Agaba Deogratias

One of the most important things I’ve come to understand about making money is that, in many markets, the price is already set before you arrive. If you trade commodities like coffee, maize or sugar, you cannot simply decide to sell your goods at ten times the prevailing market price. Your customers know what those goods cost elsewhere. And if your margins become unusually attractive, competitors will enter the market. The same applies to the job market. If thousands of people can do what you do, there’s already an established market price for your labour. You cannot simply demand ten times the going rate when an employer can easily find someone else. Now, you can become extremely wealthy in these markets. But to make substantially more money, you’ll often need scale. More goods, more capital, more employees, more transactions, more operations and more risk. The money grows, but so does the machinery required to make it. But there are other opportunities with different economics. Consider a young Ugandan who moves abroad and discovers that the same labour commands a much higher wage. If he manages his expenses carefully, he might accumulate in a few years what would have taken him much longer back home. Or a Ugandan software developer serving American clients while living and spending in Uganda. In both cases, the advantage isn’t necessarily greater intelligence or harder work. It’s access to a market where the same labour commands a higher price. Another advantage is scarcity. If you possess a skill that very few people have, but which many people need, you can command a premium that someone with an ordinary skill cannot. And then there’s scalability. Consider an author who writes a book once and sells thousands of copies, or a software developer who builds a product that can serve thousands of customers without requiring a proportional increase in production costs. These opportunities work differently, but they have something important in common: they can improve the rate at which you accumulate wealth relative to the resources you deploy. And this brings me to something I think many Ugandans overlook when pursuing business opportunities. We spend a great deal of time asking whether a business is profitable, but very little time considering the economics of accumulating wealth through that business. A business can be profitable and still require enormous amounts of capital, energy and time to build significant wealth. One person might need hundreds of employees, substantial capital and years of operations to accumulate wealth that another builds with a laptop and a handful of clients. The difference isn’t necessarily intelligence, discipline or hard work. Sometimes it’s simply the economics of the opportunities they chose. And that’s why I believe choosing the right opportunity can be just as important as working hard at it. Don’t just ask whether an opportunity can make you wealthy. Ask how much of your life and resources it will take to get you there.