Entrepreneurship: The missing link

Matsiko Kahunga

What you need to know:

We thus need to refocus onto macro, mega enterprises, which provide market, jobs, skills

The narrative seems to remain the same. Recall October 2013. The Transform Africa Summit at Kigali Serena.  Fast forward to July 2015. The Global Entrepreneurship Summit (GES), Gilgil, Nairobi, Kenya. Same script: funding innovations…young people…!

Funding, if it be the magic wand, then the GES in Nairobi has found one. Billions from angel funds and similar sources. But is it really funding that is the alpha and omega of entrepreneurship challenges in Africa? We return to this shortly.

Sunday, July 26, 2015. After a day-long ‘detention’ at home by The  Obama Grand Return, our abridged promenade led us to a new cosy-looking café  in our neighbourhood. The new place, to our pleasant surprise, belongs to a long-time friend, whom we met in 1999, as we bought domestic furniture during our earlier sojourn in Kigali.

We were to meet again during the Transform Africa Summit 2013, while I interviewed the K-Lab innovators as they pitched their respective innovations. Catch up on the old days, he told me he was in what he calls ‘simple’ printing business, but can make his ends meet.

Instructive about his success is that he started with what he describes as ‘no capital to talk of’, and moved to success.

  He picked his business idea during one breakfast at our pre-home hotel, as he presented to us his furniture sales proposal. At that time, the hotel used disposable paper table-mats daily, with printed messages wishing guests a fruitful day, started well with the sumptuous breakfast.

The lesson he picked from this, was the constant assured market for the business that supplied the disposable printed table mats to the hotel. From his experience, (he supplies printed branding labels to two companies),  Jojo argues that every nascent infant enterprise needs an established one to hold onto and this is a bigger determinant factor than capital.

All that he needed was a supportive partnership from the two big firms and this is his success story.  Jojo is progressing thanks to the two companies which support his innovation. They use branding labels in their millions per month. And Jojo has grown from his ‘simple’ start-up to a medium size printery. Because of the two key accounts providing a reliable income (cash cows), he was able to venture into other areas of printing. His latest acquisition is state-of-the-art digital printer. Micro or Macro Investments? In an interview with Citizen TV’S Terry Anne Chebet during the GES 2015, Atlas Mara Chief, Harshish Thakkar, one of the key speakers, roots for small-scale innovations and enterprises, since innovations in Africa need to stay small.

Small is fine. They will start, but they need what Charles Handy calls elephants. The elephants in the case of our Jojo, are the cosmetics company and the spice processing company. Innovation thus found a fertile ground.  Would funding alone have been sufficient to guarantee Jojo his success? If funding be the determinant, is it possible that it can be channeled to the elephants, with a specific agreement with funders (angel, venture, credit, equity) to support the innovations?

Handy refers to the small, young innovations as fleas: they need elephants onto which to hold and grow. We thus need to refocus onto macro, mega enterprises, which provide market, jobs, skills.

Moreover, with most innovations now being in technology, technology is an enabler. It cannot work on its own. Fintechs are the in-thing now, but the money to be mobiled must be earned first.  Payment solutions, banking solutions, all fall into what elementary commerce refers to as aids to trade. The real trade must be there first. And this is production, with fleas holding onto elephants.