Increased sensitization on opportunities opened up by technology has seen more investors warming up to the seed and pre-seed stages of local businesses, visible decent exits and capital appreciation by others gone before whetting that appetite for risk.
Entrepreneurs are more knowledgeable and are positioning themselves better to tap into these investor networks while government is keen to keep us on track with Vision 2030, currently decomposed into several projects and initiatives. There are no gospel truths in business save for success being underpinned by sustainability and eventual profitability.
There are some areas that require work to increase our odds for success as more people enter into techpreneurship and these in my opinion are:
Thirty percent local content sounds easy on paper, but the reality is very different and we need more deliberate efforts to realize the benefits. In collaboration with industry associations, outreach must be done to segment and identify the capabilities of companies, thereafter followed by an enhancement program to cover other bases such a corporate governance, prospectus creation plus positioning and perhaps even matchmaking (under consortium’s) with multinational corporations where good fit is seen in line with rollout of key projects. This will over time build up a good track record, brand, and certification of quality and standards for companies that can then venture out into other markets.
Recent discussions within a local technology entrepreneur pool, point to the preference of traditional debt via bank loans where possible, as a source of capital. This is mostly because other owners of capital (VC and PE) may have slightly different motivations and often give the paper while handing over the match to burn through it. The environment does not allow the luxury of running a redline businesses long term and all players (government programmes, micro finance institutions, banks and equity investors) need to marshal around this to create instruments that would make sense.
Regulatory Fast Track
Government is a sloth in many respects, and in the fast moving world of technology, many companies are started and wound up in the time that it takes to vote on legislative amendments. Since not every business will have Mpesa’s unfair advantage, we need to prioritize legislations drafted to help nurture and support new ways of doing business.
Some of the bolder ideas that are being birthed require skillsets that may not be readily available in-country even with participation of academia. Government needs to better facilitate knowledge transfer by making it easier to formally engage outside talent.
We can grow globally-competitive tech companies and make Kenya the destination for innovative and investable startups and SMEs at various stages of growth in Africa.