By Michael Karaimu, regional representative Faster Capital
Entrepreneurship is increasingly being viewed as the only sure way to wealth creation. World renowned billionaires like Jeff Bezos(Amazon), Bill Gates(Microsoft), Warren Buffet(Berkshire Hathaway), Bernard Anault(LVMH), Mark Zuckerberg(Facebook), among others are all entrepreneurs having founded their own companies.
While many countries today are facing the dilemma of an ageing population, the majority of the 1.2 billion Africans living on the African continent are young, ambitious and entrepreneurial.
Entrepreneurs are a critical driver of innovation and development and there’s a growing consensus that the future of Africa’s development will depend on the success of entrepreneurs that are able to build scalable companies.
More than half a billion people in Africa are now subscribed to mobile services and over 150 million smart-phones are in use across the continent. With about half of the African population having mobile phones, internet usage spiked to over 300 million users as of June 2017. The global IT industry has been estimated to be worth USD 3.8 trillion, and the African landscape is ripe for development, filled with startups in need of financial support and guidance. These are entrepreneurs building companies that are providing jobs to Africans and tax revenue to their national governments. The sectors experiencing high entrepreneurial activity are ICTs, agribusiness, e-commerce, fintech, ed-tech, e-health and renewables.
According to Disrupt Africa, a startup news and research portal Disrupt Africa, the total amount of funding raised by African tech startups was, USD 334,520,500 in funding in 2018. This represented the best year since records began, and a substantial leap on 2017. The number of startups that rose grew by 32.1 per cent, and total funding jumped by an impressive 71.5 per cent.
A key finding of the report was the emergence of Nigeria as Africa’s startup funding hub, after years of playing second fiddle to South Africa. With 58 startups raising a total of USD 94,912,000 in investment, the country was clearly top dog; while South Africa fell behind with 40 businesses raising USD 59,971,000. Kenya ranked third in terms of the number of startups that raised capital.
However, there exists plenty of challenges that we will seek to highlight on and suggest a powerful remedy.
What are the biggest challenges entrepreneurs with no technical knowledge face when building a tech startup?
It is important to note that in spite of all the hype and glamour, entrepreneurs face a myriad of obstacles and challenges.
- Financial Issues-Entrepreneurs face the financial challenges resulting in fewer funding opportunities. In overcoming this, one need to have a fantastic sales pitch and a solid business plan to improve chances of attracting the financing needed to open or expand a business.
- Social Rejection-Family members and friends might not understand an entrepreneur’s reason to start a business. They might not share one’s passion or ideas. Many others would question why you left employment.
- Criticism-As a young entrepreneur, people might criticize your ideas or second-guess your plans. Some may critic your business decisions with full of negativity.
- Low Calibre Development Team- The process of identifying, recruiting, and training the right talent for your business can take time and cause frustration. You need to create a great company culture that attracts employees that have the right combination of skill, ability, and attitude. Most startups fail because of mismatch talent.
- Finding customers-A small marketing budget and global competition can hinder your efforts to attract and retain customers. To complicate matters, many of your leads and prospects might turn away when they find out that the business has little experience.
Why a Savvy Technical Co-Founder?
Virtual incubators can be defined as a catalyst for socio-economic development, providing a process for developing early stage ideas into viable ventures. They offer formal and informal learning opportunities and connect entrepreneurs to an ecosystem of related services. While virtual incubators are still getting defined in a fast-changing world, they have a potential of disrupting the traditional business incubation model.
FasterCapital is a Dubai based virtual incubator with a unique approach to startup development. More than 25 startups have graduated from the firm’s incubation with close to USD 13M worth of investments. FasterCapital operates globally with more than 192 touch points and 230 companies under its acceleration program.
Understanding there was a big gap in the industry where entrepreneurs need to be nurtured, mentored and aided in growing their ventures; FasterCapital was formed with a clear vision to help such entrepreneurs with access to funding, mentorship and vital connections.
Co-founding ensures that the entrepreneur has the right technical partner who actually believes in the product therefore minimizing social costs to the entrepreneur.