International business leader and technology professional Lucy Quist breaks down…
Eunice Baguma Ball is a former start-up founder and technology enthusiast with over 10 years experience in the mobile and digital space in Africa. She is the founder of the Africa Technology Business Network (ATBN), a London-based community that is aimed at creating a bridge between the UK and Africa tech ecosystems. She has been featured as a TEDx speaker and is passionate about the role of technology in accelerating development in Africa. Here, she shares five mistakes to avoid when launching your technology startup in Africa.
Failing to look beyond the statistics
Africa has over 700 million mobile connections,160 million smart phones and it is estimated mobile broadband penetration will exceed 50 per cent by 2020. These are some of the exciting statistics relating to technology adoption in Africa.
While true and reflective of the technology wave that is sweeping across the continent, it is important to look beyond the stats and seek to understand the particular market you aim to launch your solution. There are big variances in technology uptake between the different African markets, and taking mobile penetration as an example; while it stands at 42 per cent in Kenya, it is only around 17 per cent in Burundi.
Stats provide a good indicator of what opportunities are ripe for the picking, however do your own research and test the market before you launch.
Copying and pasting from the west
One of the biggest mistakes tech entrepreneurs in Africa – and those going into the continent – make is copying and pasting models they see working in the West. While the general concept might be feasible, technology solutions in most African markets require a high level of localisation to succeed. Solutions that may require developed payments or logistics infrastructure for example will encounter many challenges, and entrepreneurs will need to think creatively about how to overcome these unique obstacles that companies in the West will not have had to deal with.
Uber realised this and earlier this year started accepting cash payments in Nigeria; a major change for them as cash-free transactions is such a core part of the Uber experience. However, they realised they would need to adjust their model to succeed in developing markets.
Ignoring the power of ‘simple’ tech
Apps are a very popular choice for tech entrepreneurs everywhere, including in Africa. While apps are great and responsible for many success stories coming up in Africa, SMS is still king. Yes smartphone and mobile broadband usage is on the rise, however, simple low cost technologies like SMS and USSD should not be ignored and are still the best way to reach a majority of users. Take for example the success that has been achieved by Eneza education – one of the participants at the upcoming Africa Tech Forum in London. Their SMS and USSD powered courses have been accessed by over 800,000 students and are on track to achieve their mission of reaching 50 million learners across rural Africa.
Not designing for scale
Because of the high degree of localisation required in Africa, many startups may then fall into the trap of being so local that their solutions are not scalable across the region. This may sound in contradiction with point two above, but the key is striking the right balance between being localised and scalable. A good practice for startups everywhere is to start local but think global. This is particularly key for startups in Africa where there is a huge opportunity for them to solve similar challenges across the continent and where sometimes singular markets may not provide the level of scale that is attractive to investors. So think about how you can build a solution that meets local needs but is based on an infrastructure that is scalable.
Not taking into account existing consumer/user behaviour
Access to technology doesn’t necessarily mean that consumers will be able pay for and use your solution. This recent study in rural Ghana, Malawi and South Africa found that 40 per cent of phone-owners they interviewed had no airtime at all on their phones.
Due to the widespread lack of access to credit and savings, consumer spending in Africa is often on a Pay as You Go basis with people mostly topping up airtime and generally purchasing just what they need at any given time.
Think about what this might mean for your solution and be sure to test issues such as consumer spending habits, level of comfort or trust using technology and disposable income.
Eunice Baguma Ball is founder of the Africa Technology Business Network I(ATBN). On 22 June June 2016, ATBN will host the Africa Tech Forum, a one day conference showcasing the most exciting technology opportunities that are unfolding across the African continent as part of London Tech Week. Click here for more