Funding is not the Startup problem in Kenya. Don’t mix issues

September 29, 2020

If Kenyan entrepreneurs can learn anything from foreign entrepreneurs, it’s to separate politics, tribe and business. A racist will work in Kenya without their philosophies coming to play. Kenyans on the other hand allow politics, tribe and social economic factors to influence what, how and who they do business with.

The biggest resource Kenyans have is Social capital, and the networks this comes with. Yet Kenyan entrepreneurs don’t exploit this. If i’ve been with you in high school and university for 8 years, and then politics for instance separates us, so much that we can’t even do business together, then even opportunities to raise money diminish. There are so many economically capable Kenyans that even if each person gave Kshs 10,000, we would finance all our startups.

We are not capitalising on our networks. As a production level economy, aggregators who capitalise on networks will grow immensely, regardless of funding. Our startups are going to try competing in advanced capital raising ways like Venture Capital before even trying to nurture the grass-root networks they have to grow. The starting point is addressing a real grass-root issue, and establishing yourself in a particular niche then growing from there. Achieving a critical loyal mass of customers will help you meet your basic business needs, like paying workers and paying bills.

The problem with us is we put too much emphasis on the big money and forget the value of the small money. Business is like a ladder, you have to start at the bottom, and work your way up.

Prof. Bitange Ndemo was a guest at Un.thinkable roast (our monthly 10X Growth Leaders Meet-up) in July 2020. Click here to apply for membership in Un.thinkable.

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