Africa hardly seems like an obvious place to look for the next wave of entrepreneurs. But because the continent has leapfrogged PCs and gone straight to mobile, angel investor Adam Jackson thinks they have as good a shot as any.
Jorn Lyseggen, the CEO of Meltwater, a large Norwegian software company, launched MEST as a way of giving back to the continent that was least advanced in its adoption of the technology on which he’d built his business.
Below are some of Jackson’s observations.
Unlike many US incubators, which typically pack their coursework into several months, the MEST program runs for two full years
Attracting kids from undergraduate school, mostly from the University of Ghana, isn’t really an issue.
According to Jackson, the application process for MEST is extremely competitive, taking only approximately 20 out of 1,000 applicants—all individually interviewed.
“They are picking the best of the best for this school,” Jackson said.
After the two year schooling, the students present startup ideas to a council. The best ones move forward to the incubator phase. Current participants and alumni include Dropifi, a smart contact form for small businesses; Saya Mobile, a chat app using data, which eliminates SMS costs; and AdsBrook, a mobile ad network.
The trends in the African startup scene are subtly different
Mobile is the way in Africa, as they sort of “skipped over the whole PC generation.”
Forget smartphones. They’re still largely using feature phones, like the ones made by Nokia.
Entrepreneurs are focusing on communication apps, e-commerce, business-to-business services, and job sites.
“They have current business models with yesterday’s technology,” Jackson said.
For example, e-commerce is huge but no one has credit cards, so they must overcome the challenge by having people pay in cash or get a bike courier.
Or consider the job-listings startup that just came out of MEST, Mpawa.com.
“They are building a job recruiting platform for unskilled labour, so think of it as Monster.com or LinkedIn but for construction workers or oil rig workers,” Jackson said.
Some African entrepreneurs are creating local versions of Groupon or Amazon, but designed for local cultures.
While startups in America are awash with capital, it’s scarce in Africa
“The main problem you have in Africa is availability of capital,” Jackson said. “These are not wealthy countries but rather emerging markets and the challenge right now is attracting outside capital from the U.S. and Europe. For technology we are prenatal still. There is definitely less than 10 programs, like the one I am describing in Africa helping out technology companies.”
Personal financial pressures are very different, too.
“By going to a school like this, they are putting off making money for a couple of years, which is a huge sacrifice for their family, because the tradition there is if you get to college you go to work and send money back to the family,” Jackson said. “It is a big deal. It causes conflicts.”
These African entrepreneurs could yet give Silicon Valley a run for its money
Jackson couldn’t express enough praise for the students he engages with at MEST.
“The raw talents, at least at the Meltwater school, the engineering talent and the business talent is on par with anything you would find at Stanford or Harvard,” he said.
He did note that even though the talent is at global level, the market remains a “little bit rustier than what we are used to.”
Yet, he believes these students have what it takes.
“The students I interacted with not only as smart or smarter than our best in breed here but their work ethic is out of control. They want it more than anyone else.”
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