WHOSE IMPACT IS IT ANYWAY?

In Africa, we love to root for the little guy! We love the disrupter, the challengers of the status quo – we want a more effective and “just” society. So, when a startup emerges with the promise of “cutting out the evil middleman” we cheer for them. Their promise of impact is welcomed with open arms. 

Stories of Mama Mbogas and Baba Dukas (individuals selling vegetables on the roadside or running neighbourhood kiosks) having access to more affordable products by cutting out middlemen warms our hearts, even more so because – thanks to technology – they do so more conveniently and get access to other services like credit to help them accelerate their growth. 

So, no doubt the end benefactors of the “dead” middlemen thrive, and we feel justified in our cheering. 

But have we asked ourselves how much of what we saved by “killing” the middlemen actually goes to these benefactors – the Mama Mboga and the Baba Duka? How much is their share of these savings, and how much ends in the hands of the disruptor? And, who is the disruptor? Also, what happened to the “dead” middlemen and their families and everyone who depended on them and their livelihood? Moreover, what happens to the Mama Mbogas and Baba Dukas who didn’t sign up for the disruption and who are outcompeted by the thriving Mama Mbogas and Baba Dukas?

Even if we optimistically assume the disruptor only keeps half of the savings to themselves – then we as a community only benefit half. Because the disruptors – the successful ones at least – are not really part of our community. According to statistics, more likely than not, they are not started by local entrepreneurs. And, even if they are, as their business succeeds, it attracts investors that certainly are not local. When we look at the good disruptors, as they grow they need a strong C-suite to manage the larger organisation (on behalf of the investors). In the vast majority of cases, these are very expensive expatriates.

So with some luck, the impact that we so passionately were cheering for may be impacting foreign investors, expatriate executives and non-local entrepreneurs much more than it impacts us, our communities, and the benefactors. This may give reason to pause!

I am not trying to hang these disruptors out to dry - we've worked with many of them over the years. I wish them success, and I applaud the work they do. But we must ask ourselves why this is the case: why can more of these disruptive entrepreneurs not be local; why can more investors not be local; why can’t more of our talented and experienced senior executives not take a chance on a disruptive startup run by a local entrepreneur that is funded by local investors? Do we have to import everything? Ideas, capital, skills… How do we learn to appreciate that which is African - and create impact for, by and of us?!