12 Things That Need To Be Addressed To Help Struggling African Tech Startups

By Peter Pedroncelli AFKI Original Published: March 16, 2017, 5:40 am
African Tech Start-UpsWinners from five DEMO Africa startups join global startups for the Startup Grind Conference and Lions@frica Innovation Tour in Silicon Valley. Photo: Africa Technology Foundation/All Africa

Africa is the new tech frontier, with a great deal of potential and passion for technology that should translate into the right environment to nurture and grow successful African tech startups, but obstacles and struggles remain.

These issues scupper the necessary investment and growth that these startups require so that they can become sustainable and successful on a continental and global scale.

Startups should be celebrated and supported as important businesses contributing to the economy and creating jobs, and yet funding issues, over-regulation, marketing challenges and other issues remain a stumbling block for these tech businesses.

We take a look at 12 things that need to be addressed in order to help struggling African tech startups.

Sources: AfricanBusinessReview, iAfrikan, SMESouthAfrica, DestinyConnect.

L'Oreal's Research and Innovation Centre in Johannesburg, South Africa. Photo: L'Oreal

L’Oreal’s Research and Innovation Centre in Johannesburg, South Africa. Photo: L’Oreal

Not enough innovative ideas

While some incredible ideas and tech startups have emerged from the African continent, there is still a lack of quantity in terms of truly innovative ideas. With the right conditions in place, and the right incentives for those who are able to innovate, these ideas will begin to flow.

Nigerian payments startup

Mentoring others is a way to give back and pass experience on to the next generation. Photo: Techpoint.ng

Mentorship is not prioritised

As the next generation of entrepreneurs come through, they require role models to follow that have come before them. Learning from these individuals is an important way to avoid making the same mistakes, and when experienced business people mentor others who are coming through the ranks, those entrepreneurs are strengthened.

When entrepreneurs have access to capital, they can make things happen. Photo: Thinkstock

Lack of startup capital

As is often the case with many potential business ideas, the money to kick-start prospective companies is often unavailable, and it is usually at this point that great ideas are considered dead in the water. With more corporate and government support, startup capital for tech startup ideas can be made available to support passionate entrepreneurs who do not have access to such resources.

507832599 job skills competition high fiving getty

When the right skills are developed, success follows. Photo: Getty

Shortage of the right skills

There is a shortage of the right skills in the market, which impacts the ability for tech startups to find the people they require to strive towards success. A vibrant tech sector requires that these specific skills be created through the education of the graduates who are entering the job market in the coming years.

It is important to see failure as an opportunity to grow and continue forward. Photo: Getty

The wrong mentality around failure

Entrepreneurs in Africa need to change mindset in order to consider failure acceptable. Outside of Africa entrepreneurs embrace failure and use it as a stepping stone to success, whereas in Africa there is negativity and an intolerance of the idea of failure which stops valuable lessons from being learned.

Ghana-based incubator, Meltwater Entrepreneurial School of Technology (MEST)

Entrepreneurship training is missing

Someone starts a tech company because they are a trained computer programmer with a great idea, but the nature of startups mean that this individual will need to know how to manage the business in terms of finances and other entrepreneurial aspects. These are lacking in many entrepreneurs, and training is required to increase the success rate of such startups.

As African tech start-ups grow they require increased funding. Photo: Thinkstock

Growth funding needs an African revamp

Africa is still fairly new to funding tech start-ups, which is why investment in these often come from other parts of the world. Experienced investors fund start-ups in rounds while experienced entrepreneurs know how to select the right funders. This kind of understanding between tech entrepreneur and funder still needs to be developed on a local level in Africa.

Deregulation must begin at government level (Photo: newsecuritybeat.org)

Over-regulation

In many African countries the scourge of over-regulation kills businesses before they truly given a chance to start. Governments need to take a closer look at the regulations they are imposing on tech startups and businesses in general, to deregulate and ensure a more conducive environment for these startups with less red tape.

Instead of taking selfies, politicians should work to support entrepreneurs. Photo: EWN.co.za

Governments are not supportive

A great deal more support needs to come from government in order for tech startups to be given the head-start they deserve and often require in order to survive. Governments should set aside funds to encourage tech entrepreneurship, while interacting with companies to understand what their needs are and act on the information they gather through solid policies geared at supporting these startups.

Africa's e-Commerce

Many African tech start-ups fail due to poor marketing. Photo: adwords.facemedia.hu

Marketing is not always on point

It is difficult for startups to compete with established brands in terms of branding, but the online world provides cheaper opportunities to get noticed. Some tech startups choose to ignore sales and marketing, which is a mistake. They need to understand the importance of implementing a marketing and communication strategy in order to survive the competitive business environment and get their products and services out there.

Academi Senior Vice President for Business Development Robert Riegle addresses the US-EAC business networking forum in Nairobi on February 26. Photo by Isaac Mwangi

Poor networking opportunities

Every tech entrepreneur should take advantage of networking events with their and related industries, as these can be incredibly valuable for making contacts. On the African continent, however, there are not enough of these events, and while they are certainly increasing, more should be done to organise networking events as a supportive tool for tech startups.

rude customer

It is important to listen to what the customer has to say. Photo: Starbucksgossip.typepad.com

Forgetting feedback from customers

All too often tech African tech startups forget to truly listen to their customers while developing a product or service, and at the end of the day, these are the people that make or break a company. Putting in place the mechanisms to receive feedback from customers allows for constant improvement of the product or service.

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