Suppliers of Money in Africa: Time to show our start-ups the money

Suppliers of Money in Africa: Time to show our start-ups the money

KIZITO OKECHUKWU | SEPTEMBER 18, 2018

As the old cliché goes, money makes the world go round. But for many an innovative start-up, lack of it brings their entrepreneurial world to a grinding and severely frustrating halt. Any fledgling business needs money of some amount to jump-start and fuel their growth. In capitalist markets, there are two stakeholders; the suppliers of money and the users of money. I use the lurid word ‘money’ in this article just to drive home the key point I want to make and that is there’s no separating money (liquid cash) from business success.

Commercial banks are an important source of funds for any business and also for small businesses, as these don’t often have ready access to the long term securities market, so bank credit is the only practical source of new capital funds, i.e. intermediate-term financing.

Besides commercial banks, there are various other sources of business funding. These include grants from private, NGO or public sectors, angel investors, venture capitalists and fund managers of private or public sector funds, among others.

The suppliers of money quite literally hold the future or failure of many small businesses in the palms of their hands, even if they can prove sustainability. The immense power they yield inevitably decides which ones get developed and also how much they, as an investor, can benefit from it. There’s a popular saying in the Igbo tradition that ‘whoever has the money has the key’.

Recently, three African start-ups, two Nigerian ones and a South African one, secured huge investment deals in the same week.

Yet something left me quite gobsmacked. Not a single African money supplier played any part in these deals or led these deals. There were probably more deals made that week and deals continue to be made each day, but I want to focus on three specific ones, given that I have associated with some of the beneficiaries of these highly lucrative and game-changing deals.

Tizeti received an investment of US$ 3 million

The company was established to tackle poor internet connectivity, not only in Nigeria, but on the continent at large, by developing a cost-effective solution from inception to delivery, for reliable and uncapped internet access for potentially millions of Africans.

Using solar-powered base stations, Tizeti is able to reduce operating costs, which allow the company to be hyper-competitive when it comes to subscription packages (a Wifi.com.ng unlimited plan in Nigeria currently costs just $30 per month). This, coupled with the company’s extensive coverage reach, has given Tizeti a competitive edge in the ISP sector, establishing the young company as an ICT and tech infrastructure leader.

4DX ventures, a New York-based venture capital company that focuses on Africa, led the US$3 million in investments. I first met the Tizeti team last year and, although I saw not much opportunity for them in South Africa, I firmly believed that their product is world-class and a no-brainer for any investor seeking opportunities in Sub-Saharan Africa.

Paga received an investment of US$10 million

Paga, a mobile payment platform, was founded in Nigeria in 2009 by Tayo Oviosu and publicly launched in 2011. Today it has over nine million customers and allows its users to transfer money and make payments through their mobile devices. Paga acts as a mobile wallet where any user equipped with a mobile device can conduct transactional activities using their device. The Global Innovation Fund, which is both Washington and London-based, led the investment deal.

Yoco received an investment of US$16 million

Yoco, a fintech start-up, was founded in 2015 and is a South African-based point-of-sale payments provider that builds tools and services to help small businesses get paid, run their business better and grow.

In just its first year, Yoco processed some R13 million, not an insignificant amount for a fintech start-up in South Africa, which has the most sophisticated financial services industry in Africa and is well served by several major banks that regularly receive global awards for innovation and excellence.

Yoco was also named one of the “250 top private companies changing the face of financial services around the world” in the Fintech 250 report by researchers CB Insight. One of only five African start-ups to make the prestigious list, the report praised Yoco for its “powerful business portal”. Last year, I attended their stakeholder session where they shared their vision for growing the company beyond the shores of South Africa.

Partech, a global investment firm based in San Francisco, led the investment.

Just these few examples are solid proof that African start-up innovation can proudly compete with the best on the planet. Yet many of us wish that our Africa institutions and suppliers of money will recognise the power in our young ‘up-and-comers’ and give them the monetary muscle to scale and take their rightful place alongside their international peers.

I have met many of our African investors (banks, angels, VCs, fund institutions, etc). It seems they expect a start-up to have a grey hair, have worked for many years and so much other frustrating criteria. Africa is abundant with fantastic initiatives, which global investors are quickly realising, but sadly many of the money suppliers in Africa are not and most times it takes them so much time and a lot of convincing to believe in African startups.

The global investment community believes in our youth and this is evident through my recent interaction with a group of UK investors from the Department of International Trade whom I met last week during their visit to our 22 on Sloane campus. Startups are pivotal in securing a positive economic future for our country and it would be great if our African funders too, would start quickly coming to the party.

I think for every aspirant start-up with proven sustainability, the words of Tom Cruise and Cuba Gooding Jr. in the 1996 hit movie Jerry Maguire ring true. “Show me the money!”

Kizito Okechukwu is the co-chair of Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa’s largest startup campus.

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SA can beat technical recession with support To & From startups

SA Can Beat Technical Recession With Support To & From startups

KIZITO OKECHUKWU | SEPTEMBER 11, 2018

I really do not know which economist coined the phrase, but it’s largely accepted that a technical recession is when a country have two quarters in a row of economic contraction. I’m not an economist, but I recall that in school we were taught the simpler definition (the nuts and bolts version) that a recession is a significant decline in economic activity, evident in less income, less sales, less production and less employment.

One of my lecturers in my MBA class, some seven years ago, quoted Ronald Reagan as saying that “recession is when your neighbour loses his job, depression is when you lose yours and recovery is when Jimmy Carter loses his”. The moral of the story is that a recession, technical or otherwise, is not good for any country.

But it’s not all bleak, especially for start-ups…

According to Forbes Opinion, start-ups, with their inherent agility, can take advantage of a weaker economy and come out on top. From day one start-ups operate an inherently lean business model, while maximizing value for customers.

While economic uncertainty is never a desirable situation, some of the world’s greatest businesses have started during a downturn or recession. Importantly, many reports suggest start-ups are some of developed country’s greatest employers, as they scale to become big companies in their own right.

Recessions create problems. They also slow investment in innovation down. Consumers and businesses are looking for solutions to problems which present opportunities for start-ups to solve. A start-up built during the tough times is designed from the ground up to be a lean, mean, efficiency machine – whether they’ve bootstrapped or not. These habits should stay with them when the market recovers, giving them higher profit margins since they’ll be able to lift prices once consumers and clients are spending again. If one can build and grow a business when consumer confidence is down and businesses are tightening their belts, then the business will be bullet-proof when things improve.

UNIDO’s Youth and Women Entrepreneurship project (YoWep), designed under the PCP framework, aims to support the country’s industrialization process both by building the capacity of the government implementing agencies and crafting a guiding strategy/framework (NES) for aligning various initiatives and actors on entrepreneurship development. This strategy, moreover, envisages structural transformation enhancing job creation, and leading to economic empowerment of youth and women MSMEs in the PCP priority sectors.

As a country, South Africa can also lessen the impact of a recession by focusing more on its local start-up environment, with initiatives such as:

  1. High impact investment in Agri start-ups. There are many start-ups and small businesses that are conducting great, sustainable farming initiatives. Our country needs to help scale these farms by investing capital in them to enable exports and increase job creation.
  2. Define what products/services are being consumed. Our resident Research Advisor Dr Pali Lehohla is a huge advocate of consumption and production. His famous quote is that “no country will ever be successful if the country does not understand in detail what is being consumed, who consumes this and who produces this”. By taking heed, South Africa has a high chance of expanding production opportunities into these industries, thereby increasing manufacturing and job creation. China’s understanding of the production and consumption model will be a great lesson for South Africa.
  3. Invest in technology. Technology is the key driver in nearly every industry imaginable. Investment is the primary enabler to get our tech start-ups with proven sustainability up and running quickly to scale. Most of our Tech startups in South Africa need as much help and support from government and private sector to scale.
  4. Help SME’s to participate more in the mainstream economy. SME’s may be small in size, but they’re big in impacting our economy. Most studies conducted in various developed countries prove that 40% of a country’s total job creation comes from small businesses. South Africa too, will not survive without them. Government should start channelling a far larger portion of its supply chain contracts to SMEs. The fact remains that big business even with more sales/production scares away from creating additional jobs in their companies.
  5. Help citizens to be more productive. How can our labour system be more flexible to allow people to have two jobs? This is the case in many developed countries, where people work flexible hours and have two jobs to help make ends meet. Employees are feeling the brunt of staying in one regular 9 to 5 job that doesn’t pay great – and can also be done in half the time – creating an opportunity to move on to their second job. Some might argue that the unemployed would gladly be a nine-to-fiver, but that’s not the point here. This challenge is that we’re not producing as much as we could with the skills we have. So how can the skilled be used wisely to produce more?

 

Any type of recession presents a complicated economic landscape, which ultimately affects every South African in some way. For start-ups, there are a lot of reasons it might be a great time. Smart start-ups should begin taking advantage of new opportunities and unique needs presented by the economic downturn. And with the country’s fiscal help, which is crucial, small businesses can definitely help turn the economic tide for the better.

Kizito Okechukwu is the co-Chair of Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa’s largest startup campus.

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Info Trade’s proof of staying power secures R250k seed grant to scale.

Info Trade’s proof of staying power secures R250k seed grant to scale.

KIZITO OKECHUKWU | SEPTEMBER 03, 2018

Pictured Above: Simphiwe Nkula founder of Info Trade

The Tyler Perry-produced movie Acrimony, which was released this year, received mixed reactions. Many questioned the script and some just blew it off as a bloated drama. However, I’m not here to give my two cents worth as a movie critic. Rather, I’d like to lift a lesson out of the movie’s premise, regarding the start-up entrepreneurship ecosystem. And this is adversity, which every start-up is guaranteed to face.

Although Lyriq Bent was unfaithful to his wife, played by Taraji Henson, he remained passionate about his idea of creating a self-charging battery. Yes, his concept was great, but not many people believed in him. After a period of total financial frustration, during which he lost lots of money, his wife also lost faith in him and his business idea. Yet, he persevered, soon banked a big investor and became a multimillionaire.

The major adversity faced by start-ups remains access to both funding and markets. Even though there is an abundance of solid and potentially sustainable business ideas out there, only a few will ever make it to market. There are also numerous processes that need to be undertaken to get an idea to commercialization, these include testing, validation and prototyping.

Start-ups face many financial challenges in their initial phase of existence, such as using money from friends and/or family. This can often lead to broken relationships because the funds may soon dry up without immediate and tangible returns.

Another is explaining to investors why they should invest in the start-up and then to convince them that they will get their money back. Always difficult, as most want (if not demand) a quick ROI. Last, is accessing markets, which at most times depends on a lucky break or being in the right place at the right time.

Info Trade is a start-up founded by Simphiwe Nkula, which offers cashless payments, order management and retail audits. It was selected by GEN Africa’s 22 on Sloane start-up campus to join its residency programme. Recently, Info Trade finalized the research on its initiative and did an initial proof of concept (POC). This has just resulted in the start-up receiving a R250 000 grant from the Technology Innovation Agency (TIA) to re-validate its pre POC and get ready for commercialization, scheduled for early 2019.

The lesson here is simple. It’s all about belief, in both yourself and your idea. One cannot succeed without the other and it’s never going to be easy. I recall that after Uber became a global brand, one of my friends pitched an idea similar to Uber to a few investors on the continent in 2013. They dismissed the idea immediately, saying Uber is already doing it.

Now very importantly, the key thing here is not about Uber doing it first, it’s about if there’s a market that needs the product (albeit it a similar one), what are the chances of accessing this market?

Later on, beep-beep, coming through! Taxify launched, now worth millions of dollars and Ola India based, now worth over US$3 billion.

Many funding entities are quick to dismiss start-up concepts, based on the fact that some US or European company is already doing it. Yet, I believe that there is an opportunity to support start-ups, fund and launch them to compete in the market towards global reach. The key here is startups should not always be subjected to invent but rather be innovative coupled with a business minded, savvy entrepreneurial skill. Seed grants are a fundamental foundation to support many young people to test their concepts and give them the chance to see the light of day.

Let’s not be our own worst enemy and remember, as the classic rock song goes by Journey, “Don’t stop believin”…

Kizito Okechukwu is the co-chair of Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa’s largest startup campus.

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Woman of steel proves her mettle for business investment.

Woman Of Steel Proves Her Mettle For Business Investment

KIZITO OKECHUKWU | AUGUST 27, 2018

Pictured Above & To The Right: Tebogo Mosito, CEO Ditsogo Projects

Small businesses are the economic engines of any country. Yet no space is more mentally challenging, highly competitive and financially frustrating.

Countries that understand the true worth and contributing power of their small businesses can thrive immensely by building the necessary and relevant ecosystems to fully support and scale them to sustainability.

Although significant progress has been made since the establishment of the Small Business Department in South Africa, small businesses continue to face various obstacles. These include unfair competition from big business, entry to markets and access to funding, which is undeniably the key make-or-break factor.

Having a sound and viable business proposition that shows healthy potential is not good enough without the seed money to materialize and scale it. Yet the tedious and bureaucratic fund-sourcing process sends many a great idea straight into oblivion.

Research published in the United States Small Business Profile shows that small businesses added 1.9 million net new jobs during the latest year studied. There are 30.2 million small businesses in the United States, which employ 47.5 percent of the state’s private workforce. The top three ranked industries for small business employment in the United States are healthcare and social assistance, accommodation and food services, and retail trade.

In this regard, Acting Chief Counsel Major L. Clark, III, says that small businesses are the United States’ economic engine and reiterates that they are the key to the state’s ability to grow economic output, entrepreneurship and private sector employment.

Recently, I had a chat with one of the startups at 22 on Sloane – Tebogo Mosito who is the founder of Ditsogo Projects, a steel company that specializes in engineering, metal fabrication, the manufacture of rolling stock, conveyor structures, hoppers, chutes and various other machineries. She has invested over R700 000 in her business, which currently generates an annual turnover of some R10 million and employs 12 permanent staff and over 25 temporary workers.

Although her business is based in the North West province, she’s a regular visitor to our 22 on Sloane start-up campus in Johannesburg. Tebogo describes her journey so far as a tough one, given that her industry is mostly male-dominated, both in reality and perception. Yet, she never gives up and is not afraid to get her hands dirty by doing any job necessary to ensure her manufacturing plant can survive and more importantly, thrive.

In order to expand her company, Tebogo revised her business case and growth strategy and approached various funding institutions. Confusingly to her, most funders declined to finance her, citing unfounded reasons, causing her immense financial frustration, which has become more and more apparent within many businesses looking to move to the next level in Africa.

Yet with sheer perseverance, Business Partners agreed to offer her a Series A funding package worth R2.1 million. These funds have been invaluable to acquire a manufacturing site and expand operations. Currently, she’s in search for another round of funding to continue her expansion drive and use technology to drive better performance and optimisation including exports to the SADC countries. Today, her current clients include Impala Platinum, Bushveld Vametco Minerals, Anglo, Sibanye and a few others.

Tebogo was one of the 20 finalists for the 2018 Fast Growing SMEs Standard Bank Business Women’s award and also placed in the top three for the FairLady Women of the Future awards. In addition, she was one of just 14 business owners selected by the Department of Trade and Industry (DTI) to visit Peru in September this year. During the visit, they will engage with business owners from the mining and engineering in Peru and seek business opportunities.

Tebogo acknowledges that over the years, South Africa’s policies are getting more progressive and that the government’s policy on involving more women in the country’s mainstream economy has opened doors for her and given her the confidence to compete on par with her male counterparts.

As South Africa ends the celebration of women’s month this August, we encourage more women to be motivated by Tebogo’s story, the 100 year anniversary of Late Ma Albertina Sisulu which we celebrate this year and the hard work and sacrifice of Late Ma Winnie Mandela who together fought hard to liberate the country and advocated for the development of women.

Kizito Okechukwu is the co-chair of Global Entrepreneurship Network (GEN) Africa: 22 on Sloane is Africa’s largest startup campus.

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Advancing Entrepreneurship Education in Schools

Advancing Entrepreneurship Education in Schools

KIZITO OKECHUKWU | AUGUST 20, 2018

Five Nigerian School girls that represented Africa at the Innovation competition at Silicon Valley – Photo Credit: https://guardian.ng 

Entrepreneurs are undoubtedly the engine of any country’s economy. Yet they’re not born, but rather made by the contingencies of their environment, one which is characterised by the agents of socialisation and plays an impactful role in developing the next generation of start-ups.

The government, religious entities, local communities and, most importantly, family and especially schools are all collectively crucial to develop sustainable future entrepreneurs. They should help mould young, innovative minds into becoming valuable, contributory members of society by equipping them with the supportive knowledge, skills, resilience and confidence at the early stages of development, in order to start and grow a business.

With this is mind, entrepreneurship education is now becoming more and more important in the global economy. Many years ago, entrepreneurship education might not have been taken seriously, but there is no doubt that it has always existed in some form or another, often in a subtle way.

For example, in the 90’s when I was in high school, my parents gave me energy drinks, snacks and food. I liked a different type of snack that was sold in the school canteen and I recall selling my own snack to a classmate and using the money to buy what I wanted, rather than what my parents gave me. Unbeknown to me, I was educating myself on entrepreneurship. Today, in many schools, young people buy and sell various products with each other.

According to Erasmus, Loedoff, Mda and Nel (2006), entrepreneurship education is a structured formal conveyance of entrepreneurial competencies, which in turn refers to the concepts, skills and mental awareness used by individuals during the process of starting and developing their growth-orientated business ventures.

Pulitzer Prize-winning author Thomas Friedman advocates for inspiring young people to create the companies that will provide long-lasting employment for the country’s citizens. Because the jobs on which the 65 year-old Friedman’s own generation relied are no longer available, he advocates for having students graduate high school “innovation-ready”, meaning that along with their certificates, they receive the critical thinking, communication and collaboration skills that will help them invent their own careers. I believe his theory holds true for – and in, any country. Over the year, we have been a big advocate of entrepreneurial education, going to various township schools with some of our experts who apply the design thinking methodology in prompting a different kind of thinking amongst pupils.

The European Situation

With the European Commission’s Entrepreneurship initiatives, schools are becoming more and more responsible for developing what is both a mind-set and a skill. Erasmus+ projects play a part by making sure that educational staff are equipped with the knowledge, teaching materials and methodologies they need.

The Perspective Project has created Europe-wide models of entrepreneurship education so that teachers of all subjects can make it part of their teaching. Maria Brizi, the Coordinator of the Perspective Project, says that European funding has allowed them to introduce new approaches, promoting entrepreneurship as a set of skills, knowledge and attitudes that will support pupils to be creative, responsive and successful in whatever activity they undertake, regardless of their career choices.

The YES mobility project has allowed a Croatian school to develop a new programme for teaching entrepreneurship by developing the competences of its whole educational team, from the headmaster to the school librarian, including math, language or craft teachers.

The African Situation

As we know, our continent is home to a large number of young people and it simply doesn’t have jobs for them all, making youth unemployment a major concern. Some countries, like Nigeria and Kenya, are tackling this problem by equipping children with entrepreneurial skills while they’re still at school. These include essential foundational knowledge, such as emotional intelligence and risk taking; it also develops their appreciation for self-employment opportunities. This means that if they find themselves in a situation where they are unemployed, they don’t give up and succumb to self-pity. Instead, they are able to use their skills to create new opportunities as entrepreneurs.

South Africa is also playing its part. Addressing the Global Entrepreneurship Congress (GEC) in 2017, then Deputy President Cyril Ramaphosa, now President of South Africa, said that “There is much more we can do, entrepreneurship must be part of the school curriculum, so that young people must, from an early age, be encouraged to be problem solvers.” He added that the inclusion would also ensure that more job creators, rather than job seekers, were developed and that entrepreneurship would be seen as a viable career option. The Gauteng Department of Education through its MEC Panyaza Lesufi is also advocating the entrepreneurial mindset agenda in various Gauteng schools. I have also heard the Minister of Small Business Development Lindiwe Zulu in various platforms where she advocates for entrepreneurial education in schools.

Recently, the Chartwell Leadership Primary school in South Africa, led by Principal Simon White, hosted a number of school teachers, learners and ecosystem stakeholders, which included the Department of Basic Education, the Director General of Small Business Development, as well as other champions of entrepreneurial education, such as Junior Achievement South Africa and Primestars. Held at the 22 on Sloane start-up campus, the two-day workshop focused on what the future skills force will look like and how do young school-goers gear themselves up for this exciting challenge. It was extremely impressive to witness many bright South Africa young minds presenting their various innovative ideas, proof that Africa remains bedrock of innovation.

Adding official testimony to the above, is the recent prestigious award received by five schoolgirls representing Africa and Nigeria at the World Technovation Challenge, held in Silicon Valley, USA, the global birthplace and home of innovation.

Amidst fierce competition from the USA, Spain, Turkey, Uzbekistan and China, the team, led by Uchenna Onwuamaegbu Ugwu, took the gold medal for their mobile app called the FD-Detector, which they developed to help tackle the challenge of fake pharmaceutical products in Nigeria. Now known as “Africa’s Golden Girls”, the team comprises Promise Nnalue, Jessica Osita, Nwabuaku Ossai, Adaeze Onuigbo and Vivian Okoye.

The true value of entrepreneurship education is that it benefits students from all socio-economic backgrounds because it teaches kids to think outside the box and nurtures unconventional talents and skills. Furthermore, it creates opportunity, ensures social justice, instils confidence and stimulates the economy. Sure, inculcating a culture of entrepreneurship won’t instantly wipe away youth unemployment. But it can reduce unemployment by giving young people the skills they need to create their own businesses and generate work for themselves or others outside the formal job market.

I believe that South Africa and Nigeria are powerfully poised to revolutionise and champion Africa’s entrepreneurial education agenda, alongside all their continental counterparts.

Kizito Okechukwu is the co-chairperson of the Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa’s largest start-up campus

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IBM partners with 22 ON SLOANE to launch its entrepreneurship programme

IBM partners with 22 ON SLOANE to launch its entrepreneurship programme

KIZITO OKECHUKWU | AUGUST 13, 2018

Pictured Above: Ziaad Suleman – Chief Operations Officer IBM South Africa

Founded in 1911, International Business Machines Corporation (IBM) is an American multinational technology company headquartered in New York, USA and has operations in over 170 countries.

Affectionately known as “Big Blue”, IBM is a pioneering industry legend and manufactures and markets computer hardware, middleware, software and provides hosting and consulting services in areas ranging from mainframe computers to nanotechnology. The company also holds the record for most U.S. patents generated for 25 consecutive years. These include the ATM, the PC, the floppy disk, the hard disk drive and the magnetic stripe card, to name just a few.

IBM is one of 30 companies included in the Dow Jones Industrial Average and one of the world’s largest employers, with some 380 000 staff members. Known as “IBMers”, they’ve been awarded five Nobel Prizes, six Turing Awards, ten National Medals of Technology and five National Medals of Science.

As a company that is undeniably one of the world’s frontrunners in the creation, development and manufacture of the industry’s most advanced information technologies, it gives me great pleasure to extend a warm welcome to IBM as our entrepreneurial pilot programme partner, from all at the Global Entrepreneurship Network (GEN) Africa’s 22 on Sloane Start-up Campus.

At the launch of this exciting initiative, Ziaad Suleman, the Chief Operations Officer of IBM South Africa, wasted no time in encouraging and motivating the selected tech start-ups to embrace this once in a lifetime opportunity which will support their next level of growth and enable them to enter new markets and regions. As a technology leader, IBM helps boost capabilities in South Africa by developing local skills and providing access to cloud, analytics, and big data technologies to solve some of the country’s most complex problems and change lives.

IBM’s next era is all about the power of cognitive solutions delivered to transform industries. Cognitive systems augment human intelligence, allowing faster and more informed decisions. Through their Enterprise Development Programme (EDP), IBM selects aspirant entrepreneurs or start-ups in the ICT space with the base capability to be endowed with high-end solution/content execution capability, via a range of support mechanisms, such as incubation, finance, coaching, mentoring, access to markets and business processes.

Since the inception of EDP, IBM has provided entrepreneurs and small businesses with development support, growth investment and access to IBM products and technology aligned to the life stage of selected business in line with our continued commitment to drive development within the South African economy.

IBM has always been a proud African techno-economic partner and as part of their continued commitment to entrepreneurs and startups, the Digital – Nation Africa (D-NA) programme supports their focus on building digital, cloud, and cognitive IT skills to help support a 21st century workforce in South Africa. Through D-NA, IBM is contributing to building a country of digital innovators by providing digital skills to South Africans through a free, Watson-powered skills platform. D-NA is designed to help raise overall digital literacy, increase the number of skilled developers and enable entrepreneurs to grow businesses around the new solutions. This accessible online learning environment delivered on the IBM Cloud, provides a vast range of enablement resources, ranging from basic IT literacy to highly sought-after advanced IT skills including programming, cybersecurity, data science and agile methodologies, as well as important business skills like critical thinking, innovation, and entrepreneurship.

In 2015, IBM partnered with the City of Johannesburg and the Council for Scientific Research (CSIR) to apply technologies to help the city deliver on its air quality management plan. In the same year, it announced a R700m investment over the next ten years, via a Broad Based Black Economic Empowerment Equivalent programme. In 2016, the IBM Research Lab opened its doors in Johannesburg, partnering with entrepreneurs, developers and business to develop commercially-viable solutions that spark business opportunities. In 2019, it aims to launch its IX Digital Lab to drive transformation projects.

The entrepreneurs selected for the GEN/IBM programme will join a cohort of around 67 of their peers selected last year to be part of GEN’s 22 on Sloane residency programme. The newcomers will enjoy access to a dedicated workspace and technical support from the GEN/IBM teams, which include experienced entrepreneurs, mentors, scientists, managers, CEOs and funders, as well as access to all other facilities at 22 on Sloane, such as meeting rooms, branding services, the gym and many more.

More about GEN Africa’s 22 on Sloane Start-up Campus

GEN Africa is a subsidiary of the Global Entrepreneurship Network (GEN), which operates in 173 countries. By fostering deeper cross-border collaboration and initiatives between entrepreneurs, investors, researchers, policymakers and entrepreneurial support organizations, GEN works to fuel healthier start and scale ecosystems that create more jobs, educate individuals, accelerate innovation and strengthen economic growth. Today, GEN Africa has bases in 42 African countries.

GEN Africa’s 22 on SLOANE is the largest, and arguably the most innovative, start-up campus on the continent. It offers start-ups and SMEs a complete turnkey solution to scale, from the initial idea all the way to commercialisation, funding opportunities and access to markets. Its aim is to nurture the entrepreneurial mind-set, ensure business sustainability, explore the development of new industries and contribute towards job creation in Africa.

Kizito Okechukwu is the co-chairperson of GEN Africa; 22 on Sloane is Africa’s largest startup campus

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  • Corner William Nicol Drive & Sloane Street
    Bryanston, 2191
    Johannesburg, South Africa
    Email: residency@22onsloane.co

GEN GLOBAL

  • 1133 15th St, NW
    Washington, DC 20005
    United States of America

© 2018 Global Entrepreneurship Network

Re-skilling for the Future: GirlCode Hackathon at 22 Sloane

Reskilling for the Future: GirlCode Hackathon at 22 Sloane

KIZITO OKECHUKWU | 7 AUGUST, 2018

Last week, the quarterly labour force survey, conducted by Statistics SA, revealed that the unemployment rate rose to 27.2% in the second quarter, from 26.7% in the first three months of this year. This equates to 6.1 million people without jobs in the three months till the end of June, compared to 6 million in the previous quarter, with the manufacturing sector being the main contributor to job losses.

If we add discouraged job seekers, the expanded unemployment rate rose by 0.5% to 37.2% of the working age population, or some 9.6 million people. The number of people between the ages of 15 and 34 that are not undergoing education or training, or are not employed, increased by 0.4% year-on-year to reach 39.3%, or four people out of ten. At 33.6%, the unemployment rate for young people aged between 25 and 34 is more than double that of the 45 to 54 year-old category, which stands at 16%. This basically means that over 5 million young people are unemployed in South Africa.

The Problems

I have identified five potential causal effects of why many young people are unemployed.

  1. Unable to settle for less: The dynamics of the world today have changed drastically. Social media is now the BFF of the youth, as they constantly share, explore and ultimately discover how some of their successful peers are living and they want that too – and immediately. Now school graduates often scoff at an entry intern job that could pay around R5000pm. They believe they should earn higher and ‘live larger’, with expensive apartments, cars and smartphones. This scenario is the antithesis of the lives their parents lived – with a steady job, working their way to the top. I cast my mind back to my first job in 2007 as a shoe-shiner, earning R1500 (USD$150) per month at a hotel. Today’s youth probably wouldn’t be seen dead doing that…
  2. Mismatch between available jobs and skills: There is a significant mismatch between the skills obtained by young people and the available jobs that suit those skills. The youth want the easy way in. For example, they study public relations or marketing, etc. and are unaware that the real world of work needs different skill-sets. Our youth should research courses with the best probability of job opportunity, while our education system should gear-up and re-channel resources to focus on key skills that the global and local economy need.
  3. Lack of targeted entrepreneurial programmes: Most entrepreneurial programmes still focus on teaching business basics, such as taxation, finance, and marketing. Yes, this is crucial for business success, but should go hand-in-hand with developing critical skills and scaling for young people. Focus should also be on technical expertise. 
  4. Lack of entrepreneurial financial risk appetite: Most funding agencies claim to have loads of seed cash to fund entrepreneurs, but the reality is different on the ground. Many quickly lose the risk appetite to invest in innovative start-ups, as they still require historical financials, which most of the start-ups cannot provide, severely limiting their capability to compete in the market.
  5. Lack of big business commitment: Any big business feels threatened by the rise of start-ups in their industry, so they will try to avoid creating a competitor for the future. They’ll probably pay lip service that they support start-ups, but ultimately will do everything in their power to limit the threat of a competitive start-up.

The Solution

Every year during August, which is Women’s Month, GirlCode invites all female programmers to enter the GirlCode Hackathon which takes place at 22 on Sloane, a 48-hour non-stop programming challenge. The hackathon is open to all females who would like to work collaboratively to create a website, game, or mobile app that addresses a selected real-world challenge.

This past weekend, GirlCode hosted over 200 girls aged between 18 and 35 for the hackathon. At most of the hackathons, the main incentives are small cash prizes and bragging rights. GirlCode believes that women would be more drawn to an altruistic goal: projects that will make a difference to society as a whole, so the hackathon is not run as a competition, but rather a collaborative learning experience, where everyone walks away with new knowledge and starter-kits to help them continue their journey in exploring the tech space.

Staying with tech, the key question is what skills are needed for the future of South Africa? How can we better support start-ups to scale? How can big business and government support start-ups?

There are critical skills needed in the job market today and it’s even easier to launch a start-up with a good client pipeline. Let’s take a look at what’s out there tech-wise and the basic remuneration that goes with it.

App development is worth over $77billion globally with an average entry-level pay of R231 000 per annum;

Network security is worth $165billion globally with an average entry-level pay of R373 375 per annum;

Data science is worth over $125billion with an average level entry pay of R395 207 per annum;

Digital marketing is worth over $135billion with an average entry-level pay of R299 427 per annum;

Games development is worth over $108billion with an average entry-level pay of R400 000 per annum;

Hadoop is worth over $80billion with an average entry-level pay of R500 000 per annum;

Robotics is worth over $135billion with an average entry-level pay of R300 000 per annum;

Internet of Things is worth over $160billion with an average entry-level pay of R272 000 per annum.

Positioning for the future remains critical and I believe that re-strategizing the education systems, reskilling and upskilling for the future and supporting and scaling our young people’s start-ups are paramount to empower South Africa’s youth.

At 22 on Sloane, we’re always on the lookout for like-minded partners and startups that will help turn these dreams into reality, build our economy and ensure that Africans continue to rise and achieve the Africa Union’s Agenda 2063, of obviating the environment where young Africans come up with great, sound ideas, but go no further.

Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa; 22 on Sloane is Africa’s largest start-up campus.

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  • Corner William Nicol Drive & Sloane Street
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  • 1133 15th St, NW
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© 2018 Global Entrepreneurship Network

Local fashion steals (some of) the show at BRICS.

Local fashion steals (some of) the show at BRICS.

KIZITO OKECHUKWU | JULY 30, 2018

Anyone who followed the three-day BRICS summit in Joburg will undoubtedly agree that it was totally overshadowed by the fierce trade war, instigated by the US President Donald Trump, as world leaders from Brazil, Russia, India and China gathered in South Africa, hosted by President Cyril Ramaphosa. They had one mission in mind – how do we increase cooperation, facilitate economic transformation and become a global force?

In my opinion, the rise in status and stature of BRICS is something to definitely keep an eye on. Since its formation in 2009, it has been a force to be reckoned with. My first participation at the BRICS summit was during 2013 in Durban. Since then, the organization, has shaped the direction of the world’s economy with its formation of the BRICS Development Bank in 2014, now called the New Development Bank, which has facilitated over USD6billion worth of projects. It has also established the BRICS Contingent Reserve Arrangement (CRA), which is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures.

The objective of this reserve is to provide protection against global liquidity pressures and is seen as a competitor to the International Monetary Fund (IMF). In 2016, a BRICS financial services working group was established to help with determining the viability of establishing the BRICS credit ratings agency. Experts believe that it’s now close to reality and a formation agreement is temporarily on hold, pending further engagement with member countries.

The 10th BRICS summit was not only about big money and striking mutually-beneficial trade deals, it also offered delegates the opportunity to engage with start-ups and attend a fashion show.

22 on Sloane, Africa’s largest and arguably one of the world’s most innovative start-up campuses was honoured to host the BRICS fashion show, which was championed by the Department of International Relations and Cooperation (DIRCO). The fashion show, produced by the renowned Carol Bouwer, saw fashionistas such as Rubicon and David Tlale to name a few, embrace the opportunity for models to grace the catwalk parading their creations in front of the BRICS delegates. Dr Precious Motsepe, Founder of African Fashion International (AFI), was among other dignitaries, which included the British High Commissioner and other prominent ministers, who attended the occasion.

Now it’s a known fact that start-ups have a huge economic role to play in various countries. With this in mind, I would really like to see BRICS use its platforms and resources to look at ways to partner with various high-impact start-ups, specifically in the technology space, which cuts across all industries, whether it’s manufacturing, agro-processing, mining, health, energy, transport, education, fashion and numerous others.

Some of the BRICS countries seem to be leading in various investment deals in the global startup platform. Proof of the pudding is in the various lucrative deals that have already been made in the last year alone, such as India’s Ola, which is a ride-sharing start-up company that raised USD1billion in investments and the Chinese Sense Time company, which rose over USD1.2billion just this year. South Africa is also perfectly positioned strategically to put its weight behind facilitating similar deals for its high-impact start-ups, via the New Development Bank or various other VC’s and funding agencies.

I believe BRICS is here to stay and will help transform the economic landscape of the world for the better in the very near future. Today, BRICS countries control 22-23% of the global GDP, worth a staggering USD40trillion-plus. And, with its involvement with various other developing countries, such as Rwanda, Zimbabwe, Angola, Madagascar, Botswana, Turkey, Jamaica, Argentina and many others that attended this year’s summit, the BRICS bloc is now a true financial force to be reckoned with.

Kizito Okechukwu is the co-chair of Global Entrepreneurship Network (GEN) Africa, 22 on Sloane which is Africa’s largest startup campus.

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Kingmakers – The global capture of Africa’s high-impact start-ups

Kingmakers – The global capture of Africa’s high-impact start-ups

KIZITO OKECHUKWU | JULY 24, 2018

Modern globalization makes it difficult for anyone innovative to succeed without collaborating and cooperating with various ecosystem stakeholders. Capital resource is now the new weapon for kingmakers in the booming and lucrative technology space. European, American and Asian counterparts have grasped this quickly and have amassed vast capital resources, which makes the playing field uneven and gives them a great leading edge to invest in and scale new opportunities.

As we know, today’s world operates without boundaries and technology is a key culprit in making it even more challenging to keep the borders closed. Gone are the days when inventions or innovations are kept for consumption by a local community or country.

Now, it takes just a mouse click for these to go global, because any innovation, anywhere presents lucrative opportunities, which in turn instantly attract institutions, investors and countries – primed and ready to jump right in to ensure that they play a role in bringing it to market or to ensure that their organisation does not get swept aside by the wave length of the innovation or invention.

Africa is still on the back foot of these funded developments and most funders on the continent do not have the foresight to identify and act on opportunities quicker than their counterparts in America or Europe. It is a fact that most big deals that were struck were led by investors from Asia, America or Europe. US-based Insight Venture Partners has raised $6.3 billion for its latest technology fund. Softbank, a Japanese firm, has also amassed a $100 billion-plus vision fund for tech companies. The Softbank fund is also seeking to invest over $1 billion on a China AI start- up firm – Sense Time Group.

The world is also fast realising that African start-ups are a pivotal part of the economic future. A recent report published by Africa Tech start-ups funding report claims that in 2017, African start-ups raised over US$159 million with Nigeria, South Africa and Kenya leading the pack. I believe this figure is an underestimation, given that most deals conducted by investors and start-ups on the continent are not recorded.

It is widely believed that the actual recorded deals for this year alone are worth over US$170 million. With these deals in mind, a new report suggests that many Silicon Valley investors are now eyeing Africa as the next tech frontier. Recently, the Nigerian Vice President Yemi Osibanjo visited Silicon Valley to meet with various US tech investors, for what he is hoping will bring a tech revolution and investment into the country. Google also announced that it will open its first AI lab on the continent in Ghana.

I wrote an article a little while back on start-up visas, highlighting just how many countries in Europe, America and Asia are offering them to African start-ups to reside and work in their countries. On top of that, they dangle lucrative incentives, as much as €40 000-50 000 each. There is also a noticeable upsurge in international institutions launching various entrepreneurship and start-up programmes to lure young trailblazers and high impact start-ups to join them. I highlighted this on my previous piece titled, “Africans on the outside”.

Yes, this current entrepreneurial environment is exciting and does present an array of opportunities, but it can also pose a threat to the economic solidarity of the continent. I’ve highlighted a few threats and how various African governments and institutions can curb these:

  1. Data Threat: As these innovations develop, Africans were exposed to abuse where there are no checks and balances on the protection of information. For example, post the exposure of Facebook’s data threat, America and the European Union summoned the Facebook CEO to account for this. In Africa, this was ignored because I assume that there is no system to even establish whether there was exposure to us or not.
  2. Invention Threat: Many young high-impact start-ups that are offered an overseas programme either receive positive engagement with viable, mutually beneficial partnerships or their innovation gets taken by these organizations, investors or NGOs.
  3. Solidify our System: The African Union, African Development Bank, various African governments and DFIs, from South Africa to Nigeria to Kenya and Egypt, should solidify their systems and work on creating environments that are conducive for start-ups to thrive, which includes mentoring and funding. Without these funds, African start-ups are prone to quickly enlist with investors. Speaking at the annual Mandela lecture in Eastern Cape, Professor Lumumba mentioned the economic colonization of African countries, for example, although a country produces cocoa, it does not produce chocolate, or it mines gold but does not manufacture jewelry. I believe the next colonization could be in the form of African start-ups selling their initiatives and registering their IP in other countries and we’ll end up procuring or using these same services/products from these countries. This is a new form of colonization, but who are we to blame these benevolent countries or organizations? I believe our role should be ensuring that, from the get-go, our local systems are built to fully support each and every start-up and not to whine about the possible ‘theft’ of our idea. Also of critical importance, is to ensure that various developmental institutions have the right people in the right place to accelerate and diligently manage and distribute funding to eligible start-ups.

At the recent annual Mandela lecture, President Obama mentioned how young people should continue to rise and become more ambitious. He added that many young start-ups are doing great things on the continent. What they need is more and more support to continue to thrive. He also spoke to young African leaders to drive change at home, rather than emigrating and encouraged African government to support its people. He said, “More and more not only are we seeing concentrations of wealth, we are seeing concentrations of talent in various global centres, whether it is Shanghai or Dubai……If we have African leaders, governments and institutions which are creating a platform for success and opportunity, then you will increasingly get more talent wanting to stay”.

Recently, many Africans celebrated France’s World Cup soccer victory as an African victory. A French journalist’s response was “if we gave the same team to an African country it would not even pass the first phase, the money for preparations would be diverted, the delegation filled with mistresses and parents for tourism, psychological preparers replaced by pastors, cooks and masseurs without experience, the doctor chosen by affinity with the politicians….”

African start-ups are the beacon of hope and globally, various institutions, investors and countries are now both acknowledging and appreciating this. It is now up to all our African governments and institutions to stand by them every step of the way, or else the neo-colonisation of ideas will make us retreat significantly to where we only consume and do not produce. We hope that one day African start-ups and investors will be kingmakers.

Kizito Okechukwu is the co-Chair of GEN Africa, 22 on Sloane which is Africa’s largest startup campus.

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Nelson Mandela’s 100 life and leadership lessons for startups

Nelson Mandela’s 100 life and leadership lessons for startups

KIZITO OKECHUKWU | JULY 17, 2018

He is a legend, a father and icon of this and many generations to come. I have compiled from various books and authors, one hundred quotes and snippets to help live what we’ve learned from Nelson Mandela in life and leadership in celebration of his 100 year anniversary.

  1. Anything worth having is worth fighting for.
  2. Our greatest fear is not that we are inadequate, but that we are powerful beyond measure.
  3. Remain true to your principles.
  4. All people are equal and therefore deserving of basic respect and dignity.
  5. Forgiveness makes us stronger and happier people overall.
  6. Embrace diversity in all spheres of society, including the workplace.
  7. Leaders must take accountability for their actions in both the private and public sectors.
  8. Have the ability to adapt quickly to changing circumstances and environments.
  9. While it is difficult to change society, it is even more difficult to change yourself, which is vital to become better at what you do.
  10. Learn and grow as an individual in times of conflict and tough experiences.
  11. It takes people of integrity to build ethical organisational cultures and ultimately create an ethical society.
  12. Life is about building good relationships at the individual and collective level.
  13. You pass through this world once and opportunities you miss will never be available to you again.
  14. Show your leadership during moments of suffering and opportunity.
  15. The human soul and human body have an infinite capacity of adaptation and it is amazing just how hardened one can come to be.
  16. Prove them wrong.
  17. Use your time wisely.
  18. If wealth is a magnet, then poverty is a kind of repellent. Yet poverty often brings out the true generosity in others.
  19. Be humble.
  20. Have heroes.
  21. Take a stand.
  22. Manage your emotions.
  23. Speak with conviction.
  24. Leadership is as much about delivering results as it is about uplifting those who worked and strove with me.
  25. The habit of attending to small things and of appreciating small courtesies is one of the important marks of a good person.
  26. Do not judge me by my successes, judge me by how many times I fell down and got back up again.
  27. It always seems impossible until it is done.
  28. If there are dreams of a beautiful South Africa, there are also roads that lead to that goal. Two of these roads could be named Goodness and Forgiveness.
  29. Tread softly, breathe peacefully, laugh hysterically.
  30. Education is the most powerful weapon which you can use to change the world.
  31. I like friends who have independent minds because they tend to make you see problems from all angles.
  32. A fundamental concern for others in our individual and community lives would go a long way in making the world the better place we so passionately dreamt of.
  33. If it were easy, everyone would be doing it
  34. Difficulties break some men but make others. No axe is sharp enough to cut the soul of a sinner who keeps on trying, one armed with the hope that he will rise even in the end.
  35. The things that are truly worth having in life are usually the hardest to come by. It’s the people who persevere and push through the difficulties who ultimately accomplish what they set out to achieve.
  36. Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do.
  37. A good head and a good heart are always a formidable combination.
  38. it’s time for the dawning of a new age — one in which people remember that the same frame of bones lies underneath every person’s skin, no matter the colour.
  39. A good leader can engage in debate frankly and thoroughly, knowing that at the end he and the other side must be closer, and thus emerge stronger.
  40. It is better to lead from behind and put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger. Then people will appreciate your leadership.
  41. There is no passion to be found in playing small – in settling for a life that is less than the one you are capable of living.
  42. Have faith in justice.
  43. Courage will triumph over fear.
  44. With hard work comes progress.
  45. Take pride in your convictions.
  46. Show compassion to everyone.
  47. Significant progress is always possible if we ourselves try to plan every detail of our lives and actions.
  48. One of the things I learnt when I was negotiating was that until I changed myself, I could not change others.
  49. It is what we make out of what we have, not what we are given, that separates one person from another.
  50. If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart.
  51. When the water starts boiling it is foolish to turn off the heat.
  52. Demand respect.
  53. As we are liberated from our own fear, our presence automatically liberates others.
  54. If you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner.
  55. One cannot be prepared for something while secretly believing it will not happen.
  56. It is not the kings and generals that makes history but the masses of people.
  57. It is in your hands, to make a better world for all who live in it.
  58. I have a special attachment to the people who befriended me during times of distress.
  59. I am not a saint, unless you think a saint is a sinner who keeps trying.
  60. When a deep injury is done to us, we never heal until we forgive.
  61. The colour of my skin is beautiful, like the soil of Mother Africa.
  62. No one is born hating another person because of the colour of his skin, or his background, or his religion.
  63. We must strive to be moved by a generosity of spirit that will enable us to outgrow the hatred and conflicts of the past.
  64. We must all strive to be inspired by a deep-seated love of our country, without regard to race, colour, gender or station in life.
  65. There were many dark moments when my faith in humanity was sorely tested, but I would not and could not give myself up to despair.
  66. People must learn to hate, and if they can learn to hate, they can be taught to love, for love comes more naturally to the human heart than its opposite.
  67. You will achieve more in this world through acts of mercy than you will through acts of retribution.
  68. A winner is a dreamer who never gives up.
  69. We must use time wisely and forever realize that the time is always ripe to do right.
  70. A man is never more truthful than when he acknowledges himself a liar.
  71. Resentment is like drinking poison and then hoping it will kill your enemies.
  72. Money won’t create success. The freedom to make it will.
  73. Of course we desire education and we think it is a good thing, but you don’t have to have education in order to know that you want certain fundamental rights, you have got aspirations, you have got claims.
  74. History will judge us by the difference we make in the everyday lives of children.
  75. It is through education that the daughter of a peasant can become a doctor, that the son of a mine worker can become the head of the mine.
  76. I am the product of Africa and her long-cherished view of rebirth that can now be realised so that all of her children may play in the sun.
  77. There can be no keener revelation of a society’s soul than the way in which it treats its children.
  78. The children who sleep in the streets, reduced to begging to make a living, are testimony to an unfinished job.
  79. It is an achievement for a man to do his duty on Earth, irrespective of the consequences.
  80. Overcoming poverty is not a task of charity, it is an act of justice.
  81. It was during those long and lonely years that my hunger for the freedom of my people became a hunger for the freedom of all people.
  82. To be an African in South Africa means that one is politicized from the moment of one’s birth, whether one acknowledges it or not.
  83. Courage is not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.
  84. The greatest glory in living lies not in never falling, but in rising every time we fall.
  85. The only thing my father bestowed upon me at birth was a name, Rolihlahla. In Xhosa, Rolihlahla means pulling the branch of a tree.
  86. I could not imagine that the future I was walking toward could compare in any way to the past that I was leaving behind.
  87. To be a father of a nation is a great honour, but to be the father of a family is a greater joy. But it was a joy I had far too little of.
  88. We do not want freedom without bread, nor do we want bread without freedom.
  89. I have spent all my life dreaming of a golden age in which all problems will be solved and our wildest hopes fulfilled.
  90. When a man is denied the right to live the life he believes in, he has no choice but to become an outlaw.
  91. Never, never and never again shall it be that this beautiful land will again experience the oppression of one by another.
  92. I shall neither impose my own customs on others nor follow any practice which will offend my comrades.
  93. Until I was jailed, I never fully appreciated the capacity of memory, the endless string of information the head can carry.
  94. I have tried not to falter; I have made missteps along the way. But I have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb. I have taken a moment here to rest, to steal a view of the glorious vista that surrounds me, to look back on the distance I have come. But I can rest only for a moment, for with freedom come responsibilities, and I dare not linger, for my long walk is not yet ended.
  95. Greed and power have turned brother against brother.
  96. For to be free is not merely to cast off ones chains, but to live in a way that respects and enhances the freedom of others.
  97. I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say.
  98. Our people have the right to hope, the right to a future, the right to life itself.
  99. What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others.
  100. Men and women, all over the world, right down the centuries, come and go. Some leave nothing behind. Not even their names.

Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane. 22 on Sloane is Africa’s largest startup campus.

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Urban Grown – How committed are our start-ups?

How committed are our start-ups?

KIZITO OKECHUKWU | JULY 10, 2018

Pictured Above: Simba Chimhandamba

Entrepreneurship is not an easy road, it never has been and never will be. The risk and reward factor is often skewed largely towards risk, making aspirant entrepreneurs deeming it too challenging, according to their vision, lifestyle, wants and needs.
With the constantly rising unemployment rate in South Africa, especially amongst the youth, many are questioning whether various entrepreneurship programmes and support activities within the ecosystem actually add value in producing and scaling high impact start-ups. As an entrepreneur myself, I believe they do. The proof is always in the pudding and my question is “just how committed are our start-ups?” How committed are they to push and realise their dream by continually knocking on doors (when one closes another may open!), be it for support, funding, partnership or even consolidation?

Entrepreneurship is a two-way street and it’s so easy to blame government agencies. But how has your large corporate, your accelerator or your incubator helped to change the entrepreneurial landscape for the better?
A few years ago, Nonhlanhla Mokoena and her husband Simba Chimhandamba started an agricultural and agro processing business called Urban Grown. Their vision was to change the age-old belief that farming is done by old people in rural villages. Yet their farming techniques can easily be adopted in urban areas, as their produce is farmed hydroponically. Their tunnels allow them to farm enough produce to make the business sustainable by being in close proximity to the city.

Hydroponics farming is the practice of growing plants in water using a non-soil based substrate, such as coco-peat or perlite. Coco-peat is derived from recycled coconut husks and can retain 11 times more water than soil.

The beauty of hydroponic farming is that it benefits both the environment and the consumer. Hydroponics uses 95% less water than conventional farming and fewer pesticides, as there are far fewer diseases associated with hydroponic farming. What’s more, farmers are able to grow crops throughout the year, all the time generating income. For the consumer, they have direct access to quality nutritious produce all year round, grown and supplied in the city.

Recently, the pair acquired a few hectare plots of land on which they expanded their farming activities. Currently, they produce baby marrow, lettuce and other crops, supplying large retail chains, such as Pick ‘n Pay, City Lodge hotels, Bidvest and many more.

I met Simba a while back before he started his business and he shared his vision with me. I too, am not a big fan of agriculture, as I also associate the practice with old people in villages, yet as an entrepreneur, I did encourage him to go for it, if it was his passion. He has proven us all wrong and that it can be done. Today, he and his wife run a multimillion-rand business that employs around dozens of people.

Pictured Above: Nonhlanhla Mokoena

A few years ago, he participated in one of the Global Entrepreneurship Network competitions during the 2016 Global Entrepreneurship Week and won prize money, which also assisted him to scale his company, thanks to Absa bank, a loyal strategic sponsor of the Global Entrepreneurship Week in South Africa. Their company was also one of the top ten start-ups that were featured at the Global Entrepreneurship Congress, held in Johannesburg last year, which saw over 173 nations and 8000 people descend on the city.

I must reiterate that starting any business is not easy and to do so, one needs a multi-stakeholder approach. Sometimes one accelerator or incubator might not have all the resources to start and scale, but the key aspect is how committed are the start-ups to keep pushing and keep getting help as little as possible from the ecosystem.

To start Urban Grown, they needed to rent a space that is conducive for their business vision, which they did from Riversands incubator at a subsidized rate, due to the Gauteng Government’s partnership with the hub. Last year, Simba was accepted into the Endeavor Entrepreneurship Programme and their business is still growing, further proof that by staying committed to the process, you’ll reap the fruit of your labour.

Over the past month, I took the time to meet each of the 70 resident start-ups face to face at 22 On Sloane. They really inspired me and fuelled the hope that we can definitely achieve the jobs target set by President Ramaphosa in his budget speech. I believe that Africa is the next big thing and that our start-ups have a much better chance of making it and succeeding than ever before.

Many of the start-ups are passionate and visionary and I see most of them soon becoming a success, like Simba and Nonhlanhla.
In this light, we are also getting a lot closer to achieving the Africa Union Agenda 2063, which states in its entrepreneurship vision that “we would like to remove the syndrome of Africans always coming up with great ideas, but with no significant achievement”.
Our mutual vision should be to fully support African startups in every way possible and help connect them with credible, visionary and like-minded stakeholders within the ecosystem to enhance their sustainable growth.

Kizito Okechukwu is the co-Chair of GEN Africa 22 on Sloane. 22 on Sloane is Africa’s largest startup campus

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Is there a future for start-ups after 2030?

Is there a future for start-ups after 2030?

KIZITO OKECHUKWU | JUNE 27, 2018

As we all know, start-ups have always existed, as documented by a recent CNN report on the historical brands that are now celebrating their 100 year existence, which includes household names like Tabasco sauce and Nikon. Over the past few years, start-ups across the world have also been making a significant impact by contributing to both their local economy and the global economy. Yet, these were prominently propelled by the rise of organisations such as Facebook, Stripe, Uber, Mpesa and various others.

The question now is whether start-ups can continue to exist in the future, or whether we will see a different kind of start-up. Also, what led to these start-ups becoming so prominent, so quickly? One thing we’ve learnt is that it’s mainly because large corporations lacked innovation, or even the desire to innovate, rather choosing the safe and rigid path ‘more’ travelled. Imagine if Kodak innovated to be the next Instagram? Imagine if General Motors or some of the yellow cabs companies became the next Uber? Imagine if Sun International hotel group became the next Airbnb?

In my opinion, start-ups as independent companies will cease to exist in the near future. This is due to the fact that currently, large corporations are quickly realising that they have to keep up and innovate to ensure they meet the needs of their innovation-embracing customers. So now they’re starting to work closely with start-ups that align with their customer-centric business visions. This means partnering with start-ups, either through a trade exchange where the corporation offers to train and upskill them but ends up taking their initiatives or buying equity in the business. Some corporations also just choose to employ the founder of the start-up full-time, by dangling a juicy and lucrative corporate carrot in front of them.

new report from the Brookings Institution finds that in nearly every industry, from agriculture to finance, the share of new companies is falling.

So what’s going on?

Dan Kopf in his latest piece analysed this as…

One possibility: Start-ups are struggling in this era of rising market concentration. In most industries, since the 1980s, the share of all sales going to the top firms is increasing. Start-ups may have a hard time competing with these mega firms, which can out-pay them for the best talent and sometimes attempt to drive them out of the industry.

Another related possibility that Dan mentioned was that the most-educated American workers are no longer attracted to entrepreneurship. In 1992, 4% of 25-54-year-olds with a master’s degree or PhD owned a small company with at least 10 employees. In 2017, this was true of only 2.2%. Companies started by the highly educated are often unusually productive.

The Brookings report suggests that high salaries for educated employees at big companies have made entrepreneurship less compelling. Why compete with Google or Walmart when they are offering you an enormous amount of money to come work for them? He wrote.

According to Joseph Flaherty, three prominent tech thinkers recently declared the end of the start-up era, questioned the future of tech innovation generally and heralded the rise of the “Frightful Five”, being Apple, Amazon, Facebook, Google and Microsoft, who will dominate the future of tech. All of the posts make credible arguments, but they ignore how consolidation could be good, even great, for start-ups.

If we define start-up success as building cornerstone companies that will go down in history and be worth hundreds of billions of dollars, we may, in fact, be entering a lean period. If we define success as building an ever wider assortment of products, shipping them to tens of millions of users and earning hundreds of millions, or even billions of dollars in short time frames, the good times may just be getting started.

Just look at the case of tbh, an anonymous social media app available in all 50 US states designed for high school students. Reports suggest that Facebook likely paid $80 million for the seed-funded, one-year-old company. Each founder probably made close to $15 million for a year of work, making them better paid than All-Star NBA Champion Stephen Curry. Entrepreneurs may have to settle for acquiring mere generational wealth, rather than becoming ‘pledge to cure all diseases’ wealthy, but the death of start-ups has been greatly exaggerated.

The kind of industry consolidation we see with the “Frightful Five” isn’t new to tech, it’s the norm in most industries and can actually spur innovation. The pharmaceutical and packaged food industries are heavily consolidated, have thriving start-up scenes, are hyperactive in M&A and provide a glimpse of how the future of tech may unfold.

So where does this leave African, or more specifically South African start-ups? Your guess is as good as mine.

In 2030, it will become easier to launch a business-to-customer startup because the next generation — unlike its predecessors won’t be shy about the risk/reward aspect of trying new products. Once a brand or company becomes established, however, it might be ditched for the new “new thing.”

In conclusion, the death of traditional ‘permanent stand-alone’ start-ups may be looming in some sense, but I feel there are endless possibilities and avenues for start-ups to fully exploit their innovative talents and realise prosperity, both personally and for their local economies.

Kizito Okechukwu is the co-Chair of GEN Africa 22 on Sloane. 22 on Sloane is Africa’s largest startup campus.

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GEN AFRICA, 22 ON SLOANE

  • Corner William Nicol Drive & Sloane Street
    Bryanston, 2191
    Johannesburg, South Africa
    Email: residency@22onsloane.co

GEN GLOBAL

  • 1133 15th St, NW
    Washington, DC 20005
    United States of America

© 2018 Global Entrepreneurship Network