Moving back to Africa to start a social enterprise? Read this first
Source: Jennifer Ehidiamen
14 Mar 2017
Chika Uwazie was wrapping up her master's degree at Georgetown University in 2015 when she asked herself, “Do I really want to be a consultant?” Like some young Africans in the diaspora, Uwazie had the option of continuing her career in the United States. But she was also aware of the many opportunities disguised as challenges on the African continent.
The prospect of leaving her comfort zone to start afresh in Nigeria did not sound appealing at first. Three years earlier, she had penned a column highlighting why the Nigerian diaspora won’t return home. Yet some of the reasons that she listed — corrupt political systems, a lack of infrastructure and cultural divides — are some of the same things that are now attracting many young professionals back to Africa.
“There are too many challenges that have not been solved [with] many opportunities,” she said. Uwazie took the risk and went on to co-found TalentBase. Started as a recruitment platform, the business has evolved into a payroll software that gives small- and medium-sized enterprises access to a payment system for their unbanked employees. “A lot of employees are still unbanked and don’t have access to financial services,” Uwazie said. The mobile wallet provided through TalentBase enables them to have financial history and a record that might come in handy when they need to apply for loans.
There are a growing number of stories like Uwazie’s. The African diaspora’s willingness to make a difference on the continent goes well beyond sending money home, although remittance flows are still significant at close to $40 billion in 2015, according to the World Bank. What is it like to return to the continent and establish an enterprise? Three social entrepreneurs who have successfully launched social impact businesses on the continent shared their tips with Devex on what prospective returnees should consider.
1. Build a network before you go
Prospective entrepreneurs should take a systematic approach to returning to subSaharan Africa. Uwazie began thinking about returning in 2010 and began networking. She urged returnees to start early: Get to know people, get mentors, and be in the community. “When I was able to come back to Nigeria, I transitioned more quickly than others because I already have a network of more people there,” she said. “A lot of people move back to Nigeria cold.” It is easy to be overwhelmed in the beginning — a phase when some may be discouraged and move back abroad. When Uwazie finally returned in 2015, she opted for a full-time job, and only later stumbled upon a pressing issue that needed to be addressed. “I was working [at a] multinational in Lagos, and I realized that all interns still send direct mail to apply [for jobs], and what was worse was that all the contract employees and interns were paid cash,” she said. Surprised by the lack of provisions within a multinational to pay short-term staff electronically, Uwazie decided to find the missing link and fix it. “That was how we created TalentBase,” she said.
2. Understand the problem
Before diving into building solutions, it’s important to take a deep look at the challenge you’re trying to tackle. Sometimes, what appears to be the problem may be just a symptom of a deeper issue. Uwazie and her team, for example, immediately saw the gap in the payroll system. But further investigation helped them realize that the problem was that the employees were unbanked. That discovery facilitated TalentBase’s shift toward focusing on financial inclusion. “I want to enable every SME to have payroll because I feel like if they have payroll, they will be able to activate other HR processes that will make them more efficient so they can grow,” she said.
3. The business model matters
The entrepreneurial space — whether for business or a social impact startup — is rough, said Elias Schulze, managing director of Kana Television, an Ethiopian entertainment television channel. One’s passion for social impact has to be matched by a drive to generate revenue, if not for monetary gain, at least to sustain the project. “I would say look at the monetization strategy first,” said Schulze. “Ultimately content is king, but if your kingly content cannot drive revenue, then that is not sustainable.” Schulze resigned from an e-commerce startup to found KANA Television, a free-toair satellite channel focused on producing entertainment programs for the Ethiopian 3 population. One of the key lessons he took away from his previous job experience was that when there was no structured revenue model, founders and employees tend to burn out quickly. If you have not figured out a revenue model that would enable you to pay the bills and grow something meaningful, then it is not yet time to start, Schulze urged. “You have to have a commercial model to drive the social enterprise when passion takes the backseat, as it sometimes will,” he said. And it won’t be easy, he cautioned: “If you don’t 100 percent believe in [what you do], you should either find a job that is easier or find a job that you believe in.”
4. Dig deep for funding
Finding startup funding to finance a good idea is a major challenge. Many opportunities are not in plain sight; you have to search for them. “One of the biggest questions I get [asked] is how do I get money to start my business?” said Uwazie. She has interacted with women who are into agriculture, have an education, and who have ideas and business models — but lack access to cash. Research is the right place to start. Several major donors have grant programs, such as the World Bank and the U.K. Department for International Development’s GEMS grant in Nigeria. “There is a Silicon Valley group that is bringing USAID to Ghana, Nigeria, South Africa to learn more about the opportunities there,” Uwazie said. The investor tour, “Geeks on a Plane,” which is expected to kick off between March 20 and April 2, 2017, would enable the organizations to identify homegrown innovations to fund and support. Private philanthropists are also moving into startup capital, for example through programs such as Tony Elumelu Entrepreneurship Program. Hubs and accelerators are proliferating, although they are still more scarce than in other regions. And governments are also increasingly interested in helping fund small businesses or social enterprises. Nigeria, for example, offers the Youth Enterprise with Innovation in Nigeria, or YouWIN, which provides grants as high as $65,000 to entrepreneurs in the country. Networking is also key to winning funds. “You have to show your business model and have mentors. I think that is one of the biggest things that has helped me,” Uwazie said. Mentors can help strengthen your business model but also introduce you to the right individuals in the startup space, who might have access to money and investment. 4 Schulze agrees. Before launching Kana Television, he said that he spent hours talking to lawyers and people on the ground, figuring out different approaches and understanding how other entities were structured. Being transparent also helped him gain trust with the government and the market.
5. Start from where you are
Maybe you do not think it is time to make the big move yet. You can still start to build. That’s what Bola Lawal, the CEO of ScholarX, has done. Currently based in Texas, he travels to Nigeria about five times a year. “If you are lucky to get the right co-founders on ground, good. But make a trip. Get out there, get in the mix and see what is going on,” said Lawal, whose startup helps African youth find and access scholarship opportunities. Lawal is not certain when he might move back, and so far collaborating with his team virtually has worked well. It has even enabled him access opportunities in the diaspora that has benefitted the business. For instance, he is currently raising funds to scale up through crowdsourcing and mobilizing his diaspora network to support the enterprise. Youth make up about 70 percent of the Nigerian population, and Lawal hopes to make ScholarX their go-to resource. “Our goal is to be that one platform where Africa youths can come find opportunities, but we also help them through application process,” Lawal said. Even from afar, he told Devex, “You can make a lot of things happen. It just depends on the type of effort [you put into it] including some luck.” He continued, “We need more people to get involved. If you don’t want to move back, you can do it from the diaspora. But get involved.
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About the author
Jennifer Ehidiamen is a Nigerian writer who is passionate about communications and journalism. She has worked as a reporter and communications consultant for 5 different organizations in Nigeria and overseas. She has an undergraduate degree in mass communication from the Nigerian Institute of Journalism, Lagos, and M.A. in business and economics from Columbia University Graduate School of Journalism, New York. In 2014, she founded Rural Reporters (www.ruralreporters.com) with the goal of amplifying underreported news and issues affecting rural communities.