TechCrunch founded by Michael Arrington in 2005 has gone on to provide us with updated news mostly about web 2.0 companies, ranging in size from startups to established NASDAQ-100 firms. Up until recently, I’ve been reading TechCrunch. It was one of the first things I visited when I got a chance to access the Internet on a campus computer lab computer many years ago as an undergraduate engineering student in Uganda.
I was excited about the web and how small companies were making big leaps in the digital technology industry.
From the early days of Facebook to when nobody understood what Twitter was all about. TechCrunch was there writing about these cool startups in Silicon valley and it was a source of inspiration to me to the extent that I also started blogging about tech in Uganda back in 2010. My single author blog has grown to be a multi-author Tech blog covering not just Uganda, but the entire African Tech space.
However, my inspiration from TechCrunch has since faded.
Not because it doesn’t cover the African Tech space or because now I have a blog where am the Editor-in-Chief. No. It’s primarily because of the content that TechCrunch is publishing these days and how African Tech ecosystem is deceptively following suite.
Before writing this post, I visited the site thinking that perhaps the content therein can change my view. Well, it didn’t.
TechCrunch still has a misguiding dose of content for entrepreneurs in Africa.
The blog which I’ve already credited for creating buzz around the dot com bubble concentrates on closing funding from Venture Capitalists as a means to success. This sends a misguided signal to an upcoming entrepreneur who will think that one must raise several thousand dollars to create a successful venture. The perception that’s formed from this kind of reporting blurs the other aspects of entrepreneurship such as having a solution to a real need, persistence, vision, teamwork, passion among other things.
There’s also a disconnect between venture capital and startups in Africa. In fact, there’s almost no VC funding for startups in Africa (at the time I originally wrote this post originally in 2014) which makes it incredibly hard and nearly suicidal to follow the Silicon Valley model of building startups in Africa.
Starting up in Africa
As an Internet entrepreneur, I know first hand what it means to raise funds in Africa. It’s probably more daunting than making your startup work. In fact before we even get to the whole raising funds thing, lets start with entrepreneurship itself.
How supportive is the African environment to business and entrepreneurship?
Well, not so supportive.
In most societies in Africa, the formulae to success is quite simple. Education.
"The blog which I’ve already credited for creating buzz around the dot com bubble concentrates on closing funding from Venture Capitalists as a means to success. This sends a misguided signal to an upcoming entrepreneur who will think that one must raise several thousand dollars to create a successful venture."
The idea is that one should go to school, graduate with good grades and then get a good job in one of big companies around. As Daniel Mwesigwa puts it, in explaining why you should not drop out university:
“In Africa, Uganda in particular, education is revered with so much ferocity.”
The African parent struggles to raise funds to educate their kids up to university after which their Return On Investment must be immediately visible. They aren’t looking at pouring more money into your newly found venture, but rather for you to get out their home and start your own life. Sometimes you are required to start finance the education of your younger siblings now that you have “made it”.
The stories of self-made college-dropout billionaires such as Bill Gates, Mark Zuckerberg, Michael Dell, and Steve Jobs are virtually unheard of in Africa. Not only won’t you get financial support, perhaps you won’t even get social support.
So if your parents aren’t ready to invest into your startup, who will?
So when I read screaming headline on TechCrunch that such and such startup has raised several million dollars in series A funding, I take a moment in retrospect to reflect how remote and how hard the odds are that such a thing will happen here at home. (Editor's note: this has since somewhat change since 2014 as every year the amount of money raised by startups in Africa is increasing).
Upcoming entrepreneurs must come to terms with the harsh realities that are unique to the African environment — and that could actually be a blessing in disguise!
African entrepreneurs could quite easily escape the ensnare that most innovators fall for — the thinking that you need huge amounts capital to build a successful business. What TechCrunch doesn’t publish is a long tail of startups that despite having raised huge amounts of funding miserably failed.
Now, I must make it very clear that yes, funding is fundamental in building successful businesses. It should be treated squarely as a means, rather than an end in itself. Once an entrepreneur has proven their business model and there’s a prospective market for the product, they obviously need the funding to scale their business. At this stage one could approach a local bank (although it freaks me out to say this), a VC, or maybe their network of family and friends to take their venture to the next level.
Entrepreneurs out there must create their own narratives and share them with others so that they can relate and wisely apply them in their own ventures.Share this via: