Tech business is on the rise in Africa. Tech entrepreneurs are those who create, build and grow tech businesses. They are the ones who break boundaries, venture into uncharted territories, and influence their peers. In the process, they become instrumental in shaping today’s new technology landscape.
Some of these people succeed in establishing their business and a few end up failing or quitting. The successful ones; the ones with grit, and etermination, owe a lot of their success to the way they perceive challenges, how they planned to tackle them and finally what strategies they employed in executing them. These are facts which many don’t have access to.
As a techpreneur, your outlook on businesses will differ greatly from other kinds of business owners. You will be focused mainly on how to solve problems around you while using tech as a tool.
You will need to generate and apply new, useful ideas to solve specific issues. Surely, you will need to transform your ideas into solutions that add value to society.
It sounds quite easy until you need to build a startup in Africa.
There are so many factors that limit the start, growth and development of your business. Four barriers are known to often pose constraints to businesses in Sub-saharan Africa. They include; lack of financial capital, low levels of demand for new products and services, inefficient administrative systems, and underdeveloped physical infrastructures.
Entrepreneurs in Africa are automatically subjected to consider certain factors because of the environment (Africa) in which they intend to do business.
We will discuss a few of them below, starting with…
Generating Profit and Revenue
One would think that startups in Africa are gaining ground when it comes to raising revenue and making profit. Besides, the continent has recently gained from foreign investors. However, there are a lot of grounds to cover as regards funding.
Research has shown that African tech entrepreneurs struggle to secure funding from foreign investors. A Crunchbase insight pegged Africa’s venture funding at $5.2bn. This is quite low compared to North America’s $330bn investment and Asia’s recorded $165bn investment.
It shows that despite the applaudable growth in Africa’s tech ecosystem, more still needs to be done for startups. Many of them despite proving their investment worthiness are still unable to secure funding, leaving them to embrace bootstrapping as the only option.
Furthermore, the main reason anyone wants to start a business is because of the profit they wish to make. Of course, they might be motivated to solve an actual problem but the end goal is to make money from providing a solution to said problem.
So take a wild guess, what happens when your startup can’t generate enough funding to get you your profit. Yup! you guessed right, you get frustrated and when you exhaust your funds on bootstrapping and there’s still no investment, the startup faces eventual death.
This is the fate of the average African tech business that doesn’t get the attention of investors.
Mentorship
In an industry where you have to fight for recognition and customer patronage against other companies fighting for the same thing, you’ll need solid training to stand out.
The average African entrepreneur gets mentorship from a senior colleague who probably got lucky on their first trial with a startup, books from people saying the same thing to the same audience or even business experts that the intricacies of breaking even but lack operational efficiency.
Inexperience and lack of knowledge can contribute to the stunted growth of the business. Thankfully, there are incubators, accelerators, hub training, and other programmes for founders nowadays that would be essential in facilitating startup growth.
Ease of Doing Business
The average ease Of doing business score in Africa is less than 40 compared to 73 in OECD, underscoring the long road that African countries are faced with. It is important to highlight the discrepancies between African groups notably regarding the trading across borders, the getting electricity and the resolving insolvency categories.
Nigeria, Africa’s most populous nation, improved its ranking on the latest World Bank ease of doing business index. However, some analysts think it doesn’t necessarily mean an improved economy and that the country still has anti-business policies.
In an interview with CNN, Tunde Leye, a Nigeria-based business analyst with SBM Intelligence, said the new rank is a major improvement from last year but there are existing counterproductive policies that make running businesses hard.
He said, “The ease of doing business may be better, but the actual process of running a business has been stifled.”
What this means for entrepreneurs in Nigeria is that they would face several bottlenecks in carrying out business transactions or planning. The worst plague they will be faced with will be the country’s unfriendly business policies.
There’s hardly any future for businesses in a country where the government makes it difficult to run a business.
KPIs, Staff Performance and Company Growth
As your company grows, the structure also needs to become more developed. Roles become more defined. This is an important part that you can’t take from your business or startup. This way, to translate mission to metrics for your employees.
You need to assign core metrics targets to each department and distil it further to show how each department contributes to this metric. You can measure activity and results. On the issue of KPIs, it’s important that you set up a system that measures and rewards staff performance. This encourages your employees to perform better, it makes them aware that they are being watched and anyone that performs well will be celebrated.
