I recently read a piece by victor Asemota in the Guardian Nigeria title "Why African entrepreneurs need to think bigger" in which he challenges African entrepreneurs to think bigger in order to increase their chance of getting VC funding. For the author, it is not enough to solve local problems, entrepreneurs must think about growth and scale. Also exit while they are at it. The article sounded like an attempt to justify investor bias that was highlighted in the Bill & Melinda research report called “Breaking the Pattern: Getting Digital Financial Services Entrepreneurs to Scale in India and East Africa”, that reveals 3 companies got 72% of money invested in Kenya and 90% of funding for East African Fintech goes to founders who have come on from outside Kenya. The author begins by narrating an experience where a startup failed to provide due diligence documentation ahead of an investment. After reading the piece, I felt compelled to answer with my take as an African founder, born in France, raised in Cameroon and who started a company from Canada, looking at Africa with a 30,000 feet view. While I agree with most the issues raised in the article, I think the author failed to pin point one of main reasons why African entrepreneurs can't think big especially when they are local founders.
On solving local problems
When I started KASI insight in 2014, I wanted to help solve the data and information gap in Cameroon, my home country. I had just completed a business plan for my sister who was partnering with a French company to build a meat processing plant in Cameroon. The business plan was full of projections but lacked supportive research and data. How could we reasonably build a case for a meat processing plant when we couldn't even estimate the meat consumption patterns in the main urban centers? How could we possibly believe we had a shot at disrupting a market we had absolutely no visibility about when it came to the meat supply chain? Needless to say the business plan was rock solid on potential but completely weak on data and metrics -we headed for a total disaster. That experience led me to think that most of us in the diaspora or within the continent often make investment decisions with very little data and context. By the way anecdotes and stories don't count as reliable data sources when it comes to business plan. It was a local and personal problem that led me to think about solving the information gap. Naturally, I started with my home country and Cameroon was the pilot ground for our MVP. There is nothing wrong with solving a local problem in Africa, because of the shared characteristics of most African countries, no problem is too little or too local to be solved.
On thinking big
When you are born and raised in Nairobi and you've never been in Dar Es Salaam or outside of Kenya, it's understandable that your world revolves around what happens in Nairobi. Sure we have the Internet and social media today that gives us the impression that we are connected to the world. Unfortunately it is sound to argue that our understanding of the world is also a function of the physical connection we have with it; as I put it, We are human (be)ings, not human (know)ings. I was fortunate enough to live, study and work in 3 continents (Africa, Europe and America). By that seemingly meager virtue, I am now tagged a global citizen with the luxury of seeing Cameroon or Africa from another view point. A much wider one. This “problem-solver” mentality motivated my entrepreneurial journey to launch data collection activities in Cameroon, few interesting references and a good team later, the next step for us was to see if we could replicate in other countries. Why setup a process that only works for Cameroon, it's such a small market (roughly 24 Million in population) compared to Nigeria (160 Million in population) and prone to many risks ? Beyond the usual excitement of building a “multi-national” business, that question rang a bell. Replicating the business in Kenya forced a change of our initial requirements because the environment in Cameroon wasn't exactly the same as in Kenya. We took a step back to think holistically about different African countries and what requirements could work for most African countries. It took our team months to figure something out. In the end, we engineered a process that could work in most African countries and that we could roll out easily (within 2 months). Yet, that too was not without its own limitations.
Thinking big is easy and cheap. Acting big is expensive and not a luxury most local entrepreneurs have in Africa. For us, we needed to hire or partner with local people in several countries, then train and guide them. Despite the fact that I lived outside of Africa, we made sure we hired the right people for the local environment. The right people in our case were not the “I Just Got Backs”, far from it. Thinking big and scaling in Africa go hand-in-hand with thinking small and acting local.
On blaming rather than helping
I read an article by Sadibou Sow called “Stop looking for the next Zuckerberg in Africa. Mark wouldn’t last a day in here …" I very much agree with that assertion. Starting a business in Africa is hard, very hard. It is very easy to blame the entrepreneurs because they can't think big or they don't have an exit strategy. Entrepreneurship in Africa is often a matter of life or death, it is a short-term "bread-winning” necessity for most average less fortunate local entrepreneurs. How do we push them to think big? How do we give them tools to act big? I don't think African entrepreneurs are not ambitious enough to build global company. Far from it. Tech leaders on the continent have been spending most of their time trying to make Africa an attractive destination for investments and not enough time trying to nurture local entrepreneurs into solving local problems with a wider view. Yes we have incubators, angel networks, pitch competitions – all copy and paste models from the US/European style ecosystem. A critical question we could ask ourselves is: Are these models made for Africa? If so, why?
When it comes to investors, local entrepreneurs should also be careful when dealing with VC. It is always unwise to reveal your business idea and your strategy to a stranger even if he or she promises to invest if the business is sound. Always, Always stay one or two steps ahead of to-be investors. It will protect you if your idea ends up in the wrong hands or it will impress the investor if you over deliver. Your team, your dedication and your market (customers) are far more relevant to your success than investors' money.
On helping African entrepreneurs act big
When we started KASI, we wanted to help entrepreneurs from across Africa by providing reliable data and actionable insights from most African markets. Whether you are from South Africa, East Africa, Central or West Africa, we wanted you to be able to get market research done at a reasonable budget and time frame. We believe that African entrepreneurs don’t think big and can't act big because they lack the kind of research and insights that will give them the confidence to go beyond their local markets. It's that simple. Access to reliable data and insight in Africa is a cause worth fighting for, this objective drove us from day 1 to build a scalable and global offering because we didn't want any entrepreneur left behind. Today, we offer market research, consumer insights and data-driven advisory from 7 countries in Africa. In less than 3 years we have helped several local and diaspora entrepreneurs access multi-country research to challenge their business / investment assumptions. Because of what we do, local entrepreneurs have started scaling businesses in apps development, transportation, restoration, training, recruitment and e-commerce sectors. We push our clients to start thinking about more than one market early on and build solutions that are applicable to different markets.
How we can help?
Business thrive on the availability of markets, you are only as good as there are customers willing to buy what you are selling. Though we believe each entrepreneur could trust their guts for the one innovative and game changing idea, we insist they trust real market data before putting a cent into that idea. Problem identification is not usually a problem in Africa, just take a trip and as soon as you land, you will find gaps and problems to solve. How to solve the problem is usually the issue. A lot of the entrepreneurs we work with have limited resources to even afford market research. We encourage them to partner and syndicate research projects, as added incentive (or corporate social responsibility) we co-fund multi-market research projects; all with the sole aim of delivering factual market data to local entrepreneurs. Again, what was imagined as a local solution for my home country has now turned into a scalable award-wining powerhouse for innovative market research in Africa.
For us, helping African entrepreneurs build African multi-nationals, starts with providing them with data and insights at scale.
We encourage all entrepreneurs interested in building businesses in Africa to connect with us and hear first-hand stories of businesses we helped build in over 10 countries.