Did you know that since 2012 over US$3.4 trillion in venture capital (VC)has been invested around the globe? However less than 0.5% (as in half of 1%) has gone to African startups?
The irony is that VC money is literally being thrown at Startups from everywhere.
Here's how it works:
Just to put things into context- large corporations like Google, Microsoft and Amazon are all on the lookout for new ideas. So they will fund as many 'seemingly good' ideas and then rely on the probability that one of those ideas will be worth billions.
For example- they can allocate a million dollars to 10 startups. That's $100k apiece. Out of those 10, not all will fail, and there's a chance that one could be worth 10x, 20x or even 100x as much within a year or two.
The key however, is that each of these investments should have the potential to recoup the cost of the the other 9 that fail and in addition, bring a profit.
So even if 9 out of 10 investments fail, they know that one investment that will shine can recover all their costs and more. So they aren't even scared about failure... and as a result they invest aggressively.
In fact they expect you to fail and will fund you even with a string of failures. (If you've ever applied for funding you'll note that their forms always ask the question: "Have you received any funding?" Those battle-scars work in your favour)
However African entrepreneurs don't seem to have that luxury. Even our own governments aren't investing in startups. FYI, you can't really do much with US$5k so hatisi kutaura izvozvo. With that said, I made a number of observations:
a.) Startups = Growth
While the words startup and small business are used interchangably, there is a huge difference. A startup is designed and built for super-growth. So oftentimes what we consider here as startups are really just new businesses.
For example- a chicken project is not necessarily a startup. However if you innovate and set it up to take on Irvine's then that's probably a startup. Better yet if you plan to make it regional.
b.) Lack of exposure
NgesiNdebele sithi "ukungazi kufana lokufa". We are literally years behind when it comes to innovation and all. Not even talking about fancy tech stuff... but even in simple things like farming and beauty. People are building mega businesses in all sectors, not just tech.
So let's read and stay up to date on industry trends. There are new innovations in all sectors... from using chicken feathers to make meat, to creating self-cleaning sanitary pads. Ngapha even some of the largest companies don't even have company email accounts and still rely on gmail. Yet that should be basic. Its standard. (Which is why you should contact me and get a website for your business. Cheap cheap. A respectable business person like you with no website? Hayi bo!!)
c.) Lack of support
We virtually don't have a startup ecosystem to support new ventures. Nxa ngisithi support I'm talking of financially, structurally, legally, socially, economically and so on. An ecommerce business like Amazon relies heavily on the reliability of the postal services, efficiency of the transport network and the backing of a sound financial and socio-economic framework. Replicating their model in Africa requires rethinking. That entire ecosystem thrives on the mutual trust of all parties involved.
So even the best African entrepreneurs end up relocating overseas because that's where their businesses can thrive. It's where decisions are made. It's where partnerships are formed and it's where money circulates.
When you see new products being launched, the question you should be asking yourself is "ngingakwanakwana njani la?" How can I partake of this moolah feast? Partner with upcoming local ecommerce sites to boost your detergent, cosmetic or handbag sales. Your success is their success... and vice versa. So they are most likely routing for you to min.
d.) Mediocrity is everywhere
We need to start thinking globally. That means targeting global markets and also coming up with products that can compete on the global scale. Think beyond impressing your mom, girlfriend or crew. Yeah it's cool that you can create a program... but benchmark yourself against the best. You're not doing this for props, your vision is bigger, right?
Another thing to note, is that you can make a product for Zim but Zim is really a small market. Ngoba with a population of 16 million and say about 4 million being urban dwellers, then we can estimate your available market at say 40k people... but from those 40k we can still narrow it down to those who will actually like your product and the number drops to a few thousand people.
So aim small but think globally. Or as they say in the movies... aim for the stars, so that when you fail, you'll land on the moon. Go beyond the ordinary and think beyond average. You're selling detergents, yes... but what can you do differently? What can you do to become world class? The world already has that old stuff... so give us something new. Phew😅 [ I'm giving you all this game for free... however let's not just be talkers.
It is against this backdrop that Asaqè was built.
The rationale behind Asaqè Business Pro
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| The Asaqe Business Pro Android app |
Our goal is to help entrepreneurs:
I. Develop a growth strategy
II. Write actionable business plans
III. Keep decent records
IV. Make data driven decisions
V.) Find a community of like-minded individuals
However, most people get intimidated by words like 'growth strategy'. They think of a retreat in Nyanga, with some industry specialist showing you complicated charts while you beg your eyes to stay open.
That's why we've gone a step further to make all of this so ridiculously simple. For example, a growth strategy starts with outlining your vision, setting foreseeable goals and coming up with a plan to achieve them. Asaqè comes with all the tools you need to nail this.
Download Asaqè Business Pro from Google Play
If you're building a startup, you're more than welcome to get in touch.
Much love, Likhwa
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