When Sara Fakir and Tatiana Perelra wanted to start an incubator in Mozambique a decade ago, people thought that they wanted to raise chickens. The concept of incubation of startups was unfamiliar to people. This story amused me.
Without much support from the public and private sectors, they started their journey by offering pro-bono workshops on entrepreneurship at the weekends. Now these two ambitious women’s company ideiaLab has trained 1095 entrepreneurs in the year 2019 alone with 25722 members in their community.
According to their ideiaLab Impact Report 2019, 71% of the business remains active 1 year after participating in their programme, and 63% of the business owners employed at least one new employee.
They implemented the Orange Corners Maputo, which is a space where young people can get access to practical training and valuable coaching to start a business. They’ve trained more than 1400 university students. With the Ideate Bootcamp, they trained 362 entrepreneurs on lean startup and design thinking in partnership with StandardBank.
Their impact went beyond Mozambique. In partnership with Acelera Angola, they also implemented the first programme “Quem Quer Ser Empreendedor” (Who wants to be an entrepreneur) in Angola. They were also responsible for creating the entrepreneurship and training curriculum for the SKILL2LIVE programme in Mozambique and Zimbabwe. You can read more here.
People may not be aware of the success story of UX Information Technologies which built Biscate, an informal job posting website in Mozambique in 2016. According to the GSMA report, “as of July 2017, the 14 team members at Biscate have attracted more than 46K workers to the platform, connecting them to more than 28K customers through a total of 83K contact requests across Mozambique’s 10 provinces.”
The startup ecosystem in Mozambique may still be in its infancy stage. However, Sara Fakir and her team are working tirelessly to change it. She passionately shared with me her mission of empowering Mozambique youth and entrepreneurs. Below you can read my interview with Sara.
Your co-founder Tatiana mentioned that your consultancy work has taken you to different parts of the country. You have seen many things that could be improved in Mozambique. Can you tell us some specific problems you identified almost a decade ago? What made you believe that ideiaLab can solve those problems?
Thank you for your question. It takes me to another space in time. I started my career at Deloitte. When you were young in the consultancy work, you do the hard work. Most of the time, the hard work was to travel around doing interviews and collecting information everywhere in the country. I could see a lot of opportunities in every place that I traveled to.
The Human Development Index and the quality of life in Mozambique are low. But at the same time, we are a rich nation with abundant land and resources for opportunities to raise. It frustrated me that people who are living in those places were not able to see the same opportunities.
One example I kept close to my heart because it is something that has not been done. I studied in Portugal for my university and Portugal is famous for its wine. In both city and rural areas, people in Mozambique always bring wine in every traditional get together with family. It can be grapes in the cardboards or the big bottles.
One time I was traveling for work in the center of Mozambique, and I stayed in a place with a huge backyard. When I got up in the morning, I saw many vineyards. I tried the wines and grapes. I knew these were the right grapes to make wine, yet no one was producing wine in Mozambique. The Portuguese probably brought the technique during the colonial time. They were planting their vineyards and producing their wine.
However, Mozambique was independent 45 years ago. Yet today nobody can preserve it and build a culture and produce the local wine products. People say that we don't have the proper woods to do the barrels, but we are exporting high-quality woods to China. Instead of getting the woods that the French used to make wine, we could have innovated and done it with our local woods.
The problem is not lacking knowledge because we have laborers and experts working in the vineyards. In my mind, there was no reason that these local people could not produce wine products. So, what is happening?
It took me some time to understand why the local people did not see these opportunities. I have a different background, knowledge, and experience. So, I saw things with a different lens from them. I think the problem is that people do not have the “Let me try” attitude.
Just let me try and let me see how it goes. The real problem is that people were not feeling confident. Or they did not have an entrepreneurial attitude or were not motivated to do it. This was painful for me to see.
In the back of mind, the question was how I could support my people to start seeing these opportunities? So that was the bigger problem that I envisioned. That was the purpose of ideiaLab.
The goal is to bring practical knowledge and entrepreneurial tools and mindset that allow people, especially youth, to see what they have as opportunities not only as problems. The vision is to build a sustainable business model that can contribute to this.
There were a lot of problems but the problem that I envisioned for the creation of ideiaLab was based on this human development and human capabilities. We want to bring these resources to the Mozambican youth so that they can have the tools and make something out of it when they see the right opportunities.
When you first started, there were lots of closed doors for you. Please share with us some of your early struggles.
First, when we started ten years ago, entrepreneurship was not a common word. Entrepreneurship was not perceived positively. People could see someone selling in the street as an entrepreneur because they were hustling. But they could not see someone who perceives a proper opportunity as an entrepreneur.
People understand the concept we were talking about. But I would say there is a lack of knowledge on how to operate an incubator and what would be its impact. Everything we did and we still do today at ideiaLab is to show that we are making an impact.
Whenever you bring a different concept to a specific sector, you feel resistance. There is a lot of resistance to doing things differently from what they have been done in the past. People are conservative and are averse to risk to do something that they do not know well.
But I truly believe we also have to see where Mozambique is coming from. We were independent of 45 years ago. We adopted a socialist regime and many private initiatives were probably not well perceived. There is a limited time for things to improve and for people to achieve success so that they can become role models. Everything is still new. Today the government is looking into how to do more incubators and how to contribute to this movement. But 10 years ago, we were not so lucky to get the same understanding.
Second, people advised us to establish a social enterprise or an NGO, but we decided not to that. We chose a more difficult path. It was critical for us that we could have a conversation from an entrepreneur to another entrepreneur and vice versa.
But people didn’t know much about it – how to bring entrepreneurship in the context to support local development. It was hard to convince people to help us and to convince people that entrepreneurship could be a path to support local development.
It took us three years, from 2010 to 2013, to convince government agencies and private organizations to support us in one initiative. It was Fora da Caixa, the first National Business Ideas Competition focused on technology. Our partners were private banks and the Ministry of Science and Technology of Mozambique.
We also had a Finnish partner - the Finnish embassy here decided to fund the competition. Considering it was a competition in a specific sector, they were happy to have 50 applications, but we were able to get more than 180 applications.
It was amazing because it was the first time that we could prove our right to be in business. We were able to show to everyone that there was a critical mass of local youth with capabilities and knowledge to bring technology products to the market. For the first time, other organizations are looking at us and thinking maybe these two girls can do something.
How did you make the transition from pro bono work to generating revenues? How did you and your co-founder Tatiana decide to work full time on this? How did your family and friends react to that?
We always knew that pro bono work was not sustainable. We had well-paid jobs so we were not concerned with money in the beginning. But we used savings to attend workshops and international forums at that time because we wanted to learn the best way to support entrepreneurs.
After we started to get some traction. I decided to resign from my job and dedicated full time to ideiaLab. But we arranged that Tatiana would keep her job. If the business did not go well, she would share her earnings with me so I could survive.
And that’s exactly what we did. One year later, Tatiana joined the company full time and we were able to pay proper salaries. We were able to get more clients and deliver results.
My parents knew what they had created. They were supportive and they knew that I have always been a creative person. I told them that I could always go back to the market and get a new job if ideiaLab did not go well.
But many of my friends thought there were some problems that I left the work in the oil and gas company which was a booming industry. But we stayed focused and did what we planned to do. I'm very happy that I took that step.
What is ideiaLab’s business model and can you share with us some of the specific examples of your client work in the private sector and the width development agencies?
Apart from the entrepreneurs that we wanted to support, we tried to figure out who could be interested in working with us and to whom we could provide some added value. We start seeing and observing where exactly we could create value for those partners, being development organizations, or the corporates. We start teaching them and helping them amplify their impact.
First, development organizations start seeing entrepreneurship as a way to promote youth employment. We could create employment opportunities for founders who can employ others.
Second, there are many Corporate Social Responsibility initiatives that we could work with. For example, oil and gas companies have an obligation by law to contribute to local content. This means in a certain period that they have to start working with Mozambican companies.
But the spectrum of Mozambican companies is small. We don't have more than 50,000 companies in this country. To incorporate Mozambican companies in this specific value chain of oil and gas, more companies need to be built.
Today we are working on multiple projects with multiple partners to make sure that we have enough resources to do what we want to do. For example, we are running the Dutch initiative Orange Corners in Mozambique. Instead of offering only development aid, the Dutch government also wants to see more international trade between the Dutch and Mozambique companies. But we lack Mozambican companies and more need to be built.
They first implemented the idea in South Africa. But South Africa has a completely different business environment than in Mozambique. When they expanded to Mozambique, the model in South Africa did not work. Therefore, we designed the entrepreneurship support programme and we are now their implementation partners.
However, we also brought in conjunction with us private sectors, including, banks, oil and gas companies, and some consumer brands. This was important because when the embassy had to cut the funding, we still have private partners to keep the project going which helps us deliver sustainable long-term results.
What kind of support do you offer to entrepreneurs?
We share resources so that everybody can understand the basic concepts. But in conjunction with the training, we also provide business advisory and mentoring. We help participants get access to information, market opportunities, funding, and networks. Especially for young people who lack social capital, we open our network to them.
For example, we have the mentorship program where we invite experienced entrepreneurs and business people to be part of. There are certain requirements from the entrepreneurs, for example, they should have a certain amount of sales, and are growing the business. Then they can apply to have a proper mentor that will support them in the next steps they need.
We also have acceleration programme for women entrepreneurs with 7 editions in Mozambique and 1 edition in Angola.
We have a huge alumni community. During COVID, there is a lot of uncertainty. Our immediate response was to support our alumni community because we didn't want to lose the impact that we were already creating. We have advisors so that the alumni could ask them to help with specific issues or when they just need to speak with someone so that they can make the right decisions. We also partner with the legal company, especially in the case that they had to dismiss some people. We provide practical support for our alumni.
Do you charge any kind of membership fee for people to join the program?
Yes, but only when it's possible. Most of our programmes are sponsored and sometimes the sponsors may not want us to charge. Sometimes we charge a commitment fee from the participants. If they do not complete the programme, they will have to pay this fee.
What are some of the successful businesses started by young people who have received the training from idealab. Can you give us some examples?
In the last four years, we support more than 900 businesses. But you always have those that somehow stick with you.
For example, a startup named Biscate built a marketplace that connects informal workers, such as electricians and carpenters, with consumers. Another startup is called PÁGUA (Plataforma de Gestão de Consumo de água). It makes it possible to read the meter and print the invoice at the customers’ house. It makes the process transparent and allows customers to have access to all transactions on their mobile devices.
There are also innovative solutions developed by young people working in agriculture, for example, a platform that connects buyers and sellers. Technology helps farmers to get access to the market.
6 years ago, a friend shared on social media a photo of a brunch. She said the food was all imported products. 2 years ago, I could send her back a photo, a table full of food, all local products. Mozambique imports many products but now I see many products done locally. Even though I work with entrepreneurs every day, I could not realize there are so many things they are changing.
In one of your interviews, you talked about the difficulties of starting businesses in Mozambique. What are some of the common challenges?
Our business environment is bureaucratic and there is some level of corruption. For example, you have to pay expensive fees to get a business license to get started. Then you also need to pay for a license to operate the business. Even for developing an app, you have to pay for a license.
There is a misunderstanding here in Mozambique that if you want to be in business is because you have money to invest or have already achieved success. That is not true. The bureaucracy is even worse if you want to close a business, but failure is part of entrepreneurship.
I think there are several challenges. First, there is a misconception that doing business might not be good. I think we must have a common understanding of why we should support private sectors and what value the private sector can bring, such as job creation.
Second, the major ecosystem players are not interconnected. For example, academic institutions are not actively engaged in this conversation of entrepreneurship.
Third, there are not enough policies for SME development. We have a strict financial system in place which means only commercial banks can lend money. We don't have VCs around and we still lack regulations in private investment. The bureaucracies at all levels of the government agents make it difficult to get access to finance.
What kind of collaboration do you have with academic institutions?
We have tried several different approaches. There are opportunities to collaborate but it requires the academic institutions to be open.
Last year, we started a project with the technical vocational training center in Mozambique and Zimbabwe. We set up an entrepreneurship curriculum so that the students can get robust entrepreneurship knowledge. We created a safe environment that allows students to experiment and try different projects. We trained the trainers so that they can have a good understanding of the methodology to better support their students.
But universities are relatively more conservative. We do not work with universities directly but we use student association as our entry point to organize entrepreneurship relevant activities. I am not concerned with what others cannot do, but I focus on what our team can do together.
Your team certainly had restrictions organizing offline training because of the COVID-19, how’s your team adapting to this change? What are some of ideiaLab’s future goals and what does even more successful ideiaLab look like?
The first thing we did in the first two months was to reshape all our offers. We don't want to close our business so we need to innovate. We will help our main clients to go digital because we already have the resources. We are lucky enough because we have partners.
We are a member of YBI, Youth Business International, an umbrella organization that works with other entrepreneurship support organizations such as ideiaLab through the world. The community of practitioners got together to figure out what to do. It was a huge push for the team because we have to adapt fast.
We are aware that the model that we have and the projects that we are delivering now, they are not with the majority of the Mozambicans. We want to make sure that these tools and methodologies that we are using can also be relevant, specifically for people at the bottom of the pyramid, such as people working in agriculture in rural areas.
So, we have launched internally what we called “Lab Lab” - our research and development department. What if we could bring the methodology and tools to a rural space? We are working on a model for a rural lab, and we are testing to see if it works.
Second, we also start expansion. For example, we are delivering programs in Angola and Zimbabwe. We believe that we will go grow through partnerships. When I say partnerships, it means creating capacity for other ecosystem agents.
It is not just working only directly with entrepreneurs, but also working with entrepreneurship support organizations so that we can amplify the impact of our community and make sure more and more people can have access to this.
Lastly, we are being able to collect a lot of data and learnings from what we are doing. We’ve generated a lot of knowledge on supporting entrepreneurs and also development in our region. This will be an additional revenue stream utilizing these data in the future.
If you were given one-minute pitch about why young people should join ideiaLab, what would you tell them?
Young Mozambican have dreams, but they may not know how to take the first steps. It can be frustrating. It is why they come to have the first entrepreneurial experience with us. When this happens, I know they will keep coming.
I will tell them that we are all free to dream that we should dream as much as we can. We are here to support young Mozambican to build those dreams into a reality. We are here to help them contribute to the inclusive development of our region and our country.