Startups

How Ugandan startups could be failing themselves

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Uganda

In 2015, one of the most fascinating reports in the recent past was released, naming Uganda the world’s most entrepreneurial country. Since then, several other surveys have been conducted, painting a rosy picture for the Pearl of Africa in the entrepreneurship sector.

For instance, a recent research done by Ecobank revealed that Uganda was second after Kenya in East Africa in the number of fintech startups and technology hubs; the comparison with other African countries is also admirable.

Another, done by GSMA, showed that East Africa was increasingly becoming an investment destination for many Western ICT companies seeking to invest on the continent, with Rwanda and Uganda beginning to become attractive to investors.

“Kenya, Nigeria and South Africa remained the most popular investment destinations, accounting for 76% of total funds raised by startups in the region. However, the downward trend in the combined share of investments for the three markets, from more than 80% in 2015 and 2016, shows growing investor appetite for other markets, notably Ghana, Rwanda, Senegal, and Uganda,” said the report.

But, at the recently concluded Kampala Innovation Week, the founder The Innovation Village, of one of the biggest innovation hubs in the Uganda, CK Japheth challenged the audience to reflect on why, despite all these beautiful and encouraging reports, there have not been startups from Uganda hitting huge milestones and producing products that tackle problems at the global scale, as has been seen in Kenya, Nigeria, and South Africa.

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According to CK, some startups had raised more money in funding than the current budget of the Ministry of ICT.

Over the years, CK said, he had realized that the reason some of these countries were developing at a faster rate in the entrepreneurship sector was not because of the citizenry’s entrepreneurial acumen but because of their geopolitical advantage.

For instance, he said, investors are interested in countries like South Africa because of their location and policies towards investors. Looking at this from the market perspective, Nigeria’s capital city, Lagos, is almost 20 times bigger than Kampala by numbers.

Personalities of entrepreneurs

CK Japheth also said that after traveling to different countries across Africa, he has realized that most of the Ugandan entrepreneurs are not energetic and passionate about their projects compared to their counterparts, for instance in Nigeria, where he said founders there were so spirited about marketing and talking about their companies.

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Basing on this, he told entrepreneurs “to take your game up”. As a manager of an incubation hub, he says some of the entrepreneurs he has interacted with are “shy and they can’t have a direct conversation.”

Additionally, he said, some use language that “downplays” the projects they are working on: “We need to be prouder about what we are trying to do as innovators.”

Unrealistic projects

Another thing CK has observed is that some innovators don’t reflect on the target markets and resources before embarking on some projects. He said that there are innovators out there “putting time into projects that will need a miracle to work”, a thing he says is at times fueled by motivational sayings like ‘never give up’.

“We mistake busyness for business,” he said, adding: “do we spend enough time to stop, reflect, ask yourself – is what I’m doing a good business idea?”

CK went on: “We need to tell our entrepreneurs that coming up with an idea doesn’t mean that you’re the next Bill Gates.”

From his speech, it could be observed that some of the startups find themselves in such situations because they are not willing to learn and are only focused on developing their project.

He said he has organized multiple events at The Innovation Village and invited some of the biggest achievers in the startup ecosystem like Kevin Ryan, the founder of Business Insider among other successful ventures, but convincing entrepreneurs to attend such events and learn from them is a “difficult” task.

The Permanent Secretary at the Ministry of ICT and National Guidance Vincent Bagiire Waiswa while speaking at the same event reechoed similar views, calling on innovators to check what the market and investors are interested in before kicking off work.

Bagiire assured innovators that it is those with products that are ready to solve immediate problems that will be supported first.

“… but what we are reluctant to do is to know that there are 30 innovators who are here and therefore because there is money we should divide that money and everybody gets an equal share. No. Because amongst yourselves there are teams that put in a lot of effort and indeed make products that are market ready. Now, when you get a product like that one it would be supported in a different manner,” he said.

Quoting Ryan, CK told entrepreneurs that the first thing they need to look at is identify a problem; “Once you identify a good problem, nothing else matters,” he said.

After getting a problem that affects lots of people, you’ll now have to scout for a good team to work with, he added.

Way forward

According to CK Japheth, “the secret in developing Uganda’s ecosystem is through rallying and converging the different partners (government, the private sector, academia, international development agencies) within the ecosystem.”

CK says the education system should be ready to align its syllabus with the contemporary climate and other stakeholders have to liaise with each other so that there is coordination and awareness in what is needed for the market and setting up a sustainable innovation ecosystem.

As such CK has helped found one of such projects called The Kampala Angel Investment Network, with an aim of “bring ideas to life” by attracting alternative sources of capital. The project so far has 30 local investors and 3 foreign.

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