Urban Inflation Index: December 2014

It’s been over a year and a half since the last urban inflation index. So let’s see what the differences are in tracking changes compared to 5 years ago and to the last index which was in July 2013..

There is a current debate about the impact of many external and internal events on the Kenyan economy and the cost of living. Some of these include insecurity around the country which has directly impacted the tourism sector, investments in infrastructure (the standard gauge railway,) education, electricity generation (coal, geothermal) new laws by counties, unregulated or illegal imports of some commodities like maize and , and digital changes (in public service vehicle fares and television broadcasting) etc.

Gotten Cheaper

None really

About the Same

Mobile Communications: Costs are largely unchanged, but there’s a push to do more now. Safaricom launched 4G a few days ago,and like Airtel, they have taken to pushing many messages to reward and retain customers at the same time. Current promotions include buy a Samsung and you may win a BMW, pay by m-pesa and you may win a house etc. Meanwhile Airtel and Safaricom have respectively absorbed the customers and assets of (Essar) Yu that has exited Kenya, while Orange is also looking to sell out.

Staple Food: A 2kg pack of (Unga) maize flour, which is used to make Ugali that is eaten by a majority of Kenyans daily, costs Kshs. 101 compared to 104 in July 2013. But it was Kshs 83 in December 2009.

Missing Mumias Sugar

Missing Mumias Sugar

Beer/Entertainment: A bottle of Tusker beer is Kshs  200 (~$2.3) at a local pub same as it was in July 2013. However, 5 years ago it was Kshs 140.

Other food item: A 2 kg. Mumias Sugar pack is Kshs 250, same as last July. However it was 200 in December 2009 and today Mumias Sugar is a shadow of it’s former self limping under debts and losses, with their sugar products now difficult to find in many Nairobi supermarkets.

Electricity: Consumers have been told to expect to see an electricity price drop in their bills, but many are not sure.  KPLC shifted many customers to a new prepaid system a few years back and it is tough for most customers to understand how far their money goes in terms of actual electricity delivered (see this FAQ)..and while the cost of fuel, forex charges on bills appear lower, it still does not translate into more units of power per shilling.

More Expensive

Fuel: At Kshs 106.8 per litre ($5.40/gallon) fuel is slightly cheaper than the 109.52 of  July  2013 – and just today, the government has lowered that to Kshs 102.01, with diesel at 90.85 and Kerosene at 71.37. However petrol was Kshs 83 in December 2009 – and with the recently there has been a sharp drop in the international price of oil, there has been expectations that the petrol price drop would be greater. International oil is about $57 per barrel now, compared to $95 in July 2013 and $75 in December 2009.

Cost of Financial Inclusion: Bank charges are creeping up for many. The government now taxes a 10% tax on every fee-levied by a bank on a customer – whether it’s for an M-Pesa withdrawal, ledger fee, new debit/credit card, even a tax payment..a tax on almost every charge except for loan interest.

Foreign Exchange: 1 US$ equals Kshs 90.56 compared to 87.15 in July 2013. The dollar was exchanging at 75.62 in December 2009.

Business Impact of the Security Law Amendments

Business Impact of the Kenya Security Law Amendment (PDF) for various people & companies (XX refers to pages, not clauses).

  • For people who own/occupy property near airports; A cabinet secretary can designate zones and  impose restrictions on land use
  • People (farmers, bush air tour operators, helicopter charters?) who fly planes from unmanned airports, may have to inform a cabinet secretary (70)

Business Premises

  • NIS officers get powers to arrest (46) and enter any place and obtain access to anything (47)
  • A Cabinet Secretary to designate where demonstrations can take place – this may ward of looting of businesses that follows large demonstrations across towns (2)

Citizen Data

  • Landlords are to keep records of tenants e.g. name ID, email, telephone (36)
  • Police stations to obtain information from hotels in their area on guests names, ID numbers, sex, telephone, email  details (70)
  • Motor  vehicle dealers to maintain records of buyers of vehicles (40)


  • Electronically recorded evidence is admissible – electronic messages, digital metrical (26, 29) also teleconferencing or videoconferencing of court proceedings are recognized
  • The government may intercept information if it believes it will prevent terror. Such evidence is admissible regardless of the technicalities under which it was obtained (57)


  • (For white-collar crimes), there shall be no local extradition proceedings required if a court is satisfied that a proper foreign warrant was executed (21)
  • A police officer can apply to hold someone longer in jail by writing to a judge e.g the Britam-Acorn case


  • A cabinet secretary shall designate which industries are eligible for work permits  - and also vet foreign investors (42)
  • An (all important) ID card can be cancelled if there is evidence of fraud  in its procurement (22)
  • Foreign nationals residing in Kenya for more than 3 months will have to inform the government of change of address (66)
  • Employment bureaus to be registered before sending Kenyans to work overseas (42)

Media/Social Media

  • If you travel to a country designated as a terrorist training country without passing through immigration you are presumed to have traveled to receive terrorist training (54) ..people who live around border areas are exempted
  • Anyone who publishes or broadcasts  photos of victims  of terror  omits a crime can be jailed for 3 years or fined Kshs 5 million (55)

Self Protection

  • Want to own a gun? A  firearm licensing board will be created to assess suitability of applicants, issued cancel, change licenses, and register civilian firearms (34).


  • No person shall own an armored car unless certified by this body (35)
  • Government to have a database of all diplomatic plated vehicle (40)

CBA Bond

The Commercial Bank of Africa (CBA) has an ongoing medium term note (MTN) bond issue to raise Kshs 8 billion ($90 million) with green shoe option for another Kshs 2 billion. Investors in the MTN bond will receive 12.75% paid semi-annually for the next six (6)  years.

  • The minimum investment is Kshs 1 million ($11, 235) for the MTN that is priced in multiples of Kshs 100,000 thereafter and runs from  26 November to 10 December. Other recent financial bonds in Kenya include CFC raising Kshs 5 billion, an 11% infrastructure bond from the Central Bank of Kenya (minimum investment was Kshs 100,000), NIC Bank’s 12.5% bond which was oversubscribed by 30% in raising Kshs 6.5 billion (90% of which came from institutional investors), and Britam also got Kshs 6 billion (minimum investment was Kshs 100,000 for the 13% bond).
  • In case of an over-subscription those who apply for more than Kshs 100 million ($1.1M) of the MTN will get priority in allocation.
  • The CBA bond will be listed on the fixed income securities market segment of the Nairobi Securities Exchange
  • CBA which has 23 branches in Kenya, 12 in Tanzania, and 1 in Uganda, plans to use the funds to strengthen Tier 2 capital and fund regional expansion. CBA is looking at partnerships with other institutions to make it a stronger regional financial services platform.
  • The MTN bond is budgeted at Kshs 67 million (0.67% of the target for the fund-raising) and this is split as: arrangement fee – Kshs 40M(CBA capital), legal fee – 4M (Coulson), Accountants – 3.5M (PWC) , marketing – 10.5M (Ogilvy), and the NSE gets Kshs 0.8M while the Capital Markets Authority (CMA) gets Kshs 8 Million.
  • CBA’s EPS was Kshs 15.22 in 2013, with a 4.38 DPS, payment of over Kshs 1 billion. Shareholders include a CBA Employees Share Scheme (ESOP) who own 2.5%.

Idea Exchange: Acumen, Elumelu, Mastercard, MP’s Qatar

Acumen Global Fellows:  Applications for the Acumen Global Fellows 2015 are now open. Gain world-class leadership training, serve in the field with a social enterprise, join a cohort of emerging leaders who will change the world. Deadline is December 14.

Challenge Cup 2015:  Startup Incubators 1776 and iHub have partnered to bring Challenge Cup 2015 to Nairobi.  Challenge Cup 2015, is a global competition that spans 16 cities in 11 countries to identify the most promising startups with the best ideas to solve the world’s biggest challenges. Challenge Cup participants compete for $650,000 in prizes in four categories—education, energy, health, and cities—as well as the chance to connect with mentors, corporate partners, policymakers, and potential investors. The Nairobi event, will be held on 22nd January 2015,  and the application deadline for that is 19 December.

Tony Elumelu Foundation Entrepreneurship: The Tony Elumelu Foundation launched a $100m program to empower next generation of African entrepreneurs through a multi-year program of training, funding, and mentoring. A committee of African business leaders will select the most promising 1,000 start-ups annually from across the continent. The online application portal for the 2015 round of entries will open on 1 January 2015 and close on 1 March 2015, and is open to applicants from all 54 African countries and will be accepted in English, French and Portuguese.

GSK Africa: GSK asks that you submit your ideas that help improve the understanding of non communicable diseases (NCD’s) in Africa to be considered for funding from GlaxoSmithKline. GSK have availed 4 million pounds to fund research proposals with an opportunity for successful applicants to collaborate with GSK scientists. Deadline is 13 January.

ITU Telecom Initiative: The Young Innovators Competition is an annual ITU Telecom initiative, aimed at talented young social entrepreneurs using technology creatively to meet a range of real-life developmental challenges. Selected winners with the most exciting ideas or start-ups are invited to ITU Telecom World in Doha for a four-day accelerator programme of pitching sessions, workshops and mentoring – as well as the opportunity to win up to USD 10,000 in seed funding.

LIFT Innovation Fund: TradeMark East Africa launched a $16 million challenge fund for innovations that reduce the cost of transport & logistics in East Africa. The #LIFT challenge fund supported by DFID (UK) will provide grants of US$200,000 – $750,000 to winning proposals.

MasterCard Foundation Scholars: The Mastercard Foundation has committed $86.6 million to educate up to 2,300 university students from Uganda, South Africa and Ghana by 2015. The support will be channeled through 4 universities that are now part of the Foundation’s 21 global partners;  Makerere University ($21M), The University of Pretoria ($21.3M), The Kwame Nkrumah University of Science & Technology ($20.8M), and the University of Cape Town (23.5M). The MasterCard Foundation Scholars Program is a 10-year, $500 million Program that hopes to inspire 15,000 young people from economically disadvantaged communities to lead change through education. Scholars receive holistic financial, social, academic and leadership development support to create pathways for them to transition to jobs, entrepreneurial activities or further education – and by the end of the Program, about 75 percent of the Scholars will be girls and young women.

People Shujazz Awards: Which Parliamentarians raised motions, issued statements, made contributions or moved bills of great public interest in 2013-2014? Mzalendo keeps an eye on Parliament and has selected nominees in 10 categories. Help Mzalendo celebrate the parliamentarians by voting for your choice. Voting ends on 7 December, at 11.59pm, and finalists will be announced on 11th December.

(edit) Rising Star: The  CfC Stanbic  Rising Star Awards Programme has been developed to publicly recognise inspirational and passionate and talented young people (between the ages of 28 and 40) who contribute in an encouraging manner to the future of our nation. There are ten industry categories in this year’s awards –  include banking & finance, construction, energy & chemicals, entrepreneur, ICT, logistics & supply chain, media & marketing, professional services, manufacturing, retail & FMCG, Service: public & private, and tourism & hospitality. Deadline for nominations is 30 January, 2015.

Safaricom Spark Fund: The Safaricom Spark Venture is a $1 million fund available to start-ups using mobile technology as an enabler in mobile commerce/payments, youth, media content & infotainment, SME & cloud solutions, data & messaging etc. The Fund will be managed by TBL Invest over a 2 year period and Spark will invest $75,000-$250,000 of debt/equity in ICT startups selected by TBL.

What other cool opportunities are there that people can apply for?

When to hire a smart accountant

 A question I often get, is when should I hire hire an accountant to manage the books of my small or growing company? This should provide some answers. Reposted with permission from the author..article first appeared in the Nation.

Accountants help out in the growth of your business. They handle more than just tax and payroll. This question has become all too familiar. “When should I consider hiring an accountant?” It depends on your immediate needs. Out of your needs, you will either get a full-time accountant, part-time one or contract one.

A good reason for hiring an accountant however is to create a business plan, form a company, apply for loan, during tax audit or simply in order to delegate some duties. However, since we have a number of rogue ones out there, recruit your accountant carefully.

Here are some moments when an accountant would be a smart hire.

  • Say you need to write down some financial projections, a business plan or the usual business finance management and reporting. An accountant can help you use an accounting software to generate reports.
  • The earlier you hire one, the better. This way, you benefit from sound financial knowledge. It saves you a lot of money and helps you mitigate risks associated with poor financial management.
  • An accountant can also advise you on the best legal structure for your business. For example, it is a fact that you will have business liabilities. When you operate as a sole trader, you could be held personally liable for business deals whereas in a limited liability company, the burden of the enterprise is limited to its assets.
  • SME accounting can easily become complex when you do it yourself, and can get overwhelming since you are stretched across many control points. An accountant can help you fix your cashflow by computing key business metrics that help you ensure that the outfit is on track. Say ratio of salaries and other employee payments to total revenue, cashflow analysis, your gross margins and net margins. These are reports that help you understand your business’ financial standing at a glance. It is even better if you are using an accounting software that is online as this can allow even an external accountant to review your financial records for regular reporting. These kind of reports help you monitor the pulse of your business. With the reports, an accountant is able to offer input on how to improve your business model, pricing or even inventory.
  • Generally, you need an accountant to prepare and file tax returns. Although we have software that simplifies this, it is always safe to get a seasoned hand to deal with the taxman. A good accountant should help you complete and file all legal and compliance company returns, prepare regular annual statements of accounts, handle your payroll, ensure all individual taxes and payments are recorded and bank reconciliation is done monthly. A good accountant will help you meet tax obligations. If external auditors are coming, your accountant should ensure that all necessary reports are ready.
  • You might need an accountant when applying for a loan, overdraft or securing a fresh investment. An accountant will help you develop the financial statements your bank will need. Your accountant can help you know if the loan interest, terms and conditions are favourable.

Overall, at some point, you will need to hire an accountant, so recruit wisely!

@DorcasMuthoni is the founder of OpenWorld

Shares Portfolio: November 2014

Comparing shares to last year and last quarter, the portfolio is up 7% in three months (excluding new investments), while the NSE 20 share index is up is up 0.5% since August 2014.

The Stable


Bralirwa (Rwanda) ↓
Centum  (ICDCI) ↑
Diamond Trust ↓
Kenya Airways ↓
Kenya Oil ↑
Mumias Sugar
Nairobi Shares Exchange ↑
Safaricom ↑
Scangroup ↓
Stanbic (Uganda) ↑
Unga ↑
In: Mumias Sugar
Out: None
Increase: Kenya Airways, KCB, Scangroup
Decrease: None
Best performer: NSE Kenya (up 121% since IPO), Centum (16%), (Unga 14%)
Worst performer: Kenya Airways (down 22%) Bralirwa (down 19%)
Unexpected Events:
- Bralirwa share dip which has been linked to the bonus share
- KQ’s loss in the half year. Amid the arrival of a half-dozen new Boeing 787 Dreamliners and other aircraft and long serving CEO Titus Naikuni stepping down there was one more shock from the airline in the form of a half year loss of Kshs 10.45 billion ($116 million)
- Are Kenya bank stocks overvalued as a Citi report says?
- Listings by Kurwitu Ventures (at Kshs 1,500 per share, which was higher than British American Tobacco that’s at 904 now) and Flame Tree (FTG) in recent weeks in the GEMS category of the NSE.
- Both Equity and Housing Finance forming holding companies and transferring banking and mortgage business respectively to the new group parents.
- The vicious fallout between BritAm and Cytonn.
Looking forward to
- Unga’s acquisition of Ennsvalley, a bakery worth Kshs 500 million ($5.55 million)
- Uchumi’s rights issue to raise Kshs 895 million ($10 million) by offering shareholders 3 shares for every 8 held at Kshs 9 per share, with the funds to be used for expansion in East Africa and refurbishment of stores.
- Seeing how Mumias Sugar shares proceed..having gone from highs of Kshs 40 in years past, to 1.4 this month.

Gold Cards are 3rd Class

You can stop bragging or flashing your gold credit card now as you settle the bill at your favourite restaurant. Looking at this card comparison chart from Visa, it is now clear that having a gold card is getting lower in the hierarchy of cards to aim for after Infinite, Platinum and then Gold, that’s just above a Classic card . This was made clear when NIC launched platinum cards some months ago and the extensive benefits of the new cardVisa card range were listed..including some that were previously attached to gold.

Visa chart The big change is airport lounge access which Priority Pass attach to Platinum cards, but not to gold cards – and it seems gold cards no longer entitle owners to use airport lounges e.g. at Nairobi or Kigali, but ‏reader, @smandavia says gold is still good at Mombasa airport.

Still it could also be following a global trend where the best that airports have to offer are reserved for passengers flying on first or business class, and those with enough accumulated miles  - regardless of what credit card they have. Curiously, Airtel  Africa premier customers also get access to airport lounges with Priority Pass.


Small Hotels in Kenya

This post is inspired by a conversation with Henry who uses his platform Enchanted Lanscapes to try and connect uniquely Kenyan tourist attractions, but which don’t fall in the traditional beach & safari package that the country is famous for. Enchanted Landscapes highlights sites like the Koitalel arap Samoei Mausoleum, Wagalla Massacre Site,  Kenyatta Cave (where Kenya’s first president once lived), the Jade Sea of the El Molo, the  Shimoni Slave Caves, the  Stone of Luanda Magere and  KooHotel safebi Fora where Homo Habilis was discovered.

Our discussion was about the type of hotels found around the towns near such sites. How does one find these hotels, what do they cost, and what are the features they should have?

There are many new hotels in Kenya, with some billed as ’4 star’ ones under construction  in Mandera and Machakos, while towns like Eldoret seem to have a new hotel every year from a marathon winner’s investments. There’s demand for these, as all the hotels in some of these towns get filled to capacity when there are events like motor rallies, rugby, church crusades or large weddings.

The ideal hotel for a budget conscious traveler e.g. an Enchanted landscapes local tourist, or company sales person is one that charges rates of about Kshs 1,500 ($17) to Kshs 5,000 ($55) per night
A good guide of if a hotel is suitable, is to find out if it is often used by tour van drivers or backpackers. The former have vehicles that cost up to Kshs 6 million ($68,000) that they must guard against damage and petty vandalism that happens in many towns. A hotel slightly on the edge of a town is ideal if it fits the above cost and has a secure parking for resident vehicles. It should also have a decent kitchen, and affordable drinks for a quick dinner and short night.
Some peeves of the hoshower cautiontels
- The (usually friendly) hotel check in staff don’t communicate all the features of the hotel
- Some hotel safes, if provided, in rooms are too small. A hotel safe should be able to store a small laptop computer.
- The bathroom systems are untested. There are dozens of varieties of plumbing systems in different hotels, but too often; (i) some are very complicated to operate)  (ii) hot water systems don’t work (ii) water does not drain properly and leaks all over the floor
- TV’s have very poor selection. Usually it’s one local news channel, CNN on BBC, one movie one, and 3 soccer channels. Hotels should always have a channel for young kids.
- If the hotel is in town, you often have to put up with very loud music from pubs adjacent, or sometimes from the hotel’s own DJ.

Kenya Orchards Share Mystery

In the last year, Kenya Orchards share price has gone from Kshs 4.75 to Kshs 175, a 3,500% gain via small trading volumes of about 1,000 per day (The company has 12.8 million shares issued).

There seems to news driving these gallant share gains which have only been slowed by the 10% daily share price change limits. Their 2013 Financial results (PDF summary)  show revenue of Kshs  47 million (~$540,000) up from Kshs 29 million, and a pre-tax profit of Kshs 966,022 (~$11,450) up from 757,201 the year. The company has assets of Kshs 58 million, of which 56 million is debt and 2 million is equity, with Kshs 55 million of accumulated losses.

In past years, the NSE has seen similar mystery gains from CitiTrust, ICDCI (now Centum) and EA Cables.

Kenya Orchards

Kenya Orchards share price chart at Mystocks.co.ke

Growing a Tech company: 5 Lessons Learnt in Hiring

A guest post by @Wanjiku

Two months ago, Erik Hersman wrote a nice post on his blog about Kazi ya mkono. To the educated folks, “kazi ya mkono” is for those who didn’t go to school and were relegated to manual labour or just assisting and to the folks doing it, its a way of earning a living.

Over time, the term “kazi ya mkono” has evolved to mean the people who are not afraid to get their hands dirty and, given the proliferation of universities and colleges, having a degree doesn’t mean anything, and you still get to do kazi ya mkono.

But for the sake of this article, let us use the meaning as “digging the trenches, getting our hands dirty and just getting stuff done”. I am that person who always has a business going, whether selling biscuits and bread in high school or operating the corner milk shop in the neighbourhood – I am the side-hustle person.

Since Erik’s piece came out, I have been thinking about my mistakes and lessons in the process of growing a tech company. Staffing is probably the biggest challenge a growing company faces, along with capital. Investing in an area like tech infrastructure is challenging. You get the most skilled and the mediocre claiming ability to do the same job.

The lessons relate to bringing together a team, that will help achieve the dream.

1. Earning your credibility: One of the guys we hired in the early days, told me that he wanted to work for a company with directors. I wondered what he meant because the company is limited ergo, must have at least two directors.

What the guy meant was that he wanted to work for a big company with a name or a board of directors – I presume more than two. You guessed it right, a month later, the guy gave me a day’s notice when Wananchi Group came calling. (and that was of course after I had paid him his salary :) )

That statement stuck with me over the years because the guy went to work on the same salary or maybe slightly higher, but he had chosen to go because Wananchi had the name. That I couldn’t argue with although I wanted to ask if Richard Bell would tuck him to bed in the evening, after his board meeting or serve him dinner. But I reserved my comments.

You can imagine the conversation a few months ago, when we discovered the guy was let go from Wananchi and was working at another company but with basic pay. I actually called him to say that we still have the same directors but could give him a job. Well, that was just talk.

People want to work for a credible or seemingly big organisation. That is why people get souped-up offices, with furniture that can massage behinds, directors buy big cars and provide this make-believe image in order to attract talent. People seem to buy into this perception big time.

2. Papers don’t always mean anything: Last month, I was very shocked by a smooth-talking guy who had tech certifications from here to Meru. He had everything but I was interested in the practical bit. I asked him like ten times whether he knew the stuff and if I sent him to a client he would be o.k. He answered yes, giving me examples of sites he had deployed and I was impressed by the young man.

Enter the practical bit. The technical lead greeted him with a router and the guy descended on his phone to search. Then he was told that the internet wasn’t needed. The guy sneaked out under the guise of pressing matters. The guy had Cisco certification but he couldn’t even log in.

I have several other cases of guys with certs who have done it but an equally high number that are self-taught or learnt on the job and are very good at it. My new strategy was to start with the practical, then chat about other stuff later.

The best, efficient people are not always the most educated.

3. No one likes to persevere, learn and earn later: This debate has been going on for a while. A person leaves university and immediately wants to earn some big money. They don’t look at it in terms of experience and what they can provide, its all about the big money.

Yes, our higher education teaches us that we can only be managers and bosses and not the people doing the actual stuff. I guess that is why very few people want to stick it out for a few years on minimal pay that rises normally;  we are all ready to drive within year one and how will you guarantee that loan?

I was recently eavesdropping on a conversation with two people in accounting. The old timers got their jobs when CPA (K) was the thing. Now, new graduates are coming with the papers and within the first year they wonder why their boss with minimal papers should be taking home that much.

I drew parallels with tech, where new graduates ask the same of a guy who has learnt through experience over the years. How do you answer that, while there is no substitute for experience?

I gave up on trying to show people what comes with patience. I started by working hard to show people that lack of higher education shouldn’t be a barrier to achieving dreams. People didn’t see that far and in the end, my colleague told me to quit “being all motherly”.

Now, I demand performance, if you can’t hack it, try another place where mediocrity is entertained and if you want to go stay at home, it is ok.

4. For the guys who put their head down and work: I know much has been said about salary negotiations and productivity. The last quarter we hired more people and of course we all have to keep the wage bill in check. The salaries are not the highest but we are good and make people comfortable.

But after a month or two, we realised that some of the guys were worth more than they negotiated. These guys had gone out of their way to deliver beyond expectations. The fact that they were on fair or comfortable salaries didn’t impact their productivity.

There are several circumstances that may make people not to get the best deal but once someone has proven their value, it is only fair that you make them feel appreciated. So, within the second month, the salaries were adjusted up, to reflect their (almost) true value.

I am still struggling with the guys who over promise and under deliver. How do you call guys and say, your salary is a scale lower? Yet they negotiated higher? That one I am still figuring out.

5. Rewarding loyal employees: In every company, I am sure there is that one person or people who can give you the history, from the time they all shared one desk. These are the people with institutional memory and probably know the organisation’s DNA.

Pay rises, continuous training and promotions are some of the strategies to retain the people but as companies grow, shareholding becomes a better option.

Conclusions: There no way of saying that these lessons apply to everyone but for Kenyan companies that are bootstrapping, you are likely to face these challenges.

At the same time, don’t think that your passion and drive as a founder can necessarily rub off the people working there. You need extra motivation and money does a great deal of motivation. If you have to go hungry to drive the company, you can do it with your co-founders, but not with the employees, otherwise they will start leaving.

The trick is to sell the dream to the team while at the same time working hard to make the conditions comfortable and making them feel it whenever there is an upturn in fortunes. If the profits get better, find a way to make it felt.

That is what I tell myself :)