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Kenyan American Tycoon Listed Among the Top 50 wealthiest black individuals in the US Makes a Comeback

Baltimore state in the US had an eponymous holiday named after him courtesy of his business acumen that saw him ranked the 41 richest black person in the US.

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Businessman David Karangu
Photo: Shutterstock

At 30, David Karangu became a dollar millionaire, joining 5.3 million affluent households, comprising 1.9% of the population, in the world’s largest economy with a net worth of $1 million or more.

The year was 1997—the place, Augusta, Georgia.

 Ten years later, after earning his millionaire stripes, Karangu sensationally retired from his daily grind, selling his entire business to revel in his next earthly adventure of globetrotting and building luxury homes.

Since relocating to Kenya in 2022, he has met with disparate professionals involved in his nascent businesses on a particular day of the week. Each group seemingly allocates time to engage with him, demonstrating a time management skill replicating a military regiment.

 And if an interlocutor is running late, Karangu is open to politely dialling their digits to inform them that a meeting has begun; what they do with that information is up to them.

Karangu’s time discipline evokes Carl Sandburg‘s observation: “The common man does not concern himself with time; it propels the talented man forward.”

Currently, he’s involved in some real estate projects in Malindi, where he has purchased significant land. That’s all he’s willing to share about his present exploits, opting to court anonymity with a vengeance.

But your correspondent is not done with him yet. He reminds him of the Biblical parable of talents and assures him that he, who lives in the firmament, is undoubtedly proud of his earthly achievements to date and, therefore, he should not be modest.

 But he does not budge.  

One of Karangu’s properties in the US was described as “ a smart home version of a European castle.” 

“ Where most business people make a mistake is when they become too attached to a business,” says Karangu, whose judgment call, influencing him to call it a day at the age of 40, led the Columbia Business School to write a white paper sponsored by the US Government called “The Owner’s Journey”.

The paper interviewed eight successful US entrepreneurs, including Karangu, who nurtured and grew businesses but unwittingly struggled with cognitive dissonance as their accustomed adrenaline-driven lifestyle got disrupted.

It features their firsthand accounts of shared experiences, lessons learned, and reflections on what they might have done differently.

At the time, as the days and nights unfolded, paving the way for a fresh year and then another and another, Karangu, according to the papers’ account, raised the white flag. An unquenchable desire for the business he first fell in love with at 18 years old, namely running a car dealership, seductively strangled his pulmonary veins.

 He badly needed to breathe again.

Let’s move forward.

It turns out that Karangu’s journey to the U.S., once associated with the 26th largest minority-owned car dealership in the U.S. according to the Black Enterprise Magazine (BEM) – with annual sales surpassing $100 million – is traceable to his father, Dr. Mwangi Karangu, a beneficiary of the Kennedy Airlifts who ended up being an egghead at Morgan State University.

But in 1972, after a 12-year hiatus, the old man and his fledgling family relocated back to Kenya, marking the first time the younger Karangu, born in the U.S. in ‘67, would set foot in the motherland.

However, Karangu’s visit to his forbearer’s homeland was short-lived.

In 1983, the older Karangu and his brood relocated to the U.S. upon accepting a job at Morgan State University. With the political uncertainty submerging Kenya then widely thought to have prompted the move.

For tellingly, in 1982, two unsavoury events occurred in Sub-Saharan Africa’s fourth-biggest economy, including an attempted coup and the abrogation of plural democracy. These duo acts gradually smothered the bloodline of a functional democracy, precipitating a palpable sense of edginess in the national psyche.

From then on, Kenya seemed to be barreling towards an aberration of what the Roman goddess Libertas symbolised in the iconic Statue of Liberty in the Big Apple.

This foreboding atmosphere in Kenya stirred the lecturer and his family to return to the US.

The Washington Post nicely captured the mood engulfing this East Africa state at the time, reporting that “Since he came to power in 1978,( President)  Moi has weathered a reported assassination plot, a bloody Air Force coup attempt, a sharp drop in Kenya’s economy, and, by his own recent account, the recognition of “evil-minded people” in his government who are holdovers from( President) Kenyatta’s days in power.”

Additionally, the Paper reported that by holding parliamentary elections in 1983, a year before  the scheduled time, Moi had advanced the argument that it was  “in order to clean the system.” He further advised Kenya’s 7.2 million registered voters that it would serve their best interests to elect members of Parliament closely identified with him and reject any incumbents likely to be “disloyal.”

In 1983, the world also witnessed several seminal events.

That year, the first-ever portable mobile phone was unveiled, coinciding with the U.S. invasion of the Caribbean Island nation of Grenada, and Zimbabwe witnessed the beginning of a civil war. Clearly, parts of the world were in a capricious mode.

It was also a watershed year for this East African state because it was holding national elections.

Many recognise that Moi explicitly called for the 1983 elections to address a severe political crisis that arose after Moi labelled Charles Njonjo, a powerful politician at the time, a traitor, dismissed him from the cabinet, and expelled him from the ruling party KANU.

Two reasons led to this decision.

 First, Moi hoped that the elections would legitimise the presidency and restore confidence following the abortive coup on August 1, 1982. 

Two, the elections were used to focus public attention away from the serious economic problems that the country faced, says Dr. Ahluwalia Davinder Pal Singh, a political scientist.

And for a person whose worldview had disproportionately been shaped by the thinking behind a coterie reverently referred to as an Assembly of Demigods, it was arguable that Dr. Karangu’s fidelity to the second paragraph of the United States Declaration of Independence was sacrosanct.

Indeed, it can be said that the Kenya of the 80s and 90s exhibited a predatory, retaliatory, and uncharitable character, particularly towards adherents of libertarianism but also towards that anonymous man on a Kenyan street who dared to believe in the doctrine of all persons having inalienable rights.

Young Karangu takes over from here.

“I got started when I was 17 years old. That’s when I relocated back to the US from Kenya. People who knew me then in Baltimore will tell you I used to say, ‘I will be a millionaire before I’m 30 years old.’ And they would say, ‘That Karangu kid is crazy.’ But this is something I badly wanted to become more than anything else. So, retrospectively,” says Karangu, 56, “the first personal quality one needs to have to achieve success in business or any other sphere of life is ambition.”

Entrepreneur magazine declares, “Self-belief is the foundation of success.”

 This assertion remains an ironclad rule. No one ever achieved unreasonable success without maintaining a strong belief in themselves. Self-belief must ultimately align with the specific field in which one aims to triumph.

“Nobody reaches a target without defining it and believing –sometimes naively and to almost universal ridicule – that it is attainable.”

In his telling, Karangu states that other qualities necessary for business success include liking people, adopting a cautious approach when hiring human capital, and possessing money management skills.

 “You have to know how to hire and maintain discipline,” he emphasises. “This is a crucial skill you must possess. Interpersonal relationships are critical. For instance, how one deals with customers is essential. Another area where people often falter is in managing money.”

This is where education and going to college come in. In business, you first learn that profit and cash are two different things. If you are not managing your money correctly and there is a lot of cash tied up in inventory, you can be cash-poor, affecting many people.

 “Managing money and managing people are the two biggest things that can make or break a sale,” says Karangu, born in 1967 in a U.S. hospital.

Being disciplined, says Karangu, is an attendant quality required to succeed in business.

“One requires undivided discipline; I worked 70 to 80 hours weekly, not because I had to but because I took my business extremely seriously.”

 He adds, “When it comes to business, I’m very strict; I do not hire people because they are my friends, as I have always protected my reputation and integrity,” says Karangu.

Back in the United States, was probably the only  Kenyan progeny to have had a calendar day named after him, as evidenced by the Mayor of Augusta, Georgia, declaring July 28, 2005, “the David Karangu Day.”

In addition, the bureaucrat also awarded this entrepreneur, widely thought to have been one of the top ten business operatives in the ancestral home of the Hardest Working Man in Show Business, with an Honorary Key to the city.

In addition, the Governor of Georgia appointed Karangu to the board of the second-largest hospital in the State for a three-year term.

These accolades underlined Karangu’s then-unvarnished pedigree as an influential entrepreneur in the States.

Upon completing his undergraduate studies at Morgan State University—with degrees in accounting and marketing—his first job was as a dishwasher at a large pancake franchise, which he considered tedious.

Initially, he had set his mind on becoming a lawyer, but gradually, his innate intuition directed him to the sales profession.

“It was something I just sort of fell into,” says Karangu, who, on exiting the pancake franchise, got employed by the Ford Motor Company, where he stayed for eight years, ascending through the ranks.

“I discovered it was something I enjoyed,” he says.

Soon after learning the ropes, he dreamed of owning his dealership and building a nest egg.

After saying goodbye to Ford in 1995, he enrolled at the National Automobile Dealers Association Academy – a prerequisite requirement for all car dealers in the U.S.- while working as a sales manager at a Lincoln dealership in Melbourne, Florida.

Ford Motor Company owned Lincoln Motor Company and acquired the company around 1922; it’s a luxury vehicle division of Ford.

“When I started my business, I knew I wanted to do this.” I did my research and was able to provide hard numbers. I left a job paying me over $120,000 a year to start a business.

The first year I made $40,000. This brings me to another point. You better get married to someone committed to the ups and downs of business. Imagine going from $ 120,000 to $40,000! Or moving from a nice four-bedroom house to an apartment. These are the sacrifices you have to make when you are getting started,” he says.

After he completed the course, he could do nothing but wait for the right opportunity to come along.

But after learning the ropes, he started dreaming of owning his dealership and building a nest egg for that purpose.

The thought of starting his own business didn’t worry him, but the waiting drove him crazy.

“I had always loved cars since I was a little boy.” “During my stint as an employee, I made up my mind that the automobile industry would be part of my future,” he told the Kenya-based Nation newspaper.

His entrepreneurial journey, which led to his present-day financial freedom, began in Augusta, Georgia. And it was anything but bliss, for he faced the ubiquitous travails faced by bootstrapper entrepreneurs.

Listen up as Karangu narrates his initial obstacles.

“ Let me walk you through.” I was working for the Ford Motor Company and was comfortable doing what I was doing. Then, I decided I wanted to go out and do something else for myself. I couldn’t think of anything at the time. But at night, I’d see all these informational commercials on TV about buying houses and becoming a millionaire. Guess what? I bought into this stuff.

“I realised that you could get rich this way. The next thing that I did was to identify the business I wanted to engage in. And I identified that I wanted to buy an automobile dealership. And I went to the people in the industry that I knew, and they turned me down. They asked me, “How old are you anyway?”  I said, “ 25 years.” And they said, “Get another 15 years before we can take you seriously.”

“Then I went to a bank. I will never forget when I went to SunTrust Bank with an excellent package prepared, and the guy in the bank did not even open the package. After this, I started reading biographies of wealthy people. And the one thing that stuck out was partnerships. I had 150 clients. My clients were mainly car dealers.

I thought, “Out of the 150 people, there must be someone with whom I can partner.” As I went through my day job, I would ask those I was close to, “What do you think of you and I starting a business together? “ Eventually, I ended up with a list of three people. The last person I talked to said to them, “Look at this. Give me the capital to get started.”

“I will own 51 % of the business; you do not have to do anything.” I will do all the work, and you will own 49 % he said, “What are you giving up? I will give up my house. “I will give up my 410 K plan.”

Admittedly, Karangu got his big break when a friend in Orlando told him of the opportunity at Fairway Ford, a six-acre lot off Washington Road in the booming bedroom community of Evans.

Mr. Karangu saw potential in the dealership. It was modern, in a prime traffic location, and had an upper-income customer base.

He quickly purchased it using his savings and a line of credit through Ford Motor Co., which he used to leverage a bank loan.

According to Wealthy Gorilla, entrepreneurs must make seven sacrifices to succeed in business, and Karangu verifiably ticked all the boxes.

Should one be interested in pursuing a business, what advice would Karangu give to a putative entrepreneur?

Says Karangu, “There are so many businesses you can do.” But you have to narrow them down.  And the best thing is always to engage in something you are familiar with. And a lack of seed capital should not be a hindrance.

“I will normally tell anybody that I started with no money.” I came to the US just like anybody else. Yes, I was fortunate to have brothers and sisters, but none came to me and said, ‘Here is a batch of money; invest in a dealership.’ There is no easy career in this world. I started attending business conferences and talking to people doing what I wanted to do.

And I heard their stories. I was also able to meet people who finance businesses, and I was able to grow that way,” says this Nyeri High School alumnus, who was ranked the 41st richest black entrepreneur in the U.S. by BEM in 2013.

Then, on November 1, 1997, he launched his first dealership—Fairway Ford of Augusta, in Georgia—at age 30, becoming the youngest dealer of the Ford Marquee in the United States. This milestone led him to bag the Ebony Magazine 2001 Dealer of the Year award.

One may very well wonder if there is a magic bullet in business.

Hear him speak: “ If you want to be a doctor, you must attend school. You have to read and research. Often, people start a business without researching and then wonder why they failed. By research, I mean if you want to open a restaurant, you have to talk to people who own restaurants.

Amazingly, we Kenyans are so shy about picking up the phone and going to talk to someone with specific questions. People will tell you how they became successful. Talk to people and listen to how they did it. And you will learn different things.”

In 2002, aged 35, his Atlanta-based motor dealership company, the Ivory Chevy Auto Group, was ranked among the largest minority-owned enterprises in the U.S., grossing over $100 million in sales annually—an equivalent amount to what today’s world’s largest software and programming company is spending over the next five years to open an Africa technology development centre with sites in Kenya and Nigeria.

And his appetite for motor vehicle dealerships was headed north with each passing year.

Interestingly, growing up in the motherland, he intuitively developed a passionate love for the Mercedes Benz brand, believing that cars bearing the three-pointed stars marquee were the world’s ultimate ride.

Coincidentally, on July 1, 2005, Karangu opened a Mercedes-Benz dealership, which became the crown jewel of his new empire. From the word go, it was a shoo-in, setting new records for a Mercedes dealership, as the entrepreneur emerged as one of only five African Americans in history to own one.

On July 14, 2010, he purchased the former Steve Rayman Chevrolet South dealership, the biggest in Georgia, attracting unprecedented recognition by the state government and the business community, and renamed it Ivory Chevrolet. Then, on April 2, 2012, he purchased Sutherlin Mazda, signalling the beginning of a new chapter in the auto industry.

He went on to own a BMW dealership in Columbia, South Carolina, followed by Volkswagen and Subaru dealerships in the same state.

In 2013, Karangu, then 46, became the first African immigrant to make the coveted list published by BEM.

Over the years, the younger Karangu has been involved in philanthropic work both in the US and in Kenya, earning him, for example, the local state award of Moran of the Burning Spear (MBS) in 2012.

What does Karangu think of his storied entrepreneurial journey?

“At that time, for the last 10 years, we had made much money before I decided I wanted to do something independently.” That’s when I went and bought the dealerships. Right now, banks approach me and ask if I want money, and I tell them no, recalling the times when no one would speak to me.

But it is because I did not have a proven record then. But all I will tell you is that a strong idea always prevails, even when lacking money. In my case, the idea was more powerful. Think about it—even in Kenya, when someone gets started, who gives them money?”

Maya Angelou would also echo this truism, saying, “You can only become truly accomplished at something you love.” Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you.”

Karangu worked 12 hours a day, six days a week, meaning the guy did not have time for a social life. This leads one to ask whether hard work alone is the panacea for business success.

“A good plan comes first.” The love of your work is secondary; you would do it for fun. “Hard work follows along with a little luck,” he says.

Karangu, without a doubt, is a person who became a Croesus through sheer personal grit and self-belief. As a millionaire, his advice is indeed worth heeding.

His parting shot is, “Read about other successful people and surround yourself with positive people.”