John-Paul: It’s a fact that Africa remains one of the toughest places in the world to do business. But what is really striking is the growing number of non-Africans who flock to Africa every year in search of promising business opportunities. Unlocking the huge demand beneath Africa’s problems and needs is the biggest secret to making money in Africa. At the turn of the millennium, there were just about 16 mobile phones on the continent. Today, there are over 650 million. Several entrepreneurs and investors made, and continue to make, billions of dollars from serving Africa’s underserved industries. Almost every business opportunity shared in our book, 101 Ways To Make Money in Africa, is built on this principle of solving problems and satisfying unmet needs.
Vera: Which are the most attractive business opportunities in Africa?
John-Paul: Agribusiness is one area- specifically food storage, processing and marketing. More than 50 percent of fruits and vegetables harvested by farmers in Africa never make it to the consumer due to a lack of storage, preservation and processing options. Education is another major opportunity on the continent. Public schools suffer serious neglect and most parents – including the very poor – are willing to invest in a good education for their children. Successful low-cost school models like Bridge Academies in East Africa, and Omega Schools in West Africa have proven that it’s possible to provide quality and affordable education and still make a profit.
Housing is another interesting industry. There is a significant shortage of affordable housing and commercial spaces to support Africa’s growing population. Power is also another major pain point as more than 60 percent of people do not have access to electricity. Other interesting opportunities are in healthcare, financial services, entertainment, and consumer products.
Vera: Innovation can sometimes be equated to needing to be original and creative but need not be. What’s your notion of innovation re: entrepreneurship?
I agree. There are several successful business models in Africa that are the direct result of “copying” from elsewhere. One example is the success and growth of eCommerce in Africa . Though it’s an innovation borrowed from the developed West, it is significantly enabling trade and commerce on the continent.
Innovation doesn’t always have to involve revolutionary technology or groundbreaking research which could end up in products or services that are expensive for the final consumer. What Africa needs is “frugal innovation”. We need to use more of the simple resources, materials, tools and techniques available on the continent to create the innovative solutions we need. For example, M-Pesa, the mobile money service which was developed in East Africa entirely built on mobile SMS technology is an innovative financial service solution that is widely acknowledged internationally.
Vera: There are obviously many aspects to running a business effectively. Which parts would you say an entrepreneur must not fail to get right?
John-Paul: The most important thing to get right is the market fit for one’s product or service. Next is the team- ensuring you’re working with the right people – employees, partners, investors etc. The third is to watch your costs. The cost of doing business in Africa can be high, but if you develop a lightweight business with a flexible and scalable cost base, it’s very possible to succeed in spite of the odds.
Vera: What would you say are the hallmarks of a smart entrepreneur and what type of smartness does it take to scale a business in a sustainable way?
John-Paul: The way I see it, there are two core levers that support every successful business. Relationships and Resources. Being skillful at handling relationships will keep you going with customers, employees, suppliers, financiers and partners who are crucial to the success of your business. Also, resources – such as cash, equipment, inventory, brand etc. – are important for your business. A smart entrepreneur will know how to manage these two factors and through that increase chances of success in business.
Vera: One of your own enterprises is ‘smallstarter.com’ providing entrepreneurs with tools and information to not only exploit business opportunities but to impact lives. What form do you see the latter taking?
John-Paul: When entrepreneurs build successful and growing businesses, they create more wealth; not just for themselves, but for their employees, suppliers, partners and the society. The solution to Africa’s problems is not foreign aid, subsidies or government handouts but jobs. At the current levels of unemployment, governments cannot create enough jobs to ameliorate the unemployment crisis. Only entrepreneurs have the capacity to produce the large number of opportunities needed. Unfortunately, the formal school systems don’t adequately equip Africa’s entrepreneurs with the tools and knowledge to start or grow a business. That’s exactly the void we’re trying to fill at Smallstarter Africa.
Vera: You’re passionate about youth entrepreneurship. Are there any sectors/industries that would benefit from what young people have in abundance such as energy, passion etc?
John-Paul: When you live on a continent that has about 60 percent of its population below the age of 25, it’s hard not to be concerned about the best ways to harness the brimming supply of youthful energy, passion and ambition. I think information technology presents a powerful platform for Africa’s youth. With technology, the continent can leapfrog and solve most of its serious problems. By applying their creativity, young people can build anything with today’s IT platforms. This can range from simple apps that provide useful information for rural farmers, to complex solutions that diagnose and solve problems.
In Uganda for example, one young entrepreneur and his team developed a biomedical kit for early diagnosis and continuous monitoring of pneumonia, a disease that kills half a million children in Sub-Saharan Africa every year, according to UNICEF. The kit, named “Mamaope” eliminates most human error, and diagnoses pneumonia at a rate three to four times faster than a doctor.
Another interesting sector that Africa’s youth can harness is agribusiness. If the continent’s youth population can apply its abundant creative energy to solving the continent’s food problems, I’m confident we can achieve it within a decade.
Vera: In developing your own businesses what’s been most challenging and how have you handled it successfully?
John-Paul: In business, almost nothing ever works according to plan. When my plans don’t work as expected – which happens often – it’s imperative that I adapt to the situation and recover quickly. Everything else – regret, complaints and blame – is merely a waste of time. So, in order to handle the disappointments, challenges and frustrations that are inevitable in the life of an entrepreneur, I keep training myself to be flexible, open-minded and willing to change course – always.
Vera: You mention the importance of patience and perseverance in doing business in Africa. What’s been your strongest attribute that has kept you going?
John-Paul: The harder the journey gets, the more I’m convinced that I’m on the right path. I’ve come to realise that the reason most people haven’t become successful entrepreneurs isn’t because they don’t want it. Everyone admires success, but only a few are willing to put in the hard work, sweat, tears and “waiting time” that’s required to build success. It takes a lot of grueling hard work to succeed in Africa.
The only thing that stands between me and my goals is time. And as long as I stay consistent; keep showing up, and continue putting in the hard work, time will naturally pass in my favor. This is the mentality that keeps me going.
John-Paul Iwuoha is author of ‘101 ways to make money in Africa’, business strategist and Founder of Smallstarter Africa. He works with entrepreneurs and investors to start up and grow businesses in Africa. His work and articles have been featured on several local and international media including CNN, Huffington Post and the Africa Perspective magazine. More about John-Paul’s work from smallstarter.com For updates on business and entrepreneurship across Africa, follow him on twitter @JP_Iwuoha
For more information on Vera Ng’oma’s work and resources in leadership, personal and career development and excellence building, click here.