Jun Shiomitsu, the CEO of AVODA Group. Photo/Courtesy
En route to Kisementi from Kireka, the traffic jam was monstrous. I prayed that my source, Jun Shiomitsu, wouldn’t find me annoyingly late. By the time I reached Endiro Coffee, I was 17 minutes behind schedule. Not a great start, but at least he was already there.
As I walked in, phone pressed to my ear to confirm his whereabouts, I spotted him waving at me and thankfully not looking like he’d been waiting forever. If first impressions mattered, I had already lost points. But that was beyond me. What mattered now was the conversation ahead.
Jun Shiomitsu is no ordinary businessman. He’s an angel investor, the CEO of AVODA Group, and the founder of the African Business Institute (ABI), which he established in 2016.
Passionate about Uganda’s entrepreneurial sector, he has a front-row seat to the struggles of start-ups in the country, struggles that often see their lifespan cut shorter than a nursery school child’s attention span.
Short lifespans
Delving straight into the conversation, he wasted no time pinpointing the culprits behind this short lifespan: lack of market data, arbitrary pricing, inconsistency, and an over-reliance on Western start-up lingo.
Just as he was getting into it, our waitress arrived, notepad in hand. Shiomitsu ordered a Cobb salad and a cappuccino, while I went for black tea and a rolex. Once our orders were settled, he continued.
“Without data, entrepreneurs can’t accurately project how a product will sell,” he explained. “Take bicycles, for example. Back home in Japan, you can find data on how many people buy them, what kind, and at what price point. Here, that information is nearly nonexistent.” And that’s a problem.
While the idea of electric bicycles sounds fantastic and is perfect for climate change discussions, it lacks the hard numbers that investors crave.
“You can’t just walk into an investor’s office and say, ‘Hey, I have a great idea!’ Investors aren’t just in the business of funding dreams; they fund numbers,” he said, leaning back slightly.
Our drinks arrived, and just as I was about to take a sip, he dropped another truth bomb. “Ugandan entrepreneurs are great at telling compelling stories about need,” he said. “But many aren’t good at telling a convincing story about revenue.” I raised an eyebrow.
“But what about the figures we hear?” He chuckled. “Most of those figures show massive market potential and then ask for huge investments. The problem? The investor doesn’t find the numbers credible.”
He explained that at AVODA, they have a system that tracks students’ data, such as tuition payments, grades, and even punctuality. For instance, when they clock in, they register their attendance through a GPS system.
“Even if they don’t have market data, we at least have reliable information on the entrepreneur’s behaviour. Investors love that,” he said. Just then, the waitress returned. “Sorry, we have no kale for the rolex. Should we go ahead with the order?” “What does that mean for the price?” I asked with a smirk. She smiled.
“No change.” “Ah, capitalism in action! I’ll take plantain instead,” I said, waving off the mild injustice.
Honest revenue
Back to AVODA’s system, Shiomitsu continued, “When we present investors with this validated data, even if it’s just on the entrepreneur rather than the start-up, they light up as if thinking ‘finally, credible data!’
You see, the problem in Uganda’s start-up community isn’t lack of capital; it’s that investors can’t find people to trust with it.”
He had some advice for African accelerators and incubators, whose success is often measured by how many start-ups receive capital. “Help businesses get validated data and earn honest revenue,” he urged.
“The rest will follow.” Another issue? The Westernised approach to pitching. “A lot of it is borrowed from Y Combinator (Silicon Valley’s mother of all accelerators) and TV shows like Shark Tank,” he said.
It involves an entrepreneur pitching before a panel of investors, and the interested one takes it on or the entrepreneur is rejected.
However, that does not work in Uganda for two reasons. Firstly, Uganda has far more entrepreneurs per capita than investors. Secondly, there’s the fundamental mismatch between a start-up in Silicon Valley and Uganda.
“The ones on Shark Tank and Y Combinator already generate significant revenue. Here, most don’t,” he said.
So, investors in Uganda are tired of watching pre-revenue start-ups pitch dreams using unvalidated data. Instead, these days, they simply approach AVODA itself to ask for investment recommendations. That’s why AVODA phased out pitch days.
“The time spent rehearsing a pitch and readying themselves for pitch day could be spent generating revenue or gathering meaningful data,” he explained. “Without either, being a good presenter doesn’t make you a good entrepreneur.”
Resultantly, AVODA focuses more on connecting students to markets such as in the UAE, USA, and Japan rather than on start-up capital. “For instance, last year, we didn’t make any investments,” he said.
“Because our students were already earning enough revenue-based capital. That’s our ultimate goal.” At this point, our food arrived. Seeing all the green on Shiomitsu’s plate, I couldn’t help but ask, “You really love salads, huh?” He laughed.
“It’s healthy and leaves me feeling full but light.” A subtle reminder to reconsider my own food choices. Shiomitsu then pointed out another common pitfall: most “entrepreneurs” aren’t running businesses—they’re just selling products. “If there’s no scalability or plan to expand, you have a product, not a business,” he said.
Profit maximisation
He used the iPhone as an example. “IPhone 1 was a product. The strategic, constant releases of newer iPhones? That’s a business.
The same can be said for people who diversify their offering, say, from only selling seeds to adding seed oils, or from only selling in Kampala to selling also in Kigali or even Dubai. If you have no plans to upsell or expand, serious investors won’t bite.”
Finally, he reminded me that while many investors are good people, they’re in it for profit. They answer to their investors, too.
“Your data must be verified and your projections realistic. Unfortunately, most Ugandan start-ups don’t know what investors are actually looking for.”
As I took my last sip of tea, awaiting my gonja, I couldn’t help but think—Ugandan start-ups don’t have a capital problem; they have a credibility issue. And in a world where numbers speak louder than dreams, data might just be the missing link to unlocking Uganda’s entrepreneurial potential.
