Early seed fund for ICT startups is a great idea
Early seed fund for ICT startups is a great idea I wrote an article in New Vision about bailing out university startups that was published on 11 august 2016.
3 weeks later. I reached at office in the morning my colleague hands me a copy of New vision while smiling and said. “There you go Ronald the government has replied you and the answer is unbelievable “. I dropped everything to read the news with screaming headline “ICT innovators given Sh15b “ and also to build ICT incubation centers. This is the greatest news to ICT startups and the best initiative the government has taken to unlock massive youth opportunities and equally cut down youth unemployment. The good thing about ICT innovations is, it takes two or three people to start and requires very little resources but impact millions of people. Did you know Facebook was initially started by one student called Mark Zuckerberg in his dorm room then got $1000 dollars from his friend Eduardo Saverin to put Facebook online?
I believe this initiative will solve two bottlenecks that have blocked Ugandan ICT startups to succeed as compared to other African countries like Kenya, Nigeria and South Africa.
The bottlenecks are:
1. Luck of seed investors.
ICT innovations have to raise money in order to succeed. It is very difficult to find a short cut on this. Startups need money to grow fast and reach product-market fit, a stage where the right solution is found for right painful problem that affect many people and that solution delivered to them. Then build business around that solution. All ICT innovations you know of in the world go through this stage where founders have to raise money in stages.
But the most important funding stage is early seed. To turn ideas into a minimum viable product (MPV) something working for customers to use and also to validate the many assumptions one has in an idea. This money is usually gotten from personal savings, family, friends and other people who are normally called “fools”.
All those innovations you treasure so much including the popular Google and Facebook couldn’t have existed without seed founding. In fact Google was incubated by Stanford University. Mobile money was under the wings of safaricom and the list goes on. No angel investor or venture capitalist will give you money to grow your idea unless you have an MPV and passed early seed funding stage.
Now that has been the number one bottleneck in Uganda.
ICT innovators couldn’t raise seed money. They don’t have personal saving since most of them are fresh graduates. Friends and family don’t understand ICT investments they would rather give you money to a more safe businesses. And no fools in Uganda to invest in those dreams of coarse no bank will give you such loan currently.
This has left young innovators frustrated in Uganda. I always see my fellow startup founders participate in any ICT competition available with hope of winning seed money. Some try to sell or collaborate with established brands this never works for startups, because by nature startups are supposed to disrupt the existing businesses. That’s how our innovations have been dying without seeing daylight.
Surprisingly these young founders need just the following to start:
a) Hosting service, to put their Innovations online
C) space to work from
d) Team facilitation like transport lunch and etc.
If the government can provide the above. Then the biggest hurdle is removed.
The heart and soul of any innovation is the team behind it. I am a business mentor and I have seen that problem every day. Having a good team that can bring an innovation to life and build businesses around it to success is another important element needed besides availability of a support fund.
Like they say, a Great team produces a great product while a mediocre team produces mediocre products.
I believe with the arrival of this program our innovators will be fine-tuned to be better and also learn from a pool of many fellow innovators around them. We are going to have an environment with fantastic business mentors especially those who have succeeded through the program.
One of the main reasons why Silicon Valley has produced over half of the biggest ICT companies in the world I; it is easy to raise money of all stages and great pool of talented team available. Furthermore lecturers/supervisors of this innovators, need to have their salaries well settled to allow them a peace of mind.
Now we have those two hurdles removed. And there are many problems to solve with technology and broken business models to fix. Coupled with high internet access in Uganda (11 million people access Internet) this initiative will definitely unlock massive opportunities for the youth. With the two problems solved, let’s trust that the implementers will strictly elude the ever spoiling hand of corruption.