By: Amma Gyampo
March is a month of marking our Ghanaian heritage and celebrating the contributions of women globally. As we mark our independence and celebrate Women’s Day, I sought the opinions of several leading women in the African technology, impact investing and entrepreneurship space. At this point in our ecosystem’s development, and having had some very insightful discussions and meetings this past month, I feel optimistic about the way forward in forming closer networks to develop practical new models for entrepreneurship in Ghana.
We recently had a Women’s Entrepreneurship event hosted by the 2nd Lady and the Ministry of Business Development. Business Development, Incubator and Accelerator Leaders participated in a Ghanaian roundtable to explore the role of hubs, business advisor and stakeholders. KOSMOS Innovation Centre continues to support agribusiness entrepreneurs with practical training on investment readiness and book-keeping essentials.
To more effectively support early-stage businesses, ecosystem players need to form strategic alliances to attract the funds and support required to push the needle where resourcing high-growth businesses in Ghana is concerned. Resourcing in the form of Technical Assistance, Corporate Governance, Management Teams and even Local Investment; including Angel Investing, Corporate Investment in Entrepreneurship initiatives and streamlined government initiatives that can eliminate the bureaucracy that frustrates the average entrepreneur.
Here are some tips and insights for entrepreneurs to help optimise business performance before looking for external sources of funding.
Be guided each day by these three questions: ‘What (problem) are you fixing?’ ‘What product are you making?’ and ‘Who are you helping?’ – Juliana Rotich, Ushahidi and iHub – Kenya.
Cash is still king. The difficulty of raising capital is well established. It is commonplace to see entrepreneurs overstretch themselves and take on a huge amount of bank debt at rates as high as 35% to tide them over. Offering credit terms that are highly unfavourable to business is another way we see businesses struggle to get in the cash. There is a lot of talk about Venture Capital, Angel Investment and Mobilising the Diaspora. AmDeCo facilitates discussions with the Ghanaian Diaspora and one concern that is raised time and again is the absence of a “formula” for Diaspora investing. There has been plenty of evidence presented on Diaspora remittance values, but very little exists to make it easier for Diasporans to channel investment into local businesses. There are a few organisations specialising in mobilising Diaspora funds such as Movement Capital (formerly Homestrings) founded by Eric Guichard to offer impactful, profitable investment options. West Africa has a burgeoning African Angel Investment scene led by Tomi Davies and the Lagos Angels, who have embraced the concept of syndication and co-investing to minimise investment risk and raise capacity. With talk of raising investment Funds and active advocacy for Angel Investment from the likes of VCTF’s Hamdiya Ismaila and MBC’s Anna Samake to encourage more investment by local angels to support local SMEs, women-led businesses especially, I sense tangible progress being made this year in the offering of alternative, patient and helpful funding for established businesses in Ghana. Watch this space.
Other than capital expenditure, entrepreneurs need to invest in and take time when it comes to processes and people. We all know how difficult it is to attract and retain dedicated and motivated staff with the right mindset and attitude to help grow your business. Aliesha Balde is Communications Manager for the LIONS@FRICA Initiative and an Associate at the African Technology Foundation, a Silicon Valley corporation that seeks to globalize African tech: “For the team member selection process, founders should look for team members that have values and passions that are in alignment with the company’s mission. To retain staff, founders should provide opportunities for team members to demonstrate leadership and take ownership. Founders can also increase retention and nurture talent by making staff education and development a part of the company culture from the very start.” By providing opportunities for upcoming talent to be developed, we believe that entrepreneurs may see better engagement for those with the interest and potential to become reliable members of staff.
Former Meltwater Entrepreneurial School of Technology Communications Manager and Founder of Skrife, Kelechi Udoagwu says “On selecting, retaining and developing talent in my team, I’ve realized that it’s tough to gauge what people are good at just from interviewing them. At Skrife, we instituted a test period – a time where we get to work with employees and freelancers by giving them a test job and watching how they perform both as individuals and in the team. The most important skill when we hire is someone who takes feedback well, knows that they don’t know it all, and are consistently improving their skill sets. These attributes we only find out, when we work with them on a job or for a period.”
Internships, probation periods, appraisals and clear performance indicators are three very simple ways to manage the on boarding of staff beyond introductions or interviews.
“The best kind of money you can ever raise is the money you get from customers. That is product validation.” Wale Ayeni, IFC
As a Mentor on the KOSMOS Innovation Centre (KIC) Business Booster and similar programmes over the years aimed at supporting and developing established local businesses, I cannot emphasise enough the importance of understanding the concept of Product-Market Fit and continuous monitoring of timely data which empowers entrepreneurs to make decisions and changes to improve revenue, cut costs and ultimately improve the likelihood of sustainable profitability.
It’s almost the trendy thing for founders to look at funding as the number one thing they need for their businesses. Wale Ayeni, IFC’s venture capitalist expert puts it succinctly when he said at the recent Africa Tech Summit in Kigali, “I know people who have been able to do big businesses without investment.”
If you have a great product and you have the volume or calibre of customers willing to pay for it, you have achieved Product-Market Fit, the holy grail of a sustainable business which is a journey rather than a final destination. It takes constant analysis and examination of your business assumptions and in this case the market demand for your product or service will indicate when you have got it right. Until you get to that point as an entrepreneur, you do not have the luxury of resting on your laurels and doing the same thing you started off with. Keep the pace going, engage with your target customers, understand the problems you are trying to solve and keep adapting until your data tells you that your clients are happy with what you are offering and they are willing to pay good money for it.
Aliesha Balde adds, “To achieve product-market fit, founders should be aggressive about getting feedback from the users/customers they have. Depending on the product, or market, this may need to be done in unconventional ways, but it is vital information in order to better align with their needs. Founders should use what they learn to refine the product and pivot, if necessary.” The willingness and ability to change your product offering or even business strategy could be the saving grace of your business. Do not be afraid to switch things up and be responsive to your market insights.
As always, I have a word or two on government policy geared towards developing talent and creating an environment for entrepreneurs to start or scale, any Programme in this space should include those who operate and understand the ecosystem. Consensus from the ecosystem is that these programmes are not run by those who particularly understand and have the relationships with entrepreneurs; there is a lot of scope to simplify these interventions i.e. cutting unnecessary red-tape and decision making processes that create a poor customer experience for the very entrepreneurs they have been designed to help.
I humbly suggest Government benchmark all their activities in this “entrepreneurship” space against a simple “enable and simplify” yardstick; empower trusted ecosystem support professionals to execute structured programmes combining funding and management that will deliver results. Imagine the outcomes a coordinated pooling of resources towards this single goal could achieve. Individual “hustles” never built anything. It’s great that we have Digital Centres, NEIP, the new Business Development Ministry but what do we do to optimise the significant pool of skills, innovation and entrepreneurship facilitation right here in this ecosystem. I am advocating far deeper engagement with ecosystem players who know how to implement programmes, but who remain under-resourced and unsupported in their daily pursuits; fundamentally to help our nation grow stronger through entrepreneurship and innovation.
Amma Gyampo is Founder of AmDeCo which develops Agri and Tech SMEs. She advises leaders on how to tap into disruptive technologies to solve local problems; creating synergistic and sustainable competitive advantage. She is an advisory board member to several Tech companies and has built up a consulting portfolio across several industries including Telecoms (BlackBerry and Vodafone), IT Management, Real Estate, Public Sector and Hospitality. She brings a unique perspective and global entrepreneurship network to forward-looking African CEOs and Founders seeking to harness the full potential of business processes, innovation and technology. AmDeCo also assists established companies to innovate through entrepreneurial collaborations, innovation labs, accelerator and incubator programmes. Amma is also an active advisor on such programmes.
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