TMS Ruge is one of the pivotal personalities in the startup ecosystem in East Africa. Although he spent many years studying and living in North America, he seemingly never left his country of birth. He is a prolific voice in international development discourse and a champion for the promise of technology in Uganda’s development.
But he doesn’t stop at discourse, he practices what he preaches. He is the co-founder of Hive Colab, launched the rise of Uganda’s tech incubator and co-working spaces. Apart from supporting other startups, he is also behind a number of startups in various market sectors.
Notably, he is the founder and CEO of Raintree Farms - a Masindi based agri-cuetical Company focused on medicinal crops, as well as a co-founder at Remit – an online remittances platform.
Ruge has not only seen the ecosystem from its inception but been at the center of it. I caught up with him and we shared a lot in a conversation that lasted more than half an hour.
External Validation
If you have ever talked to Ruge, heard him speak anywhere, or followed his ‘rants’ on twitter, then you know that he is a proud African and an ardent advocate for self-determination.
One of the issues we discussed was the fact that many Africans (black to be specific) still feel they need an outsider (white to be specific) to believe in something before it is considered up-to-standard, viable or good enough.
This has, in turn, bred what has come to be known as “white fronting” where a white person is brought onto the startup team to go around the difficulties that come with running a startup as a black person. A couple of African startup founders, looking for external funding or market validation, have ended up taking this route.
When asked about it, he says “this issue spreads not only across just technology but everything. Our very individual identity and development hinges on this slave mentality. This colonized mentality where we need outside validation in order to think for ourselves”.
On the very day we had the conversation, he tweeted that morning that there was a meeting where Korean businessmen were teaching the Ugandan parliament on how to love Uganda.
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This is a thing that happened with our parliamentarians. How to love your country! Do you really need to be taught that? Do you need that validation from an outside source? We are waiting to be told how to wash our feet. It's like you [a fellow black man] telling me [to do something] is not enough, I need that guy [who is foreign] to come and tell me in order for me to believe it - Ruge
He went on to reveal that “one of the problems we faced starting Remit was this very mentality. We couldn't get trust with our own people. The first responses were like ‘you guys are frauds. You guys want to steal my money’ from people that had never even tried the [online remittances] system”.
Customers weren’t willing to try it out at all because the platform was made in Uganda and was innovated by Ugandans. Therefore, in their thinking, "the thing was fake”.
According to Ruge, these doubters are the same people buying fake things from China thinking 'because it is foreign, then it must be good.' This trend not only makes us our own worst enemy, it is also stifling innovation by Africans.
If you look at our demographic statistics alone, we are in a lot of trouble if this mentality continues. If we are going to develop and break out of this dependency cycle, we've got to think differently.
Yet, Ruge believes this trend can be reversed if Africans are willing to cheer on their own. They should be able to front and celebrate any success attained. This should also be followed up by constructive criticism for improvements to be made.
Expat Founders
Having talked about White-fronting, we were also prompted to discuss the issue of Expat founders. This also stemmed from the fact that a report from GALI stated that “foreign (typically US-based) investors in emerging markets find it easier to invest in expat founders.”
Asked whether the report used Expat founder to mean whiter founder, Ruge exclaimed, “Absolutely right! There's no way most startups in Africa were going to get funding without those [white] guys”. He also adds that that’s why there is the white-fronting strategy among African startups in order to be able to get some funding.
To Ruge,
“money follows like. It stays in circles that it understands. It rarely ventures out in circles it doesn't understand, and when it does that, the only time it breaks that paradigm is when it is guilt driven. When it is alleviating guilt for the money holder in the form of donations.”
He also points out that it is easy for the very people to give donations yet when asked to convert that into risk capital for African founders, the bar is set very high.
“To invest [in Africa] means they have something they want to buy. And [that] shutters their perspective of what Africa is and what it is capable of", adds Ruge.
In conclusion, Ruge says “the people that are coming in as expat founders actually understand that [the funders have that kind of mindset]. They know that it is easier for them [white founders] to actually raise money here. They see an opportunity where others [Africans] have failed to accelerate. A person comes in here with an idea same as Remit but it is easier for them to raise capital.”
Local Capital
Speak to a couple of African startup founders about their challenges, and you’ll find that access to funding is on top of the list – at least for the majority.
When asked if there’s money in Africa, Ruge says “there's money here.” However, to him, what were are missing is the vision.
“You see all these buildings going up. We have the money, we are lacking vision and lacking taste. People have money but just don't know exactly what to do with it. People's mindsets have been tuned to real estate", he adds.
Ideally, in Africa, we call an investment something that one can see and touch. When it comes to digital and tech investments, people who have the money are yet to catch up. He says “for our sector (tech), it is going to be impossible to raise capital if that's the mentality.”
That kind of mentality of not thinking outside the box of the types of investments that are still holding back local investment in startups. However, with time and a few success stories, Ruge says “people will be asking questions like ‘you mean you can actually invest in this thing and it returns money?’”
It is a matter of giving them the numbers of what it means to actually invest in a startup, tell them what a digital economy is and what the potential is.