While local interest in entrepreneurship is on the rise, support from venture capital funders has been slow to follow, hindered by an outdated vision of life and ingenuity in Africa.<\/p>\n
Frank Rizzo, Partner KPMG South Africa, provides a list of the top myths regularly encountered when discussing the future of entrepreneurship across the African continent.<\/p>\n
Myth #1: World-class innovation only comes from developed economies.<\/strong><\/p>\n I\u2019ve heard it said time and again that African countries lack great ideas and great minds\u00a0\u2013\u00a0while nothing could be more untrue. Fact is, we have strong entrepreneurial minds solving real-world issues here in Africa. With increasing support through accelerators and incubators, savvy investment and greater connectivity, the successes coming out of African countries are only going to grow.<\/p>\n Such statements also miss the many highly successful apps, technologies and innovations that simply never spread to Europe or North America. Two great examples are Mxit, a popular mobile messaging app that replaced text messages years before the advent of WhatsApp, and M-PESA, a mobile payment solution that allows people to send and receive payments from their cell phones without a bank account.<\/p>\n While African companies aren\u2019t trumpeted in international headlines, there is nonetheless a strong and growing culture of technology-driven entrepreneurialism, especially in South Africa, Nigeria and Kenya. As cellular and internet connectivity spreads across the continent, the entrepreneurial spirit is coming alive as local inventors look to solve local problems.<\/p>\n Myth #2: As Africa is an underdeveloped region, it will be years before we see ideas worth supporting.<\/strong><\/p>\n The African continent is a tale of two halves. On the one hand, there\u2019s the perception of African countries held by many in the developed world: impoverished and underdeveloped, with remote communities and harsh landscapes. However, as mobile and internet connectivity spread, barriers to prosperity and innovation are being broken down. Connectivity is transforming access to information and education and providing communities with the resources to transform their lives. As cheap smartphones become more widely available, the process is only going to accelerate. This is highly disruptive in the best possible way.<\/p>\n On the other hand, standards in countries like South Africa have long rivaled those in much of the developed world. These are the areas where we\u2019re going to quickly be seeing entrepreneurial success stories, especially as interest and investment in local companies heats up along with a supportive ecosystem such as technology incubator hubs being backed by large local and global corporate players.<\/p>\n Tech and innovation hubs are developing in Nairobi, Kenya; Lagos, Nigeria; and Cape Town, South Africa, as well as right here in Johannesburg. There is phenomenal potential in these areas, especially when it comes to tech ideas. While many foreign venture capital funders have yet to discover the untapped potential in these markets, my prediction is that we\u2019re going to see rapidly increasing international interest in future years.<\/p>\n Myth #3: A digital solution that works in the United States or Europe will work in Africa.<\/strong><\/p>\n We\u2019ve seen businesses of all shapes and sizes attempt to expand to Africa, bringing tech solutions that have been successful in other markets\u00a0\u2013\u00a0to disastrous results. This isn\u2019t a sign that African countries aren\u2019t \u201cready\u201d for innovation. Rather, it\u2019s a reflection of the uniqueness of this market.<\/p>\n For example, many individuals fail to realize that the majority of people in African countries don\u2019t have\u00a0\u2013\u00a0and will never get\u00a0\u2013\u00a0a bank account. The retail market, too, is entirely different than that of western nations. Most areas still have a \u201clocal store\u201d approach, with small business owners providing necessities to sprawling communities. American retail solutions make little sense in this environment, while an app that helps the local store manage inventory or track buying patterns has a wide potential consumer base.<\/p>\n The other side of this coin is that the kinds of solutions that are developing in Africa are tailored to meet the problems of our nations and peoples and aren\u2019t necessarily tech that one could drop into a developed economy and see thrive. Yet that doesn\u2019t mean that our entrepreneurs aren\u2019t creating ideas with the potential for worldwide impact\u00a0\u2013\u00a0only that it will take a savvy investor with a bit of foresight to see the opportunities local inventions will create.<\/p>\n There\u2019s a wealth of untapped potential in Africa\u2019s entrepreneurs and it\u2019s time the rest of the world took note. Look for the rise of this market in years to come.<\/p>\n By Frank Rizzo, Partner KPMG South Africa, Technology sector leader<\/em>.<\/p>\n Read the full article here<\/a><\/p>\n Entrepreneurship in South Africa sucks<\/strong><\/a><\/p>\nMore on entrepreneurs<\/h3>\n