Defying The Odds As A Tech Startup Founder in Ghana

Image credit: entrepreneurfail.com

Typically in Ghana, your parents would want you to become any of these four professionals when you grow up. A medical doctor, a lawyer, an engineer or a Bank manager (funny isnt it). By missing the target to become any of the mentioned professionals means “you have brought shame to the family”. You can make your parents proud again by getting a good job in any sector that pays well (as long as the money is good, your birthright stays intact).

Growing up in Ghana, we were not conditioned to become entrepreneurs or a company founder. Right from high school, the objective has been to do a course that will guarantee you admission into any of the tertiary institutions across the country. Once admission is gained into any public or private university, the aim was to get a top spot GPA that will guarantee you a job placement in any of the multinational or local firms in the country.

Starting your own company at a young age is not embedded in our cultural DNA. Unless of course your parents were entrepreneurs and they want you to take over from the family business once they go on retirement. There has always been a secession plan.

The tech boom started in Ghana and Africa at large not long ago. About 10 years ago. The inception of the tech boom saw companies moving into the internet connectivity space, voice services and domain reselling. Ghana was gradually migrating onto the digital platform. That isn’t the focus of this article. The focus is on the tech startup ecosystem in Ghana.

The tech startup ecosystem is still at it’s infancy stage. A toddler. Now learning how to walk. Crushing its bum repeatedly on the hard concrete floor. The odds stacked up, higher than Mount Kilimanjaro. In the last 5 years, a few brave young men and women have embraced the Silicon Valley concept of tech entrepreneurship. The drive has been to solve critical problems facing the country using technology and innovations. The passion has been high, when a need in the society has been identified and startup founders huddle in groups trying to define the solutions. From SWOT analysis, business model canvass etc. You’d expect a smooth take-off right? WRONG!!

The tech ecosystem in Ghana is plagued with many problems. First of all it is a disjointed ecosystem with a lack of governmental support and structures. Yes! Every tech startup operates in isolation. There are no clear cut regulations and benefits startup founders stand to get from the government. Maybe because it is at its infantile stage and has not caught the attention of the “powers that be”.

Secondly, there are no defined Venture Capital firms and Angel Investments in the country. The type of investment in the country largely remains infrastructure based. Physical stuff. Buildings, buy and sell businesses etc. No one will want to give you money for an app idea or “an idea in a computer”. It has to be physical. Any “investor” who wants to invest in your idea will ask about “how soon can we generate revenue and make profit”. Many budding ideas wilt and die because they cannot scale due to monetary restrictions. A good idea backed by money will always scale faster. A lot of startup founders have to rely on external investments from companies in Africa and beyond. That puts a lot of limiting factors on that approach. If your idea is not backed and validated on your home soil, how do you get backing from outside firms?

Thirdly, the use of technological tools to aid your venture sometimes is non-existent or restrictive. If you need to develop an e-commerce platform and process transactions, there’s a limiting factor to the payment processing engine you will use. Many of these international payment processors will not process online transactions from Africa with one main reason: FRAUD. The alternative is to accept cash as a payment mode or go with an existing local processor with high charges. The consumer gets to suffer because high transactional charges will be passed on to them. No one wants to pay high charges. The typical Ghanaian will rather walk into the shop, haggle over the price and pay with cash. R.I.P to your budding e-commerce platform.

Finally you face competition from international giants with enough money to burn who make an entry in Ghana. An international company has the potential to kill of more than 10 local startups with an introduction of a similar idea, backed by enough capital to advertise. The Ghanaian ecosystem is such that word of mouth barely grows your user base. You’ll need to advertise in the traditional media: TV, newspapers, radio etc. Not just one ad. You’ll have to continually advertise till it becomes a household name. Social media ads reach only a small segment of the population. The current internet penetration rate stands at 28.4%. The critical mass of your consumers cannot be reached via the internet alone.

The greatest of all these odds is the negative mindset. As a founder, you will be alone in your struggles. About 99% of your friends will be employed, meaning they draw salaries at the end of every month. You are perpetually broke until you are able to generate some revenue or get funded. The urge to quit and look for an alternative employment is very high because of pressures from friends and family. You will be misunderstood because not many will understand the path you have chosen. The snide comments and remarks will always come. The dreaded question every founder tries to avoid will always hit you in the face when you meet your friends in any social gathering; “So Ghana Mark Zuckerberg, how is your business doing”? “Have you changed the world already as you planned”? These demoralizing comments have the capacity to break you if you don’t keep a positive mindset.

With all these challenges tech founders face in Ghana and Africa, many are rising out of the ashes like a phoenix, challenging the status quo and making a positive impact using a positive mindset. You will fail with some ideas; but that is not the end of the road. It is the lessons learned from the failed venture, if applied well to the new idea will see it running faster than Usain Bolt in a 100M dash.

Keep pushing…

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