Joe Gakuo’s uncle introduced him to the stock market when he was barely 19. He was just out of secondary school and the idea was to help the young man to think about owning a business and not formal employment.
A book would expose him to better understanding and financial literacy. So, when they met next, the old man dipped his hands into his bag and fished out a copy of Wallace D Wattles’ The Science of Getting Rich.
Taking the route of business and investment would guarantee the young man “more than two meals a day,” the old man told the current proprietor of Upstream Oil and Gas Limited. A son of peasant farmers in Nyeri, Mr Gakuo says the parents owned “a small piece of land that only provided two meals a day.”
This is how his uncle told him to expand his horizon and dream about more than two meals daily.
“My uncle had his success in doing business and when he introduced me to Suntra Investment Bank Limited, it became very interesting to learn how people were creating wealth through the stock market,” he says.
“My uncle wanted education that works and that can even sustain in case of a sack.”
When he joined the University of Nairobi to study Economics and Communication in 2003, he hardly attended classes between 10am and noon in the first two years. He spent this time on the floor of the stock exchange, then situated on the First Floor of Nation Centre, in the heart of the city.
He had been bitten by the bug of making money, or, according to the title of the book his uncle bought, he was learning the science of being rich. In 2005, he deferred his studies to concentrate on business, a step his friends faulted, but something else was pushing him to take such bold and, to his peers, wrong turn.
He opened up to Business Daily on what was eating him up: “Our education system involves studying hard, passing exams and securing good jobs. Nowhere during the lessons was I told that dynamics had changed and I had a role to create my own destiny. That is how “I chose to create, [jobs]’’ he said.
Using his contacts at the NSE, he secured a job at Suntra Investment Bank selling of the unit trusts. “The job may not have been well paying but the experience gained was worth more than the money gained,” he explained.
Making Sh1 a day rather than nothing made a lot of sense, he says. In 2008, he resigned from Suntra and joined Studio Partner Architects as a business development manager and went back to the University to complete his studies as a part-time student.
This decision and a good boss helped him to learn the ropes of running a business because “I wanted diverse exposure that I could apply to start own enterprise.”
In 2010, he made another bold step, this time to own boss by establishing Upstream Oil and Gas having got information that Kenya was about to find oil. He started with two employees; they are now seven.
Oil and gas have been discovered in Kenya, which the explorers say meet commercial exploration quantities. “Initially, this was not a capital-intensive business, so we were mainly offering consultancy and logistics support to companies that were planning to enter Kenya. We started off with less than Sh250,000.”
He started off from the office of a friend to check costs. Upstream Oil and Gas operations cover the whole of eastern Africa.
The firm, the proprietor said, has clients, including the Ministry of Energy, Tullow Kenya, Africa Oil, Camac Energy, Simba Energy, Taipan Resources, National Oil, Afren, BG-Group and Ophir Energy.
“We also work with direct contractors who are keen on supporting local suppliers among them Schlumberger, Halliburton, Baker Hughes, P.R Marriot, SMP Drilling and Sakson Drilling,” said Mr Gakuo.
The challenge in the oil sector is that the field is yet to develop in Kenya and only a sprinkling of investors are pursuing the line, he said. Other threats or weaknesses include getting the right people for the job and sometimes inevitably huge capital investments.
“We normally work with what is available and outsource what we don’t have. Partnership and honesty are crucial components of doing business,” says the entrepreneur.
Returns are juicy since the field is yet to be flooded, he said without giving figures, adding “most people fear trying because of the misconception that huge capital is needed to enter into this field.”
The wider strategy, he notes, is to establish an oil field support services and grow into oil and gas integrated company that can play across the value chain. Mr Gakuo plans to sell part of his stake to investors to enhance growth and give the company a global outlook.
“We are keen on capital-related partnership to expand our operations. This process is ongoing and shall be completed within the next 12 months,” he said.
“Our model will also involve partnerships and joint venture to go for specific opportunities in the oil and gas industry.” Starting small is the wisdom that every budding entrepreneur or those yet to start a business should embrace, the Upstream boss said.
To increase its visibility and footprints, the firm is set to host its second exhibition on oil and gas in two months time and has already expanded its investment into the media market by unveiling The Upstream, a new publication on the sector.
“The idea is to grow the company organically, increase our sales volume and at the same time create employment.”