The Start-up scene in Africa is growing in leaps and bounds and many entrepreneurs are creating solutions at a pace faster than ever before. Africa’s digital economy began in Cape Town, South Africa, in 1995 when Mark Shuttleworth built Thawte, a leading certificate authority, and sold it to Verisign in 1999 for more than half a billion dollars — Vodacom championed prepaid airtime that same year and over the last decade, the wave has moved to other parts of Africa.
“I wanted to be here because Africa is on the move … young people are harnessing technology,” said President Barack Obama when he opened the 6th Global Entrepreneurship Summit (GES) 2016 in Nairobi, Kenya.
There are quite a number of success stories which we can learn from – Jobberman has grown into one of Sub-Saharan Africa’s most popular job search engines with more than 1.5 million visitors monthly, it was 100% acquired last month by the $167 million-valued One Africa Media. Hotels.ng is one of the biggest online hotel booking agency in Nigeria using seed investment of $225k from SPARK in 2013. IrokoTV ‘Netflix of Africa’ is the world’s largest online platform for African entertainment, one of the most recognised African technology brands. Andela received the very first lead investment by the Chan Zuckerberg Initiative to the tune of $24 million.
There are the 4 major stages to building a successful start-up
The Product
Creating a product is the first step of every business. For the entrepreneur, this includes coming up with an idea for a product, creating a prototype, introducing it to the market and working on improvements. There are two major views to consider when building a start-up, the Consumer’s view and Investor’s view. A consumer wants to understand what the product does and how much value it will provide while the investor is interested in the chances of success and the return on investment.
The Co-founder
Find a co-founder who can build it with you and in return, the co-founder will get a share of the equity. According to the Co-founder of Andela, Iyin Aboyeji – “Your co-founder should have skills that complement your own and that is how you will create a successful business.” Therefore it is important to find a partner with the requisite traits to nurture world-class start-up firms and adapt to overcome local challenges.
The Investor
The role of the investor is to give entrepreneurs the funds needed to create the product. This is either in the form of a loan that has to be paid back with interest, or equity in the business. Investor funds also come into play when the entrepreneur is looking to scale the business, typically from a VC.
The Payoff
List your company on stock exchange (this is after you’ve either raised a lot of money or have a lot of revenue, or better yet profit). Once the company is listed, sell a lot of shares, in order to gain your money back.
To learn more about the innovation across lagos at Africa at large be sure to attend #smwlagos 2017. Register here: https://socialmediaweek.org/lagos/attend/