Why this startup in Africa failed – and what you can learn from it (part 1)

Together with my colleague at NICE I write a couple of blogs for Unreasonable Institute, to share our learnings from building a startup in Africa. After writing about the history of NICE we write a series of blogs on why we think the startup failed. The first blog of this series is about the business setup – and online now!

Why this startup in Africa Failed – Business Setup

 

Solar Works

SolarWorks!

The problem: Better and less expensive technologies exist to support people in their basic needs. In the case of SolarWorks! these basic needs are mostly related to the use of energy.

The opportunity: Solar energy (and sustainable technologies in general) can help to fill in needs, but only when the offer is better than the existing solution. For instance, a solar lamp is a solution to the need for light. However, so is a candle and in the perception of the end user a candel is cheap, affordable on a daily basis and always works (even when it rains for three weeks straight). In this case, the solar lamp should offer a better solution  compared to the use of a candle.

The mission: To find solutions to bacis needs that require energy in countries with limited or no access to electricity.

The strategy: SolarWorks! makes good choices considering: (1) starting from the consumer need rather than technology; (2) product portfolio; (3) regions and especially the expansion regions; (4) route to market, reaching the consumer profitably; (5) generating recurrent sales; and (6) good after sales through local presence.

The status: SolarWorks! is growing. The product portfolio is in place. At the moment there are three products. The first one is a solar light that also charges the battery of every mobile phone possible (first Nokia to smartphone) and the product can be charged by any source of electricity if needed. The second product is a theft proof light for indoor use that can be fixed to a roof. Thirdly, the Solar Home System was launched recently and focuses on so-called ‘low cost houses’. The light can be charged by the sun or any other power source.

The focus is on Southern Africa for now, because of the available infrastructure  and the different tiers that are represented in this region. The advantage of the latter is that beside the target customer, higher tier customers that these target customers associate themselves with are also present.

It is becoming clear how to get the products on the market and generate recurrent sales. SolarWorks! does not build its own retail system, but uses existing distribution infrastructures. There are many of these infrastructures available, but it is a long learning path to find the right ones. Since 2013 there has been a focus on local presence and selling products through local partners that are in direct contact with the end consumers, realising spectacular growth in the last year.

The entrepreneur Arnoud de Vroomen and Bernard Hulshof are the founders of SolarWorks!. Their enterprise started from a wish to make a (positive) difference through running a commercial business. Arnoud is an econometrician, but already since 1995 an active entrepreneur in emerging markets with a focus on Africa. His vision on this continent is portrayed in the documentary ‘Vroom Vroom Africa‘*. Bernard has a technical background and, using his expertise, he believes that through SolarWorks!  he can combine the best of both worlds: a commercial approach for social returns.

* This is the trailer, for the full documentary please send an email  to lonneke.craemers@gmail.com (highly recommended!)

Social enterprise according to Arnoud and Bernard: ‘An enterprise with in its objectives not ónly financial return for shareholders.’

www.solar-works.nl

RuralWeb

The problem: Many people in developing countries lack decent knowledge of IT. The gap between those who do use IT and those who do not keeps increasing, leaving plenty of development opportunities unused. For instance, using the internet unlocks huge (distance) education potential and IT is a basic skill to attain work (African employers lack enough IT skilled employees).

The opportunity: The number of people in developing countries with access to internet is growing every day. In the last 10 years the number in Africa has grown towards 167 million people. This enables people to develop themselves through accessing information, information sharing, education, leisure, employment, time saving, and financial benefits.

The mission: Unleashing the potential of people in developing countries through building an online community that supports personal and professional goals.

The strategy: RuralWeb facilitates the first online community that distributes content for and by people from developing countries, making relevant information useful and accessible to communities worldwide. RuralWeb focuses on the creation of content and knowledge sharing, not on hardware or providing access. The first topics selected are IT and business. In this context, the RuralWeb community aims to share information and experiences, train people’s IT skills and create work. Existing information at the Internet is made visible and experiences from users (in developing countries) worldwide can be added. A bit like Wikipedia, where people can create, share and improve information. In addition, ‘learning circles’ deal with specific themes through e-courses and discussion groups that are facilitated by trainers or teachers in IT centers.

The status: RuralWeb does not have a legal person yet. There is a Facebook page and a Wikiversity page, both already have some followers and are in the process of being filled with content. Three projects have been selected: 1) IT-education; 2) entrepreneurship and (local) start-up finance; and 3) making beautiful websites. Two potential clients have been identified for listing and mapping information on these topics. The next phase is projected to focus on agriculture. RuralWeb is looking for funding to start five small pilot projects that are planned in Ghana, Uganda and St Maarten beginning 2014. RuralWeb is also looking for ICT-coaches to guarantee the quality of the study and working group ‘making beautiful websites’ (providing online feed-back on work or answers to questions – 4 hours / month).

The entrepreneur Inemarie Dekker is convinced that access to information as well as entrepreneurship are essential pillars of development. She has worked in development cooperation for 8 years through NGOs and consultancy, living and working with partners in several African countries. Two years ago she founded svikaworks, to support and advice foundations and social businesses with a focus on development issues. For RuralWeb she is building a co-creation team and developing a business plan with the goal of financial and organisational independency.

Social enterprise according to Inemarie: ‘Solving a social problem (ICT gap, job opportunity, support self-reliance) and at the same time having a financially sustainable business.’

http://www.ruralweb.info/

SingleSpark

SingleSpark

The problem: entrepreneurs in developing countries it is difficult to establish a business.

The opportunity: there are a lot of successful businesses in the West that are useful to entrepreneurs in developing countries.

The mission: to create employment, share knowledge and encourage development.

The strategy: to translate successful businesses (best practices) for use in developing countries in order to help local entrepreneurs to get through their first year. Together with a partner (both business and NGO) Single Spark explores which potential businesses can be started in a developing country. Based on the findings starters kits are developed for those specific businesses and sold to the partner. The packages include simple and visual manuals, videos, business plan, tools, etc.

The status: currently the first starters kit is being developed for the production of honey.

The entrepreneurLuc van Hoeckel recently graduated from the Design Academy in Eindhoven. He is the creative director at Single Spark. He develops new and user friendly starter kits. As a designer he enjoys solving ‘real issues’ to contribute to a better functioning world. 

Social enterprise according to Luc: ‘an enterprise that contributes to a better functioning world, that is financially self-sustaining, creates jobs, is fair to all stakeholders, and impact first.’

www.singlespark.nl

Musoni logo

Musoni

The problem: 80% of the population in Sub Sahara Africa has no access to financial services.

The opportunity: of this group, 70% has a mobile phone.

The mission: to improve the quality and accessibility of financial services to people with low income in developing countries.

The strategy to provide financial services through the mobile phone and establish best-practice microfinance institutions, using technology to lower costs, reduce risk and improve efficiency and transparancy.

The status: In 2009 a BV was established. Since the start over 45,000 micro loans have been given out in Kenya through the mobile phone with a total volume of > €10m. In Kenya these activities are being scaled up. In Uganda the start is being prepared for 2014. And The Musoni System was developed: an IT platform that is licenced to third parties, providing a best-practice solution for microfinance organisations

The entrepreneur: Bart van Eyk is co-founder and CEO of Musoni. After working more than 10 years at ABN AMRO he was introduced to microfinance in Peru. He was impressed and learned that he can use his knowledge and experience to make a real difference.

Social enterprise acccording to Bart: ‘Just a for profit business, but specifically with a long term vision and a clear objective towards the social agenda.’

www.musoni.eu

About this blog

Since August 2007 I have worked as a business development manager for NICE International, a social venture in the solar and IT sector in Africa. In October 2013 we handed over our business to local management and I started looking for new challenges in the social enterprise sector. There are so many inspiring stories that I come across in my search. On this blog I will soon start posting the most inspriring findings of my search in the world of social entreprises. As a platform for myself to keep track, and as an inspiration for others who are interested to follow.