Business
African Startups Face An Uphill Task Even After Funding
“Incubation hubs are solving this by offering access to mentors and industry contacts who help the startups access the market. Local investors are a plus since they have contacts in the relevant industry and more than money offer relevant contacts,” said Francis Gesora, founder of BookNow, an online ticketing service.
Another major problem startups have to grapple with is the lack of skilled personnel to help run the business including marketing and administration. Startups, especially in the ICT sector, are forced to high expensive labor at the on the set for investors to be comfortable to finance their business.
Staff retention and marketing
These skilled employees are usually targeted by established competing companies, which can afford to poach them at higher salaries. The startup also needs to have a very aggressive marketing strategy and budget for the service or product he’s selling to gain traction in the market.
“New products are not the easiest thing to introduce into the market. A large marketing budget may make it easier but clients may take a while before they trust the product. It takes a lot of patience on the business side to make this happen. Not forgetting great confidence in your product.” He adds.
African startups have also had challenges in getting their products patented across the continent. Not only is it expensive but it is also unrealistic considering the difference in legislation across the 54 states in Africa. Charlse Muchene of Clad Light, a startup that has created wearable technology for use by motor cycle rider and their passenger, told AFKInsider that his firm had decided to pursue a Kenyan patent first in the hope that money generated can be used to acquire the regional copyright.
“If we waited to first raise the money for a continent wide patent we could wait forever. We have just decided to start in Kenya where our patent application is still ongoing then we will focus elsewhere later,” Muchene said. African government are also not very keen in encouraging local entrepreneurs and most of the time they only extend tax breaks and create special economic zones to attract foreign investors. These skewness in legislation and policy makes it even more difficult for local entrepreneurs to make it in the market place.
Copyright AFK Insider 2014
