Leaping from your daily job to starting up a business could be one of the most dangerous career decisions you could ever make, mostly because it would seem like suddenly quenching the source of your livelihood, and starting a journey of uncertainty. Not many people, of course, would have such certainty of purpose as the world’s richest man, the billionaire owner of Amazom.com Jeff Bezos, who in 1994 was already so sure and secure that one of the world’s most valuable hedge funds, D.E Shaw & Co, where he was already a highly successful employee, with fat pay packages and bonuses, held no further future for him. 

As a matter of fact, David Shaw, partner at D. E Shaw & Co (then) could not understand why Jeff would want to gamble his life away, to ‘do this crazy thing’ which was supposed to be a better idea for somebody who didn’t have a job or any financial security. 

So David Shaw was quick to suggest that Jeff joined him for a walk down Central Park. But after two hours of such walk along Central Park, Jeff had never been more convinced that he was ready to resign from his role at D.E Shaw &Co. 

For startup founders, this obviously would remain in the past because they have already crossed the Rubicon, and would probably have to confront whatever they are faced with currently. But for regular work goers, this is a very long leap yet to be made. 

Nevertheless, there remains the stories of certain yet-to-be founders who are still skirting the boundary of indecision and the thought of quitting their daily jobs to start up a business. Below, we consider how a few African founders came to this point in their lives. 

Mostafa Kandil — Co-founder Swvl

Swvl is the Egypt’s startup that competes with Uber, Careem and other internet-enabled bus sharing services. In 2018, Swvl was the top Egyptian startup to raise the most funding, raising more than US$30 million at a valuation of approximately US$100 million. Mostafa Kandil was just below 30 years of age when he co-founded SWVL. Leaving Careem where he had always worked would appear to be a bit less tough a decision to make. 

“I had graduated in Petroleum engineering, but as I started working I hated it; I felt it was too stiff for me,’’ he said. ‘‘I was also part of something called the Growth Team, which directly reports to the CEO [Mudassir Sheikha]. I remember it was my first week and he came to me and said: “when I quit McKinsey [& Company], I knew I could come back. The same goes for you; if you leave Careem now to start something and fail, you can always come back.”

That support to ‘‘always come back’’ would seem like an insurance against the adventure he would later take at Swvl. 

‘‘That was on my first week,’’he said. ‘‘I kept meeting him every day. We used to check something at the Growth Group: the average trip fare, which in Egypt was about 3–4 dollars. I knew that was a lot for an average Egyptian; so in February I decided I would leave to create something new.’’

However, the crucial point for Kandil would be learning that ‘‘around the world, public transportation is a loss-making machine. If you can take this load off the government and privatise it in a way that is super cheap and create job opportunities, you are revitalising a sector.’’

With that confidence, albeit naivety about the sector he was about to disrupt, and still backed by the guarantee of always coming back, he left Careem. 

‘‘We now have a huge fleet,’’ he said. ‘‘We have 40 routes and 300 buses on the road, but we don’t own any assets, so it’s super scalable”

Of the total amount of about $686.4 million raised by African tech startups last year, Egypt got a share of $68 million. SWVL got about $38 million out of Egypt’s share, making the startup the most-funded Egyptian startup. The startup has expanded to Nairobi, Kenya, with plans for Manila, Jakarta, and Dakar

Obi Ozor — Co-founder Kobo360

JP Morgan Chase is one of America’s largest banking institutions, with reported 2018 revenue at 109 billion USD. If Obi Ozor, co-founder of Nigeria’s Kobo360, was still at the bank’s headquarters at New York , his average salary per year should have been in excess of $100,000 (converting to Nigerian naira, his home country’s currency, at the current exchange rate, would be close to NGN40 million). To complicate matters, Obi Ozor had no background in technology, except a degree in Biochemistry from the University of Michigan, USA and further studies in international Relations with focus on trade and finance at The Wharton School of Business in Pennsylvania, USA. Abandoning his well-paying job in a country 53 times richer than Nigeria, and in preference for a space — technology — he was no master at would appear like throwing caution to the wind. 

‘‘In 2014, while at JP Morgan, I played a role in a team that was negotiating on a $5 billion project with Dangote group,’’ he said. ‘‘By 2015, I had developed strong relationships with key members of the Dangote group. On the team, I saw a lot of smart people who went to top schools in the States and had great careers but had moved back to Nigeria. They seemed to be doing better financially and appeared to be more fulfilled than me, this reality was another nudge in my gut to consider moving back.’’

Ozor said by March 2015 with a team from Dangote at the Wharton Africa conference, he heard that a lot of the issues with businesses in Nigeria seemed to center around electricity and logistics. 

‘‘I asked Dangote’s chief strategists if they were open to outsourcing their logistics and surprisingly he gave me a nod. I came back to J.P. Morgan, and after months of strategising with my future Kobo co-founder, I decided that I needed more logistics technology experience, and so when Uber came along I hopped on it,’’ he said. 

However, it does not appear that Ozor was ready to launch himself from frying pan to fire. He was obviously grooming himself for what he wanted. One more job stint as the director of operations at UBER Nigeria prepared him roundly for quitting job in the future. 

‘‘My mandate was to grow Uber’s supply in Nigeria,’’ he said. ‘‘This involved getting thousands of cars on the road so anyone in Lagos metropolis can get a ride within 5 minutes. Onboarding 50 cars is one thing, but securing hundreds and thousands for of cars required some serious business development with banks and wealthy individuals. Of course, you can’t forget the issue of smartphone penetration and millions of people who want to use Uber while paying with cash.’’

After Bezmo (his first startup), Ozor said he had learned how to build a company, how to say ‘no’ to lots of funding in the first year of a startup, how to be a CEO and not second guess himself all the time or be too democratic. 

‘‘With Kobo,’’ he said. ‘‘I see what we are doing as a career, so hardly make rash decisions or get depressed by normal business fluctuations like the recession we are in now. In fact, I like the recession; it’s giving us the time to build capacity and has been instrumental in re-routing capital back to hardworking entrepreneurs instead of oil deals or trade finance which doesn’t create job or add real value to the economy.’’

In August, 2019 Kobo360 raised a US$30 million debt and equity Series A funding led by the American multinational investment bank and financial services company Goldman Sachs. The startup is set to scale its operations in more African countries.

‘‘Kobo is in the first phase of that mission to provide logistics solution to more than 200 million SMEs across Africa,’’ Ozor said. ‘‘The journey has not been easy but there seems to be light at the end of this tunnel. 5 months from launching beta operations in August 2016, Kobo ended 2016 with close to N1 billion naira in revenue, helping create and retain 156 jobs, and looking forward to a prosperous 2017.’’

Read Also: Random Business Thoughts From Top Startup Owners

Aretha Gonyora — Co-founder at Payitup

Aretha Gonyora was already a senior business analyst at Ernst & Young, Zimbabwe when she started Payitup Technologies, a Zimbabwean fintech startup. As difficult as the economic situation could be in Zimbabwe, where inflation reached as high as 89.7 sextillion percent year-on-year in mid-November 2008, quitting job has to be the toughest decision Aretha Gonyora, who was already reaching the peak of her career at Ernst and Young, could ever make in her entire life.

Payitup has since raised US$13 million in funding from the UK-based Thawer Fund Management. The new round of funding is the largest ever by any startup in Zimbabwe. This would put the startup’s value at US$20 million . Although Payitup has secured seed funding in the past, it has faced challenges securing this larger round.

“We had been engaging our investor for over a year. The startup ecosystem in Zimbabwe is not that vibrant at the moment, and the current economic condition makes it difficult to get funding. There is still hope. What saw us through in the back and forth of the last 15 months was a combination of having a strong vision and finding people that believed in us,” she said

“Our goal is to build a more connected financial life for the African people and beyond. Through our mobile and web applications our customers will be able to pay for various goods and services, access loans, investments, insurance and a wide range of financial products. We will be working towards financial inclusion for all and maximising on technology. A lot of people still do not have access to basic financial services, while the people with access to banking services are not fully capitalising on the power of technology,” she added.

Although facts largely remain sketchy, it does appear that Aretha Gonyora started her journey to building a startup while still at EY, before fully transitioning to Payitup. 

From the above, Aretha Gonyora would probably fall into Richard Brandson’s school of thought, that “some of the world’s most successful companies began as side projects, with their founders working evenings or weekends to turn their ideas into realities.’’

‘‘ Virgin is a prime example of this — all of our Virgin businesses started while we were working on something else,” Branson writes. “Virgin Records was originally a side project as part of Student magazine,” while Virgin Atlantic started “as a side project while we were running Virgin Records.”

“We’ve found that those who apply and plan to grow their idea while still working their day jobs are more confident in their ability to manage their money and time. Not having to be reliant on their new business to provide them with a full-time income, they are given a bit of breathing space and time for their idea to gain traction,” says Branson of a startup loan scheme he’s involved in.

“If you have an idea for a business that is keeping you up at night, it would be such a shame to waste it.” So go ahead and get started even if you can’t afford to quit yet. Some in the startup world will sniff at your efforts, but not the Virgin boss,’’ Brandson concludes. 

Jason Njoku — Founder IrokoTv

In 2010, the Nigerian Jason Njoku and the German Bastian Gotter launched irokotv, a web platform that provides paid-for Nigerian films on-demand, which is usually dubbed ‘the Netflix of Africa’ and which is believed to be one of Africa’s first mainstream online movie streaming websites. With its headquaters in Lagos, Nigeria and offices in London and New York. iROKOtv brand was so valuable that Jason said in less than a year old at the time, investors paid $80,000 for 10% of the iROKOtv but sold to other existing investors, for $2.4 million. In some of his posts, he made the following points about starting out.

‘‘When people ask me about when I started or how I started I always think back to those summer days of 2004, when I was only 23 years old with the world as my oyster,’’Jason said. 

Njoku grew up in South-east London, launching his first startup — a student magazine called Brash which failed afterwards.

‘‘I blew almost £5,000 over that fateful summer. As an ordinarily working class, poor student approaching his third and final year in a Chemistry degree I had no business doing anything like that,’’ he said. 

4 years later in the corporate world, Njoku quit his job, a decision he said he had made in his ‘youthful gusto’.

Njoku thereafter proceeded to make a failed attempt at a T-shirt business, which failed again. He also had a stint at web designing and still failed. 

‘I spent three years making every mistake there was to make about how to run a business,’ Njoku said. ‘But that taught me about hard work and focusing on the right things.’ 

In 2008, Jason decided to come back to Nigeria and that journey sparked the vision of his company — iROKO Partners.

In a blog post Njoku explained, in 2016, his journey with investors:

$80k for 10% of iROKO. That’s an $800k valuation. At the time it was crazy for a less than one year old company, which had generated $200, $1k and $6k in the previous 3 months. I was a terrible negotiator then, so was pretty desperate. I actually offered an old university friend of mine 35% for about $50k. Thank God Bastian [iRoko co-founder] did the negotiation and was a less generous than I. In the end? He passed.

Earlier this year, after 5.2 years, the same investors sold their entire stake for which they paid $80k for in 2011. For $2.4m.$2,400,000.00. With Naira at N300, that’s N720m. Thats a x30 ROI. 3,000%. It took 5 years.

Five years after launch, iROKOtv remains a leading player in the video-on demand space. In January, only weeks after Netflix announced its Africa launch, iROKOtv raised $19 million from French cable service Canal+ and the Swedish-based media company Kinnevik AB. The money, the company said, will be invested in producing 300 hours of original content this year and double that by 2018. iROKOtv has grown popular, particularly outside the continent where 55% of its subscribers are located.

Bottom Line

Finding yourself at crossroads on your way to building the startup of your dream could be one of the hardest situations you could find yourself in. The above founders have made out their own paths, and it has been successful for them in different ways. The key points to draw out from their experience are that to effectively transition from jobs to startups:

• You need to leverage your job experience to learn more about the startup sector you would want to venture into.
• Starting a hustle viz a viz your regular job could eventually transition into a full-blown startup that may finally lead to quitting your job, without having to feel the discomfort of suddenly quitting job.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

You’ve just invented the self-tying shoelace in your head. It’s intellectual property that could make you millions. But you’re stuck in a 9 to 5 job. Is the dream over before it’s begun?

Certainly not. More and more people are having small business ideas and starting up SMEs, or small-to-medium enterprises, in their spare time. And thanks to new technology and techniques, setting up a business is easier than ever.

The idea

First of all, take a look at your idea. Do we really need self-tying shoelaces? Great ideas solve problems and plug gaps in the market. Maybe you don’t have time to sit around brainstorming all day. But you can look at what’s missing where you work or study. Working in Belgium, GU founder James Averdieck saw the potential for high-quality puddings like the ones from his local patisserie to sell in supermarkets.

British student Ben Francis saved his money from delivering pizza to buy fitted fashionable gym wear that young people would like. After just four years, his successful brand GymShark turns over £26m. While working for Louis Vuitton, Kunal Kapoor noticed there was no opportunity to buy pre-owned, luxury fashion items at a discount. So he started Dubai-based online platform Luxury Closet where people could buy and sell their designer handbags. US toy manufacturer Mattel started making picture frames. With the leftover materials they tried their hand at dollhouses. The dollhouses sold better. All saw the opportunity and had the idea.

The business plan

So you’ve decided we do need self-tying shoelaces. It’s a great idea. If you’re setting up a business, you need a business plan. Business plans can seem daunting. Fortunately, there are lots of tools and templates out there to help you get started. The $100 Startup’s One Page Business Plan asks simple questions to help you work out what your business is and what to do next. Enloop makes it even easier. Not only can this app autowrite sections of your business plan, it uses the data you input to automatically generate financial forecasts, saving you time and money on fortune-tellers.

StratPad for the iPad or Business Plan & Start Startup for Android also provide plenty of tools, resources and tutorials. Make sure to register your company. There are numerous online company formation services that can register your business quickly and easily at low-cost. It’s important to understand the legal aspects of starting a new business in your country as well. Websites like enterprisenation.com and startups.co.uk can give you information on tax law, intellectual property, employment regulations and digital rights, for example.

The time

You’ve got the plan. Have you got the time? Finding the hours while working, studying or raising a family is one of the biggest obstacles to starting a new business. First of all, remember: there are 24 hours in a day. Take away 8 for work and 8 for sleep — you’ve still got 8 left! There’s a whole other day in there. If you manage your time effectively, you can get a lot done.

Of course, there’s an app for that. Wunderlist is one of the most popular. An easy-to-use to-do list and task manager, it can help you decide what you need to do and when you need to do it. But how long do you do it for? Try the Pomodoro Technique by Francesco Cirillo. Spend 25 minutes doing a task and nothing else. Congratulations. You’ve completed one Pomodoro. Take a five-minute break to celebrate before starting the next Pomodoro. Every four Pomodoros, take a longer break.

The place

One day you’ll have an amazing HQ for your new company. For now, you have to work where you are. Chris Orrell, the founder of Hotelstayuk.com, used to call clients from the car park during his lunch break. If you’re running a home business, Emma Jones of Enterprise Nation suggests setting up dedicated business spaces in your home to minimise distractions. But when life intervenes, try and incorporate it. She calls it the ‘work-life blend’. If you’re going out to make a delivery, why not take the kids along?

Sara Mauskopf founded Winnie, an app that gives parents local information, while bringing up a new baby and helping her husband through chemotherapy. She’d work from hospitals and crèches, while managing her time by preparing tasks and setting time limits. These days, you don’t need an office or a company secretary either. Office companies like Regus and Anvic provide virtual office services with professional administrative support and an official business address. That helps with company registration.

The people

One of Sara’s pieces of advice is don’t go it alone. You’ll find more time if you can delegate and outsource tasks. Use people you know. For example, a number of friends Ben Francis met at university now work for GymShark full time. Vetements is an international collective of young, like-minded fashion designers who were fed up with the clothes they were making for big names. Creating their own designs in a Paris bedroom at weekends, the brand now regularly sells out in high street stores. Luxury Closet receives its products from 15 countries a month and sends them on to 40. Such a logistical operation is beyond its means, so the company outsources the supply and delivery of luxury items to DHL.

The tech

E-commerce has made it possible to run a business in your sleep. Customers can buy your product or service whenever they want online. Marketplaces like eBay and Amazon make it quick and easy to get started. If you want something a little more tailored, web hosting companies offer web shop services. Shopping cart systems like Shopify can let customers buy stuff directly from your website, while you’re doing something else. But what happens if something goes wrong? Now you can digitally outsource your tech and customer support. Amazon Web Services can host your website and apps. Snapengage can integrate live chat support directly into your website. Zendesk offers support ticketing, knowledgebase and FAQ features along with apps for all major smartphone operating systems.

Communication with customers is key to the success of your new business. But you can’t be on call 24 hours a day. Email is a reliable way to track customer complaints or queries. Use auto-responder to notify customers when they can expect a response. There are also customer relationship management apps like Nimble to organise your contacts and track what’s going on wherever you engage with customers. There are tools as well to analyse the data.

Dashboards like Microsoft Power BI service and 9-Spokes automatically harvest data from all your business systems. They then present it back to you in an easy-to-read form, highlighting which areas of your business need work.

The marketing

If you’re working 9 to 5, you probably don’t have the time or the money to market your new self-tying shoelaces. In that case, learn from GymShark’s use of social media influencers. Sponsoring 18 top global YouTubers, Instagrammers and bloggers, with a combined following of 20 million, the company raises awareness of its brand at a fraction of the cost. Enterprise Nation suggests engaging influencers before asking them to promote your product and reaching out to smaller ones first. Also offer free samples or trials in return for a review.

Don’t have time to trawl through social media? As ever, automated tools are at hand. The bizarrely named Followerwonk searches for Twitter accounts that tweet about relevant subjects. Buzzsumo finds the most shared articles on a topic. Buzzstream identifies influential websites.

The money

So everything’s come together. You’ve set up all aspects of your self-tying shoelace business over a few lunch hours. Now you just need the money to make some self-tying shoelaces. It takes time meeting investors and venture capitalists to secure business finance. Thanks to crowdfunding on websites like Kickstarter and Indiegogo, you can let the investors come to you. ForeverSpin is a company making spinning tops that crowdfunded on Kickstarter. Originally trying to start a software company, the founders didn’t have enough capital. So they brainstormed a product that was simple, unique and nostalgic — high-quality metal spinning tops — and went to Kickstarter for funding.

First they tested the website with an unrelated project to find out how it worked. Then they made a good, simple video for an international audience. People loved the idea, which in turn increased its visibility on Kickstarter and drew in more backers. Read our guide on how to get funding. It really is easier than ever to set up a business. You can fund, make and sell a product or service pretty much anywhere, anytime. So what are you waiting for? You could be sitting on a billion dollar self-tying shoelace company, or a knot-for-profit.

This article was originally published by on DHL’s Discover platform.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

AI-powered start-ups in Africa face a set of challenges not experienced by entrepreneurs in Silicon Valley.

In Africa, like everywhere else in the world, artificial intelligence (AI) is moving up the agenda as companies, entrepreneurs and governments work out how to keep pace with the Fourth Industrial Revolution. While the continent has a long way to go when it comes to AI adoption, these technologies already play a prominent role in many individual organizations: Nigerian mobile-lending platform Carbon uses machine learning to evaluate credit applications, South African fashion retailers rely on algorithms to predict the next season’s top sellers and Kenyan ride-hailing app Little has implemented AI to assess driver performance.

For the continent to remain relevant on the global stage, it is not only vital that companies embrace AI, but also that local entrepreneurs have equity in these technologies. That said, building an AI-powered start-up in Africa comes with a unique set of challenges not experienced by entrepreneurs in Silicon Valley, particularly in terms of raising capital, human resources and market receptiveness.

Entrepreneur Vian Chinner has first-hand experience of both worlds. Having founded, and sold, a well-funded start-up that applied machine learning to the rental real estate market in the US, he is now CEO of South Africa-based Xineoh, which uses AI to predict consumer behavior.

Here are three lessons running an AI start-up on the African continent has taught him:

1. Early stage AI start-ups struggle to get good valuations

“In a single morning in North America, more VC funding is raised than in an entire year in South Africa,” he says. 

According to the Southern African Venture Capital and Private Equity Association, the region’s VC industry made investments to the tune of $77 million (converted from 1.16 billion South African Rand) in 2017 while KPMG puts US VC deals at $84.24 billion for the same period — an average of $115 million per morning.

In Chinner’s experience, South African VCs, with a few exceptions, are much more risk averse than their Silicon Valley counterparts. Whereas US-based VCs are generally willing to take a bet on a high-innovation/high-risk idea; South African investors typically avoid companies that don’t have a proven cash flow and solid traction.

“In Silicon Valley you basically need to sell the direction in which you are going. There’s an understanding that a start-up won’t have an exact business plan until it has launched its product in the market,” says Chinner.

“Once the start-up has received initial feedback from customers, it will start iterating to create a product-market fit. US VCs put a very high premium on innovative products and ideas, but attracting investment based on a concept or idea is tough in South Africa.”

Another challenge faced by start-ups in South Africa is that VCs often don’t have the in-house expertise to adequately evaluate AI solutions. According to Chinner, most South African VCs have a banking background, unlike Silicon Valley where many investors are former techies.

Looking abroad for funding is an option but it’s not always an easy route. While the economic and political situation in many African countries may make some VCs nervous, distance is an even greater factor — early stage investors tend to prefer start-ups that are based close to them. Chinner says: 

“A San Francisco-based VC would be skittish about investing in a start-up in Phoenix or New York. People generally prefer to back teams based in the same city as them. They want to keep a close eye on them and be able to check in once a week.”

Working at a start-up on the US’ West Coast allowed Chinner to build a solid contact book, which helped with Xineoh’s fundraising efforts. To fund the company, he approached Canadian investors who were willing to back him at a valuation almost 10 times higher than what he could have raised in South Africa at the time.

Without such a network, Chinner believes Africa-based entrepreneurs will find it much tougher to attract investment from US-based investors.

Related: What African Startups Can Learn From Alphalogic Techsys As It Goes On India’s Startup IPO This Week 

2. Recruiting AI talent is an ongoing pressure point

Super-smart data scientists are critical for the success of AI companies; yet it is a skill that is in short supply on the African continent.

As Wim Delva, acting director of Stellenbosch University’s School for Data Science and Computational Thinking, writes, virtually every university in Europe and North America has responded to the challenges and opportunities of data science by establishing new institutes, departments and degree programmes in the field. In Africa, however, educational institutions have only recently begun to narrow the gap.

Although AI and machine learning have become hot topics at tech, employment and economic forums and workshops, Chinner hasn’t seen a meaningful increase in the number of trained data scientists. He says,

“South Africa has enough smart people with the potential to become data scientists, but for some or other reason it hasn’t been a popular career choice.”

Chinner hires applied mathematics graduates and trains them in modern-day data science: 

“The best people to train, by far, are those who come from applied mathematics. I can’t explain it, but suspect it has to do with the way they view the world.”

Xineoh has also adopted some unorthodox recruitment strategies: “We normally ask recruitment agencies to send us the names of the people who interviewed worst. People who are bad at politics and social skills usually end up being good data scientists.”

What is the World Economic Forum doing about the Fourth Industrial Revolution?

To thrive commercially, AI companies also need salespeople who can explain complex algorithms in a way that corporate executives can understand. Finding them hasn’t been easy in South Africa and after several failed hires, Xineoh began appointing salespeople who also have an applied mathematics background. 

“They are scarce, but they are out there,” says Chinner.

3. Corporates don’t fully appreciate the benefits of AI

AI sales pitches in South Africa usually have to include a significant educational component. Although large corporates generally recognize the importance of AI, they are mostly in the information-gathering or experimentation phases and are not close to adopting AI on an industrial scale. Chinner also found that South African companies often believe they can build their own AI solutions, but that in-house initiatives rarely get to the implementation phase.

One industry that has shown a particular willingness to adopt AI solutions is the brick-and-mortar retail sector. Retailers’ transaction data (on which AI algorithms feed) is generally in good shape. Chinner ascribes this to the highly competitive nature of the industry: “South African retailers are extremely focused on customer service and having the lowest prices. In order to succeed at both, they need highly accurate real-time data. It is the competitive tension in the industry that makes them open to innovation.”

Software is, however, a global game, with solutions from names such as Microsoft, Oracle or IBM used throughout the world. Xineoh’s two biggest international competitors in the consumer behavior prediction space both sell their solutions globally, including in South Africa.

So is there a case to be made for South African-based AI companies that cater to the local market? Yes, says Chinner:

“Local players often have a better understanding of in-country nuances. For instance, in many African companies, even large ones, transanctional data is not as structured and clean as it would be in an American multinational. This is mostly because they typically don’t have as much resources available to allocate to data administration. As a result, the algorithms used by AI players in the developed world more often than not struggle to cope with Africa’s unstructured and unclean data, whereas local companies build their solutions with this in mind.

“Think of it this way: a top US tech company is a bit like an F-16 fighter plane: highly efficient, but needs near perfect conditions to take off. By comparison, a MiG [an alternative jet fighter plane] can take off on a dirt road and doesn’t need the same ongoing maintenance. The software platforms created by local companies are MiGs; they tend to be more robust, flexible and suited to local conditions.”

Jaco Maritz is the Editor-in-chief at How we made it in Africa, a pan-African online business publication

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Is it easier to become an entrepreneur now than it was several decades ago? Today’s founders probably can’t conceive of starting a business without the aid of technology, while many of those who began their business journeys in the pre-digital age recall there was less competition and therefore a greater chance of success.

It’s a question I put to Virgin Group founder Richard Branson, who started his first business in the 1970s, long before the dawn of mobile phones and the Internet. Thanks to technology opening so many doors, he believes there are more opportunities today than ever.

He says: “Customers are just as happy to buy from someone based at home as they are from a business on the high street, and this brings the cost of starting a business down dramatically. You don’t have to commit to expensive global advertising campaigns but can do your marketing and market testing at the touch of an iPhone.”

And as he points out, it’s easier to get funding to start a business, with schemes such as crowdfunding and Start Up Loans helping entrepreneurs avoid many of the difficulties in securing business funding presented by mainstream funding sources, such as the banks.

“While competition may be fiercer, I believe that if you have an idea for a business that solves a problem and makes people’s lives better, as a result, you have a good shot at success,” he says.

Arguably those who started up in the tech sector 30 years ago have witnessed the greatest changes and the biggest impact on life as an entrepreneur.

Inspired by the moon landings and the dawn of the computer age in the 1960s, Andrew Bud had always wanted to be an engineer. He went on to become one of the pioneers of the European mobile communications industry, as CTO and a founding member of Vodafone Italia.

Read Also: Don’t Waste Time On A Startup Business Plan — Do These 5 Things Instead

In 1987, he was a key member of the team responsible for creating the first digital consumer wireless telephone, which now resides in the Science Museum in London. Today he is the founder and CEO of face verification startup iProov and reflects on life as an entrepreneur, then and now.

He says: “In the 1980s everything in mobile was regulated, and a business could live or die by the stroke of an official’s pen. Regulation was just changing from national to European scale, creating not only enormous opportunities but also new challenges. Exactly the same applies now to some aspects of the identity business in which iProov operates today; it’s very recognizable.’’

Then in 1995, Bud wanted to spin out Olivetti’s premises wireless systems business, which he had founded and built, into a separate startup.

“It was impossible,” he says. “In Europe, including Italy, there simply was no venture capital, and getting skilled staff to work in a startup was extremely difficult. It was not at all glamorous or attractive back then, just horribly risky.”

Without question, he says, it is far easier today, easier to build a startup team, simply because people are up for the adventure and it’s far more socially acceptable. It’s also easier to fund a team, because there are innovation grants available to small businesses that didn’t previously exist, while the risk capital environment has been transformed by tax incentives and a decade of low interest rates.

“It’s true that competition moves faster today,” says Bud, “However, modern software makes it easier to build, evolve and test products quickly, meaning we learn faster, which is the key to any entrepreneurial activity.”

The speed at which businesses can hit the market today means that markets quickly become saturated, so that challenge for founders is being able to stand out from the crowd, and to adapt to rapid change in the market, without compromising their core business values.

Mel Pledger is the founder of personal development program DNA Light Up, however, her first foray into entrepreneurship was over 30 years ago when, at the age of 21, she became involved in running a cleaning company.

“In those days, building the business was all about keeping detailed paper records. It was slow and methodical, but it worked for me in a slow, solid, plodding kind of way.”

Today Pledger is running a company that delivers training and development programs to a broad customer base that includes business leaders and their teams, as well as to private individuals.

She says: “The challenge today is standing out and maintaining integrity in a market that becomes flooded with imitations the second a product or idea seems to be a good one. For me that is the greatest difference between being an entrepreneur then and now.”

The focus today, she says, is on authenticity and having a genuine interest in connection and humanity.

Pledger says: “Is that easier or harder than the rules of 30 years ago? I guess that’s a personal opinion. I relish the opportunity to stand up for what’s real, for our team and for the work we do and I’m loving being an entrepreneur in 2019.”

Alison Coleman is a founder of Coleman Media, with 20 years of experience in both national and international online and print publications.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Startups across the world are never giving up on their ventures. Alphalogic Techsys is gearing up to go on India’s first startup Initial Public Offering on India’s The Bombay Stock Exchange (BSE)’s newly launched BSE Startups Platform. And this is coming soon: this Friday August 23, 2019.

Formed in 2016, Alphalogic Techsys has interests across segment such as mobile app development, web application development, business intelligence and data analytics. In the past, it offered services to the US government, Merck India, Payback Card and several other companies across India, Australia, US and the UK.

Here Is The Deal

• The BSE Startups Platform was started in 2018 with an aim to encourage new-age entrepreneurs to list their companies on BSE, which is India’s prominent stock exchange.
•  This platform endeavors to strengthen the startup eco-system in the country, and Alphalogic Techsys Limited became one of the first two companies to qualify for listing on this platform.
• Alpha logic Techsys has fixed the issue price at Rs 84 ($ 1.18) per share.
• The minimum units for each purchaser of the startup’s shares is 1,600 shares. This will correspondingly require a minimum investment of Rs 1,33,400.($ 1,866.13)
• Alphalogic Techsy’s net profit more than doubled in Fiscal Year 19, which helped it report 40 per cent compounded annual growth rate in last 4 years.
• The pre-issue net worth of the IT company stood at Rs 2.22 crore ( $61,239.69) as per restated balance sheet for FY19. The startup’s total debt stood at Rs 1.21 crore ($ 33,378.39).
• Managing Director of the startup, Anshu Goel says the company plans to expand into new clientele and expand the team in order to leverage various organic and inorganic opportunities.
• The company lists Middle East, North Africa, Europe and Latin America as target geographies.

Alphalogic is a Software Solutions Company that delivers new-age solutions to its clients to help overcome business challenges and achieve their growth in this fast-changing digital world. The company has its development center in Pune, India, while its sales office is located in Arlington, USA. With a vast clientele in India and overseas, Alphalogic sees the opportunity of getting listed to the Bombay Stock Exchange a noteworthy milestone that can skyrocket their growth.

IPO On Stock Exchanges Designated Only For Startups Could Be An Alternative To VCs For African Startups

Nigeria

Indeed, African startups may begin to consider listing on their local stock exchanges where such structures exist.

For example, there is now a fourth board on the Nigerian Stock Exchange meant for small businesses and startups. The board, known as the Growth Board would offer them the opportunity to raise equities for their businesss. All the startups and the SMEs need to do is to obtain approval from the Nigerian Securities and Exchange Commission and then list their shares for public subscription.

The new framework for startups, SMEs at the Nigerian Stock Exchange (NSE), to be known as growth board, was recently approved by Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC).

The framework creates two segments on the growth board for start-ups, micro and small companies and medium-sized companies.

• Start-ups and small companies are denoted by market capitalisation of between N50million and N500million while medium-sized enterprises are companies with market capitalisation of between N500million and N4billion.
• Start-up and small companies are expected to be listed on the first segment, known as entry segment, while medium-sized companies will be listed on the second segment, known as standard segment.
• The growth board will be the fourth board at the NSE. There are three existing listing boards at the Exchange, including premium board-for large-cap companies that meet additional requirements on dedicated corporate governance assessment, main board- the general board for all companies that meet the specific stringent listing rules and alternative securities market (ASeM), which provides listing for quotable companies that cannot meet or sustain listing requirements for the main board.
• 

South Africa

In South Africa too, there is no more waiting for years and centuries for startup IPOs to happen. Once startups raise funds through equity crowdfunding in South Africa, the startups’ shares automatically become tradable on the floors of South Africa’s Stock Exchange.

Here Is How Everything Is Going To Happen

• Africa’s first equity crowdfunding, Uprise.Africa, and South African alternative exchange ZAR X have come to an agreement that will see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market.
• Not only could the arrangement be the funding gap filler that fledgling South African entrepreneurs desperately seek, but it could bring the local capital market to the people.
• The partnership also solves the fundamental flaw of all other pre-IPO models, Nel says, namely that once a company has issued the shares they remain fairly illiquid, with investors having their funds tied up until that company looks at going public.
• Tabassum Qadir, co-founder, and CEO of Uprise.Africa says they plan to conclude at least three deals a month.

“We are simplifying venture capital through this mutually beneficial partnership for both entrepreneurs and investors,” says Qadir.

Bottom Line

This listing by India’s Alphalogic Techsys shows continually expanding alternatives to traditional VC fund raising, which if properly exploited would boost the value of Africa’s startup ecosystem. Indeed, it is time for African startups to begin to look beyond the traditional VC funding market, and exploit such other alternatives as this. However, not many startup founders in Africa can afford to put themselves out for public scrutiny at the most crucial stage of their companies’ development  – the growth stage. But this could still remain an alternative for many, courageous enough to toe the path.

Again, this will probably be one of the most risky investment vehicles ever, but it’s still a great idea that helps startups raise funds and allows non-affiliated, individual investors to invest into the startup and small business ecosystem.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

There is now the fourth board on the Nigerian Stock Exchange meant for small businesses and startups. The board, known as the Growth Board would offer them the opportunity to raise equities for their businesss. All the startups and the SMEs need to do is to obtain approval from the Nigerian Securities and Exchange Commission and then list their shares for public subscription.

The New Framework For Startups, SMEs

The framework for the operation of the new listing platform at the Nigerian Stock Exchange (NSE), to be known as growth board, was approved by Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC).

The framework creates two segments on the growth board for start-ups, micro and small companies and medium-sized companies.

• Start-ups and small companies are denoted by market capitalisation of between N50million and N500million while medium-sized enterprises are companies with market capitalisation of between N500million and N4billion.
• Start-up and small companies are expected to be listed on the first segment, known as entry segment, while medium-sized companies will be listed on the second segment, known as standard segment.
• The growth board will be the fourth board at the NSE. There are three existing listing boards at the Exchange, including premium board-for large-cap companies that meet additional requirements on dedicated corporate governance assessment, main board- the general board for all companies that meet the specific stringent listing rules and alternative securities market (ASeM), which provides listing for quotable companies that cannot meet or sustain listing requirements for the main board.

Requirements For Listing 

• For any company to be listed on the growth board, it must be a duly incorporated public limited liability company with at least two years of operations, audited financial statements in line with the International Financial Reporting Standards (IFRS) and must have grown its revenue by a minimum of 20 per cent cumulatively in its last two years of operations.
• Also, all companies to be listed on the growth board must undertake that their promoters or directors shall retain a minimum of 50 per cent of their shares for a minimum period of 12 months from date of their listing, and that the directors or promoters shall not directly or indirectly sell or offer to sell such securities during that 12-month period.
• The framework meanwhile provides alternative requirements for listing for each segment.
• Under the entry segment, a new business may be considered for listing if it can provide evidence of investment in it by a core investor or a strong technical partner that has a minimum of two years’ operating track record, or a majority shareholder, who is either a High Net Worth Individual (HNI) or is a director of a listed company.
• Under Nigerian rules, High Networth Investor is an individual with net worth of more than N100 million.
• Besides, companies heading for the entry segment must have market capitalisation of not less than N50 million, a minimum of 10 per cent of its shares available or to be available to minority retail investors and at least 25 shareholders.
• Under the standard segment, a new business may be considered for listing if it can provide evidence of a core investor or a strong technical partner who has a minimum of four years operating track record, or a majority shareholder who is a HNI.
• The company must also have a minimum market capitalisation of N500million, at least 15 per cent of its shares must be held or will be held by minority retail shareholders and it must have a minimum of 51 shareholders.
• The NSE stated that it aims to use the growth board for greater global visibility for eligible Nigerian entities and foreign companies in order to engender global capital flows.

The new board is designed to support SMEs’ growth as part of the strategic initiatives by the stock market to enhance its traditional roles as catalyst for economic growth and development.

SMEs and start-ups account for more than 90 per cent of businesses in Nigeria and provide about 85 per cent of employment, according to various national and international data.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/