The road to mediocrity is paved by pretenders! I have never read that quote anywhere, but that is a statement that has been replaying in my mind ever since the end of the Uganda Innovation Week. I kept on asking myself, "What was this, and is this the best that we can do?". For starters, let me explain why this criticism is important.
Let's first forward to 22-24th November 2023. Another edition of the Uganda Innovation Week is in full flow, and guess what is happening? Bankers are on the stage giving startups investment advice, entrepreneur support organizations are flouting their work once again, and people running SMEs are panelists in an innovation week! And then it's a wrap. Rinse and repeat in 2024, and 2025!
For how long can the premier event in our ecosystem continue to be run like an SME expo or as an advertisement board? When shall we hold a true innovation event that can propel our ecosystem forward? How long, can the guardians of our startup ecosystem get away with doing the bare minimum? This article is about pointing out their shortfalls so that this ends in 2022 or there is no point of UiW.
For starters, one could ask why the growth of our startup ecosystem is important. The Ugandan startup ecosystem has enormous potential. With a population of 40m people, the majority of who are young, the prospects couldn't have been better. The rising internet and smartphone penetration rates make the next decade key for our startup ecosystem and it is important the ecosystem grows. Let me tell you why this is important.
Let's go to the USA, which is essentially the world's most advanced startup ecosystem. This research by Stanford University’s Business School measured the impact created by venture-backed companies in the USA from 1979-2013. The study encompassed 4,063 firms with a market capitalization of $21.3 trillion. Of these firms, 43% (1,747) were venture-backed companies. But the VC-backed companies accounted for 57% ( $12 trillion) of the total market capitalization and boasted of 4m employees. But also crucially, the venture-backed startups accounted for 82% of the research and development (R & D) budget.
R & D can be defined as the processes taken by companies to develop new products and services, or to improve on those that already exist. Companies take on a lot of risks doing this. But the venture-backed companies shoulder the most of the R& D budget and the results have truly changed the world. Some of the companies surveyed in this study include Google, Microsoft, Tesla, Apple, Amazon, Facebook, and Twitter among others.
Essentially, the growth of a startup ecosystem is the equivalent of building an industrial park, but at a fraction of the cost for results that could potentially be greater than what any industrial park could achieve.
But obviously, it is impossible that the Ugandan startup ecosystem could grow to the extent of the USA’s. So for a fair reflection, let's talk about the Nigerian startup ecosystem. From an economic lens, Nigeria is a country where there is little to smile about. But in Q2 2022, the National Bureau of Statistics (Nigeria’s equivalent of the Uganda Bureau of Statistics) revealed that the ICT sector (into which the Nigerian startups fall) contributed 18.44% to the Nigerian GDP. With the GDP measured at over $400bn, the ICT sector is contributing at least $73bn which is more than the GDP of Uganda! The three most funded Nigerian startups: Jumia, OPay, and Flutterwave have raised more funding ($1.9bn) than what Uganda earns from tourism every year ($1.6bn). The contributions of the ICT sector are transforming Nigeria from a traditional economy, into one of Africa’s leading digital economies.
So, you can see why it is important our startup ecosystem flourish. The benefits of a truly innovative startup ecosystem are immense. But the premier event of our startup ecosystem makes a mockery of this. So what was wrong with the Uganda Innovation Week?
The organizers need to decide if they are holding an innovation week or an SME summit.
For starters, we need to understand what innovation means. Innovation occurs when companies implement new processes, ideas, services, or products. Successful innovations lead to companies defining an era or the future, but most importantly, revenue generation because of consumer demand.
The term innovation is usually a reserve of startups. And it is important that going forward, the innovation week should focus on startups that are truly bringing innovative ideas to the market. If you attended National Science Week, you would know that innovation is not an issue in Uganda. There are hordes of young founders truly trying to change the way things have been done for ages.
Let me define the difference between a startup and a regular business. Imagine two people, Felix and Patrick, decided to start companies doing something in the furniture business. Felix goes ahead and rents a large workshop with a magnificent showroom buys all the equipment and raw materials needed and then starts making furniture. You walk in, make your order and you can pick it up in a week or two. This is a regular business.
Patrick on the other hand builds an app and then brings on board people like Felix, people that own furniture workshops. He onboards more Felixes in Arua, Gulu, Wakiso, Mbarara, Masaka, Jinja, and Mbale. How his app would work is that you order a piece of furniture from a workshop near you and it is delivered to you. Patrick takes a cut off each order made on the platform. Now, this is a startup, a true innovation.
Patrick can replicate his model in Tanzania, Kenya, and Rwanda with minimum capital allocation. All he needs is the app and onboarding new workshops. His startup has the potential to amass a million users and do millions of dollars in transactions in a few years. These are the businesses that attract venture capital.
For Felix to reach a million customers, he will have to open up a showroom and workshop in multiple places. The investment needed to execute this is enormous. Innovation is what has made Airbnb the world’s biggest hotel, without actually owning a hotel. They can do what Hilton Hotels can't do, and that is being everywhere in every corner of the globe. It would cost Hilton Hotels a fortune to be in every corner of the globe.
So for conversations to be streamlined and attract the right audience, policymakers and investors, Uganda Innovation Week should focus on innovation. In an innovation week, people running early education schools and house cleaning businesses should not be panelists. We need to be clear on if we are holding an innovation week or a small and medium enterprises (SME) summit. And this is not to tarnish SMEs. They are vital to Uganda's economy, but the dynamics involved in running an SME and a startup are different. And if Uganda Innovation Week is truly about innovation, it doesn't make sense to give a platform to SMEs.
Bigger is not always better.
I am not privy to the conversations around holding the Uganda Innovation Week, but it seems a metric that they are focused on is bigger. Bigger is better in some cases for example, when holding a music festival, but for an innovation week, it isn't.
The demand for bigger could be what drove the organizers to invite sponsors on board that turned what was supposed to be an innovation week into an NSSF Hi-innovator/JICA/Entrepreneurial Support Organizations (ESO) Week. Make no mistake, the startup ecosystem needs all the help that it can get from established partners, but if it is at the expense of true innovation discussions and growth of the startup ecosystem, then it may not be worth it.
Holding a smaller event, where impactful discussions are held could be better. Even if the event is held virtually, it can have a far-reaching impact in the long run rather than a big, highly publicized event that becomes a mouthpiece of the sponsors and doesn't focus on the growth of our startup ecosystem. But also, if the organizers don't know what they are doing, then the sponsors will eat up the event for sure.
The topics, panelists, and moderators were mainly underwhelming.
Uganda’s startup ecosystem is young, and thus the knowledge pool to pick from is very small. But even this small knowledge pool has outliers. There are Ugandans that are doing incredible things in our local startup ecosystem, and in other ecosystems. So it is truly shocking that our premier startup event is not utilizing these people.
Instead of inviting bankers, and investment professionals whose portfolio doesn't include any single startup, aren't the interests of innovation better served by inviting people into this event that have walked the talk? Why aren't we inviting people like Timothy Asiimwe, an investment analyst at Partech, one of the most storied VC firms on the African continent? Why arent people like Peter Kisadha, formerly at Future Africa and now building Steward, given the time and space to discuss what it truly means for a startup to raise millions of dollars in funding?
If we are discussing accelerator programs, then it is a disservice not to invite people like Bruce-Nsereko Lule, a Ugandan, and currently the general partner at Seedstars Africa Ventures, one of the biggest accelerator programs on the continent. Surely, his insights and work experience can go a long way in pushing the ecosystem forward.
In a year in which a Ugandan startup made it into Y Combinator for the first time, it is insane that Mina Shahid of Numida did not get even an opportunity to speak. Numida followed up its admission into Y Combinator with a $12.3m Series A which attracted VC firms like Serena Ventures, Launch Africa Ventures, Soma Capital, and 4Di Capital. Wouldn't other innovators appreciate his insights into how to get into Y Combinator and the benefits of doing so? This is a conversation that would propel our ecosystem forward.
The dream of the majority of founders is to build a unicorn. There are two Ugandans that have managed to build unicorns; Ham Serunjogi at Chipper Cash and Melvyn Lubega at Go1. How are founders supposed to understand what it takes to build a unicorn if the few Ugandans who have done it, are not even considered panelists in the premier startup event in the country? Do we have no time for Ron Kawamara, the former CEO of Jumia Uganda to speak?
If we are talking about innovation, how many companies can claim to have innovated as much as Tesla Motors in the last two decades? Not so many. Wouldnt the Uganda Innovation Week be better served by inviting Geoffrey Kiboneka, a Ugandan that spent five years working at Tesla? As per my sources, he was actually in the country for this event.
If these panelists can not attend physically, surely, they can attend virtually. And if they are not interested in sharing their insights, what does that tell about our premier event and its attraction?
A true success story in the African startup ecosystem is Egypt. Egypt, alongside Nigeria, Kenya and South Africa raises more than 80% of all funding raised by African startups. But this wasn't the case. Egypt emerged onto the scene and made a previously big 3, a big 4. How did the Egyptians do it? How are the Kenyans doing it? This is where partnerships with these ecosystems in our Innovation Week should be important. Our ecosystem is still behind, so why don't we learn from those ahead of us?
In a country where the majority of founders have never seen a term sheet or know what a Series A or B funding round means, wouldn't truly in-depth sessions on venture capital be of profound importance? Isn't this where founders like Davis Musinguzi of Rocket Health, who raised a $5m round this year, be an important panelist? In a year when Nigeria enacted its Startup Bill, shouldn't we have had a town hall where the Uganda Startup Bill could be discussed? How many times in a year are we going to get so many founders and ecosystem players in the same room? This was the perfect opportunity to speed up these conversations.
Instead of simply inviting the Uganda Registration Services Bureau and Uganda Revenue Authority to explain what they do (which we already know), wouldn't it be better for us to engage them in discussions about what it will take to reduce the barriers to registering a business?
There are so many topics and discussions that could have been had or explored in depth. And we can do better in terms of moderators. How can a moderator ask an insightful question about something they don't truly understand?
We are a country in which mediocrity is deeply intertwined with our ethos. The "anyhowness" system of running the country by the government has penetrated the private sector. If the government isn't working, why can't our startup ecosystem work? The Buhari government in Nigeria has been rubbish, but the startup ecosystem has shown you can make incredible gains amid poor governance. Now, it is impossible for the Nigerian government to ignore the work being done by startups.
How shall our startup ecosystem attract the government and other players for true meaningful partnerships and conversations when our premier event is a mockery of innovation? If a Big shot investor with a $20m fund attended our Innovation week, wouldn't they conclude that we are joking and hence set up shop elsewhere?
A lot of young people are out there dedicating their lives and legacies to building startups. Surely, they would do with a true Uganda Innovation Week. Startup founders are comfortable with building things with little resources, and if the likes of UNCDF and NSSF partnered with true startup people (not pretenders), the Uganda Innovation Week would be more impactful at a fraction of the cost. We don't need three days at Mestil to move the ecosystem forward. But as I said, the road to mediocrity is paved by pretenders. We are well and truly on the path to mediocrity. But for how long shall we act like this is okay?
Cover Photo/UiW on Twitter
The writer is a retired founder, and now Editor-in-Chief at Digest Africa. You can reach him at +256771162922 or [email protected]
About us
Digest Africa is a leading provider of data and insights on investment into African startups that investors, corporations, researchers, banks, and startups can use to make meaningful decisions. We have a database encompassing;
- Over 1,400 venture capital deals for companies raising funding over the past 5 years
- More than 3,000 startup company profiles
- Over 400 investor profiles
Contact us for custom research and intelligence on the African startup ecosystem and venture capital. Email: [email protected]