Archives for posts with tag: Senegal

l_201

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.

Advertisements

1410688_327963127344344_2058674942_o

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 !

—————

HumanIPO_Logo-624x169

Note : this article is the original version of an interview given to the great site Human IPO and first published under the title :  Senegalese accelerator secures $150k for startups this year –   Thanks @ Tom Jackson

– What is the idea behind CTIC, and how does it work?

CTIC is the first accelerator and incubator for IT entrepreneurs in Francophone sub-saharan Africa. Created 2 years ago as a public-private non-profit organization, CTIC’s vision is to support the best IT entrepreneurs based in Senegal but having a global or at least regional reach. We have been supported from the start by great partners like the World Bank Infodev program, the German cooperation GIZ, the European Union, the Senegalese Government, the operator Orange and other smaller local private partners. The big idea is to have the government involve to provide facilities, electricity and also to facilitate access to public markets for our SME, but it doesn’t interfere with CTIC’s the business-oriented management style. Our business model is based on a percentage of the revenue growth of the companies we support – if they don’t grow, we don’t get paid. We have two programs: the incubation for existing companies already generating revenues which goes up to 3 years, and the accelerator for innovative startups teams which last 6 months. We don’t take equity so far in the accelerated companies, the accelerator being more for us a way to increase the pipeline of venture and to select the best for our incubation program. We have a team of 8 full time employees.

– Do you provide incubation?

Yes – we provide private office spaces to our companies (but also support larger companies having external offices), business development and contract negotiation, financial and fiscal management, media partnerships, community management, dedicated events if you want to showcase your product and of course access to finance. We now have few local partners directly seed funding our companies and startups.

– How are you funded?

We started with grants from the WorldBank / IFC, Orange, EU and the Government. After 2 years of activity only, we are now able to cover 45% of our annual budget with the revenue we generate from our companies and few business development services like consulting and events. We hope to be fully sustainable by 2016.

– What potential is there in the Senegalese tech space?

Senegal has for us a tremendous potential. Of course the market is small (13 million inhabitant) but Senegal has been traditionally the entry door to Francophone sub-Saharan Africa, which represents a +350 million people market. For historic and administrative reasons, 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. Third, Senegal has a very good higher education system, with more than 200 institutions and several international campus. The country attracts a lot of students from other francophone places which created a large talent pool to tap in if you are starting your business. Finally, the IT infrastructure and connectivity is good and the mobile penetration rate is close to 90% now. 3G is well used and 4G is in its pilot phase. Last but not least, the quality of life and security is one of the best on the continent – and that also is important for a tech ecosystem!

– What is holding it back currently?

We need more private investment at the seed stage. We now have several VC based in Senegal or looking closely at it, but we need 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 of 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 (but not for CTIC’s ones!)

– Does Senegal have the potential to compete on a global scale through ICT?

Surely. At least we work night and day at CTIC to achieve this! 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. We also believe that with the internet penetration rate growing rapidly, Senegal starts to be an ideal place to test business models and products for the francophone and global market. We now need to attract more international private investments (and not only from France!), but we are sure that with the political stability and the recent visit of Barack Obama, US investors are closely searching for a way to enter this region.

– What achievements can CTIC point to so far? Any high points?

We have graduated our first company, People Input, which is now the largest digital agency in Francophone Africa with around 30 employees and a presence in 3 countries. They of course have a great team but we did a great job together structuring their business development, getting access to public commands and gaining international partnerships and visibility. We have so far incubated 16 companies which are all still in business and 30 startups teams. The average revenue growth of our companies was 85% in 2012, up from 33% in 2011. In 2013, we have been able to secure around $150,000 in innovation investments for our startups and one of our incubatees received a series A funding from an international VC.

– What does the future hold for CTIC?

We are glad to have reached an interesting level of national and international recognition in only two years of time. CTIC is now involved in all major discussions at the top level in Senegal regarding ICT and entrepreneurship which helps us lobby for our entrepreneurs. The demand being high, we hope to move into a bigger building soon and thus we now need to better structure our team and internal processes to be able to scale rapidly. We want to develop better our soft landing program to facilitate entry in West Africa to foreign tech companies. We are also working with our original partners to replicate CTIC’s model to other regions of Senegal and to other countries. Niger incubators is already launched and Mali and Gabon are on the way. We will also keep on structuring the IT angels community and hopefully once we will have enough of them we could try to develop an equity based model for our accelerator program. Indeed, still a lot to do, but thanks to Human IPO, we’ll keep you posted!

20130516_184844

Note : This article has been written By Dinfin Mulupi and first published on How We Made It in Africa.

French-speaking Africa has often been approached cautiously by investors and companies from English-speaking countries within and outside the continent. However, the region is being viewed as an exciting region to do business as more local and international companies enter the market.

The Francophone Africa region  has a total population of more than 300 million people which some of the big economies being Senegal, Cote d’Ivoire, GuineaRepublic of the Congo, Cameroon and the Democratic Republic of the Congo (DRC).

Technology, according to Yann Le Beux, Catalyst at CTIC Dakar, the regions first incubator and accelerator based in Senegal, is one of the sectors expected to thrive in the region in coming years.  While some of the countries in the Francophone African region are politically insecure, Senegal is quite stable making it a good entry point into the region.

“Senegal is a very good base to start a business because people are well educated, very talented, there is good infrastructure and a lot of companies are headquartered in Dakar making partnerships easy and accessible. It is a good entry point into the rest of Francophone West Africa,”

Le Beux said Senegal’s market is mature adding that the country has a good technology infrastructure network with three mobile operators and about 98% mobile penetration.

“The technology market there is actually mature. It is not a very large market in Senegal but, what is interesting is that a lot of companies are headquartered in Senegal and target the entire Francophone regions and its 300million inhabitants. So, there is a lot of opportunities,”

In 2 years of activity, CTIC Dakar has incubated 15 companies generating revenue and has supported more than 30 startups drawn from Francophone West Africa.

“Generally, a lot of Senegal companies do well when they go to Ivory Coast, Burkina Faso or Cameroon. That is an advantage. The companies that we support at CTIC Dakar may have between 5 and 30 employees but already half of their revenue is made outside of Senegal”

CTIC Dakar is currently focused on supporting high-growth tech companies and start-ups because ‘there is not enough of them’ in the region by linking youthful tech enthusiasts with more experienced entrepreneurs. The incubator for IT and mobile services entrepreneurs offers training, business development, financing and linkages with industry players and public decision makers.

“There is opportunity to use technology to create linkages in other sector such as agriculture, tourism or education which are big in Senegal. We still have basic needs on this continent that have not been addressed using technology yet. We see a lot of opportunity for enterprise products,”

Companies that choose to venture into the region through Senegal have to contend with the challenge of accessing well trained and experienced manpower.

“We need more training in this area in Senegal. Generally, all over the continent these skills are lacking.  Financing is also a challenge because we don’t have enough early-stage private sector investment in Senegal. We need more business angels to bring seed capital to startups but we know that few venture capital funds like I&P (“Investisseurs et Partenaires”) are already based or looking at Senegal.

Local entrepreneurs in the country also have to battle with cultural expectations which stifle their business endeavors.

“The family is something very important in Senegal so, as soon as you get your diploma you are expected to start giving back to your family. Starting a business means you have to borrow a lot,”  says  Le Beux “This makes it difficult for one to start a business because they are expected to give, when what they need is other people to lend to them money to support their start-up. For some young entrepreneurs who start being profitable, it is not easy to find the right balance between helping the family or investing back in their growing businesses.”

He advised companies interested in investing in Senegal to hire the right people and form partnerships with local companies.

“As an investor you need to find a good person that will support the structure that you have. You need to have a reliable local team that you trust,”

English speakers, Le Beux added, should not shy away from Francophone Africa since they can ‘easily get around without speaking a word in French’ if they get help from local partners… like CTIC Dakar !

ORGANIGRAMME-copie-1024x768Amorcée depuis les années 90 aux Etats-Unis, la fièvre de l’entrepreneuriat TIC et des startups technologique est maintenant présente aux quatre coins du monde. Récemment, l’Afrique à rejoint le mouvement et de nombreux espaces co-working et quelques incubateurs ont commencé à émerger dans la plupart des pays et surtout au Afrique du Sud, Kenya, Ghana, Nigéria, Sénégal et Côte d’Ivoire. Leur but de ces organisations est de dynamiser les « écosystèmes technologiques » (communautés de développeurs, grandes entreprises, universités, etc) et/ou d’accompagner les porteurs de projet ou entreprises déjà établies dans leur croissance. Ces modèles nouveaux d’accompagnement entrainent la création de nouveaux postes, en général très centrés sur le relationnel et la connaissance des phases de développement d’une entreprise technologique. La double compétence TIC et Business est en vraiment recommandée. Voici une liste non-exhaustive de ces nouveaux métiers. Gardez à l’esprit que ces organisations se comportant la plupart elle-même comme des start-ups, les limites de ces postes sont larges et les personnes restent en général très polyvalente. Le poste de « Catalyst » que l’on trouve dans certaines structures par exemple, est souvent un mélange des trois profil ci-dessous.

 

Community, Digital et Event Manager

Personne en charge de gérer la présence de l‘incubateur et de ses entreprises sur les réseaux sociaux – les plus pertinents en Afrique étant Twitter, G+ et Facebook – et sur le web en général. Cette personne anime la communauté « online » mais il est très important qu’elle le fasse également « offline », en allant à la rencontre des gens et communautés de développeurs, des entrepreneurs et des décideurs du secteur TIC. Cette personne par ailleurs doit en organiser des événements (compétition de startups, panel de discussion sur l’entrepreneuriat, témoignages d’entrepreneurs, etc).

Qualités requises : grand sens du relationnel, connecté 24h/24h sur les réseaux, compétence de développeur est un plus, très bonne organisation et capacité de gestion du stress importante pour les événements.

 

Business Developer

Profil plus présent dans les incubateurs et que dans les co-working spaces. Personne en général senior ou junior plus et ayant un très bon carnet d’adresse. Cette personne est en charge de trouver des nouveaux marchés aux entreprises accompagnées par l’incubateur. Elle prend et accompagne les entreprises pour leur rendez-vous avec des prospects et aide à la négociation des contrats. Son rôle est ensuite de former les équipes commerciales des entreprises pour qu’elles puissent le faire d’elle-même. Ce poste est vraiment clés pour la croissance d’une entreprise car en général les fondateurs ont un profil technique et structurent assez mal leur déploiement commercial. Cette personne peut selon les organisations s’occuper aussi du business development de l’incubateur et lui trouver de nouveaux clients (entreprises à accompagnées), organiser des formations ou certification payantes ou négocier des prestations de conseil auprès de nouveaux incubateurs, qui seront réalisées par plusieurs personnes de l’équipe.

Qualités : carnet d’adresse, business focus, connaissance général des technologies, talent négociation

 

Hub manager et directeur d’incubateur

Ce poste varie grandement en fonction de l’organisation mais en général cette personne gère l’équipe et le développement de la structure, la recherche de financement et supervise ou gère la comptabilité. Elle aide à la visibilité locale et internationale de l’organisation et tisse des partenariats avec d’autres incubateurs, des réseaux, des universités, des bailleurs, des multinationales dans plusieurs pays. Elle peut également faire du Business Developement pour les entreprises et les conseille sur leurs modèles économiques, levées de fonds ou appel d’offre. Elle gère ou supervise également la création de nouveaux programmes d’accompagnement et d’événements. Cette personne travail enfin à la conceptualisation de l’offre de service de l’incubateur et réfléchis sur son modèle économique.

Qualités : très bon manager, carnet d’adresse, connaissance de l’entrepreneuriat TIC et du métier d’incubation, esprit entrepreneurial, talent négociation, capacité relationnelles et de présentation en public.

 Merci à Céline Thiam, Directrice RH chez Africsearch, pour m’avoir pousser à écrire ces quelques lignes…

Notes rédigées en partenariat avec Omar CISSE, directeur du CTIC, à l’occasion de la consultation sur l’élaboration de la Stratégie Nationale du Numérique du Sénégal en 2013.

Depuis plus d’une vingtaine d’années, les spécialistes étaient d’avis que le Sénégal regorge d’un potentiel important dans le domaine des Technologies de l’information et de la Communication.

  • Un environnement politique stable
  • Une bonne connectivité Internet
  • Un taux de pénétration du mobile de plus de 80%
  • Plus de 350 entreprises TIC
  • Une contribution de 7 à 9% des TIC au niveau du Produit Intérieur Brut

Cependant, force est de constater qu’aujourd’hui, ce potentiel n’est toujours pas assez exploité et que les TIC au Sénégal n’ont pas connu le développement attendu. Le développement des TIC au Sénégal ne saurait se faire sans des entreprises fortes capables de porter cette économie.

Constat

Cependant, il faut noter que :

• La contribution au PIB est essentiellement portée par les opérateurs de télécommunication et que la part des autres entreprises TIC est très faible ;
• La plupart des entreprises ne dépasse pas les 3 années d’existence ;
• Rares sont les entreprises qui font de la recherche développement du fait qu’elles sont souvent dans un état de survie et que le court terme est leur priorité
• Il n’existe pas de fonds d’amorçage pour des entreprises qui démarrent

L’environnement n’est pas toujours aussi propice au développement des entreprises :
• Le Sénégal ne dispose pas d’une vision clairement définie dans le secteur des TIC. Ceci ne favorise pas l’émergence d’une véritable industrie des TIC
• Le financement par les banques est difficilement accessible par les entreprises TIC du fait qu’elles ne disposent pas souvent de biens matériels pouvant servir de garantie. L’entreprise repose plus sur les ressources humaines et des immobilisations incorporelles. Il n’existe pas aussi de fonds de garantie dédié à ce secteur comme on en trouve pour d’autres ;
• L’investissement privé n’est pas assez structuré dans le secteur des TIC. C’est ainsi qu’il n’existe pas d’outils d’investissement qui pourraient accompagner les porteurs de projets à différents stades de développement (business angels, Venture capitalists, etc.)
• Il existe une faible connexion entre l’Université et l’entreprise. Ceci fait que l’innovation au sein des universités n’est pas vraiment exploitée par l’entreprise et que les véritables problématiques de ces entreprises ne sont pas toujours adressées par les universités. L’entreprenariat pourrait aussi être mieux développé à l’Université dans des domaines qui gagneraient à être mieux adressés par les TIC (agriculture, pêche, élevage, industries culturelles, etc.) ;
• Il existe très peu de structures d’accompagnement pouvant encadrer les entreprises TIC dans leur développement. Le secteur gagnerait à disposer d’un cybervillage, de plus d’incubateurs, de Co-working space, d’organisations qui accompagnent les entrepreneurs, etc. ;
 

Propositions

Les réponses à ces questions sont connues et ont fonctionné dans d’autres pays. Par exemple :
– fonds de soutien à la R&D et l’innovation (type OSEO en France ou SBIR aux US)
– fonds d’amorçage pour les PME TIC
– fonds de co-investissement lié à un club de Business Angel pour amorcer l’industrie du capital risque
– incubateurs et accélérateurs viables économiquement mais soutenus en partie par le gouvernement (son implication du gvt dans ces initiatives est indispensable pour amorcer le modèle)
– co-working spaces et espaces de création pour les développeurs et designers
– programmes de recherches financés par les industriels dans les écoles et universités
– programmes d’entrepreneuriat dans les écoles et universités

– établissement de partenariat avec centres de recherche ou entreprises étrangère, pour amener des technologies de pointe sur le marché Africain

– initiative nationale de promotion de l’entrepreneuriat tech (cf. (cf. Startup America, Startup Britain, Startup Chile, etc)