I recently read a piece titled ‘Why African entrepreneurs need to think bigger’ in which he challenges African entrepreneurs to think bigger in order to increase their chance of getting venture capital 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 three companies got 72 percent of money invested in Kenya and 90 percent of funding for East African Fintech goes to founders who have come from outside Kenya.
The author begins by narrating an experience where a start-up 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.
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 centres? It was a local and personal problem that led me to think about solving the information gap. 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.
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.”
Thinking big is easy and cheap. Acting big is expensive and not a luxury most local entrepreneurs have in Africa. Thinking big and scaling in Africa go hand-in-hand with thinking small and acting local.
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 Venture Capital. 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.
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.
* Yannick Lefang is the founder & CEO of Kasi Insight. Yannick has a background in banking, data and statistical analysis with a focus on financial services, telecom and engineering.