Why do most African Start-ups fail  (My view Point)

 

  1. The market simply isn’t there. The start-up could be way too early, too early, or just never was.
  2. Inability to change your business model midstream. Some start-ups fail to pivot their idea as they keep on persisting on a product which is not being accepted on the market
  1. BAD PRODUCT: I include vision, customer understanding, and user acquisition in this one because customer understanding should drive the idea/vision which should drive the selection and prioritization of features which should drive marketing and user acquisition. A great team and market is often enough to build traction and success, where as a great product in a bad market will almost certainly fail. Don’t get me wrong, product is hugely important but in the early days of a startup, there is no product. You just have team and a vision. Most startups never  make it to the part where they have a great product.
  2. Falling in love with an idea: this is popular amongst African startups. Crazy ideas and techno demanding tech startups are being started around. It goes back to my above point of TIMING. Some startups take ideas in the first world which are way to complicated for Africa, they do not keep it into consideration that Bandwidth is still expensive and in most parts of Africa we are too slow to adapt to technology

 

  1. Not paying attention to the economical/ Political Climate: Most African economies are not stable and this is another reason why banks fail to give startups funding because of the uncertainty. This point is quite critical for those who pour all their savings when the economy is plugging into the sea. This leads to the startup failing dismally and also losing that little bit of funding you got from your granny
  2. Lack of capital: this is a major crisis in Africa. Banks don’t support Startups. There are a few or close to none venture Capital in Africa to support young talent.
  3. No incubators – incubators help startups to network with other Entrepreneurs, Working with an incubator means that you have immediate access to all their facilities, including lots of experience setting up corporate legal structures, shareholder agreements and possibly even things like office space and other down to earth needs of a fledgling company. Most African Start-ups have got high costs and some of them are not even directly related to the product their launching
  4. Market: There are often times when great teams with great execution fail because they chose to innovate in a market that is not growing fast enough. You will often see a common trend in these situations. Talented team with great technology/vision start to acquire paying customers
  5. Bad luck : Your granny will be slaughtering goats and chicken so that you don’t succeed ( African beliefs)
  6. Building overly complex solutions: At times the market is not yet ready for that tech. before building a product one has to understand the users. Being a bunch of developers testing the product does not mean everyone is able to use it
  7. Not enough mentoring: Young Africans are facing a challenge of not getting mentoring from our elders. Most CEOs in Africa are above 40 years and will stretch their “reign” up to 60 or 70. This leads to the young not getting a chance to understanding strategic planning or management skills on how to manage a startup. The old guys fail to teach young kids on how to grow their startups. Therefore this is going to be a lost generation as they won’t get the chances to grow their careers and skills to their full ability. At times we want advice from those who have experienced something, this helps in not recurring the same mistake over and over
  8. Hand to mouth: most us become Entrepreneurs due to push factors (Poverty or unemployment). When the company starts ticking we end up diverting the working capital to salaries. The company won’t grow hence it dies
  9. Poor teams: the matrix of choosing other co-founders is a bit pathetic. Some choose co-founders through friendship or they are “beer drinking companions”  and fail to understand that it is  matter of sharing skills and assist each other on a task. When members are not motivated they quickly get pissed off with the idea and bail out real quick!!!
  10. Government Intervention: Most African governments seem to have laws and regulations that control a lot of things. Most governments don’t care when you making small cents but the moment they see that it is paying off they will be all over your throat. I will give an example of a government far away from me Jg. in Kenya the government didn’t care about bit coin start-ups when they were transacting a few hundred dollars until they started transacting thousands of dollars. The Central Bank came knocking and issued a statement against usage of bit coins in Kenya.
  11. Culture and lack of support: African elders do not believe in things like entrepreneurship. They believe in going to school, get degrees and certifications so that you get promoted. With lack of support in such things others bail out whilst they are still at it.
  12. Poor problem solving skills: Like I noted above, the issue of copying and pasting IDEAS in First world countries is the reason why most start-up fail. Africans need to do their researches and create products that are wanted by Africans. This issue of starting an “African WhatsApp” should stop!
  13. Low incomes: Some startups are brilliant but the problem the market has no purchase power. People want the product but cant afford.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s