Challenges of building a technology company in Africa

Entrepreneurship is not a bed of roses and those that choose to pursue it either by personal desire, family pedigree or forced by circumstance deserve a level of respect for playing the game, whether or not the venture tanks or breaks into the sustainability league.

Technology companies, especially those that are looking to be net producers of value, face their own unique set of challenges that are constantly evolving. Africa is lighting up with hundreds of companies looking to stake their claim in a world made smaller and more competitive by the increasing number of data pipes landing on our shores, connecting us to the rest of the world.

This afro-optimism, partially fueled by the constantly stoked fires of Silicon Valley successes by way of impressive venture capital infusions and successful exits, still comes with the hard lessons for many techpreneurs who are in the trenches.

I did a quick poll on my network with people involved in the running of some well known and some not so well known tech centered companies in Kenya and got a feeling of the challenges that exist. And while this poll is by no means scientific, it still shows the dynamics of an sector that is growing.

Access to capital is an expected challenge, but this is slowly changing with funds being established seeking to grow products and services that are scalable. Capital has it uses, from acquiring talent, building out products, establishing a market presence and research. Not surprising that it is still the number one issue cited.

Skills of available talent continues to be a pain point. There are many tools and platforms on which to build and many potential employees or contractors have dabbled in many, a move that sees them acquire no competency in one particular line. From the talent perspective it may simply be a survival tactic to appear marketable to a wider range of potential engagements, but from the techpreneurs perspective, its means slowed development and shipping of product and additional training. This also means a reduced value may be placed on the talent when raising funds from investors. Talent is also fickle, and many techpreneurs suffer from flighty engineers who are often poached by bigger firms or after gaining experience or exposure decide they are ready to go solo.

The speed of legislation and other supporting structures that are policy based ranked as the third issue. Innovation in many instances moves faster than legislation simply by the nature of the ecosystem players involved. Private sector is nimble and decisive, but the same cannot be said of government. Many initiatives have been started to push for policy changes and we are seemingly waiting at the end of the production line hoping that the desired outcomes will not be derailed or sidelined by season that we are in. The protection of intellectual property both within and without our borders, enforceability of contracts in a knowledge based economy, market access, and friendlier tax regimes were the trending here.

So, if you are thinking of starting up, now you have the heads up on some of the issues that you will have to deal with. Come prepared.

An Africa based entrepreneur in the pursuit of opportunities without regard to resources currently controlled striving to build services that have real-world value for my beloved continent and beyond while having fun along the way.

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