Will the real African startups please stand up?



With so much focus on advancing the entrepreneurial ecosystems around African startup hubs at the moment, more and more Africans are starting their own businesses by choice as opposed to necessity. But, not all interesting ventures that launch can automatically claim ‘startup’ status.

While the essence of successful innovation-driven Silicon Valley startups can be found in the African spirit of Ubuntu, African ventures are still mostly backed by efficiency-driven entrepreneurs. Nevertheless, game-changing startups from South Africa, Nigeria, Kenya and Ghana have led the technology revolution on the continent with homegrown innovations, highlighting the contribution Africa can make as an emerging market in this space. As the saying goes: ‘Africa is not for sissies’.

Things work differently in Africa and the startups that embrace the unique differentiating factors in their local markets succeed because they are African and not in spite of being African. Here’s how:

Take risks in pursuit of scalability

Launching a startup differs from starting a new traditional business. Without getting tangled up in definitions, Wikipedia notes that it’s a company in search of a repeatable and scalable business model, and adds that the phrase is most often associated with high growth, technology-oriented companies.

In the post: Startup Success: Throw Away Your Business Books, Scott Allison points out that to really understand what a startup is, it helps to understand what it lacks compared to a traditional business. It lacks a repeatable and scalable business model and it lacks certainty.

So basically, unless you are in pursuit of doing something new or different with high growth prospects and an uncertain outcome, you are not a startup — this is not necessarily a bad thing, as many great early-stage business are built on more risk averse strategies.

Redefine success measures

Startup founders generally love what they do and therefore have different measures of success. Paul Buchheit — creator and mastermind behind Gmail — noted that while financial reward is nice, aspiring startup entrepreneurs should first and foremost seek out risk-taking opportunities where they can learn. He added that startups allow more innovation and flexibility. This view is shared by various founders who are Africa-focused, globally mobile and passionate about technology.

Creative Spark’s Matthew Buckland commented in a recent article on SA startup fever saying that the startup environment is highly fulfilling for driven and creative people who are typically motivated by building something more dynamic and by a desire to change the world rather than working the conventional way.

Serial entrepreneur Wesley Lynch of Snapplify does not plan to ever grow his startups beyond 100 people employed while he is involved, as he only works with people that he really likes.

This seemingly distorted view of measuring startup success was echoed by Christo Davel (of 22seven) at the Net Prophet 2012 tech startup conference in Cape Town:

A successful entrepreneur is not about how much money you’ve made – it’s about how much fun you’ve had.

Embrace adversity

One of the most interesting things about entrepreneurial success stories is the hardship and failure along the way. Most successful entrepreneurs have faced adversity on their path, and some admit that without that, they would not have had a real problem to solve.

In fact, one of Silicon Valley’s most fabled entrepreneurs – Elon Musk – credits his hard childhood in South Africa with giving him the tools he needed to triumph. He is now worried that his kids are too soft to be entrepreneurs because they don’t face enough adversity in the US.

So it seems that in a roundabout way, the problems entrepreneurs face in Africa could also be the source of our greatest entrepreneurial competitive advantage. And because of the significant challenges that Africa faces as a continent, there is an untapped market of solutions that can be packaged as business opportunities.

Combine skill, passion and a world-changing vision

Many African entrepreneurs are in love with the idea of being startup founders without a real understanding of what it takes. There are countless types of entrepreneurs, but to really succeed in the startup space you need to have a distinctive craft or skill.

Be passionately great at something and align your ideas with your vision –- a vision that is able to change the world or some niche corner of it. Chances are good that your ‘unique’ idea that is solving Africa’s challenges is already being executed in another emerging market in some format, and the only way to stay ahead is to evolve your thinking and approach in response to external market forces. To do this you really need to understand the market and ‘your world’.

Nikolai Barnwell (who runs Kenyan based startup accelerator 88mph that targets the East African mobile and web market), notes that the successful startups in Kenya succeed because they create products that are technically relevant to the devices that the Kenyans use, and also content that is relevant in their local context – e.g. local ringtones, local football news, etc. The mobile web, now more than ever, is about location. This is as true in Kenya as it is in other more developed markets.

Integrate action and analysis

Action and analysis are tough to separate in a startup environment, so real startups just start. Founders follow their gut and dive in without over-analysing and waiting for all the answers, but with a readiness to change course quickly as required. Unlike managers in big corporates, entrepreneurs don’t need lengthy approval processes to act. Founders improvise and look for solutions as soon as problems arise. Holes are plugged quickly and strategies tweaked as events unfold. If only government support structures for African entrepreneurship initiatives followed the same boldness, there would be less knowledge gathering and think-tanks and more do-tanks.

The Harvard Business Review on Entrepreneurship notes that profitable survival requires an edge derived from some combination of a creative idea and a superior capacity for execution. Ideas – as stimulating as they are – are not enough. As Derek Sivers illustrates in this post, ideas are just a multiplier of execution.

We are in the golden age of entrepreneurship, but now that everyone is a so-called entrepreneur, the word is losing its edge. Whether you embrace the label as entrepreneur or not, it is proven that high-growth ventures have a positive impact on many business and societal aspects in a country. And, successful startups are the catalysts for high growth.

The real African startups need to embrace diversity, passionately pursue something truly different and stand up in the face of uncertainty — to change the world!



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