The Facts and Fictions About Africa Innovation and Technology Hubs.
Why do we need to do more?
I don’t want to be that guy who spoils the party but we have done enough counting of the innovation and technology hubs in Africa. The focus should be moved to the outcome and impact of having these hubs; the number of investable startups, skilled workforce, investment raised and meaningful partnerships should be the new measurement of progress and success of the Africa innovation ecosystem.
By February 2019 it will be exactly 7 years of me being involved with African innovation and technology entrepreneurship ecosystem. I have published a few tools, write some blog posts and train a few courses. I have tried my level best to share my personal experience in the best way I can. I have worked with three innovation hubs, support in the launching of a few others and currently, owning one.
Listening to an interview of Shola Akinlade of Paystack who currently is being hosted at YC. The question comes into my mind, after 10 plus years of the hubs revolution in Africa to what extent we have been able to support entrepreneurs and generate really concrete success stories in numbers? I don’t mean to undermine the effort. I was asking myself, are we really doing enough? Paystack in a period of 2 years at YC is a completely different company. Can we create programs that can actually transform our entrepreneurs in residence? 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 etc to currently, where we are witnessing companies getting acquired and some receiving million dollars of investments across the continent. Someone might think we are already in the promised land. But if you think critically and do enough analysis on where or how these companies that receive investments are emerging from. You will realize very few have actually been supported by the local hubs to at least reach the mezzanine stage. Very few hubs out of the 400 plus mentioned by different reports can stand proud and tall, exclaiming we are responsible for the “African Unicorn X”. Through our technical support and mentoring it is how they have managed to reach there.
Most of the founders of successful “African Unicorn Companies” might have some associations with the local hubs but not necessarily supported by one. Most of the time founders of these companies share few traits in common; they have the strong corporate background, they went to good schools, they are coming back home after staying few years abroad, they have a strong network or work with foreign cofounders. They don’t have much to do with the local hubs except attending events and meetups, and the hubs don’t benefit much with their success either, leave aside their existence. They use consulting firms to get themselves to be investor ready and very rarely expect to get these services from our local hubs. While all the hubs are claiming to support these entrepreneurs the facts say otherwise.
Normally what we support is “Want-preneurs”, very early stage entrepreneurs, and very rarely we transform them into entrepreneurs with investable businesses. You can argue different hubs have different objective and that might not be your core mission. Then what is your core mission? Are you creating employable youths? How many 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 been happening in the ecosystem nothing much as a changed about an average African Technology Hub. Many hubs are still operating without clear business models, 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 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 community of practice to help hub managers finding better ways to run and manage the hubs commercially while ensuring they are creating an impact on the ground. 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 models from the old hubs, mostly, failed models of other African hubs. We don’t have programs with measurable outcomes, we don’t track our progress, and we live on hype and old success stories if any.
When we were reviewing companies for Sahara Sparks investor session this year. We received 204 startups applications from five African countries include applications from the KINGS, from eight different innovation hubs. With confidence, I can say over 90 percent of the startups where not investor ready and they couldn’t even prepare basic documents e.g Investor Deck. The question that was going through my mind was, what is the point of having all these accelerators, business incubators, etc if we can’t get these guys to be ready for moments like these? We are building investors 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 talks and less doing.
I’m not saying nothing has been happening. I think we should put our facts together. I really like the way the hubs ecosystem has been growing but don’t confuse the growth with progress. Don’t confuse the quantity increase of the hubs with the quality increase. We still have a lot of gaps to fill. And Maybe, 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 if we are to achieve real growth and progress.
I’m not a Messiah of the hubs, but few things that I think might help us to progress from where we are now.
- Programs and Activities; our hubs lacks programs with measurable outcomes. We love short-term activities. Very few hubs have well-structured programs for supporting entrepreneurs. We are not even tracking their progress or documenting their learning. Most hubs do one-off pitching events, meetups, partners events, hackathons etc without investing much on designing and implementing longer (meaningful) programs that can actually help to prepare an entrepreneur beyond just pitching. All successful business incubators and accelerators, Y-Comb, TechStars, 500 Startups and the likes, globally have comprehensive programs to support entrepreneurs. They don’t just do one-off event and jump on everything else that comes on their side.
- Skills and Experience; our hubs lack people with enough skills and experience to help businesses to grow. It’s normal to find one or two with the required skills and experience. The rest of the management supporting team are amateurs without enough experience to offer technical or business support to the 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 of the time you will find out that is just 10 percent of the problem. The bigger problem is the lack of mentoring and professional advice. African hubs need to partner with mentors networks or even create one if they don’t exist. They 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. Startups 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 documents the reason for their death and those who are starting new ones don’t care much about learning from others mistakes. 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 still relying on membership fees, grants, project management etc 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.
- Meaningful Partnerships; the number 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 (accelerator). You can do it all. 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 just food for thoughts, 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 benefit from this article. Please share.
If you close your eyes to facts, you will learn through accidents. ~ African proverb
Let’s keep learning.