Mind and Hand: MIT And the Pursuit of African Entrepreneurship
How the World’s Number One University Became a Key Enabler of the African Tech Ecosystem
This article is part of a series of initiatives launched by United Ventures and its ecosystem partners to honor and celebrate Black culture. The article was specifically published on Juneteenth (which is the oldest nationally celebrated commemoration of slavery ending in the United States) to show support to Black communities. Special thanks to the entire MIT community for contributing to this effort.
The African startup scene has been on a roll for the past few years with numerous success stories and an increased appetite from American and international investors resulting in over $2 Billion raised in 2019, a 74% Year-Over-Year growth. While Covid-19 has significantly slowed startup funding down, one must look beyond this crisis to truly assess the growing strength of the African tech scene.
In the past three years, Silicon Valley-based Flutterwave raised over $60 million; an African venture capital firm led a $40 million series C round supported by GV, Salesforce Ventures and Spark Capital; Y Combinator accepted over ten African startups into its program; another five made it onto CB Insights’ Fintech 250; TechCrunch launched its first ever Startup Battlefield Africa; Novastar Ventures increased its fund size to $200M; and Goldman Sachs expanded its footprint on the African tech scene.
The Hidden Role of US Universities
This burgeoning activity is the result of years of hard work from all the stakeholders of the African tech ecosystem. American universities are probably the least visible of them all, yet they play an increasingly critical role in this growing environment.
In California for instance, Stanford University launched a $3 million initiative to support African entrepreneurs while 2018 alumna Fatima Dicko raised over $1 Million to launch her startup right on campus, suggesting that universities are indeed among the best places to start a company. Meanwhile, on the East Coast, Harvard University opened a center in South Africa to better support its 3,000 African alumni and the local communities through research and exchange opportunities.
MIT’s Global Entrepreneurial Approach
MIT has proven to be particularly effective at boosting the African tech momentum with its alumni community, thanks to its strong culture of entrepreneurship and innovation. Companies started by MIT alumni have generated nearly $2 trillion in revenue, equivalent to the world’s 10th largest economy; and while African companies certainly represent a very small fraction of this amount, they are bound to play a more significant role in the narrative of the Institute’s global leadership.
In 2017, Provost Marty Schmidt unveiled a global strategy that places Africa among the three regions that will drive MIT’s international engagement. This mandate is now taking shape with the MIT-Africa initiative, an Institute-wide master plan that seeks mutually engaging partnerships in the areas of research, education and innovation.
This global strategy, while refined, is not new. MIT has been quietly producing some of Africa’s most impactful tech entrepreneurs for the last ten years, and these leaders went on to build powerful companies that have created thousands of jobs and raised millions of dollars from US and African investors.
Great Leaders Build Great Companies
In West Africa, Isaiah Udotong launched Releaf, a Nigerian startup that now has over 35 team members on payroll and that received funding from Okendo Lewis-Gayle’s Harambeans Prosperity Fund. Lewis-Gayle’s fund also supported Metro Africa Xpress (MAX), another startup founded by MIT alumni Adetayo Bamiduro and Chinedu Azodoh to tackle Lagos’ insane traffic problems and the city’s intricate public transit regulations.
Still in Nigeria, Oluwasoga Oni and Genevieve Barnard, two of Bamiduro’s friends, are transforming healthcare by building high-end medical diagnostic facilities for the continent’s next billion with MDaaS Global. Less than 300 miles away, Kwami Williams, who left NASA, is connecting thousands of small Ghanaian farmers to the global market with Moringa Connect.
In Francophone Africa, Claude Grunitzky is developing the media and financial inclusion sectors with True Africa and Koosmik. Further north, Mostafa Terrab turned Morocco’s OCP Group into the world’s largest exporter of phosphate rock and phosphoric with a $5 billion turnover in 2018; and investor Hala Fadel founded the MIT Enterprise Forum of the Pan-Arab region.
In East Africa, Kenfield Griffith is solving Africa’s customer experience challenge with Ajua which secured $3.5 million top investors such as TLcom Capital, Sangu Delle’s Golden Palm Investments and Los Angeles-based Cross Culture Ventures. And Sanergy’s David Auerbach and Lindsay Stradley have raised over $3.5 million to solve Kenya’s slum sanitation problems, winning MassChallenge’s coveted Diamond Prize and creating close to 1,000 jobs in the process.
Ella Peinovich, a member of Sanergy’s original starting team, went on to launch her own startup to reshape Africa’s supply-chain with its mobile-distributed manufacturing platform — Soko, generating over $3.5 million in revenue.
Ella, as well as Dare to Innovate’s Meghan McCormick (who won the MIT Fintech Emerging Markets Prize), WeCyclers’ Bilikiss Adebiyi Abiola (who won the Cartier Women’s Initiative Award), and all the fellows from the Legatum and D-Lab centers represent a new generation of female leaders who are building sustainable global brands and paving the way for female entrepreneurship in Africa.
These alumni have successfully channeled MIT’s appetite for practical knowledge (its famous Mens et Manus motto, which is Latin for mind and hand) into their ventures by inventing and scaling innovative solutions across the continent while opening doors for a new generation of leaders to rise. Take Sam Epee-Bounya for instance, a Managing Director at Boston-based Wellington Management, who set up a fund with his wife to help African and African-American students study at MIT Sloan School of Management.
Cultivating the Right Mindset
How did they all do it? They focused on the opportunity, not the problem. To paraphrase Brad Pitt’s character in Fight Club, the first rule of Africa is: you do not talk about Africa. That is, entrepreneurs should talk less about Africa’s challenges and more about its opportunities.
This candid simplification of the market approach helps break free from the stereotypes of war and poverty that are often attached to Africa. Perception is usually the biggest obstacle facing those who are considering doing business in this region and MIT, with its ‘anything is possible’ culture, is the perfect platform to shatter this obstacle and create innovative tech that translates into sustainable ventures (there’s a reason that Dare To Innovate chose such an evocative name).
Contextualizing Training and Educational Resources
Aside from the psychological barriers to launching a venture in Africa, the scarcity of relevant management frameworks and of Africa-focused training material represents another challenge. The US tech scene is well known for creating compelling startup material such as Eric Ries’ The Lean Startup and Y Combinator’s accelerator model. But the content we produce stateside is for the most part tailored for the US market. With its 54 countries and 1.3 billion people, Africa is a very different beast that brings a whole new dimension to concepts like customer acquisition and market validation.
The market differences between the US and Africa are so significant that an increasing number of experts are urging American venture capitalists and entrepreneurs to “unlearn everything they learned about Silicon Valley” as EcoVC founder Eghosa Omoigui once said.
Silicon Valley’s obsession with top line growth and its self-centered culture is preventing many US venture capitalists from seeing Africa’s true investment potential and stakeholders need to follow Eghosa’s footsteps in educating the industry. They also need to communicate Africa’s value proposition in a language that speaks to venture capitalists.
To tackle this challenge, MIT has created experimental platforms such as the Open Mic Africa tour and alumni are regularly brought back on campus to share their experience with the community. Under the leadership of Fiona Murray (the Associate Dean for Innovation, Co-Director of the MIT Innovation Initiative and Faculty Director of the MIT Legatum Center), such opportunities are building a positive feedback loop that will ultimately produce highly relevant educational material.
For instance, in 2018, the Legatum Center collaborated with the Martin Trust Center to produce a series of workshops that combined elements of Disciplined Entrepreneurship (best-selling book by MIT’s Bill Aulet) with real, practical experience from African entrepreneurs. The collaboration extended to the Get Stuff Done (GSD) Clinic, a practical workshop series for MIT students solving complex challenges through technology and business model innovations. The result was a powerful mix of hard-hitting entrepreneurship advice and know-how that resonate with both American and African tech leaders.
The Institute has also created new outlets for more targeted training through courses such as Development Ventures (taught by Joost Bonsen) and Impact Ventures (taught by Georgina Campbell Flatter), both of which are specifically designed to teach entrepreneurs how to build sustainable for-profit ventures in frontier markets.
And since peer learning is a key component of startup training, the educational programming is seamlessly supported by cross-campus speaker events where alumni are regularly brought back on campus to share their experience with the entrepreneurial community.
For instance, a few years ago Uber’s Chief of Strategy flew from the Bay Area to give a presentation to MIT students, and Union Square Ventures’ Fred Wilson gave the inaugural Georges Doriot Lecture at the Tang Center.
The Need for More Research
The process of contextualizing entrepreneurship resources starts with a good understanding of the African landscape, and there is no better way to acquire this knowledge than by visiting your target market and doing your own market validation. Interacting with African stakeholders while acquiring new skills on the ground represent a unique learning opportunity and every year, programs such as Stanford’s MBA Africa Fellowship and MISTI send entrepreneurial students to Africa to build those skills.
Aside from the educational opportunities this grassroots approach creates, the local discovery process also strengthens the universities’ own knowledge of the African continent, thus creating better aligned conditions for research and case studies.
MIT is taking a page out of Harvard’s playbook by producing such case studies while remaining true to its own entrepreneurial “can do” attitude. The Institute recently introduced three case studies on African companies (Sanergy, Soko and MAX). These studies should ultimately evolve into living documents that map the founder’s journey over time and that provide near real-time insights on their latest opportunities and challenges.
MIT’s African engagement would not be complete without strong research initiatives led by its faculty members who are constantly producing groundbreaking studies. For instance, a paper from MIT professor and economist Tavneet Suri shows that mobile money service M-Pesa helped lift close to 200,000 Kenyan households out of extreme poverty and moved 185,000 women from farming to business operations. While Silicon Valley is laughing at itself for its “fake hippie rhetoric” (as The New Yorker puts it), African tech is truly making the world a better place by showcasing a different approach to tackling poverty.
Celebrating the African Tech Ecosystem
Still, there remains a significant need for more involvement from the US-based stakeholders. The diaspora has been attempting to play its part by organizing year-round conferences such as the Africa Business Forum at Stanford, the Wharton Africa Business Forum and the Africa Innovate Conference. While these outreach initiatives have been successful, they barely scratch the surface of Africa’s enormous entrepreneurship potential.
This begs the question — How can educators nurture the African tech ecosystem from 5,000 miles away without losing sight of their primary focus — serving their students and alumni? And given the geographical, cultural and budgetary challenges, what models should they leverage to make their contributions truly valuable?
Clearly, US universities are not quite equipped with all the resources they need to fully foster an ecosystem of a billion-plus people from abroad.
This limitation can be partially solved by strengthening the on-the-ground collaborations as Stanford and Harvard have successfully demonstrated with their SEED program and Africa Center, respectively. MIT’s complementary approach focuses on exporting programs and initiatives such as Global Startup Labs, Sandbox Innovation Fund, D-Lab, the Global Entrepreneurship Lab and the Regional Entrepreneurial Acceleration Program (REAP) which now supports 4 active regions: Morocco, Algeria, Ghana and Nigeria.
The resource and geographical constraints can also be solved by enabling the broader Africa-focused tech ecosystem to engage with the MIT community through virtual events. Last month, the Institute successfully transformed its famous hackathon model into a virtual platform with the Africa Takes On Covid-19 Challenge, an online hackathon that brought together over 1,300 participants and 300 mentors from over 100 countries (including 44 from Africa). This student-run event proved that American stakeholders can engage with the African tech scene despite the geographical and cultural barriers.
Funding Opportunities for Frontier Entrepreneurs
Another way American universities are helping boost Africa’s tech ecosystem is through competitions that provide entrepreneurs with equity-free capital and mentoring while helping international investors spot the startups that have the potential to scale.
MIT built a strong pipeline of funding opportunities for such companies. The Institute has provided over $3 million in funding through its Inclusive Innovation Challenge (which recently folded into MIT Solve), and $400,000 through its MasterCard Foundation-backed Zambezi Prize for Innovation in Financial Inclusion. Past winners of those prizes include some of Africa’s most successful startups including Tala which raised a $30 million Series B led by Menlo Park’s IVP, and MFS Africa which now connects over 180 million mobile wallets in Sub-Saharan Africa.
Challenges Remain
While capital is key to sustaining the African startup ecosystem, access to affordable skill development is equally, if not more, important. US universities should play to their strengths and make this goal a priority if they want to truly engage with frontier markets. EdX-powered platforms are a step in the right direction, and resources such as MIT’s Legatum Fellowship and Stanford’s Africa MBA Fellowship help lower the barriers to affordable training opportunities.
US universities should also play a bigger role in supporting female African entrepreneurs. Ghana, which has the highest percentage of female entrepreneurs in the world, is proving that African female entrepreneurship is a profound way of life, yet many tech initiatives remain male-dominated. The female entrepreneurial spirit should be better nurtured and celebrated as a catalyst for inclusive growth.
When Union Square’s Fred Wilson gave his Georges Doriot Lecture at MIT, I asked him to expand on his comments about the developing world’s tech revolution. He doubled down on his position and acknowledged this market as a key driver of radical innovation that will power global economic growth. My own mentor Nova Spivack (who serves as an advisor at my Africa-focused company) was also bullish on Africa’s growth potential when I asked him about this market’s potential during our first meeting. The market growth Spivack and Wilson foresaw can only be achieved if African female entrepreneurs have access to the same opportunities as their male counterparts
MIT is well positioned to lead this diversity effort thanks its team of female leaders with strong African connections such as Jinane Abounadi, Executive Director of the MIT Sandbox Innovation Fund Program; Alex Amouyel and Hala Hanna, Executive Director of MIT Solve and Managing Director, Community of MIT Solve, respectively; Maya Rahal, Managing Director of the MIT Enterprise Forum Pan Arab; and Dina Sherif, MIT Legatum Center’s Executive Director who also serves as Advisor to the President of Egypt.
Another challenge academia can help solve is the frequent omission of North Africa from conversations about African entrepreneurship despite groundbreaking events such as the Arab Startup Competition. When it comes to solving Africa’s biggest challenges many educators tend to zoom in on Sub-Saharan Africa, and while this region is fertile ground for evidence-based research and frugal innovation (thanks to its sizeable share of challenges to bare), North Africa should also benefit from a growing platform to serve its innovation ecosystem which boasts over 100 tech hubs.
What the Future Holds
As more stakeholders realize Africa’s true socio-economic potential, the ecosystem dynamics will inevitably shift toward better strategies for consumer monetization, digital transformation and workforce development. This shift will give birth to new models for partnerships with the backing of existing and new collaborators such as the Legatum Group, the MasterCard Foundation and the Jacobs Foundation.
The proliferation of tech initiatives will also lead to a unification of resources as Africa-focused stakeholders seek to strengthen their value propositions. They will ultimately apply some of the principles of venture studios: leveraging connections; consolidating resources through a platform model; and forging strategic collaborations driven by shared values.
The MIT Inclusive Innovation Challenge (IIC) is the perfect example of such a model: as the flagship program of the MIT Initiative on the Digital Economy, whose board members include LinkedIn co-founder Reid Hoffman, Salesforce founder Mark Benioff and Alphabet Executive Chairman Eric Schmidt among others, the IIC successfully engaged with African startups through mentorship, industry recognition and superior access to MIT’s broader network. With MIT Solve now taking a center stage in following on this tradition and in strengthening MIT’s commitment to social impact innovation, the African tech scene is poised to grow to new heights with the backing of more international supporters.
On the event side, the broader Black tech ecosystem will ultimately play a larger role in supporting African entrepreneurs through conferences such as Blavity’s AfroTech, Change Catalyst’s Tech Inclusion, and Las Vegas’ CES.
By betting heavily on a continent where practical innovation and infinite opportunities are intertwined, the world’s №1 university is staying true to its entrepreneurial culture while solidifying its status as a hotbed for research, education and innovation.
This engagement will ultimately stir an open debate on the role US stakeholders should play in supporting the African tech ecosystem. It will also provide greater learning opportunities for all of them, including American universities, venture capitalists and tech leaders who may very well learn a new thing or two about entrepreneurship in the process.
