I don’t want to be the one who spoils the party but we have done enough counting of the technology hubs in Africa. It’s thus high-time we moved to the outcome and impact of having these hubs.
This includes; the number of investable startups, skilled workforce, investment raised and meaningful partnerships. These should be the new measurement of progress and success of the African innovation ecosystem.
By February 2019, I would have marked exactly 7 years in the African innovation and tech ecosystem. During that time, I have published a few tools, written some blogs and trained in a few courses. In the same period, I tried my level best to share my personal experience in the best way I can. This has been through my work with three innovation hubs. I supported in the launching of a few others and currently owning one – Sahara Ventures.
While listening to an interview of Shola Akinlade of Paystack – who currently is being hosted at YC – a question came into my mind. After 10 plus years of the hubs revolution in Africa, to what extent have we been able to support entrepreneurs and generate concrete success stories in numbers?
The question doesn’t mean to undermine the effort. But rather to find out if what we are doing is enough. Because, Paystack, in a period of 2 years at YC, is a completely different company.
Now, can we create programs that can actually transform our entrepreneurs in residence? If not, what are we missing?
The innovation ecosystem in Africa has evolved and a lot has happened in the past few years. From the early days of White African Blog, Savannah Fund, iHub, Kinu Co-creation Hub, Pivot East, BRCK, and more. To now companies getting acquired and some raising million dollars across the continent.
Some might think we are already in the promised land. Yet, if you do enough analysis on where or how these companies that receive investments are emerging, you will realize that very few have actually been supported by the local hubs to at least reach the mezzanine stage.
Very few hubs, out of the 400+ mentioned by different reports, can stand proud and tall, exclaiming “we are responsible for the African Unicorn X”. And add that through their “technical support and mentoring it is how they have managed to reach there”.
Most of the founders of successful “African Unicorns” might have some associations with the local hubs, but not necessarily supported by them.
Founders of these successful companies actually share a few traits in common. For example, they have a strong corporate background, went to good schools, they are coming back home after staying for years abroad, they have a strong network or work with foreign co-founders.
They really don’t have much to do with the local hubs. Except for attending events and meetups. In turn, the hubs also don’t benefit much from their success either, leave aside their existence.
This is because such founders use consulting firms to get themselves to be investor ready. They very rarely expect to get these services from our local hubs. Yet, while the local hubs claim to support these entrepreneurs, the facts say otherwise.
Normally what these hubs support are “want-preneurs”. These are very early stage entrepreneurs. Yet, very rarely do we transform them into entrepreneurs with investable businesses.
You can argue that different hubs have different objectives. And that, therefore, might not be your core mission. But the question then is; What is your core mission? Are you creating employable youths? If that is so, how many employable youths have been created from your programs so far? Beyond them attending hackathons and meetups at the hub? How do you measure progress?
As much as a lot has happened in the ecosystem, nothing much has changed about an average African tech Hub. Many are still operating without clear business models. The services offered to the entrepreneurs are still average. Very few have been able to attract investment. Very few investor ready startups are emerging from them. Very few have been able to make meaningful partnerships. And, very few have programs with measurable outcomes.
Most hubs are still surviving on grants and founders bootstrapping their way out. No wonder, while more hubs are created, even more, are dying.
Organizations such as Infodev, DIY Toolkit, NESTA, and others have been developing tools, resources, and communities of practice. These are to help hub managers to find better ways to run and manage the hubs commercially. While ensuring they are creating an impact on the ground. But, are we using these resources? Are we spending enough time to develop strategic approaches to run these hubs? I’m not so sure.
I think most of us just copy business models from the old hubs. The mostly failed models of other African hubs. We don’t have programs with measurable outcomes and don’t track progress. What we do is live on hype and old success stories, if any.
This year, we reviewed companies for Sahara Sparks investor session. In total, we received 204 startup applications from five African countries, including applications from the KINGS. In total, they came from eight different innovation hubs.
With confidence, I can say that over 90 percent of the startups were not investor ready. They couldn’t even prepare basic documents like an Investor Deck.
The question that was going through my mind was, ‘what is the point of having all these accelerators and business incubators if we can’t get startup ready for moments like these?’ If we are building investor networks, what are they going to invest in?
To be honest, how we define ourselves online is very different from what is happening on the ground. There is a lot of talk and less of doing.
This is not to say that nothing is happening. What I think is that we should put our facts together. Although I like the way the hub ecosystem has been growing, let’s not confuse growth with progress. Don’t confuse quantity with quality.
We still have a lot of gaps to fill. Maybe we are asking a lot from the hubs. But, for sure, there is a lot of work that needs to be done by our hubs. That is if we are to achieve real growth and progress.
If you close your eyes to facts, you will learn through accidents. ~ African proverb
I’m not a Messiah of the hubs, but here are a few things that might help us to progress from where we are now.
Programs and Activities
Hubs lack programs with measurable outcomes. We love short-term activities. Very few hubs have well-structured programs for supporting entrepreneurs. And we are not even tracking their progress or documenting their learning.
Most hubs do one-off pitching events, meetups, partners events, or hackathons. They don’t even invest much in designing and implementing longer (meaningful) programs. Programs that can actually help to prepare an entrepreneur beyond pitching.
All successful business incubators and accelerators – think YC, TechStars and 500 Startups – have comprehensive programs to support entrepreneurs. They don’t do one-off events and jump on everything else that comes on their side.
Skills and Experience
Many hubs still lack people with the right skills and experience to help businesses grow. It’s normal to find one or two individuals with the required skills and experience. But, the rest of the management supporting team are amateurs. They don’t have enough experience to offer technical or business support to these startups.
No wonder most of our startups are not investor ready. The teams that are supposed to get them to that stage don’t have the highly needed experience and skills to do that. The next time you open a hub make sure you have a strong support team or empower your existing team. There is a lot of material and resources online for that.
Mentoring and Technical Support
While you will hear most startups complaining about gaps in finance and lack of investment funds, most times you will find out that that is 10 percent of the problem. The bigger problem is the lack of mentoring and professional advice.
African hubs need to partner with mentor networks or even create one if they don’t exist. There are free guidelines online on how to build mentors and investors networks. Encourage your teams to read and get exposed.
This is crucial if we want to have beyond average startups. Startup founders need to be advised by people with enough experience to run and manage businesses.
Business Model and Sustainability Plan
While new hubs are starting, the old ones are dying. Very few document the reason for their death. While those starting new ones don’t care much about learning from others’ mistakes.
Yet, it is important to figure out this puzzle. How do we get our hubs to run as a business and have a sustained impact?
Most hubs are still relying on membership fees, grants, project management and the like. Very few make money from their core mission of supporting startups. I don’t have a magic formula for this but its worth seating down with your team and reflecting on this.
The number one reason for the failure of most hubs in Africa is to try to do everything. They want to be the university, the government, the consulting firm and finally the business incubator. You can not do it all.
You need to find partners that will add value to your core mission. It is good to evolve and explore new things but you can’t be changing every day. What do you want to do? Where do you see yourself in a few years? What kind of partners do you need to reach there?
This is food for thought. You might have already figured out all these things with your hub but I’m very sure there is a new hub out there that might enjoy this article. Please share.
This article first appeared on Jumanne’s medium account. It was republished here with his permission.