit disorder refers to the excessive scaleup of Small and Medium-sized Enterprises (SMEs), which can lead to increased employment, and the goal is to help entrepreneurs avoid the challenges that come with it (11m56s).
• Most people function in two spheres: the sphere of anxiety, where they spend time thinking about things outside of their control, and the sphere of impact, which is often ignored (12m47s).
• The rule of any company with scaleup disorder is that if the area of the inner circle is less than 60% of the total, it can be sure to have this disorder, and it is believed that no one in the room has more than 60% (13m18s).
• People with scaleup disorder often think about cash, banks not giving cash, bad policies, strong competition, and useless employees, which can be represented as balloons that grow bigger every time these words are mentioned, putting pressure on the inner circle and making it smaller (13m39s).
• The cure for scaleup disorder is simple: instead of blaming external factors, individuals should take responsibility and start saying "what if I'm not presenting my case right" and make changes accordingly (14m27s).

Case Study: M Spirit and the Importance of Taking Responsibility

• Banks are willing to give money to SMEs, but they need to see a well-presented case, including a feasibility study, which is often lacking in SMEs (14m38s).
• A story about a company called M Spirit illustrates the challenges faced by SMEs, including not buying at the right price and not making money despite high revenue (15m20s).
• The wife of the company's owner attended a session and was challenged to take responsibility for the company's lack of sales and sales team, and was told to either get a sales team or shut down the business (16m19s).
• A couple's business was on the verge of shutting down, but after a conversation, the husband decided to take action, borrowing 1.5 million naira, hiring six salespeople, and expanding their business (17m31s).
• The couple came to meet with the person who had initially spoken with the wife, saying they wanted to grow their business, but were first asked to show their financial records (17m47s).
• The person helped the couple reduce their costs by 13% and worked backward to understand their expenses, resulting in a significant increase in revenue (18m21s).
• In May, the couple's revenue increased to 310 million naira, a 10-fold increase in four months, with a 133% increase in profit (18m51s).
• By June, the couple's business had reached full capacity, and they began expanding their operations, investing in new products and increasing their range (19m5s).
• By July 2024, the couple had started expanding their product range, moving into new areas such as sugar and mayonnaise (19m25s).
• The couple's sales eventually reached 1 billion naira, a significant increase from their initial struggles (19m50s).
• The couple's success was attributed to their shift in mindset, from making excuses to taking responsibility for their problems and finding solutions (20m42s).
• The key lesson from the couple's experience is that to scale up a business, one must first admit that they are the problem and take action to address it (21m18s).