Building An Afrikan Startup - Penny-less.
Before we start, in case Ruto is reading this, I want to let him know that we are Fear-less, Penny-less, Party-more type of Founders. Hio startup bill haiendi mahali. #reject
Ruto aside, I think, the founder support ecosystem in Nairobi is going through the same problems Kenya as a country is going through; so much money, wrong allocation.
On average, Afrikan founders take quite a long time to launch products or raise money. The reasons are many but the major issues include man-made barriers such as inability to secure funding compared to their expat counterparts - we all know why. Just look keenly who gets funded in Nairobi.
Second, because of the misinformed idea that Afrikan founders are "high risk" and need to be educated on some "startup mechanics". This means that most of the founder time is spent on Zoom calls learning ideas that cannot be taught. You cannot learn how to build a business in a classroom. I do not think so.
Imagine you went to a dentist with an aching tooth and instead of plucking it out, they start teaching you how to pluck it. Infuriating, right? That is the situation here kwa ground.
With my 26.7yrs of life and 6 of that spent with enablers and investors, I feel like we try so hard to force businesses out of ideas. Which is retrogressive, if I was asked.
Honestly, we need to stop "forcing issues" with some of these startup ideas. This is slowly killing innovations here in Nairobi. The problem is with "whoever is calling the shots" Yaani, anayetoa pesa. You know who that is, Phillip, don't pretend.
I know this is because, the "shots caller" does not trust in our capacity to build successful businesses and are not willing to take the risk juu hawatujui anyway. Accelerators and incubators nao wamekua gatekeeper, you can't access an investor without going through one.
That is why some of you ask founders to provide CVs and portfolios, I wonder if they did this to kina Zuck. In fact, I do not think we would have ChatGPT today if Sam was a regular out-of-college Nairobi founder, not under you guys. It pains me to think of how many Sams have perished unknown in this ecosystem.
You know what I think; You can never tell a disruptive idea by passing it through a series of imported, biased test processes. Not in Afrika. Here, it is the market that makes this decision. Which requires a long enough runway. The quicker we get products to market the better. Hii story ya incubation wacheni, startups sio mayai bwana.
Startups are experiments. You cannot be sure of your business models within 3 months of an incubation program that involved 2.8 months of classroom affairs and a few product validation google forms. Surely?!
On the contrary, the same 3 months are enough to build test and validate MVPs if the right resources are put in place.
A Friend Bryan Koyundi says that the African Founder is the most trained and least equipped founder of all time. Yaani, we have been trained how to run businesses but have not been provided with the resources to do, yet we came asking for resources. Sad.
If you ask me, I think, the people at the forefront of enabling startups (incubators, elite founders, accelerators, etc) are not bold enough or are intentionally gatekeeping. Investors are scared, of a market they do not know, and guess where they find refuge?
Guys, we (local founders) are considered high risk type of founders, but Afrika which is where we have been all our lives is considered a high potential market😿. Sijui kama tunapatana. Can you feel the pain?
This is why our startup ecosystem is lagging behind because. Look at the startups that are raising money, and failing. Do an analysis. Tell me what you find.
I keep saying that in this market, you cannot build a business model or value proposition at that fancy co-working space in Westlands but ni kama hamskiii.
I keep asking myself, out of the thousands of startups that go through incubation programs in Nairobi, how many out there are profitable or at least standing? 🤷🏾
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Guys, I am convinced, 100%, that change is long overdue. A complete overhaul of the current timid and gatekeeping approach. We have to it ourselves as founders.
Fixing things, one idea at a time.
We have to start by asking ourselves what does the founder want? What should be done? What is the correct way forward. As a scientist, to me, it is simple, we need to equip innovators with the power to experiment and be creative. Instead of putting hundreds of business developers in a venture studio. Let us focus that money into research and development, create strong marketing pipelines and move on.
A typical Nairobi founder is simply looking for the liberty to build prototypes, iterate, launch and then validate a business model while in the market. This cannot be taught. It can only be done, kings & queens!
Instead of spending $50,000/yr on the so-called venture builders and the likes, a studio could focus this money to power at least 3 founders to experiment and launch products within a year. But the system is hijacked. Just like in Mr. Rutos government money is being allocated for the wrong use when the important use is obvious.
" We all have those friends that will take you out, buy you drinks, completely spoil you, but will NEVER give you a coin. African VCs are those friends. They will host events & conferences, run expensive programs, buy you food & alcohol, but will NEVER invest in your company" - Matt Magera
Imagine, to build a software MVP here in Nairobi, a non-technical innovator would only need $1000 - $1500, which by the way includes a extensive pre-development ideation process. This does not take 3 months. Just a couple of weeks and a founder has a product to test and iterate on. Vitu kama pricing and business models will be determined sokoni, as long as we are solving a problem.
For market research/customer interviews, all a founder needs are google forms🤌🏾, airtime, fare, and lunch. An upkeep of $350/Month is enough for a Nairobi Founder - we are budgeting masters. This is of course if we want the founder to commit full-time. If they have a job, they can handle it themselves. But we choose to pay a venture builder $4000/month to teach the innovator how to innovate. Again, just like Mr. Rutos government, this is simply amazing🙄
Going to market, is not that much of a big deal, a venture studio community is big enough to launch a product successfully. A simple post on LinkedIn, WhatsApp communities and X are enough! You know? "Today we are launching John's Product" and make sure everyone knows. That is enough.
This article is a call to shift from the current retrogressive startup development approach in Afrika to a R&D approach where founders are provided with the tools to research, build and test products without the hurry to squeeze businesses out of them. The liberty to experiment. Not all tech ideas will make business sense even in the first year, especially for this market.
The best of Ideas are realized through experimentation which would involve building and testing different ideas with a focus to solve a problem until the right one is found.
You might want to lie to yourself and say the money is not available, but I'd forgive you because you have no idea how much money is moving through these "enablers".
Ruto goes to the IMF and says, "we have millions of resourceful young people, fund me so that I create opportunities for them, comes home and buys Musalia a new house. "Enablers" goes to the VC and says "we have hundreds of smart, innovative founders solving local problems with tech, all they need is $100M to ship products" then come back and give us value proposition templates to fill🙄
Using AI to build the next jobs revolution. Co-Founder and CEO, Rocket Jobs 🚀 Building nAIrobi, the world's next AI capital.
5moI agree with this, 100%.
Startups need a lot more handholding and creating credibility to attract right kind of investors. A lot of startups believe their success and credibility has been established when they acquire an initial seed capital. Incubator programs have become commercialized. Issues are two ways. On one side startups need solid handholding from people who have done it in Africa, secondly the startups need to be more open to understand that the difference is significant between being able to raise initial money and scaling up profitably. Raising money and utilizing the same prudently require rigor. To understand Operational issues one need not necessarily go through a learning curve but should engage with people who can enable it.
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6moWhat an amazing read. Your words gave hit home🤔 My business is 3 years old and has a MVP. I have gone through various incubation and acceleration programs and not all are like that. However, I recently attended an incubation program where alot of money was spent on "training" on business plans and attending "workshops" in expensive hotels. All in readiness for the investment summit. Once the investors came and left, the funding they received was never disclosed and they went on to advertise new calls for new programs. Ours just died like that 😭 All the money spent on the hotels, food and to pay our trainers I estimate cost an approximate of Ksh. 400,000 in a span of 4 months. That could have been money well spent injecting in my business. That is 400k just for me. So multiply that by the total number in the program which was not less than 100. I honestly felt very discouraged. To make matters worse, they won't even give a certificate of participation 😢
I concur, the field, your users, are the litmus test, not how many incubators you go through 🤓 Consider combining Design Thinking in the early phases of the SDLC particularly during requirements gathering and design, then using SDLC for a structured framework to turn insights into a reliable software product. Some additional thoughts: 1. Be frank and honest with your customers esp those who are your fans: Let them know they’re part of the journey to test and validate as early adopters. They actually are happy to be part of your early journey if you can set their expectations that things may break. 2. Launch and iterate quickly: This is where most things break. 3. Automate feedback: Users don’t always remember details accurately, which is crucial for determining your V2, V3, etc. Most importantly, build with your customer. There are no shortcuts to this game. Some stages can be collapsed, but you still have to go through most of them.
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6moI agree with a lot of what you have said here. Just wondering however, what does a winning model for a successful African startup look like? Are you suggesting that the incubation model is entirely useless, it should be scrapped off and we adopt 'market' research? I put 'market' in quotes because for a truly successful research, you have to test the idea(some form of needs assessment), the users (sometimes innovators choose the wrong customers for a good product), the product itself and the market. The startup term I use is living labs. Some notes I have picked up from your article: from my experience, just online surveys won't do the work. If you can organise physical meetings, focus group discussions that would help. Observations is a great way to collect data on how your 'targeted customers' are likely to interact with your product. Something else to note, when we do product researches, we often always forget other stakeholders that are not necessarily users of your product but will be an important part of your go- to-market strategy. Anyway, now I am assuming an innovator has carried out this research, has validated, they now have a product and gets into the market, is the success of the startup guaranteed?