Why “startups in Africa” perform better than others

In this video, Paul Miller shares tips and ideas on why African startups with foreign founders perform better than African startups with local founders.

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Show Notes:

Q. Basically , Logique you’re working to help Ghanaian and African startups get their feet ?

A. yea, right Q. Hi Paul, please introduce yourself and tell us about your business.

A. My name is Paul and im a co founder at Sikapa which is a payment platform and logique which is sort of to say a boutique style accelerated incubator lodge based here in Accra.
but the essence of the company is to have and an umbrella but we have our own brand of companies that would go underneath logique

Q. so right now onto the meet of the conversation, do startups operating in Africa succeed better or raise funds better than local startups which we call African startups , so the way we defined it is African startups have local founders who live here in Africa, they saw a problem here and they’re solving it and startup operating in Africa have foreign founders one or more or they have a founder who lived abroad for years and then decided to come back home. First of all, what do you consider yourself as?

A. I consider myself very Ghanaian, irrespective of where i live, i think it all depends on context. I know flat away which is a Nigerian startup and were able to raise 10 million and were able to do so right from Nigeria although they did it with foreign investors but I’ve seen the success rate of general fundraising for this ”African startups” because the founders are not necessarily African I’ve seen it happen here in Ghana also, when companies go for government contracts and are not necessarily Ghanaian but they get it over our Ghanaian startups which is quite unfortunate , I don’t anyone is to blame really, i think its lack of education. Lack of Education not in the sense of stay in the classroom but education in the sense of getting people to really understand what your product does, your overall ROI ( Return On Investment) of why they should do it. One thing i’ll look at is what is success as defined by the end users. So if the government is suppose to buy your product in 90 days of using it , what does success really look like to them and if you’re able to draw all these things out for people , i think we’ll do pretty pretty good.

Q. Do you think startups with foreign founders are able to convince our people better, so like you said for example the government product or the Government trying to build something and they offer the work to the foreign people. Is it because the foreign people are better ? Is it because they sell better ? Is it because they sound better?

A. It’s not because they sound better or do things better , and i’ll use myself as an example , i feel that looking from the outside you understand the market slightly different from a different perspective and you understand that you’re building it for that market which equals the end user therefore you spend time trying to understand
1. who the user is
2. what they need to accomplish with using your product. When we’re here locally we don’t spend much time doing that because we think we know our people and we know how they interact with things and we miss the absolute sweet spot for how people are suppose to interact with our product . People ask me questions about Sika for instance and i wanna play proactive engagement front and center for users and so right now Sika’s users experience for example , there’s in app support and there’s phone call , if you look at banks for instance you’ll have to call and be on hold and all that , why are we doing this , is because i want people to be very calm and confident using my product. And where as you look at others they’re doing something similar but its not the same tho, i want to know every single thing my users are doing and at every single time so i can proactively reach out to them, and say hey by the way i noticed that you trying to make this transaction and it didn’t work out , this is what happened and tis is what we gonna do to sort it out.

Q. So in summary are you saying startups operating in Africa go the extra mile and startups in Africa don’t?

A, They don’t and i’ll stand by it and again just using my experience , for example , i have sign up for a few platforms here in Ghana and Nigeria and one thing i look for is what does the on boarding profits look like for me as a user and what kind of marketing emails am i gonna get. So if i sign up for company A which is hidden platform and within a week i did nothing, zero transactions and they did zero effort in reaching out to me, hey Paul by the way we noticed that you signed up but never did anything , i’ll never use that product again because they haven’t convinced me to come back but if you look at other companies they do exactly that , they’ll send you like 3 emails in a day to get you to move on boarding process, and this is something that i’ll advocate for, it’s to make sure that you get the people to understand what the product does and the moment they touch it . you need to also educate them through emails or in app messages or whatever you need to do.

Q. Okay that’s interesting, African startups need to find more time on their on boarding process ,customer acquisition and selling the reason why they do what they do best.

A. And the holy grail here is put in your customer front and center of what you’re building, because who are you really doing it for , if it wasn’t for the end user or the customer then lets pack our bags and go home. At the end of the day, when you talking to investors , they’re asking , how many customers do yo have, how much do you spend to acquire them , what is the life time vale of those customers, why are they asking you these questions because it matters , therefore we need to spend time answering these questions to ourselves before you try to do that outside.

Q. So is this an education thing ?

A yes , it is

Q. But most of us or some of us have been through world class accelerators and we’re trying to build companies , and we kind of struggle in understanding how we can just generalize and say that African start ups and say that African startups don’t go the extra mile .

A. But I’ve been apart of these sort of world class accelerators here in Ghana and i worked for one before . And the one thing i constantly saw was missing there was, they were not teaching their entrepreneurs how to map out their entire customer journey, so from acquisition all the way to a VIP customer , how hard of use do that . I think entrepreneurship is not necessarily being the guy that knows how to code , its really having the business sense of what you’re doing and i think the reason why we’re not doing very great in Ghana and i’m gonna be able to say that is because we don’t focus on non Tech talent , we have a lot of people in Ghana that are leaving to Nigeria to work there because they get it and what we do here is sitting behind our computers in our fancy offices and not focus on what’s important too like business growth.

Q. You raised 4.8 million dollars for Logique , how were you able to do that and you did that before a lot of people in in the Ghanaian tech space knew what Logique was , or that Logique existed . how did you do that ? so can you talk a bit about that.

A. I met my co founder Kojo in 2014 and i always admire his work and his work effort, so when i came back we had a conversation on together , we just hadn’t come to table to figure out what product to build or what company to build . He had amazing ideas and so we spent literally 7 days a week in our office now trying to map out what we wanted to do.

Q. Is Kojo based in Africa?

A. yes he’s based in Ghana here , he has a company called Stark , which is also a payment platform and that is one question we get a lot, like ,wait , you run a payment company and you run a payment company , how are you able to do this , and its like we work together very well because collaboration does not necessarily exist in Ghana . I’m able to sit with him and say this is a great idea with what you’re able to do with your customers and he’s able to tell me the same thing, i think this is bad . This is what i’m doing with Stark right now and we’re able to collaborate without stepping on boundaries of sharing IP, with regards to Logique we had a conversation and went to the industry and said hey there’s a couple of companies with brand of products that we want to build under the Logique umbrella before we go to marketing and say hey, startup A or startup B you should come join. We wanted to make sure that we have the success rate of pushing out our product and companies and have case studies to support that, before we get companies on board. The entire initiative is incubating and accelerating our own companies before we get people on board. Its been a great journey , and there was nothing that i could’ve done without Kojo.