My first trip to Cameroon was in the spring of 2011. Amazing to see what kind of progress is being made only a year and a half later. It is exciting to see the ranks of technology entrepreneurs grow in the country. Also the quality of startups has greatly improved and I noticed a serious focus on business models. Several teams have gone through multiple iterations of their product before refining concepts that have real potential to gain traction.
In fact, a recent visitor from Nairobi remarked that the Kenyan entrepreneurs have something to learn from their Cameroonian counterparts. Indeed, it might seem that the constraints placed on entrepreneurs in the country forces them to focus – working faster with less resources. It was also noted technology entrepreneurs in Nairobi are sometimes hesitant to close their computers and speak with actual customers, when most of the teams in Cameroon spend a great deal of time and effort on market research.
Almost not a week goes by that we don’t read about the launch of another fund in Nairobi, an accelerator in Ghana or a competition targeting startup entrepreneurs in Nigeria. Its herd mentality with everyone piling into the same plane. Maybe Cameroon doesn’t get the same attention because people are less familiar with the operating environment or the government has done less to bolster its image. Certainly there is less sector support. That said, the quality of innovators we know in Cameroon are on par with any we have met.
There should be a podium for technology entrepreneurs in every country, and the Cameroon Startup Challenge 2012 is another step for the community in Cameroon. These individuals, in every community, are critical if we are to solve difficult social, economic and environmental problems. They are an important part of our future. Their path is not an easy one and it is important to take a step back and to recognize the progress being made.
It is hard work and these guys are blazing a new path for hopefully many generations to come. Already we see new teams of entrepreneurs staking their ground. These are still the early days of many exciting times ahead. Congrats to the team at Djoss.tv, KingMaker and Agro-Hub!
Today we are pleased to welcome 9 new members to the AfriLabs network and announce that we are hiring a director. These are the next steps in our effort to build a strong association and to support the continued growth and development of innovation hubs across the continent.
Moving forward, we look to establish AfriLabs as a catalyst for African borne innovation in areas such as mobile/web, design, fabrication, architecture and renewable resources/energy to name but a few. The aim of this effort is to create success stories and decent work for young Africans by focusing on technology and innovation as platforms for entrepreneurship, both as a means of self-employment and as job creation for others.
Here is an overview of the participating hubs.
» Nailab Incubation in Nairobi, Kenya
» HiveColab in Kampala, Uganda
» iHub in Nairobi, Kenya
» ActivSpaces in Buea, Cameroon
» BantaLabs in Saint Louis, Senegal
» mLab EA, Kenya
» Wennovation Hub in Lagos, Nigeria
» RLabs in Cape Town, South Africa
» Malagasy i-Hub in Antananarivo, Madagascar
» ICE Addis in Addis, Ethiopia
» Meltwater in Accra, Ghana
» CCHub in Lagos, Nigeria
» BongoHive in Lusaka, Zambia
» iLab in Monrovia, Liberia
Hiring a director:
The director is asked to lead the continued development of AfriLabs as a network-based organization. Key to this position is to establish strategic partnerships needed to grow the organization and allow for the implementation of programs.
Additionally, the director has the following responsibilities:
» Preserve the founding principles of the AfriLabs charter;
» Establish a work plan for 2012 – 2014;
» Manage programs and engage AfriLab members in their deployment;
» Facilitate outreach and applications of new labs;
» Manage relations with strategic partners and establish new partnerships;
» Lead fundraising efforts for AfriLabs and its members;
» Responsible for any and all reporting to stakeholders;
» Coordinate the annual AfriLabs meeting, host quarterly meetings with the board of directors and facilitate monthly calls with member labs;
» Manage the AfriLabs website and related social media channels;
» Generate, share and promote success stories;
» Support the continued development of the AfriLabs network in any way possible.
AfriLabs is a network organization that supports innovation hubs in Africa. A few details on the organization:
» Non-profit registered;
» Consortium of independent African innovation hubs, co-working spaces, accelerators and incubators;
» Individually, each hub serves as a nexus for innovators, entrepreneurs and investors;
» Goal is to support the growth of the hubs, their respective members and surrounding communities.
When Bill Zimmerman (my co-founder at VC4Africa) approached me with the idea for the Cameroon Startup Challenge, it took me about 3 second to make my decision….this is just something we just have to do! The competition offers a cash prize of USD $5,000 for the most innovative web, mobile or hardware-based business venture in Cameroon. Sanaga Ventures, a joint seed stage investment company between Bill and myself, puts up the prize money.
My first trip to Cameroon was about a year ago. Bill and I were working intensively on the launch of VC4Africa and had decided to build most of the site with colleagues in Buea, a student town at the base of Mount Cameroon (or what the local techies like to call Silicon Mountain).
The trip was a chance to meet people like Helen, Valery, Fua, Mohamed, Fritz, Al, Churchill and many others in person. Much of this community was connected through ActivSpaces, an upcoming tech hub that is now the country’s leading platform for tech entrepreneurship. On this trip we facilitated a business model workshop with some of the ActivSpaces members and hosted VC4Africa meetups in Buea and Douala. Needless to say, my time in Cameroon convinced me there is talent capable of innovating on a continental (Njorku is widely claimed as the continent’s first Job search engine) and global level. See a video for an impression.
Since this trip we have only increased our activities. Now VC4Africa is for the most part developed and maintained by Zinger Systems, a local software firm. We have also developed other projects including the VC4Africa mobile website with two developers Mohamed and Ebot. And as a community (people like Al Banda, Valery, Fua, Rebecca, Bill, myself and many others) we work to support the development of ActivSpaces as the leading platform for tech entrepreneurs in the country. Finding support hasn’t always been easy as Cameroon is not often ‘on the list’ in the same way support is channeled to Kenya, Uganda or Ghana. Exceptions are enterprising organizations like Indigo Trust. But step by step, these various pieces are coming together and a lot of progress is being made. We learn of new projects and promising ventures every day. Now we have a chance to build on these foundations and to extend our efforts to new networks of entrepreneurs in the country. If anything this challenge is a precursor to what is possible and to show the world what kind of innovations are coming from this space.
See the details for the competition and we look forward to announcing the winner in July.
Why do banks have a hard time supporting entrepreneurs? What kind of innovations are underway and what might we expect in the future? It’s time to close the missing middle and there are some promising efforts underway.
Jason Wendle, a Dalberg Associate, makes the point to VC4Africa during a recent filming, ‘The lack of collateral is the biggest challenge. Banks see the SME market as attractive, but they have difficulty assessing the risk and there are few assets in place needed to secure the investment. SMEs on the other hand need fast loans to fill big orders.’ Gerry Monteiro, the Vice President of the Small Business Banking Network, expands, ‘Interest rates are high for SMEs. We have to look beyond lending products and look deeper at financial (and non financial) needs. Banks don’t necessarily appreciate the SME profit drivers.’ This lack of insight on the part of banks hinders the development of appropriate banking solutions. What they do offer doesn’t always meet the needs of the entrepreneurs. The lack of track record, credit history, or tangible assets that can serve as collateral, further hinder the process. As a result, the cost of lending is high, SMEs run the risk of over leveraging their accounts, and there is a need for alternative financing solutions.
There is more innovation needed if we are to close the gap. It is encouraging to see high profile organizations like GroFin continue their drive to serve a smaller business segment. With 10 offices in 9 countries they have been able to reach out to countless SMEs and offer their support. We are also seeing innovative partnerships between larger players like Safaricom and Ecobank in Kenya. Reaching out to the small saver, brings the bank closer to small business. For example, Ecobank Zambia says it now targets 50 percent of its loan portfolio to Small and Medium Enterprises (SMEs) this year. Now the job is to see if partnerships like this can be replicated in other countries. We want to see more big banks willing to service small businesses and expect these trends to continue.
Banking and finance institutions aside, we also see more organizations working to address the issue of due diligence. From research with the investor network at VC4Africa, we know that finding good entrepreneurs with qualified business ideas remains a major barrier to investing into small business. One of the reasons VC4Africa launched its own due diligence and matchmaking service that looks to help both VC4A entrepreneurs and investors. Our online profiles are becoming rich sources of information and we see an increasing number of matches being made across the network. At the same time we see organizations like Open Capital Advisors, whom we have invited for an interview, doing great work in Nairobi. They are building in invaluable service for both entrepreneurs and investors in the area.
The Harvard Finance Lab (EFL) is another organization making efforts to address this gap. They have introduced psychometric screening tools that measure future upside potential, rather than traditional risk management tools used by banks for debt contracts, which only measure downside risk. Recently they announced that Standard Bank, Africa’s largest bank, has signed an exclusive two year deal with EFL which guarantees at least 100,000 EFL credit-applications equaling an estimated $US 500-$700 million in new loan origination across the continent. This adds to their already $US 60 million lent to 22,000 applications in + 18 countries.
There are a lot of encouraging developments in the space and we expect to see more come online soon. Bottom line, small business is the engine of our economy and it is in all of our interest to service this segment. More entrepreneurs getting funding means more jobs and more taxes. We need more of both!
I think it is fair to say that 2011 was a good year for the VC4Africa community. What originally started as a Linkedin group has now grown into a thriving and productive network. This year we closed the old website and started a new chapter on VC4Africa.biz, the next step in our continued mission to champion the continent’s greatest entrepreneurs.
We now have more than 4.300 members who have opened personal profile pages on the new site and over 200 entrepreneurs stepped forward to crunch their venture online. There are promising businesses making progress in over 30 African countries and we have seen members in Cameroon, South Africa, the United States, Kenya, Nigeria, the Netherlands and Somaliland establish partnerships, investments and joint ventures. Increasingly, VC4Africa featured entrepreneurs are being picked up by global media channels like Forbes and BBC World. We have opened a new thread where members are starting to share their successes as their continued progress remains our bottom line – as a community and organization.
In the past months we have launched a number of new programs and resources VC4A entrepreneurs can tap into for support. For example, entrepreneurs are now calling in on Free Feedback Fridays. These are sessions hosted by business experts and are useful for working through challenges faced in the business development process. We also hosted several Business Modeling Workshops and worked with entrepreneurs to practice and film their elevator pitches. More recently, we launched the VC4Africa Mentorship Program that connects members for peer-to-peer coaching with some early successes already on the books. We also gave a facelift to the venture profiles and entrepreneurs can now post their video pitches online, one of the reasons ventures like Njorku are top ranked all time. They are personal and you immediately get a sense for the entrepreneur and their vision behind their project. In the year ahead we will be doing even more to support our entrepreneurs as they champion their ventures.
Our team is constantly working to introduce new tools and services that further improve the VC4A networking experience. To foster more effective network building we launched our own ‘dating widget’ that matches members on the basis of complimentary skill sets and forwards recommended connections. How do you tap into a global network spread across 159 countries? This past year saw the release of Questions & Answers as a tool for crowdsourcing knowledge from across the member base. There are now 68 open threads and 128 responses. We also launched dedicated groups that allow members to come together around a specific country or theme. Some notable groups we look forward to growing in 2012 include Green Entrepreneurship, the Social Entrepreneur, VC4Africa Mentors and VC4A Woman Entrepreneurs.
Far and away, one of the greatest projects we launched this past year was VC4A Badges. Building great companies and an effective network of contacts is a lot of hard work, but it’s also a lot of fun. With great looking badges we look to recognize your milestones and contributions along the way. For example, when you establish a partnership, support VC4A entrepreneurs as a mentor or attend your first VC4Africa meetup. And they are pretty useful too. Want to know who has organized a VC4Africa meetup in the past? Want to know which VC4A entrepreneurs have been profiled with a featured article on the homepage? Maybe you want to know which entrepeneurs received funding or the ‘on fire’ badge for being picked up by mainstream media? And I encourage everyone to check out the members who are part of the VC4Africa Officers Program and help shape the community and grow the effort. See an overview of all of the badges and keep your eye out for new ones :)
We will continue to listen to your feedback and build the tools that enrich your time spent with VC4A.
These developments aside, VC4Africa had a great year because we have such great members. People who believe in the continent’s potential and want to see its best entrepreneurs succeed. As a community we share and learn from each others experiences and support one another along the way. It is remarkable to see more than 30 VC4Africa meetups organized by members from around the world. We already have great events online for 2012 starting with Accra, Oslo and London. More are on the way. Certainly Africa is a great business opportunity and we all agree the time to make it happen is NOW.
The best part about all of this? We’re just getting started :)