Want to understand the world? Try building a company on another continent.
About my journey of starting a business in Uganda with the goal of taking Ugandan entrepreneurship to the next level.
I love it. In the last three weeks I have learned as much as I haven’t in a long time. I learned so much that I almost don’t dare to write this because in a week, I will probably have realized that this was only a small part of the story. Of course I will write it anyways.
So what have I learned and what is my resulting strategy?
Dealing with what is there and making use of it
I chose Uganda as where I wanted to start the business because I felt there was a lot of blank space for me to build something. Well, it is not a blank space. Every country has a unique structure, mentality, history and culture and all of these factors have a huge effect on what the market looks like. These factors are also the reason for the current situation and therefor part of the problem you are trying to fix. Once you understand the conditions though, you can deal with them and even make use of them.
In the end, entrepreneurship is about having an attitude of abundance. Viewing challenges as opportunities and the given conditions as tools.
My findings about Uganda
Until now I met up with about 30 people. These people were founders, supporters, researchers, farmers, VC’s and business people. The subjects were mostly startups, culture and why Ugandan startups haven’t been more successful. I can only speak for what I gathered by talking to the people I met. My findings are therefor, as anything, highly biased.
It’s about money, but money just follows value
Startups here are not getting investments for a reason. I explained in my last article how I thought that there are so many great African startups that just lack money. After doing my research I found: money really is usually not their main problem. It is mostly a lack of education, a restrictive mindset and deep rooted social structures as well as an extractive, disorganized government.
All of this basically results in the incapability of building structured companies that could attract investments and create safe jobs.
More about money
Money is one of the most important factors because you can map many problems on the way money is used. There are two findings I want to address:
- Money is very scarce for most people — money is only a problem if you don’t have it. Since the majority doesn’t have it, money itself is always a main topic and it seems like money will solve any problem (which is not true). Accounting and a separate company account is also a huge problem because most people have never learned how to do it or why it’s even important. Being able to provide a record of your numbers though is the most basic thing an investor needs to see. Also people are likely to spend their first money directly for consumption instead of leaving it in the company.
- The relationship on how to earn money is messed up — there is a lively history of NGO activity in Uganda. I don’t want to undermine the positive impact they had on the life of many people, but I think that grants and donations have had profound impacts on the way people start businesses. It has taught entrepreneurs that you earn money by having a good idea with a social impact and a strong proposal. In reality you earn money sustainably by creating value for actual customers who decide very critical on what they spend their hard worked money on. Grants and donations are great, but they interfere in the local market and the impact of that isn’t necessarily good in the long run.
Summing up, it’s a mess. You have to be very careful on how you handle money topics and communication has to be crystal clear.
Common mindsets and practices
I’m going to list some common (for a thriving startup ecosystem harmful) mindsets which are symptoms of history, experience and deeply rooted structures. Any explanation relies on my own assumptions.
- Trust issues — people very reluctantly share ideas and problems. Apparently, steeling ideas is very common. I can only trace this back to the feeling of scarcity. Also just “copy- and paste-ing” existing business ideas happens often. Even the different startup supporters (Incubators, Accelerators, Co-working spaces) are insufficiently connected which only reinforces the problem.
- Ownership-syndrome — entrepreneurs seem very attached to their ideas. This makes taking (constructive) criticism, sharing and cooperating very difficult.
- Missing standards — people in Uganda have very good ideas, they also have a lot of motivation. The ability to establish standards and robust structures in a company seems to be rather difficult. Many startups start off well and even make revenues, but then fail to establish structures that keep things going and thriving.
- Rigid hierarchies — apparently, the common structure of anything is very hierarchical. A team spirit you would expect in a startup is therefor hard to set up and a good number of entrepreneurs are starting alone. People have learned to take everything given to them as a fixed truth and don’t question the status quo or even interpret the facts given to them.
- Missing confidence — education, which is supposed to give young people space to learn, grow personally and find out who they are is insufficient. There are few available jobs, security and foresight of a good life is not given. The majority of people don’t know where to go, they don’t believe in themselves and that they can create the life they want. A confident and optimistic population though is the foundation of a thriving society.
- Community — there is no strong government in Uganda. There are no strong social services like health care or a social insurance system. If people run out o money in the middle of the month, they will ask their neighbor or a friend. This results in fist, giving company money to friends and second, hiring friends and family even though they are most likely not the perfect employee for the job.
Movement, opportunities and awesome people
I admit this sounds like a lot of problems, but for every challenge, I believe there are many opportunities. And despite all the (political and social) problems, people make it work somehow. I met a ton of brilliant people already and when I talk to them, I have no doubts that the challenges I described will be used as opportunities.
My Strategy
Throughout the last three weeks I have been talking to people, absorbed the circumstances around me and I made a ton of concepts of which most of them are probably trash. I found there is, additionally to the funding gap, a much bigger gap in support and education. I also found that instead of trying to support everyone, in terms of effectively having a large impact, it makes more sense to intensively support the ones who have the most potential. A few, very successful startups can create a new standard for entrepreneurship in Uganda and bring up new role models. Eventually they build more sustainable jobs.
Long story short, my most recent concept is to create an accelerator program, that
- identifies the entrepreneurs with the most potential.
- gives the chosen entrepreneurs intense strategic and technical support.
- provides pre seed funding.
I want to help create a new generation of Ugandan businesses. I want to define a new standard of startup support in Uganda and enable a few entrepreneurs to become the role models for the next generation.
You can check out our website on foundality.com.
Process
One thing I’m pretty sure about: one of the best ways of understanding a country is trying to build something from the ground there. You are forced to look behind the curtain and you become very aware of how much you don’t know. It’s certainly a process with many ups and downs and you can never forecast whats coming next. Until now, I highly recommend it.
Any thoughts?
Let me know what you think and feels free to follow me on social media :)
Instagram @theantonialorenz
Medium Antonia Lorenz
