Archives for posts with tag: africa

COVER

Pride vs existence. Vison vs survival. Impact vs. Communication

All of us, small incubator and accelerator of the world face these dilemmas every single morning.

Our job  to build real companies, help them train and retain a talented team and generate revenue on a daily basis is so much of a full time job that it is sometimes challenging to focus on a long term strategy and vision. Stuck in this operational framework, we often follow blindly the few important partners that we have signed (or rather that have us signed) and which use us to get in touch and buy legitimacy with the tech ecosystem.

However, we should not forget that we are also entrepreneurs and that we are here to build long lasting organizations – hence here are few reasons why we should not let our “beautiful big partners” dig too much into our beliefs, or dig in them at all:

1) They don’t know much about technology entrepreneurship

Ok, that’s an easy one.  Any angry kid could have said that, but it is, nonetheless, it is true. Almost none of the employees or executives in those corporations, even the so-called “technology experts”, really know what it’s like to build technology SMEs, fund them, support them, manage HR and finance for startups, etc. Whatever program, event or money they want to give you, never forget that they’re mainly in it  for corporate responsibility reasons and not really ecosystems building.

That is not necessarily a problem. The problem is when their hidden objectives are more prominent than your priorities. When it comes to building the ecosystem, never forget that you are the visionaries, the ones to make it happen. More importantly, do not forget that you have a responsibility, to yourselves and to your clients, to remain true to that vision. Take their money, help them achieve what they need, but never at the price of your vision.

2) They tend to see you as “their” incubator

Well at least if you’re successful. But when you fail, they suddenly remember that you have other partners. That really may be a problem since you want to remain independent,  objective and open with all the entrepreneurs.  And you want them to perceive you as such. Indeed, the last thing the latter want is to belong to a large company, they want that large company to be their client. Just take for instance the corporate accelerators with no other partners: no entrepreneurs want to be part of those, because they need more than one partner. They need banks, investors, technology providers, legal advice, etc. Money and communication can never buy a trustful network.

3) They may discourage your team

As most large corporations, they live and grow by putting others down. They seem not to know any other way to build business relationships. It is even more flagrant in African ecosystems where open innovation and co-creation are still obscure concepts. Thus, when you collaborate with them, they may have behaviors and words that can really break your team’s motivation. Every young team is going to make mistakes but what matters is that they work  their ass off to execute perfect events and programs. Getting criticized just because your partners need a reason to diminish your fees or justify an internal argument within their team, may hurt your more passionate team members.

4) Your core vision is to help entrepreneurs succeed, not them

At the end of the day, the main reason you should not bother too much about keeping an unbalanced, non-constructive relationship with a large corporation is that, on the long term, you should not be relying on them to be sustainable. Of course, they are important in the first years, before you’ve found your business model and generated consistent revenues from your companies. But always bear in mind that you are here for one reason:  to build entrepreneurs. Every endeavor you may undertake along the way to survive is good but, if by any chance it had to stop, well it just may be a sign that you should refocus on your own core activities.

Your goal : make them better !

Of course, there is also amazing talented and passionate people in those companies who try to change it from the inside… you should definitely be close to them in order to build fruitful relationship with corporates that could also have a huge leverage on your incubator’s activity

Good luck and have fun.

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0x600This article was first published on www.techmoran.com on February 13th.

It is not easy for most people to understand the daily job of supporting tech entrepreneurs in Africa. Indeed, this fascinating mission only concerns a couple of business angels, venture capitalists, advisors of any kind and, of course, incubating teams. .

This, to me, is the most engaging job in the world: you deal with dozens of brilliant entrepreneurs and visionaries, are in touch with a lot of technologies and business models, get to know them on a personal level and sometimes become friends with some of them.

However it can also be the most ungrateful job on earth. Here are several reasons:

  • The majority of us will never get rich doing what we do! Indeed, only a very little portion of us invest their own money and have shares in the companies that we support. The rest are either volunteers, employees, mentors, etc and most of our tech hubs are non-profit organizations. The funny thing is that sometimes, when you try to have an entrepreneurial approach and make your hub sustainable, people tell you that you aren’t social enough!
  • You will be judged if your startups fail and forgotten if they succeed. No need to elaborate on this, I think you understand. Entrepreneurs all have their reasons not to show that you helped them when they were hitting rock bottom, when they were in a burnout, when they were fighting with their partners and employees, when they just needed someone to talk to. Yet, you were there for them all the time. But I understand that. Like us they evolve in a very uncertain and high pressure environment. Some of them just can’t allow to blame themselves for things that did not work out or to be grateful for something other than their own genius when they succeed.
  • You can always do better. And that’s a good thing in fact. Your job and performance will always be challenged and therefore, you’re always required to improve and rarely congratulated for your actions. And again, even though it is a highly ungrateful situation, it is a good one. You keep on getting better and better for your new entrepreneurs.

But these are personal feelings that have to be managed at a personal level by each individual. The real question that I want to ask is:

Should we support entrepreneurs – or couldn’t the real entrepreneurs get off the ground by themselves?

  • We all should advize, put pressure, open doors and boost their business, but not run the business for them. Or at least that is the theory. Doing our job you’ll quickly understand that if, at some point, you don’t get your hands dirty and do what has to be done along with your entrepreneurs, you will never have them work on something strategic or gain their respect. In the meantime, however, you have to make sure that you only provide assistance to the ones who are ready to die for their business, at least as much as you’re ready to die for your incubator. Moreover, sometimes, exceptional events make your entrepreneur or his team completely out of operations (burnouts and key employee departures are the most current cases). In those situations, either you watch the business die and tell everybody that is was not your fault, or you go ahead and manage the business during the crisis. Fortunately, we only had to do this once at CTIC in three years of activity. The startup that was in a critical situation at the time is now one of the most successful startups in Senegal.
  • Even the greatest entrepreneurs need assistance at some point.

Some people, mostly in the US, will tell you that an entrepreneur who needs support from an incubator will not succeed anyway. Maybe it’s true – at least over there in North America where incubators, in fact, can be replaced by many other parts of the ecosystem that have been involved for a long time: mentors, family, business angels, teachers, classmates – all play a huge role in building the success stories that we all know.

In Senegal however, and probably in many other countries: we don’t have many of those types of support for startups. Therefore, your incubator can play a tremendous role. But it is also a danger to centralize “entrepreneurs support” in one or two spots in a country. This is why I believe that it is clearly our role to help build this ecosystem and support other organizations, even if, at some point, they may become your competitors. But don’t worry, the work to undertake is gigantic, and the more the merrier right!

  • We should support entrepreneurs like if we had invested a million dollar in them

With passion, dedication and empathy. We have to do this very difficult mental task to put ourselves in the life and brain of our entrepreneurs everytime we meet and work with them. For us at CTIC, it has naturally been much easier to build this “symbiotic” relation with entrepreneurs located in the hub versus with “virtual incubatees”, which have office spaces outside of the incubator.

  • Finally, we should never claim the success of any company.

I heard one time that good incubators and accelerators never speak about themselves more than they speak about their companies. I could not agree more – this is true. I also think that whatever amazing services you provide to your startups, you are not responsible for their success! Great people succeed anyway – you just helped them accelerate their growth and get beyond the tough times.

In a nutshell, this fascinating job is a very difficult one in countries where ecosystems still have to be built. But do it with passion and humility. See the big picture and never discourage yourself. You’re on the good track!

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On a daily basis at CTIC Dakar, we are questioned about our model, how we get funded, who is the “boss”, why incubated companies have to pay us, how did we started, etc.?

To answer few of these questions, I would like, in this article, to discuss the pros and cons of the various forms of governance for technology incubators and accelerators in Africa, using the lense of CTIC Dakar, which is a public-private partnership and non-for-profit organization, aiming at being financially sustainable after 5 years (2 years left, damn !)

Type of support provided

First of all, it is very, very important to distinguish the various form of support provided to the entrepreneurs and set what I mean by “incubator” or “accelerator”. What you aim to do as a strong influence on your overall budget and thus on the ideal governance model for your tech hub. For me, an incubator or accelerator is an organization, non-profit or for profit, which provides a physical place and an intense, hands-on support to entrepreneurs in order to foster their growth. Their first and often only mission is to create sustainable fast growth companies. The quality of the support provided is highly dependent on the quality of the team members and thus this type of organization requires important operating /human resources costs. They generally employ 5 to 10 people plus occasional mentors and consultants and their building has to be large enough to ideally provide individual office spaces to at least 7-10 small companies.

On the other side, other tech hubs like fablabs and coworking spaces have for primary mission to create and animate tech communities and thus their costs structure is mostly made of community management and events’ organization. You can start with a small or medium-size open space and one full time employee along with the hub manager.

Market size and deal flow

Secondly, you have to ask yourself: what is the size of your market as an incubator? I believe that in most sub-Saharan countries except south Africa you don’t have enough high growth companies to sustain a fully private funded model for incubators, no matter what revenue model you use (equity, revenue sharing, etc) except maybe if you only do space rental (no added HR costs).

Moreover, since there is not enough fast growing SMEs at the moment, at least in Senegal, I think that we have to build a pipeline of promising startups by investing a lot of time and resources at very early stages, including at university and school level. We do this a lot at CTIC through various workshops and events, including TEKKI48, a 2 days startup accelerator we launch in various cities in Senegal every 4 months.

Doing this we hope that 1 out of 20 of the projects we support and identify will finally become an interesting startup and enter our programs. We had two beautiful example this year with TongTong.sn, a group buying platform and Genius Family, a company developing financial management software and apps for illiterate shop owners. Both companies started from scratch at CTIC in 2013, got grant funding through one of our public partners, and are now profitable and able to pay around 10 salaries each at the end of the month. The first has more than 100 recurrent customers and the second around 60.

In a nutshell, if you don’t have enough mature SMEs in your country or market, you will for sure need some government or international donor’s money at some point unless you have very strong private investors behind you (case of the amazing MEST in Ghana). The idea here is to do like we do at CTIC, use this money to trigger the engine, grow the pipeline and then generate revenue from your own client companies.

Governance, decision making and innovation

This is obviously the largest drawback of public incubators. If you support entrepreneurs, you absolutely don’t want government people managing the entire thing. However, if you want those people to give you money, they will want to be involved in some way. It is a tricky, very delicate power balance you have to deal with. The way we handle it at CTIC is to have the most relevant of them in the incubator’s management board but to make sure the latter remains headed by the private sector (IT Business association). Other private partners are also strongly represented (the Telco Orange for instance). It is also important to note that none of our international donor partners (World Bank, GIZ, EU) is involved in the management board. So far, we have been able to manage the ambitions of our public and international partners, driving them towards the realization of our own vision and model, but we feel that the pressure is increasing as we gain good results, recognition and TV appearances!

Access to market and finance

Let’s be realistic: In a lot of African countries, Government are relatively powerful compare to the private sector. Thus, the best advantage of having local public and/or private partners involved in a close relationship with your hub is the opening of doors. Indeed, once they believe in your mission and understand the concrete value you provide to help them fulfil their own objectives – which most of the time they have no idea how to reach – they can help you and your startups a lot by involving them in public projects or by providing seed funding for startups. For instance, last year, we secured around USD 150,000 from the Senegal Telecommunications Regulator, directly granted to 8 startups. This type of public or grant funding can be harmful for your startup business model – as it has been largely discuss recently – but I believe that if you couple this money with a business oriented support by an incubator, it works.

Team management & retention

Finally, I believe that the largest drawback of not-having a fully private model is that at some point, if your management team and business developers are entrepreneurial enough – which is what you want in the first place – they will leave after 3 to 5 years to do their own thing. Whereas, if you have a private model, it is either your own baby or you can hope to get some equity in it or at the very least drive it wherever you want. As far CTIC Dakar is concerned, our first Director Omar Cissé left after 3 years – as he always announced – and we were lucky enough to have him succeeded by our very own former business developer Regina Mbodj, who helped us accomplish a very smooth transition.

In summary, there is obviously no one-size-fits-all model for technology incubators. I believe that the markets for purely private funded – and sustainable – incubators is not here yet for most sub-Saharan countries and we have to grasp the opportunities which lie in involving public and international development partners. But again, in the field of technology entrepreneurship in Africa, it is only a matter of leadership and balance of influence.

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On May 2014 was hold in Berlin, Germany, the 2nd Afrilabs annual meeting. Supported by the German Cooperation (GIZ), more than 35 people representing the 29 hubs, co-working spaces or incubators, members of the Afrilabs network, flew to Berlin to work on the organization future. After one week spend with this amazing people for all over the continent, here are my first feelings:

1) We are at the dawn of a connected pan-African tech scene – where people who trust each other share, learn and grow a knowledge that is very specific to our African context. When I was in the room with these 30+ people, I had this strange feeling that all of them were amazing young leaders, who don’t even realize the power that they may have in their hands. Just imagine what will be the African tech and business ecosystem within 5 or 10 years? For a better sense of the context, the first hub/co-working spaces emerge from Kenya and Uganda no more than 5 years ago. There is now more than a 100 of us (map) and the list is growing.

Afrilabs aims at connecting the most advanced, dynamic of us, which share pan-African values and a strong local entrepreneur’s empowerment capability.

The network grew from 19 hubs in 2013 to 29 in May 2014. All this means that the 30+ leaders we had in the room are the pioneers of something that is getting big (and hopefully impactful) and that we have to strengthen the Afrilabs networks and the trust between the members so that we know were the African tech scene is going. Without clear values and vision of what should be the continent tech ecosystem and the role of tech hubs, we may once again be the prey of international influence, being government or corporates.

2) The international interest in the African tech scene is growing rapidly. Just as a proof of this is the pretty important involvement (financially and in terms of representation) that the GIZ gave to the Afrilabs network and the gathering if it’s member. They are feeling something that other public development agencies do not. Of course, nobody know where all this is going and it is too early to draw any hypothesis, but interestingly enough, the German may well have touch on something which could be the future or international development cooperation : a multilateral support to network organization empowering technologies leaders in emerging countries. We should study this and extract some number, but touching these highly influential and connected people probably brings a very efficient “impact-pro-dollar-ratio”. You may also replace impact by “image” depending on your view on international development aid. However, government donors have been preceded in their hook on African tech hubs and entrepreneurs by several and a growing number of private foundations like Hivos, Omidyar Network, Rockefeller and know corporates like Microsoft, Google and telco operators like Millicom (behind the brand tigo).

3) The models or interacting (“influencing”) are multiple and depends often on the organization’s capacity to deal with small investment or grants.

The most natural one will be to support directly local tech hubs or its entrepreneurs in each countries. This can be more valuable if you have a strong local leadership, thus bringing more adapted win-win types of relations. However, it would be harder to convince partners first since the ecosystem is still small.

The second option will thus be to go through network organizations like Afrilabs to be able to target a large number of countries and hubs without increasing your management costs. Hopefully, this will also enable us as hubs to have stronger negotiation capacity on the various deals – therefore making sure they fit with the network long term strategy, vision and values.

Another option is the one chosen by the now (in?)famous Rocket Internet or African Holding Company, having the telecom operator Millicom – behind the brand Tigo – as a major stakeholder. They support top down copycat e-commerce platforms and recruit in the targeted countries a business and sales team lead by high profile young managers, generally coming from the diaspora. The vast majority of their technical capacity (developers) being based at the companies headquarter in Germany. On the other side of the spectrum, Millicom is also currently launching a startup accelerator in Kigali, Rwanda. They take around 30% equity stake for a 25,000USD seed capital investment (I will let you do the math for the valuation of the companies!).

But let’s not be too critical of those models, at the end of the day, they are drawing attention to the continent technology sphere and they help bring or build amazing tech and business skills in Africa. Let us also acknowledge that, whatever their form, interest or vision, those supports are also pioneer and are high risk takers who believe in a bright future or the African continent (heu… am I being to naïve here?)

4) The importance of pan-African and local leadership shaping this ecosystem

For bad or worse, the international influence over the African tech scene will grow, and rapidly in the years to come. Our challenge as managers of local technology organization is to build a strong local and pan-African leadership so that instead of following their goals only, we make them empower us in the realization of our vision. Therefore, it is KEY for all us individually and collectively to work and build our vision and values. Doing so, we will of course be contested thus creating other organizations with other perspectives and missions. But we have to do it, if we stay to long in a kind of weak consensus state because we fear to hurt each other, we will end up, like many of previous NGO in or continent – completely overtaken by international organizations. Furthermore, let us make sure we educate and build the knowledge of or local decisions makers and that we hold them accountable, otherwise, they will easily be drafted on the wrong side.

Once again in Africa, it is all about leadership.

Article first published on 140friday.com

Senegal’s location and infrastructure an opportunity for startups – CTIC

note : article by Tom Jackson originally published on HumanIPO

Senegal’s position as an entry into Francophone Sub-Saharan Africa as well as the level of technological development mean the country’s startups have great potential, according to accelerator programme CTIC Dakar.

HumanIPO reported yesterday on CTIC Dakar, the first accelerator and incubator for IT entrepreneurs in Francophone Sub-Saharan Africa, which has secured US$150,000 in investments for its startups so far this year.

Yann Le Beux, catalyst at CTIC Dakar, told HumanIPO that though the market in Senegal was small – the country has only 13 million inhabitants – it had great potential for firms as an entry into the rest of the region, with Francophone Sub-Saharan Africa having a population of more than 350 million.

“Senegal has for us a tremendous potential,” said Le Beux. “For historic and administrative reasons, it is pretty easy for a company based in Senegal to access this regional market. Furthermore, a large number of international corporations or NGOs are headquartered in Senegal for west and central Africa.”

He also said Senegal has a good higher education system, with more than 200 institutions and several international campuses which attracts students from other countries and creates a large talent pool.

“Finally, the IT infrastructure and connectivity is good and the mobile penetration rate is close to 90 per cent now,” Le Beux said. “3G is well used and 4G is in its pilot phase.”

HumanIPO reported yesterday the latest Ookla Net Index, reporting average broadband speeds based on individual IP tests, placed Senegal in 14th place.

Le Beux said all these factors mean Senegal has an opportunity to make a global impact through ICT.

“We work night and day at CTIC to achieve this,” he said. “Senegal is already taking advantage of its very high level diaspora to boost global Senegalese companies. They start businesses back home and bring a lot a business and technology practices and then use their international connections to scale globally.”

He said with the rapidly growing internet penetration rate, Senegal is an ideal place to test business models and products for the francophone and global market. He said what was needed now was for the country to attract more international private investments.

“We need more private investment at the seed stage,” Le Beux said. “We now have several VCs based in Senegal or looking closely at it, but we need a few more business angels to really help the startups get off the ground. A public innovation fund could be a good tool to trigger the angel industry, by a match-making grants system for instance.

“Also, like many other countries in Africa, Senegal lacks good graphic designers who can work with engineers – this is really holding back the mobile apps industry. The cost of electricity is also still a break for young companies.”

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A few weeks ago in a small former colonial town north of Senegal called Saint-Louis, Tekki48, a two-day startup event organized by local tech hubs CTIC Dakar and Jokkolabs in partnership with the local University, was launched.

The purpose of the event, designed and created by CTIC Dakar, is to take the best of the StartupWeekend model and adapt some aspects to the needs of local entrepreneurs. This raises the question: Should African tech communities, incubators and accelerators create and brand their own events and programs instead of replicating proven international concepts? Of course there is no easy answer to this question, but I will try to outline a few of the pros and cons associated with each choice.

The Benefits of Localizing Your Tech Event

–        Events like StartupWeekend or accelerator programs like TechStars and Y-Combinator have been designed for startup ecosystems in the US or more precisely for some US tech-savvy cities.  However, when you implement such a program in a different geography or context, you may see that several things do not fit. It could be the stage of the companies supported, their needs in terms of support, the availability of the mentors and investors, the pitching capabilities or the young entrepreneurs, etc.

For instance, after organizing the first StartupWeekend in francophone sub-Saharan Africa in Dakar, and hosting another in Saint-Louis, CTIC decided to stop using its entire team and their resources to deliver this model. Why? Because although we may have been successful in terms of attracting media and stakeholder attention, we did not create startups mature enough to integrate into our acceleration and incubation programs. Furthermore, the governance structure of StartupWeekend stipulated that only one person from the community could serve as the entry point in Senegal, which made it difficult for CTIC to include the event in its strategic plan.

As a result, we started thinking about creating a new event more adapted to our environment. A few months later, we had a “minimum viable product” that we launched in Dakar as the first Tekki 48, a two-day startup accelerator event where companies are selected in advance and the culmination is a combination of the final pitch and several deliverables the teams have to produce during the weekend. These include financial projections, communication materials, a customer base description, an action plan and a business model canvas. For CTIC, Tekki 48 has two core objectives: to raise the awareness of local decision makers of their tech ecosystems, and filter motivated and promising startups. However, Tekki 48 will continually evolve, because as the creators of this event, we don’t have to ask permission to transform it as long as we learn and our ecosystem evolves.

–        Another reason to localize your events and programs is to encourage the natural adoption and acceptance by your tech community and sponsors. For example, using local names, concepts and ideas makes it easier for people to relate to your effort, and reduces the belief that foreign influence is too significant. However, taking this path can be more difficult at the beginning when you have no track record of success. But once one or two of your local events have worked, you start creating a brand that people recognize and belong to – and that’s a terrific victory. In our case, we named our event, Tekki, which means “success” in Wolof, the national language of Senegal.

The Challenges of Localizing Your Tech Event

–        On the other hand, an internationally recognized brand and concept is easier to present and to pitch to partners, especially if you don’t have a long history as an event organizer. It also gives you the time to build the skills of your team by using an existing concept, because you follow the canvas the international organization has developed for you. This helps you get to implementation quickly because you can focus on the logistics, which can be pretty difficult to manage in Africa on a small budget, and pay less attention to the model and program.

–        The second beautiful thing about global models like StartupWeekend is the community and international recognition. Organizing such an event can put your city “on the map”. Even though it’s just an event, it seems sometimes as if a country with no StartupWeekend is a country with no tech ecosystem, so it helps you be visible and build links at a global level. This international community will then help you learn and grow.

In conclusion, I would advise you to carefully think about what your ecosystem and organization need before involving your hub brand, team and partners in large-scale events. I believe that we need many more events in our countries in order to see entrepreneurs blooming everywhere. This includes events like Startup Weekend and barcamps, because they are fast to implement and have a clear value in building communities and raising awareness about entrepreneurship and technologies. But we also need events and support programs precisely adapted to the need of our organizations and ecosystems, and which belong to our communities. Our goal as hubs is to empower people, so let’s empower ourselves first.

NOTE : this article has been co-written with Tayo Akinyemi, Director at Afrilabs, the pan-africain network of incubators and tech hubs – and first published on the afrilabs’ blog – Thanks Tayo !

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