Only images of war, corruption, and extreme poverty came to my mind when I think of Chad, a landlocked country in north-central Africa. These images were probably my stereotype. But try search “people in Chad” in Google Images, you will most likely see pictures of hungry children and vulnerable women. It is a similar result in the Chinese Baidu Images.

Chad is one of the poorest countries in the world. Google or Baidu Images' results are not false. But how come these imagines seem to be the only images that you can see in the media? Why does the first-page search result not show the photo of young Chadian programming in PHP?

I am not suggesting Google/Baidu Images denying or hiding any of those problems that Chad is facing. But I am asking the media to share more positive stories and to talk about those who are driving the changes.

Being ignorant, I automatically assumed that Chadian people are just poor and uneducated. I certainly did not associate Chad with innovation and technology. I was also not aware that local young were learning to develop applications and starting different kinds of new businesses. When I learned about Chad Innovation, a youth incubator, and a co-working space in the capital of N'Djamena, I was surprised and excited.

Chad Innovation was founded by Hamid Khayar in 2018. Born and raised in Chad, his curiosity about Asia took him to India where he completed his Master's degree in Computer Applications. Later he was selected by the Mandela Washington Fellowship for Young African Leaders and completed his education on entrepreneurship at the University of Texas at Austin.

Returning to Chad from the US, he organized the first Chad Innovation and Entrepreneurship Summit. Thousands of young people joined the Summit and they were eager to learn more about technological innovation.

There are different startup and innovation ecosystem players in the Nordic countries. They may have quite different agendas, but there is a shared understanding between all the players – startups and innovation are good for the country. Therefore, many private companies and public agencies support innovation and entrepreneurship.

If you have a good idea to support the local community, it is quite likely that you can get support, for example, from the regional Almi office in Sweden. When Slush and Arctic 15 were organizing their event in Helsinki, my ex-employer Helsinki Business Hub, a public-funded agency were highly supportive. Our team sent out marketing newsletters, purchased event tickets for almost all the team members, and sponsored side event.

The situation in Chad is probably the opposite compared with the Nordic countries. This is why I find Hamid’s story inspiring. He is resourceful and is determined to support youth in his home country. With a limited budget and support, I was curious how Hamid pulled off this first Chad Innovation and Entrepreneurship Summit and eventually set up an incubator. Below I hope you will enjoy my chat with Hamid.

Before we dive into talking about Chad Innovation. Let’s talk a bit more about you. What made you decide to pursue a master’s degree in India 10 years ago?

I had my bachelor's degree in computer application and business in Dakar, the capital of Senegal. For my Master’s degree, I applied to some universities in the US and France and I got accepted.

However, I have always been fascinated by the rise of Asia. I once read a book called "When China wakes up, the world will tremble" by Drs Rhana C.M. Tersteeg. I was deep into the South-South Cooperation and I believed in BRICS.

I was also a disciple of the great African author Cheikh Anta Diop from Senegal. The Western academic world does not agree with his view. But he had archaeological and anthropological evidence that the Pharaohs were of Negroid origin. His books helped me better understand African civilization. I learned that even though Asia and Africa have many disparities, there are also many similarities.

In the end, I decided to study in India. Many of my friends back then thought I was going to India because of the beautiful Indian women. But I explain to them that people there speak good English. The cuisine is similar to Chadian food. The tuition fee and living costs are relatively cheaper. Also, Bangalore is the center of India’s high tech industry.

After returning to Chad from India, I started an IT consultancy company African Tech World technology in N'Djamena. My co-founder is also an engineer and he studied in Algeria. Both of us are entrepreneurial. Instead of looking for jobs, we started our company.

You were selected by the Mandela Washington Fellowship and went to study at University of Texas. What were some of the cool experiences you had there?

One time all the Mandela Washington Fellows went to the blind coffee. The coffee house was completely dark. When you enter the coffee house, the blind people will guide you on the table which you will be sitting.

The environment was cozy with music. We had discussions about our studies and plans. I had one of the best lessons here: in the darkness, it does not matter we are Chinese, Americans, or Africans; we are all human.

I remembered one lady who was scared in the darkness. She eventually opened up and shared with me about her traumatic experience of sexual assault. When we came up from the Café, we had a debrief. People cried and expressed feelings that they’ve been hiding in their hearts. It was a vulnerable and emotional experience.

In terms of studies, I learned there was no need to be humble about your achievements. Even if you may consider these achievements insignificant, it is important to put in your resume and show it to people. I learned how to present myself to captivate my audience’s attention.

Another interesting experience is having a discussion with American entrepreneurs in the Capital Factory. I met many young people in their early 20s. I told them that they had every chance to be successful in the US because they had everything. In retrospect, I think I was ignorant.

The young person replied to me that it may seem that they had many chances to succeed. But if they wanted to do anything different, there were thousands or hundreds of people competing with them. He told me that it was actually easier for me to succeed because there was less competition in my country. His reply made me reflect and I realized that there was so much I can do for my country.

You were working as a IT manager in the Radisson Blu. What made you decide to start Chad Innovation in 2018?

When I came back from India, I started volunteering at the University of N'Djamena as a lecturer. I called my class as the “truth classes”. I remembered in the first class, I asked my students the meaning of illiterate of the century. Yet students gave me the definition from the dictionary.

I shared with them the quote from Alvin Toffler who said, “the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn”. I explained to my students that the importance of speaking English and knowing computer technology because these skills will allow them to learn about the world.

Unfortunately, it is not common to see Chadian have proficient skills in English and computer. Most students speak French or Arabic, and they have limited training in computer literacy.So, I told them to learn to speak English and to use a computer. It does not matter if which tribe you are from and what kind of family you have. If you do not master these skills, you are illiterate.

We do not have to wait for our parents or our governments to help us. We must act now on our own. Though some negotiation, I connected my students with some computer schools so that my students can get access to the internet. Some of them became great journalists, and they kept telling me that I am the first one who tells them the truth.

These teaching experiences made me start to think about what I can do more for young people in Chad. I decided to organize the first-ever Chad Innovation and Entrepreneurship Summit.

Young people were very interested when I told them about this idea. People were very open to this idea, and they wanted to contribute to this initiative. We had around 2500 young people participated in the summit. It was beyond everyone's expectations.

These young people are eager to know more about technology and innovation. We also brought two young American entrepreneurs to deliver workshops in English. One is Forbes 30 under 30 social entrepreneurs; another one specializes in community building. In the English workshops, I saw young Chadian communicated in English fluently.

How did you fund the Chad Innovation and Entrepreneurship Summit and Chad Innovation Hub?

The government did not provide us any funding. But they supported us with other issues. For example, the event was under the patronage of the president of Chad. There is bureaucracy in the governments, so I am planning to do future projects under the public-private partnership.

With limited funding, I believe that we did magic to make this Summit happen. The ultimate goal is to launch an incubator. But I knew that I needed to make some noise before that. So I spoke to many of my friends and acquaintances. I asked them to help me organize the Summit as volunteers.

I told them that I have never done anything like this in my life. I asked them, are you with me? How can we do it? Where can we do it? Where can we find funding? What is the best way of doing it? I asked them to join me and find out this together. We were on the same mission to drive positive changes.

We reached out to our president and asked for his support. He agreed that we had institutional support. We wrote our first sponsor deck and we sent them to banks and telecommunications companies.

Eventually, we secured funding of 16 million Central African CFA franc, around $28, 471. We only used half of the funding because we negotiated to get better deals. For example, we convinced the Radisson Hotel to provide our venue space for free.

To get the two American entrepreneurs to come to Chad, we applied for a $5,000 scholarship from the State Department of the US. We also discussed a deal with the local government institution so that we got an apartment to host the Chad Innovation team.

It took a lot of negotiations to convince different stakeholders to support our cause. We finally launched the Chad Innovation Hub after the Summit, but it is not easy to get any funding. So right now we try to utilize the power of our volunteers.

Also, we do different projects for the international organization. We worked with UNDP on several projects. For example, it had $7,000 to build an application to fight Covid-19. We helped them with developing the application.

Also, we organized a hackathon with UNDP and we helped your people prototype their ideas. People came up with ideas such as an application to show the location and opening hours of all the local pharmacies; and an idea of setting up a campaign on stopping violence against women.

Another organization needs help in spreading information about microcredit, and we had one talented volunteer who helped them draw infographics so that people who can not read can also get access to information.

What kind of training do you offer to the local entrepreneurs and the students?

First of all, we inspire people. We can support the entrepreneurs in many different ways, but the entrepreneurs themselves must believe in their ideas. So, we help them build their confidence.

Second, we offer our time. I'm an engineer and I started my own business. So I discuss with young people about their ideas and understand what kind of problems they are trying to solve.

If the idea has potential, then we help them with prototyping. We have volunteers business advisors and mentors in our network to help the young aspiring entrepreneurs. We provide a lot of training on business ideation, business modeling, marketing, and communication. We also help them with practical issues such as setting up a website.

We have some refugees who are part of the chat innovation. We provide basic business training, but more importantly, we make sure they feel that the part of the society here in Chad. A few co-founders of Chad Innovation are refugees.

So far, Chad Innovation has trained more than 200 young people. These people started 16 startups so far. In Chad Innovation Hub, we listen to all the ideas from young people. We never reject anyone. Once we find young people who are very serious about the idea, we will move the business idea forward with him/her.

For example, we work with one entrepreneur who is working with a project called “offline hospital”. It is a small Raspberry Pi computer that includes all medical information and practics. The small computer does not require much energy, probably needs a small solar panel. This is a solution for the hospital in the rural areas in Chad.

Internet penetration is around 14% which is low. In the night, people here do not know which pharmacy is still open and what kind of products they still have in stock. We are working with one entrepreneur to provide geolocalization of all the pharmacies here. So, local people can easily find out which pharmacy they can go to and what kind of medicines are available in the pharmacy.

We are also working with one entrepreneur who wants to set up a calling line that helps fight violence against women. Sometimes women do not want to share with the world about their suffering, so at least they can call the phone lines to receive the support that they need.

Also, we have a division that connects motivated students without financial resources with universities,local professional schools, and local companies for internships. We had one refugee from the Central African Republic. Chad Innovation community helped him continue his studies. Now he is in charge of this division.

His team reached out to different companies and asked them to offer practical training to the young people and students in our network. Sometimes, these companies may not have the time to do that, they would instead sponsor some of the most promising students for a few hundred dollars so they can continue their studies.

You said that there are many opportunities to be exploited in one article. How do you think local young people can take advantage of that? What kind of challenges do they face?

I always share with people the example of Airbnb and Uber. In many African countries, we have been renting our extra rooms in our apartment. There are many informal drivers and we have been sharing cars and other transportations. Yet no one saw it as a business opportunity. Therefore, I encourage my students to see problems not only as problems, but also exploit opportunities in them.

For example, there is one guy near our university selling over-priced coffee to students. The students could come up with a better offering and service. Many people can not read or write here, students can also work on something trying to change that. Young people should develop a deep sense of observation about the local business environment.

There are many challenges for local young people.

First, the lack of training. Starting a business is complicated. Often they do not know where to get started. Chad Innovation Hub tries to address this issue. Even if someone is given all the money in the world, he/she can not make a business work without proper knowledge and skills. I believe in mentorship so we connect young people with the right mentors.

Second, the lack of funding. The government is working on something to fund more businesses but they are slow.

Third, I believe there is a certain degree of discrimination. You can apply for funding from international organizations but it requires you to write good proposals in English. The fact is that most people, the informal workers who hold this country’s economy together, do not speak excellent English. Maybe we got a young talent who has a good idea but can only speak good French and Arabic, he might lose this funding opportunity.

What are the goals for Chad Innovation Hub in the future?

The job market here is hard. But I see more and more young people who are not just interested in finding a job. They also want to develop their own business.

I want to see Chad Innovation as a place for youth, a place for ideation, and a place for entrepreneurship. I hope that when young people come to us, we can provide them all kinds of resources and support. In the future, we hope we can act as a business angle, investing in promising startups, and helping them grow.

There are many obstacles on our way. We are a land-lock country. We do not speak English. Many other African countries are ahead of us. We are in dire need of support because the government is not doing enough work to support the youth.

Unfortunately, when I wanted to register the innovation groups for Google for Startups, it was not open for Chad yet. A similar situation goes with some other international companies and organizations – Chad is not currently on their agendas.

But we are fighters. We do not easily give up. We will try to find other ways to make this work. I joined Radisson Blu as an IT manager because it helped me with other work. Sometimes people did not believe me. But when I tell them that I am working as an IT manager, people are more open to listening to me. It also shows young people an example of a different kind of career path.

I aspire to work full time in helping my country’s young people. I hope I can devote my life to Chad Innovation to build a vibrant youth community through innovation and entrepreneurship.

A Finnish growth startup organized an open office event. It allowed young people to visit the company while the current employees talked about how it is to work in a startup. Later I met a sales manager of this company who complained that these community engagement types of activities were not essential.

This manager argued that the company should focus only on the for-profit activities – the core business. This Finnish company has raised more than $ 60 million. The manager was right that the company must generate profit and create value for its investors.

But does it mean community engagement activities are not necessary? I don’t think so. This sales manager did not see many benefits the open office event could bring, such as brand awareness and talent attraction. Also, I think this manager failed to see that growth-stage startups play an important role in building a sustainable startup ecosystem in the long term.

iCog Labs is the first private African R&D of AI company since 2013. To survive, it requires their startup to focus on getting AI software development and outsourcing contracts from international clients. But they did much more than that.

While I was researching about iCog Labs, I was surprised to learn that their team has launched different initiatives to boost the local startup ecosystem. This includes students' robot competition, students' startup incubation, and girls coding training.

The startup ecosystem in Ethiopia is growing but it also faces many challenges. However, these challenges seem only to make startups such as iCog Lab even more ambitious. Their team and many other local startups shared the same notion that they must take the lead to build and contribute to the Ethiopian tech scene. They take the responsibilities to build up the ecosystem “infrastructures” so that the next generation entrepreneurs can have a chance to thrive.

Below you can read the interview which I had with Hruy Tsegaye from iCog Labs.

His name has two meanings from the local languages in Ethiopia. One means the chosen one. The other means the one who lives forever. The chosen one who lives forever? I laughed and told Hruy that his name was overly ambitious.

Hruy started his career as a journalist – a career that his father disapproved of. His parents wanted him to become an engineer. Now he works in the tech industry and his father was content. But his mother believes that he might be doing “devil’s work” when he and his team discussed the future of advanced humans.

Well, I guess it is not possible to please everybody, including your loved ones, when you are pursuing a dream of achieving something that nobody has done it before.

You received your degree in Journalism and Literature in Arba Minch University in Ethiopia. But you went to work in the Afar region north of Ethiopia for 2 years as a programme officer for a governmental agency - HIV AIDS Prevention and Control Office (HAPCO). Tell us a bit more about these 2 years of experience in Afar. What did you do and learn there?

Afar is one of the most remote areas in Ethiopia. It is known for the discovery of Lucy, a female of the hominin species Australopithecus afarensis. It is also known for the active volcano Erta Ale. It is the lowest place on the planet. For a young man, these are enough reasons to go for an adventure and experience life in the desert.

So I decided to apply for the job in the government. There was no competition because most people with a degree would not want to work in that area. I was the only person in his early 20s working for this organization and I worked at Bitu.

As a programme officer, first of all, I was responsible for planning the annual activities of this region with a population of 62,000 people. We used to run the committee conversation. We organized groups of people and discussed different topics such as HIV. Some of them believed that they have sinned and God was angry. But we didn’t tell them directly that they were wrong.

Our job was to listen to the community and lead the conversation. The goal was to educate local people and avoid any misunderstandings without forcing them to believe in anything. Secondly, we were also responsible for running Voluntary counseling and testing (VCT) campaigns and fundraising campaigns for orphans who lost their parents because of HIV AIDS.

Poverty has many faces. But I learned that lacking technology makes life extremely hard. The more you lack technology, the poorer you are, and the more expensive and inaccessible things are. The place had no electricity, no water, no telecommunication.

There were only stars, the sun, the native people, and me. The main grid, which provided hydropower electricity, was located in Awash city, 350 kilometers away from Bitu. You could not get access to information. I had to travel for 120 kilometers to the capital city Semera to watch the news on the TV.

Secondly, I learned that you must involve the local community. There was a shortage of clean water in the place I worked. Therefore, the government hired contractors to dig out water. The contractors did not consult anyone before starting digging. After they completed the project, the villagers refused to drink the water. They started to ask the local people.

What’s the problem? The elders told them that the land was a graveyard which was used to bury their ancestor. They believed that they could not drink the bones of their ancestors. This changed my attitude in life. I learned to listen to the local communities.

Thirdly, even though it was a rewarding experience to work in Afar. I learned that I should not make decisions only based on emotions. These are some of the key learnings that influenced the rest of my life.

In 2013, Getnet Aseffa and Ben Goertzel, CEO of SingularityNET partnered up and started iCog Labs. You joined the team as its fourth member. Can you share with us a bit more about the founding story?

Our founding story is very interesting. Back then, Getnet Aseffa was a computer science graduate of a military college. Around the age of 25 or 26, he stumbled upon a book called The Singularity Is Near: When Humans Transcend Biology. They were talking about artificial intelligence and editing our genetic makeup.

Yet in Africa, we were still talking about improving farming systems which have been on this planet for the past 10, 000 since the dawn of civilization. He was deeply disturbed by the book.

He started to sent emails to Ray Kurzweil. Ray is an American inventor and futurist. He shared his business emails with the rest of the world. You can imagine how many emails he would get and the chances of ever getting a response. But Getnet was not a quitter. He sent more than 420 emails within 6 months. Not spams but sincere emails.

Ray Kurzweil finally replied. He said that I have been getting your emails and what do you want from me. Getnet said he wanted to organize high-level workshops in Ethiopia for government officials and business people. This would open their eyes to the world that is changing rapidly and continuously. Ray Kurzweil liked the idea but he was too busy at the time. Then he connected Getnet with Ben Goertzel.

Ben Goertzel is a charismatic person with interesting experiences. He spent his life working on artificial general intelligence. More importantly, he had experiences running businesses in developing countries such as Brazil. Ben started to have conversations with Getnet about the state of emerging technologies in Africa.

Together, they managed to organize the first AI conference in East Africa and invited presidents of universities and many other high ranking officials. It was probably the first in Africa because no one was talking about AI in Africa. Nobody considered it to be a serious business. While Ben returned to HongKong where he was located, Getnet started to assemble a team to build the first AI company in Ethiopia.

A friend of mine told me about Getnet’s plan and asked me if I would be interested in joining. When I first met Getnet, I was not sure exactly what he was talking about. Set up an AI company in Africa? I admired his ambition. The meeting with Ben went quite well that we ended up discussing different Western philosophy. They decided to include me in the founding team. We called the company Addis AI Lab. Six months later, our team supported my idea of changing the name to iCog Labs.

In the first six months, we are located inside Getnet’s parents' place. It was a small shop which used to be a barber house. Ben and his team in HongKong would have daily video calls with us. They trained us in artificial intelligence and machine learning.

After six months, we got our first client, a subsidiary of Sony Music, which needed a music recommendation system. Ben pitched the idea to the company. They were surprised to hear about our team in Ethiopia and decided to give us a try. Our accuracy reached 92% and they were satisfied with our work. We were grateful for this contract because it opened us a door to this industry.

What were some of the challenges your team had in those early days?

The first challenge is to find and hire qualified programmers who are creative problem solvers. Our team was featured in newspapers and TV. We would receive more than 400 applications for one position. But it was difficult to find qualified ones.

There was a gap in the Ethiopian education system. The schools in Ethiopia train students to follow certain instructions than coming up with a solution on their own. However, the clients came to us with a problem. There were no instructions on exactly how to solve it. It required our engineers to be innovative.

Second, funding is hard. We worked in a barbershop. Nobody took us seriously especially in the domestic market when they visited us. Many people think we were con artists. We were using AI as a cover because nobody understood what AI was. But fortunately, we had an American angel investor who supported us financially. In addition to that, people accepted low wages to keep the team going forward.

Third, the infrastructure is missing. The cost of the internet was high and the quality of the internet was low. Also, the government would shut off the internet when there was some political issue in the country.

For example, we had a small contract with the University of Gondar. It is located more than 600 KM away from Addis Ababa. We were expected to deliver the software on the 30th day. But the government shut down the internet on the 28th day. Therefore, we had to upload the software on a flash disk and sent it by normal post.

We gradually started to get better and landed more clients. The earlier clients include Open Code Foundation from Hong Kong and an accounting firm from Australia. More than a year after we founded the company, we moved to the office in the center of Addis Ababa.

Many people may not know, but iCog Labs is part of the team that contributed to the development of Sophia. How did iCog Labs get involved and what was your team’s role in the development? And what are some other interesting projects that your team worked on?

Both David Hanson, the CEO of Hanson Robotics, and Ben Goertzel live in HongKong. I think David may have been aware of Ben’s business adventure in Ethiopia. Our team has built a reputation for delivering software on time, having high accuracy, and even coming up with our algorithm. Besides, our price was affordable.

So Hanson Robotics decided to offer us a six months contract initially. Sophia had many different contractors from all over the world. But our team was the first one from Africa. At first, our team was responsible for image processing, helping Sophia to identify humans from animals. It was a successful contribution and they offered us another contract.

We then contributed to the natural language processing to help Sophia identify different noises. Also, we worked on emotional reactions to help Sophia have different facial expressions, such as a friendly face and a sarcastic look.

For me, the other most interesting commercial project was to identify the longevity genes. It was a contract with a Canadian company. There are many factors to make a person live longer. The goal of this specific project was to map out the genetic arrangements in the people who had lived for more than 90 or 100 years.

Part of the singularity movement is creating advanced humans. This project allowed us to have conversations with different domain experts. What if rich people have the power to become immortal? What are some of the bright and dark side of this technology? Soon our office became the hub for different arguments and discussions for anybody interested in this topic.

Corporate social responsibility has always played an important role in iCog Lab’s activities. For example, your team launched an initiative called iCog Makers in 2015 to create a platform for African makers. How did that project come about and what is the current status?

In the management team, we started to have a conversation about working more projects in the domestic market. But there was little demand in the domestic market when we first started. People believed that anything related to AI must be expensive; and the maintenance cost was high. The domestic market may not be mature, but what about other projects related to education, startup, and entrepreneurship in Ethiopia?

We identified three gaps. First, we have to work with universities and policymakers to improve the education system so that we can produce competitive students in the global market.

Second, we should create awareness. We have local investors who are investing lots of money in the traditional industry. We need to help the investors be aware of the investment opportunities in emerging technologies. To achieve that, we must have a competitive tech ecosystem that showcases innovative ideas.

Third, we need to work on capacity building. It means connecting innovators from one university to another, and connecting investors with innovators.

We launched the iCog Makers initiative. It was challenging to get universities on board. So we decided to do something unconventional - iCog Makers Robosoccer cup. We added cameras, microcontrollers, and navigation sensors in the small robots. We gave students a laptop so they could communicate with their teams in the robot soccer game.

This idea immediately got the attention of universities because this did not only inspire their students but also might attract international media attention. Once Addis Ababa University signed an agreement with us, it became much easier to convince other universities. All universities wanted to be perceived as progressive.

Right now, we have 36 partners universities from Ethiopia, Kenya, and Nigeria. Under the Robosoccer Cup, the students compete with each other, and they also conduct research papers. They also came up with some applications in precision farming. We tried to connect them with the Chinese investors and helped them find the market.

Today this initiative is still fully funded by our company. We have seen many top engineers all over the country and in other Africa Universities. We have also seen some projects with high potential. We have successfully managed to have this iCog Maker Robosoccer cup for the past three years, and I hope it will become a continental competition in the future.

In addition to iCog Maker initiative, my colleagues are also running an 11 months incubation programme combined with innovation competitions in 15 different cities in Ethiopia. We select the best three students’ startup ideas from each city. Then we offer these students team free training from web development to marketing for 6 months. At the end of the training, the team will pitch their projects in a 3-day pitching event.

Day 1 is the public demo day. We invite tech and business leaders in Addis Ababa as the jury and anybody can participate to watch the demo day. Most of our participants are young people from 18 to 22. They are inspired and encouraged when the public shows interest in their innovation. It is also a good time for them to collect feedback from the public.

Day 2 is the media day. We invite different media outlets to interview the innovators.

Day 3 is the investor day. We have more than 120 investors who are interested in investing in tech projects in Ethiopia. We organize this session so that the startups can network from investors. In the past 2 years, we awarded the best projects with a seed grant without taking equity.

We also have a 4 months acceleration programme which we will invest in the startups and take around 6% of equity.

Why not focus only on the company’s AI businesses? Why is it important for your team to engage in these community-building activities?

We have been asking ourselves the same questions. We have invested a lot of resources into this.

The first reason is we wanted to create awareness of the Ethiopian tech ecosystem. It is easier for international media to write stories about these social responsibilities initiatives than writing about iCog’s commercial projects.

Secondly, the tech ecosystem in Ethiopia is still nascent. It is our responsibility to do the hard work and to contribute to the ecosystem. There is no mature venture capital industry. There is no stock market where you can go public and exit your company.

In the past, the government has a misconception about technologies. I say this in every opportunity that I find – technology is not a byproduct of development, but technology is a tool for development.

When you are living in a prison, you have to be the one who breaks out. So iCog Labs invested its revenue back to the community so that we can help create the local tech ecosystem.

How difficult it is for you to get funding from the government for all these different initiatives?

There are many levels of challenges when it comes to public-private partnerships in Ethiopia. One is that in the past 30 years, Ethiopia has been facing a demon called corruption.

Government officials used to come up with fraudulent project ideas with their friends. When they get large amounts of funding, they share the fund under the table with their friends.

To stop this from happening, the government stopped providing any funding for non-government organizations. Instead, the government set up a bureaucratic bidding process which made it equally challenging for private companies to secure funding for non-profit initiatives. Therefore, it is easier to get funding from the US embassy or the Japan International Cooperation Agency.

The second problem is attitude. There is a saying that the prophet has no honor in his own country. Some people in the government seem to be more in favor of projects that are set up by foreigners than by local Ethiopians.

You are also working with the country's Federal Minister of Science and Technology in different projects. What are some of the exciting projects you're working on right now?

We came up with this idea called Designed in Ethiopia two years ago. Under this initiative, we are creating a partnership agreement with the Shenzhen government in China. We will have access to loans from hardware manufacturing companies in China. We will also get access to Chinese investors who are interested in the electronics and hardware market in Ethiopia and East Africa.

Within this project, we recruited designers from Ethiopia. We brought in experts and offered them training. For example, last year, we brought five experts from China, France, Belgium, and Australia. They worked with designers for ten days and helped them refind the design in terms of aesthetics and functionality.

Then we selected the best five prototypes and presented them to international investors. I had the chance to meet some creative designers. I also learned that Chinese investors are serious, and they are willing to work with a low-profit margin in some circumstances. In addition to that, we help the Federal Minister of Science and Technology in policymaking.

What kind of collaboration does your team have with China? What advice would you offer to Chinese investors who are looking to invest in tech startups in Ethiopia?

We can not disclose any names of the Chinese companies that we are working with. But we are working on multiple projects. For example, we are helping a game company to develop AI software that will allow the game to adjust to players’ hand movement.

As for the domestic market, we are working to produce the first African toy robots. African children grow up with Western toys. But in African culture, we have many myths and heroes. Why not come up with an African designed robot toy with African features? For now, our experiment is only with the Amharic language. So this is one of our most ambitious domestic projects.

We are collaborating with theShenzhen Open Innovation Lab. They support us with materials and technical guidance. I am grateful that they also help us with hardware. If we will come up with a suitable design, some of our partners have promised us they will invest and connect us with the right manufacturers for mass productions.

My advice is for the Chinese investors is that do not take the negative reports about Ethiopia seriously. Some people are talking about the impending Civil War and unstable economic environments. The outsiders are narrating our stories. The outsiders compare us with the global mainstream, get frustrated easily, and assume the worst for our country.

I suggest the Chinese investors not only rely on foreigners’ reports but come to Ethiopia and see it for themselves. Come to enjoy the best coffee and the fascinating natural wonders. The tech market in Ethiopia is getting mature, and consumers are willing to pay for better tech products. There are a growing tech community and many globally competitive engineers and developers.

You talk about different examples of tech innovation in different parts of Africa, such as Rwanda, Uganda, and Kenya in your book. Can you share a few innovative startups in Ethiopia that people may not be aware, but should know about?

Farming is an important industry in many African countries. I think Debo Engineering is an interesting company. They are the MEST African country winner. They develop software that helps farmers evaluate different types of plant diseases. They also design and develop digital solutions for agriculture, education, and many other sectors.

Another one is QeneTech, a software development firm based in Addis Ababa, but has international clients. They develop and publish video games. Their games are based on African stories and African legends. They also provide game development outsourcing services. I share the same vision as their team when it comes to narrating Africa.

These two companies are good examples that Ethiopian companies can solve global challenges and scale globally.

Broadly speaking, what do you think are some of the most common misconceptions towards Ethiopian people or the country itself?

First, if you do not speak fluent English, people assume that you are not intelligent. Ethiopia is not colonized and we speak our own languages. In Kenya, anybody can speak English.

But in Ethiopia, the professors may not have the best English skills. It does not mean the professors are not experts in their fields. People should not judge only based on other people’s language levels.

Second, people assume that high technology is too good for Africans. Just because people are poor, it does not mean the technology is too good or out of reach for them. If AI is good for China or the US, it is also good for Ethiopia.

For example, when you present activities related to artificial intelligence, robotics, and IoT to international organizations to ask for support, they will suggest implicitly that I am a dreamer and ask me to come up with other activities to address poverty, etc.

Third, they think we are not informed. Some people do not believe that you can keep up with the rest of the world because you are poor. They still have this idea of Africa that there are only lions, giraffes, and hippos, but you will find megacities in African countries. Even worse, some people assume Africa is a country. Africa is a continent of 54 countries with diverse cultures and natural wonders.

What are some of the short and long term goals for iCog Labs?

COVID has put many of our projects on hold but we are still in business.

Our short term objectives are that we wanted to relaunch the Design in Ethiopia project this year. We wanted to attract at least three or four more manufacturing companies that believe in the concepts. Another project is the toy robot which I mentioned earlier.

We aim to finalize the design in the coming 9 months and find potential investors. As for our incubator and accelerator programme, we hope to have the first successful million dollar business within the next three years.

When it comes to our long term goal, we want to expand our business and establish a multinational AI company in Africa. We also hope to re-launch the YaNetu teaching tablet project which is currently dormant. It will be a virtual classroom in a tablet that will be distributed across schools in Ethiopia. We are also planning to work on projects on self-driving cars for public transportation and agriculture sectors.

Books you recommend for those who are interested in learning more about Ethiopia?

First, Notes from the Hyena's Belly by Nega Mezlekia. It is an autobiography which has two pictures of Ethiopia, the good and the bad ;

Second, The Wife's Tale: A Personal History by Aida Edemariam. This also has some good depiction of Ethiopia.

Third, Wax and Gold by Donald Levine. This one is about the ancient poetry tradition in Ethiopia but it also gives some good info about the country's past.

Fourth, The Ethiopians: A History Book by Richard Pankhurst, I didn't read this one but I trust Richard and probably it is the most well researched and unbiased history book about Ethiopia.

According to Bain&Company’s report on E-commerce in MENA, the MENA e-commerce market in 2017 is worth $8.3 billion, and the average annual growth rate is 25%. The Egyptian consumers may purchase less frequently, but they spent as much as per purchase as shoppers in the UK, US, and China. The report says that the e-commerce penetration of total retail sales in Egypt is comparable to that of Indian and Indonesia.

All these statistics made me quite curious about ExpandCart, a SaaS business that allows people to set up an online store in minutes without any technical skills. It is said to be one of the largest e-commerce platforms in the Middle East. So far, more than 2000 online stores have been built through its platform.

ExpandCart offers 15 days free try out, so I signed up to see how it works. My first impression is that the website user flow can be improved, but it offers quite comprehensive features to sep up an online store.

The Co-founder and CEO Amr Shawqy studied engineer at Cairo University. He started his career as a software developer and worked as a CTO in an early-stage tech startup. Starting a company for the first time is hard, and bootstrapping is painful in the early days.

The majority of first-time founders won’t make it, and most startups fail because of a lack of funding. ExpandCart is Amr Shawqy’s first SaaS company, and he has been bootstrapping for 6 years. I think what attributed to their current success is product-market fit - they are solving a real problem for their customers. I hope that you will enjoy our conversation below.

How did you and your co-founder identified the problem? What were the challenges when you started in 2013?

Sameh Nabil and I started the ExpandCart. Yasser Seleem later joined us. It all started when Sameh and I owned an online electronic store. Both of us were working full time as software developers, and we did not have time to run the online electronic store.

So, we decided to sell this online store to a retailer in Egypt. Soon we receive many requests from other retailers asking if we can build an online store for them. It made us start to think about what if we could create something that enables people to set up their online store without technical experiences? This is the birth of ExpandCart.

ExpandCart started as a side project because both of us had full-time software development jobs. The biggest challenge when we first started was lacking time. Therefore, it took us a much longer time to build the product.

We had experience in e-commerce, especially in marketing and sales because we had experience in running the electronic store. But we have no experience in fundraising, and we didn't join any accelerator. We have been bootstrapping since 2013. We joined an accelerator and raised funding in August 2019. For a long time, we had to find creative ways to acquire merchants, build software, do marketing and sales with a limited budget.

Our first version was ready by the end of 2013 that took us around 9-10 months to build. But that solution was not 100% market-ready, so we sold to a few retailers in Egypt. It took us 3 years to build our second version, and we launched it in January 2016.

But we started to go to the market around that time. In those early periods, we had around 150 clients, and we only focused on building products. There were moments that we wanted to give up because it was challenging working full time while building this complex product. But once in a while, we had unexpected tractions, and this motivated us to keep going.

Tell us one of these unexpected moments?

For example, when we started in 2013, we released our first version. It was not perfect. We had monthly and yearly packages. The monthly package was quite affordable like $20 per month, while the Annual package starts around $300.

As I mentioned before 2016, we had around 150 merchants in our platform. We started to provide proper customer service for them, but we were not ready to support all the customers. What about removing our monthly packages, we asked ourselves. Since most merchants subscribed to our monthly package, this would allow us to reduce the number of merchants we serve so that we could control the quality of our customer service.

However, the result took us by surprise. The next month, people started to register on the annual packages with almost the same rate that we used to have. It was a decision targeting reducing the number of customers, but it did not happen.

Instead, we got more customers! So it was a pretty exciting experiment. It proved that our solution was needed in the Middle East market and there was no better alternative. This was why people kept subscribing even on a yearly basis.

How does the comptitor landscape look like? What are ExpandCart’s competitive advantages?

When we started in 2013, there were no other solutions in the Middle East at all. There were mostly custom software development houses that built customized solutions for large retailer brands.

Now the market is completely different. E-commerce is growing at a high pace. The COVID situation accelerated the growth in almost all the countries in the region. Over the years, we have seen new startups trying to create a similar product. Also, the custom software houses started to provide package solutions for the clients. Of course, the huge market in the Middle East created all the competitions.

Our first competitive advantage is that we have the capabilities, the team, and the techniques to operate across all the countries in the Middle East. There is no other solution in the Middle East that operates across all the countries. They operate like one to three countries maximum.

We also have many integrations that we have solved so many problems in the e-commerce cycle that all kinds of merchants can benefit from. It also means that we can enable cross border commerce much easier than any other platform in the Middle East. This is one of the main functions that ExpandCart focuses on.

Secondly, our platform is much more mature than any other platform in the Middle East. We have first starter advantage because we had gained a lot of experience in e-commerce and software development to build ExpandCart. As a result, we have big brands and big retailers from the Middle East that use our software. These clients are generating revenues like in the range of $2 million a month. Our software enables them to can process thousands of orders per month.

It has all the features they need for product management and order management. We offer a comprehensive selling solution, including features such as point to point sales system for their retail stores and mobile apps. We offer everything merchants need to succeed.

Finally, we’ve focused on software development and we offer features that can support segments of online sellers that nobody else can do. For example, we are the only platform that has direct integration with Facebook shops and Instagram shop. It means we can support social media sellers. We also have integrations with AliExpress and other platforms that can support drop shippers. We can serve segments of sellers that they cannot find the proper solution yet in the Middle East.

What kind of customers are you targeting at in Middle East? What are the common reasons that the customers stop using ExpandCart?

Currently, we have 7,000-10,000 paying merchants. We have a set of segments that we are targeting.

First, international brands have manufacturers presence in multiple countries.

Second, all types of retailers from the large, medium, and small. Small retailers may have one offline store, medium retailers are those that have 7-10 branches, and large retailers may have more stores in multiple countries.

Third, online sellers. These sellers do not have a physical offline store but sell through marketplaces and social media.

Forth, drop shippers. They don’t have a product, but they drop ship to sell online to monetize the products of a manufacturer or a supplier. Another small segment is merchants who make handmade products.

There are many reasons for churn. ExpandCart is not software like Microsoft that people use almost every day. It is more similar to Shopify and Wix. It is not only about the software. It is also about the business that you are starting. You need to be able to grow your business. You need to have an organized plan, understand what you are doing online and you need to invest, at least with your time. If a person does not have any of the requirements, this could a strong reason that causes him to churn.

Some customers may not have enough experience with e-commerce and online marketing. So there was a lot of awareness and education involved in the onboarding process. We offer different online training to guide people how to build a successful e-commerce business.

Also, we offer different payment gateway and shipping gateways available in different countries.

Your team was selected to join the Hong Kong accelerator Betaron. How was the fundraising journely look like and how was the experience in HongKong? Any tips for other founders?

In August 2019, we closed our first seed round from investors in the Middle East and Silicon Valley. We had Agility Ventures, a corporate venture arm of Agility, Graphene Venture from Silicon Valley, and we had two other angel investors from the Middle East. We got introduced to Agility Ventures in Riseup Egypt. We started to explore the idea of raising capital since December 2018, so it took us around 8 months to close the funding.

One month later, we joined Betaron. We believed it was also important to join an accelerator because we wanted to gain more experiences and knowledge on strategies, fundraising, legal and financial issues. So we were quite excited to join Betaron. We raised $150,000 from them.

We knew that we also needed the experience to understand more about the fundraising and investment ecosystem. It was a 3-month program and we had to do demo day in HongKong and Singapore. It was a rewarding experience to meet other startup founders and international investors.

It was quite an insightful experience because it helped us understand what investors are looking for and how they evaluate startups. I would say that Hong Kong and Singapore are much more mature in terms of venture capital. I think they are like a generation ahead of the investor that we have here in the Middle East.

For startups at the very early stage that are raising money from angel investor versus venture capital, my advice would be that they must understand venture capital will require many details of your business. They will ask for very detailed financial information, complicated business metrics, so you have to know very well about your business.

When it comes to legal issues, they will have legal counsel to go through many documents so it requires your business to be mature enough to have all these numbers. You need to be patient to go through a long legal process with them. Angel investors do their due diligence which is not as detailed as VC. Also, a VC will support your business because they have so many connections they can introduce you to other investors and other companies.

Especially in the case when the investor is familiar with your field. In our case, Agility was in logistics and their experience was quite helpful to our e-commerce business.

For example, Agility is a partner for logistics in different countries in the Middle East, so they can open doors for. They’ve made some introductions for us with some big retailers. It was quite helpful for us to grow our customers in certain countries.

What do you think are some of the challenges you are facing right now in product and business development?

In terms of our product, we are targeting to become the go-to name brand for e-commerce in the Middle East. This requires our platform contains all the features that are needed to support all the segments of merchants. It must be easy to use and have an intuitive user experience. At the same time, we must provide a strong customer experience. The main challenge is to ensure the scalability of the technology as we grow.

As for business development, we already have merchants from over 40 countries. Most of them are from Gulf countries, North Africa, and Europe. Our goal is to have an offline presence in those countries over the coming years. We are in the process of setting up offices in these countries so that we can better serve our customers. The next country we aim to set up an office is Saudia Arabia because it is one of the largest countries that we have our customers.

You have grew your team to more than 80 employees now. What are some of the management and leadership challenges that you face?

The COVID situation gave us the opportunity to help thousands of merchants to use ExpandCart. We are growing much faster than than 2019 because e-commerce allows people continue living and buying stuff in a safe way. Now we have 150 employees. Back in 2016. It was only me and Sam. So, it has been a very long journey, and we have learned a lot in managing people and resources.

It was challenging to manage different departments. Like most startups, I think the main challenge is to build a strong middle management team. The leaders need to support the middle managers to move towards our growth goals. I am working to give our managers all the support that they need. It is normal sometimes that they do not have the right answers for certain challenges. But I am here to support them to come up with answers. Another challenge is to make sure we use our resources efficiently.

I'm trying to build a work environment that everybody is comfortable to work at. I believe that ownership is one of the most important values. It means being helpful. People need to step up and help others. Naturally, you will have an informal communication process that will keep your startup running, so it is important that people we connected and help out when it is necessary.

I also try to make sure everybody understands our our our vision and mission. I make them understand what is the idea behind a certain decision. We do not just make decisions. Instead, we have to reach a consensus and let people understand what's the idea behind this decision. The people must be engaged and are working in the same direction.

We are not an established company like DHL where they have a detailed organizational structure to deal with every detail. In startups, there must be some missing spots in the organization chart. That is why everybody has to have to show ownership and is committed to filling those gaps.

How do you think the startup ecosystem has been changed in Cairo in the past years since you started your own business?

When we started, I don't recall that there were any accelerators or incubators or VCs even in Egypt. I think in other countries like the UAE, there were some incubators. But in most countries, there was no accelerator and incubator.

Things have been evolved significantly. We have incubators or accelerators in every country in Egypt, Saudi Arabia, Kuwait, and UAE. This is huge progress. Also, angel investors and VCs start to appear. Now there are established VCs in Egypt, Saudi Arabia UAE, and Kuwait that support seed startups, some of them work in series A to Series B.

I think it is easier to start up a company now because you can get access to different mentors. I think the challenges nowadays for the first time founders are having the right mindset. The founders have to understand what they are doing. They have to invest their time and effort.

In Egypt, the local government has put much effort. I think there are two or three accelerators and incubators backed by the government. Some of them have programmes that do not take any equity. I know some startups that went through the programmes from the government. The programmes provide wonderful workshops and information and also introduce to potential investors.

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.

Recently I had a chance to speak with Shyaka Charles, the General Manager of 250Startups. It offers 6 months of acceleration and incubation programme for local startups in Rwanda. It plays a major role in fostering tech startups and innovation Kigali, the capital of Rwanda.

But it is more than a startup incubator. It also trains local young students by connecting them with tech founders so that the students are exposed to the startup world and solve real-life challenges. I found this approach unique. It seems to be a combination of Demola and Kiuas in Finland.

How did you get involved in 250Startups?

I completed my bachelor's degree at the National University of Rwanda in 2018, but I have started the journey of supporting a startup since 2016 when I was offered the opportunity to help N-frnds with their operation in Rwanda. The company developed a hybrid, multi-product network which connects small retailers and consumers with consumers good brands and financial institutions. This experience piqued my interest in helping innovative businesses, therefore, I decided to volunteer for the Rwanda ICT Chamber to better understand local startups in Rwanda.

Rwanda ICT Chamber is founded in 2011, an arm of the Private Sector Federation (PSF) of Rwanda. It is a private member-based organization that works closely with the Rwandan government and their different active bodies. Its goal is to help member companies to grow their business nationally and internationally. I worked for the ICT Chamber on various projects especially with early-stage business, this offered me a better understanding of the challenges that early-stage business face in Rwanda and what we can do to support them.

One challenge is to support the early-stage business to reach to the growth stage and to become investable. When ICT Chamber decided to launch the initiative of 250Startups to address this issue, I jumped at the opportunity and worked my way up to become the General Manager. It was called 100Startups in the beginning, but later we decided to change it to 250 because it is our country calling code.

How is 250Startups being funded and what were the challenges in the early days?

We reached out to different government bodies to seek funding. It turned out that the Japanese government here in Rwanda is particularly interested in the development of the ICT sector.

Therefore, the Japan International Cooperation Agency (JICA) funded the 250Startups initiative in 2017 which allowed us to kick off in June 2018. JICA is currently funding all of our activities but this will cease to occur next year so we are now looking for different raising funds. For instance, we are looking to offer consultancy services.

At the beginning of 250Startups, we faced the challenge of filling the skill gap between the founders and what the market needs. The education system in Africa is currently failing in providing the practical skills that one needs to start a company.

For example, the founders may have innovative technical solutions, but may not have the marketing and sales skills to take the product into the market. Without gaining tractions from the market, it can be difficult for startups to secure funding. Our goal is to equip the founders with the right skills so that they can achieve success.

What kind of startups is your team looking for and what training do you offer within 6 months of incubation?

In the beginning, it was hard to attract startups because we were not known. On average, we received around 30-50 applications. We focused only on agriculture and education at first because the government has a certain priority in helping these two sectors.

But now we are open to startups in all sectors and we started to build our reputation in the local ecosystem. When we opened up our application in April 2020, we received 75 good quality applications by the end of May. We select 10 teams to join the cohort.

To be accepted to our cohort, we review the following criteria: first, the startup should have an innovative tech solution. Second, we look into scalability, can this solution can be applied in the international market.

Third, we evaluate the founding team, do they have the motivation and skills to build a great business. Finally, we evaluate the prototype. We do not require the team to have their final product ready but we require the team to have the skillset to improve upon their product.

The 6 months training sessions consist of four parts.

Firstly, product development for both hardware and software. We take them through the design thinking training and help them build the minimum viable product.

Secondly, market intelligence. For example, the startups are given a certain allowance so that they can visit potential clients in Rwanda.

Thirdly, customer acquisition. We teach them how to acquire customers effectively through different channels.

Finally, we provide them knowledge on finance, legal issues, and intellectual property so that they know how to make a financial projection, negotiate their investment terms, and protect their IP.

Your team does not only train the founders, but you also train local students in finance and law? Tell us more about it.

Finance and law are large parts of the business world. To train up the Rwandan business leaders of tomorrow, we opened up an application for the university students to join our incubator program.

Therefore, each team has four people, two founders, and two students. This approach benefits both the early-stage startup founders and young students: the tech founders can get professional help from young talents in finance and law, while the students can have the chance to work on real-life business cases.

Almost all of our students got jobs, some even landed jobs in major multinational companies, after going through our program. This program has become quite sought after, as in our current cohort, we received 70 applications from law students and 100 from finance students.

In our previous cohort, some of the students were deeply inspired by the founders and even decided to start up their own companies after graduation. We are even thinking to turn this into a business idea itself!

What are some innovative startups in 250Startups?

We have a few interesting startups in our portfolio with the first one being Automated and Integrated Cooperative Operations System (AICOS). It was created by two Software Engineering students from the Adventist University of Central Africa (AUCA), Frank Muhiza (23), and Brice Muvunyi (22). AICOS is a digital system that allows cooperatives to manage their members' information and financial reporting transparently.

Another startup in our portfolio is O'Genius Panda which has received an investment from Japan. This startup features user-friendly experiments that allow for a better understanding of complex scientific details. By putting this option of education into the hands of educators and their students, they provide an environment for everyone to grow and thrive.

How would you describe the entrepreneur scene in Rwanda and what are the challenges to building a thriving local startup ecosystem?

Rwanda has a very conducive environment for business. For example, you can register a company within 6 hours which is free of charge.

As a small nation, all the organizations that support small businesses are close to each other. The Rwanda development board is only a few blocks away to the Minister of Youth, and down the road, you can see the Minister of ICT, people can easily approach to these organizations and have their questions answered quickly.

With only 12 million people, this is also an ideal test market for creative ideas before scaling your business to the international market. It is not surprising to see multinational companies set up offices in Rwanda, such as the Mara phone which set up launch high-tech smartphone factories and produce the first-ever "Made in Africa" smartphones.

The government of Rwanda wants the country to become the knowledge hub. Currently, there are more than 14 incubators/hubs running because we want to support innovation.

The entrepreneurial scene is growing and there are more relevant initiatives in supporting entrepreneurship, for example, the government has established a special fund and grant to support creative ideas in supporting youth and women. Our team is also working on the Startup Act so that we can further promote innovation and entrepreneurship at a national level.

However, there are also limitations and the greatest of all is the mindset. It involves two different aspects.

First, the mindset of local young people. We run different workshops at high schools and universities. There is nothing wrong with pursuing a career in a bigger corporation, but we want to change the mindset of how young people perceive of starting their own business. We want to help them understand it is possible to explore a creative business solution even if you are only a student.

Second, the mindset of local and international investors. I've seen too often that the investors shy away from the early-stage business even if the company has great product and team.

Early-stage startups are certainly risky, but we hope that they, for example, the high net worth individuals, will consider taking calculated risks and investing in small companies.

I am positive about the future of 250Startups. The long-term vision is to support more than 100 startups by 2025 and help each of them grow to achieve 50 million USD in revenue.

Recently I had the chance to speak with Kingsley Abrokwah, the CEO of KudiGo. He is a Ghanaian entrepreneur who is not afraid of dreaming.

When he was younger, he worked at a call center to fund his education and obtained a degree in Network Engineering. In 2012, he started his first company recruited a team of locals to do IT outsourcing for international clients. The financing for this project fell through, so he changed directions and started a software development company.

In the meantime, he received the opportunity to become an entrepreneur in training at the Meltwater School of Entrepreneurship. This experience equipped him with practical skills for starting a tech company. Empowered by this new knowledge, he grew his software company to $100,000 in revenue.

But his ambition did not stop there. After identifying a painful problem that his grandmother experienced when applying for a loan, he started Kudigo.

We set out to reach out and create an ecosystem where each and every individual stakeholder engaged in any form of retail on the continent can have a clear path to business growth, scale and sustainability.

What problems did you identify that made you decide to start KudiGo?

In Africa, micro-businesses in the street corners are run by individuals like my grandmother. These business owners do their financial calculations in their heads instead of using digital tools, which prevents them from having data to back up any loan requests.

When this occurs, the micro-financing banks will give them high-interest rates in exchange for even the smallest of funds. A loan of $100 would come at a steep cost of a 40% interest rate even for businesses that have a stable cash flow. Without any other options, people like my grandmother has to take this loan and quite often can’t pay it back. This is a major problem at the retail level and one that we were determined to conquer.

KudiGo was created to work specifically to build management software for retailers such as my grandmother. This will give them the ability to digitize their service and be able to present the data the banks require in exchange for fair loans so that they can grow their businesses.

Who are your current customers and how do you reach them?

As of the current day, we have three categories of customers.

The first is the informal business owners who do not have physical infrastructures and rely on traditional methods to sell their items. These users typically do not have technological means that are comparable with the other businesses around and for them, we offer our free product option.

The second type is the micro SMEs, that work out of a semi-permanent structure, for them, we offer the app to manage their store and payment processing for non-cash payments.

Our third type of customer is our SME businesses, most are pharmacies, that have the proper brick and mortar stores with multiple branches. These people are the ones that we see utilizing our app to the fullest extent.

As a company in Ghana, quite a high percentage of our potential customers have a smartphone, which means our problem does not lie with having to drive mobile phone penetration. However, our problem does lie within having to get the software on people’s phones.

We have found ways to connect with our potential customers including marketing through Facebook ads, having available live customer service, and creating videos, in the local language, to teach users about our application.

We also partner with different market associations and trade groups to organize workshops to educate team members on our available services.

What services does KudiGo offer to small business owners?

As a business owner, you must adapt to survive this new trend and focus on what’s more important: maximizing profit and reducing costs. No matter which business entity you run, I believe that you should seek an advantage over your competition.

To do this, you need to learn about the customers, their demands and values, and what you can offer which can all be completed through KudiGo Storefront, an all-inclusive retail engine.

KudiGo Storefront utilizes an Android tablet screen, a built-in Barcode/QR scanner and receipt printer, is Sim Card and Wifi-enabled, can process Card and NFC payments. All of this is used to empower the micro-business owner by giving insight to their sales margins, customers, suppliers, and have intelligent business alerts at their fingertips.

This retail engine was taken a step further with a recent innovation named KudiGo Storefront 360, which was designed as a web and mobile-based business solution to offer a 360° oversight of business operations, online or offline.

We also look at the sales agents and examine their performances as well as look at business owners’ current stock level and access the product’s action history.

We offer these insights to help make the effective decisions needed to grow a business’s operations such as being able to see profits, track where the money is going, and decide on an effective inventory. All of these features allow the owner to grow their business and stay on top.

We have come up with a business model that can monetize these clients in different ways. If you are a user of the free service, we will charge a 1% fee on every non-cash payment that is processed. These users get to manage their store with up to 50 items in stock, a daily limit of 10 SMS receipts, accept all payments except CARD, and have access to basic support.

However, if you sign up for the service that costs $13.99 a month, the cheapest on the market, you get more features and more daily limits.

How did your company adapt to the current business environment?

COVID-19 has presented its challenges as our customers are losing money. I took a step back and saw a solution for my company to help those that are struggling and help them attract more business.

We created an e-commerce software that acts as the African version of Shopify but also helps the micro businesses digitize their inventory and open their online store.

This software, at around $2 a month, offers our customers a unique website that is partnered with UBER, BOLT, and other companies that assist in delivering products, to overcome logistics struggles, as well as allow your store to take any type of payment option.

We pride ourselves on differing from the competition by only charging transaction fees instead of gaining sales commission. This allows retailers to have a cost-effective platform for selling their products and have more money flowing through their business.

What is KudiGo RapidGate and how do you help the FMCG enterprises?

We saw that bigger corporations, such as Unilever, are affected by the loss of visibility and data on the product once it leaves the warehouse. This makes it difficult for the company to project its future production and revenue numbers, directly impacting the retailers.

To address the gap between the distributors and retailers, we created KudiGo RapidGate which is designed for suppliers that provide goods directly to retailers in sub-Saharan Africa.

This allows the micro-businesses and suppliers alike to gain back control of their retail and distribution network. We notice trends in costs and product supply as well as inform suppliers about their retailer’s habits, giving our clients the ultimate business to buyer knowledge. This data also allows us to build a solution at the distributor level to reconnect seamlessly with the retailers.

Who is the team behind KudiGo and what’s your team’s long-term vision?

Gideon Adjekum Boateng, Bright Ahedor, Lucky Dogbe and I met at Meltwater School of Entrepreneurship and started KudiGo in 2017.

Gideon has over 10 years of experience in backend development, server architecture design, and cybersecurity. This has allowed him to find a niche within innovative and disruptive technologies that allow the building of platforms and architecture alike. Bright is an Aerospace Engineer that is passionate about technology’s role in our future.

We have been bootstrapping from the beginning. But we’ve raised 450K USD as a seed round from an accelerator called Founders Factory Africa as well as two other angel companies. However, we are looking to do another seed round in the next 6 months.

Currently, we have 6000 users on our platform who are doing over 3 million transactions each quarter. Our goal is to ensure that every retailer, who needs software can afford software, and every other player in the market, such as bank or FMCG have visibility on these retailers and can help them grow their business, either through loans or other products finance.

The ultimate goal is to scale up and bring our product to more individuals, become cash flow positive, allow people to obtain cheaper loans, and overall let individuals grow their business.

This week I had a chance to interview Tumi Moagi, the Marketing Lead of Nvoicia. Nvoicia is an Ghanaian invoice factoring startup which helps small businesses convert their unpaid invoices into cash.

How did you get started?

Becoming an entrepreneur has been my dream since high school; however, I did not grow up in an entrepreneurial household so I was unaware of what it truly meant to own a business, let alone start one.

Nevertheless, whilst in high school I was selected to participate in a program which educated teenagers on business practices. We were tasked to navigate all aspects of business operations from production to marketing and management. This ignited my interest in business, innovating and growing concepts to generate value.

Following high school, I studied IT programming in South Africa before working as a media analyst. The company that I worked for three years went into liquidation, therefore, I decided to start my own media monitoring agency which I operated for five years.

As a result, I decided to utilize the existing relationships that I had established with industry experts to start my own company. I combined my existing knowledge of operations and the sales cycle to generate what became a fantastic first entrepreneurial experience. With fewer personal responsibilities, I had the freedom to explore and was willing to take more risks.

After running this business for several years, I felt that it was becoming stagnant and needed technological innovation for further growth. For example, I wanted to implement automation to streamline processes; however, I lacked the technical knowledge to support this. So, I decided to work for my competitor who was more advanced in this respect.

I stayed there for one year which gave me greater exposure to the technical side of business, an experience which I found invaluable. Whilst working for my competitor, I applied to the Meltwater Entrepreneurial School of Technology (MEST) in Ghana. On acceptance, I relocated from South Africa to Ghana and founded our flagship product Nvoicia which helps SMEs gain access to collateral-free working capital.

I met my co-founders at MEST and we shared a common vision, a desire to start a tech company. Throughout a series of collaborative mini-projects, I gained exposure to the tech start-up world and networked with sixty other participants. We also participated in Kosmos Energy's agriculture-focused CSR program in the Kosmos Innovation Center to acquire an understanding of the challenges facing the agricultural industry. This process brought myself, Kelvin Tyron, Ndifreke Anwananka, and Samuel Oriaku together to form a team.

Here you can read a bit about our founders:

Kelvin Tyron –Business Lead: He has a BSc. Computer Engineering and has 4+ years’ experience running start-ups & business Strategy. He is not only a talented frontend developer, but is also skilled with UI/UX & Graphic Design and product development. Twitter: @i_am_kaytyron

Itumeleng Moagi – Marketing Lead: She has gained her diploma in IT Programming and has 8+ years of experience in B2B sales, business development and marketing. Her thirst for knowledge makes her to pursue a degree in Economics from University of South Africa. She currently studies part time. Twitter: @ItuMoagi

Ndifreke Anwananka – Product Lead: He has a B.A Computer Science and Management and has hands on experience in supply chain management, digital marketing, product design and UX research. He is passionate about building products with a purpose. Twitter:@ndiloso

Samuel Oriaku – Technology Lead: He has 5+ years of experiences in software development and 3+ years in graphic design and UI. He loves to build technology-driven solutions which benefits the users.

How did you identify the problem?

At first, we aimed to start a company to conduct traceability for the agricultural sector. We sought to gain greater understanding of the process behind how goods move from farmland to the consumer and assumed that traceability was a gap in the market which needed to be filled.

However, after interviewing farmers, aggregators, and processing companies, we soon realized that no one was concerned about traceability. They were content with the system that they had developed. The real issue was a lack of finance and consequently a lack of resources. This motivated us to re-think the problem of financing and brainstorm a solution.

We could not offer pre-financing as this was a high-risk approach and also required a license which we did not possess. After careful consideration, we decided that the smartest option was to offer financing following product delivery as this was also an area which lacked funding.

For example, an aggregator which supplies another processing company must wait 30-90 days for payment. Meanwhile, they have other orders which they cannot fulfil until they have received payment for the previous order. This results in constant risk of losing business.

We realized that this was a business opportunity which we could meet through invoice factoring. Invoice factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party as a "factor" at a discounted price.

This allows for uninterrupted running of daily operations and for businesses to meet their immediate cash needs by offloading the burden of debt collection to the factor.

This is the funding model which we sought to make available to small businesses in Ghana and other countries in Africa, thus encouraging future productivity and profitability and facilitating greater expansion of operations.

What were the challenges that you faced at the beginning?

When we founded the company two years ago, one challenge we encountered was educating users on our solutions in order to gain market access.

For example, we learned the importance of using the correct terminology to attract business. At first, we used very technical language which was difficult to understand, particularly as invoice factoring is not yet widely understood in Ghana.

Most SME owners do not even record their transactions, so they lack structure and therefore the relevant data required for traditional financing. But when we came to explain the process of invoice factoring, they did not fully comprehend the concept. We realized that we needed to adapt our language to educate customers on our offering - not business or personal loans but rather bridge-financing solutions.

Furthermore, we struggled to market our services in an environment where technology has not yet penetrated daily life. The majority of our customers are non-technical and lack the capacity to upload or email invoices.

It was necessary for us to overcome this barrier which we did by maintaining a simple product without too many features. Fundraising was also challenging: whilst we had raised seed capital from MEST, this was essential for daily operations. So, we needed to approach the market and persuade benefactors to buy-in to our concept.

Who are the target customers and how does the customer journey look like?

When we first started, we targeted small businesses selling to blue-chip corporations, but we soon realized that this market was insufficiently lucrative. We therefore decided to target small business owners supplying intermediary companies who then sell to blue-chip corporations.

This allowed us to infiltrate the revenue stream of blue-chip corporations through the intermediary customers of the small businesses. Adjusting our strategy in this way to finance any small business which supplies a reputable company maximizes our likelihood of timely payment.

Currently, our marketing is minimal and the majority of our growth is generated by word of mouth. However, we have attended several events for small business owners which is a significant channel for engaging with potential clients.

Our current targeted industries are agriculture, mining, telecommunication, fashion, and hospitality (although this is not a current focus due to Covid-19).

First, we establish a relationship with a small business on a phone call in which we guide them through the process of uploading the relevant documents onto our platform. We then explain the factoring content which requires a signature.

Second, they introduce us to their customers and their history of business with them including: duration of business, number of transactions, and history of late payments. It is important for us to receive copies of offers and bank statements as proof of payments in order to assess risk.

Third, once the due diligence process is complete, we provide a factoring quote. On acceptance, we assist the small business owner to notify their customer that they have taken invoice factoring services.

The business owner then assigns the debt to Nvoicia who collects the payments. When the customer submits an invoice, we contact the business owner for validation. After verification of all documents, we begin transacting.

Most factoring companies pay in two installments: the first covers the bulk of receivables to fulfil the small businesses' need for instant cash flow. The remainder is released on receipt of the client's invoice minus a factoring fee.

We pay 80% of the invoice value to the small business owner and reserve 20% to cover delays in payment by the client. Once the full invoice has been paid by the client, we collect a 5% charge from the business owner as our fee before releasing the final balance to the small business owner.

How do you mitigate the risk?

We commenced business in January 2018 and have received full payments to date. Our only issue has been delayed payments.

We recognize the risks and are in the process of securing insurance for our invoice factoring. This requires significant data to qualify which is our current goal. Insurance companies are necessary to minimize risks: an SME will pay an insurance company 1% of their revenue to guarantee their receivables. Subsequently, if a company cannot fulfil a payment due to an unforeseen problem, the insurance company will pay up to 90% of the invoice value which covers our cost.

At present, we reduce risks by conducting thorough due diligence: requiring small business owners to provide proof of transactions with clients and favoring companies with a history of consistent payments.

Banks offer similar invoice factoring services which is of most benefit to established business owners who transact between $500K and $700K annually. However, it is a niche market and involves a complicated process to be accepted by banks.

Even with banks, some business owners are required to wait up to thirty days to have their invoices factored. So even established business owners favor our service because we are faster and more efficient in our onboarding and due diligence.

It is important to note that we do not finance these small businesses with our own capital. We source the funds from high net-worth individuals with available funds.

These individuals lodge their funds with Nvoicia and we help them manage this by using their cash to finance the small business owners using our platform. When the SME pays back, they earn 3% interest per month and we keep 2%. Currently, we have several financiers both from Ghana and internationally.

How has the Covid-19 affected your business?

Covid-19 has affected our business because small business owners are focused on retaining capital and their transactions have fallen. For instance, the agricultural sector has been influenced negatively and there is greater demand for pre-financing and project financing rather than invoice factoring.

However, the mining sector is booming and there is a higher demand for invoice factoring: we receive invoices worth slightly over $100K monthly from the mining sector.

In this respect, Covid-19 has required us to shift our focus to serve our clients’ demands. At present, we are rolling out different financing packages including distributor financing as home deliveries have increased.

In addition, we are rolling out a salary advance financing model for employers and their employees. If an employer is consistent in paying their employees’ salary, we will finance the employees in advance so that they can receive their salaries earlier. We then collect the salary from the employer later.

This model works in two ways: either we engage with employers who want us to finance salaries and then repay to us later, or employers pay us to assist them in meeting their salary obligations in advance in return for a revenue share. This early payment allows us to split the revenue as we manage the risks and disbursements. The employer uses this capital to reinvest in their business.

What is your long term vision and future funding plan?

Our first two years have been successful. We operate in a market where there is not much available data which allows us to pioneer invoice factoring, a process which is not yet widely adopted in Ghana.

For this reason, we are able to acquire more data about industries in Ghana and thus rollout additional products to best serve small businesses. The Ghanaian market is saturated with small business owners who do not have access to capital. We therefore take immense pride in being part of the solution which allows these small businesses to grow.

Our long-term vision is to become the go-to financing firm in Africa: if a bank is contemplating financing a different market, they have the opportunity to approach us and we will develop the optimum model for them to penetrate that market.

On the other hand, we want small business owners to approach us because we have tailored a specific financing model for them. As we accumulate data regarding performance and trends, we can optimize our risk analysis methodologies and provide credit intelligence to lenders.

Our team raised $100K from MEST and are looking to raise further capital in the future. Currently, we are collecting data and using it to rollout different financial models to our customers. We hope to raise $500K in the near future to accommodate pilots and scaling to other countries such as South Africa.

What advice do you offer to other female entrepreneurs?

Employees understand what is required of them and work a standard 9-5 weekly routine to fulfil those expectations. However, I have always been inquisitive and have the drive to undertake greater responsibilities and risks in order to achieve a higher reward.

My family struggles to understand my career choice and they sometimes think that I should resort to a stable 9-5 job, but they know that I aim to make a lasting impact and they support my dream of being a successful entrepreneur.

My advice for other female entrepreneurs is to go for it. Failure should only make you more determined to work harder and achieve your goals.

This week I had a chance to interview Esther Kanduza, the Brand & Marketing manager of Digital Paygo, a Zambian Fintech startup, which is building a marketplace for shared digital solutions such as software/infrastructure as a service to lower entry barriers for Zambian businesses into utilize fintech.

Their team has secured funding from private equity and was selected to be a part of the FinTech4U accelerator program that took place from January to April of 2020.

How did you become so interested in mobile money?

I was born into a house where excellence was not only strived for but expected. As the youngest of six children and the daughter of two professors, I always felt as if I had something to prove.

This led to me beginning to read at a young age and always being a top performer in school. Our father had one goal for us and that was to get a PhD by the time we turned 30, motivating us to turn our informal table conversations into debates about sociology, economics, politics, and religion.

I decided to attend the University of Botswana to study economics and was one of only 20 people that were selected. It has always been a passion of mine to understand how to use financial data for the poor.

This led to me basing my undergraduate research on utilizing microfinance to alleviate people from poverty. This eventually morphed into a passion for mobile money as I was working with Airtel Zambia, a company in global telecommunications, as a territory sales manager.

My inspiration came from a startup, Zoona, launching a service in 2009, that allows customers to use simple text messaging to send and receive money.

The company that I worked for, Airtel, had its own product called Airtel money wallet, but was not taking off like we had planned. The customers were using another digital financial services (DFS) and were hesitant to trust our services. They knew us more for purchasing Talktime, not for money transferring.

Our team decided to push our service into the market anyway. We ran into several obstacles, but by improving upon our ideas, we were able to get people on board to utilize Airtel money.

This gave me the motivation that I needed to join Digital Paygo two years ago. I wanted to bring my passion and practicality together and join a team that could enrich that. I wanted to provide a product that was simple to use and make things easier for the consumer.

I realized that Digital Paygo was where I wanted to be when they stated that their overall goal was to make Zambia a cashless society.

We started with seven startup members when we opened our doors in June 2019. The management team consisted of 5 members, three being female.

Right now, we have 14 members and 7 of them are female. Our team consists of people with backgrounds in either telecommunications or banking sectors. Every member has a passion and was brought here to expand upon it.

Why does your team start Digital Paygo and what service do it offer?

Digital Paygo was started in order to meet the increasing demand for DFS. This was fueled by a 42% jump in using DFS in a four-year time frame in Zambia market. We wanted to further encourage people to become an active part in this market.

The founder, Charity Chitalu Mwanza, has been a presence in the banking industry for over 20 years, involved in numerous roles including digital transformation and management strategies. Ten years ago, she was a member of the DFS team at the Zambia National Commercial Bank (Zanaco) and was a part of the first digital wallet launch.

This allowed her to realize that mobile money was making headway in Africa and thus, launched her own startup, Digital Paygo. Charity obtained the ability to lead with the future in mind and had a brilliant amount of dedication.

We quickly secured our license in December 2019 from the Bank of Zambia and registered with Digital Shared Services Limited. We wanted to set ourselves apart from other digital wallets and started to look at the service from the view of the customer. Our idea was to create a QR code that would allow consumers to pay easily and act as a unifier between all digital services.

This could be made possible due to the current Zambian mobile penetration rate. Almost 100% of Zambians are connected to a mobile network and 30% of them have smartphones.

We envision a future in which even more people will gain access to smartphones and everything will become interconnected over a mobile network. These were the conditions that we needed to begin to roll out our services.

Digital Paygo offers three services, starting with our anchor product, the mobile merchant payment. We provide the QR code for the micro-merchant which then allows them to process payment efficiently.

Next, we also offer shared agency banking. In the past, this was an expensive endeavor, leading to members of different money wallets having to withdraw and pay fees in order to send money to family and friends. Digital Paygo would connect members of all different wallets, starting with MTN and Zanaco users, and make the money transferring process easier through the Digital Paygo shared agent platform.

Third, we are also a payment gateway. We are currently attempting to collaborate with the local government in order to make G2P and P2G a safe transaction through our service.

Who are the target customers and how do they use your service?

Our target individuals are the 80% of Zambians that work in the informal sector. Those that live in low-income areas do most of their shopping at corner stores rather than malls, resulting these shops to process $2,500 in a day, yet, they have not upgraded their payment processes for daily operations. Our also target at micro-merchants that achieve a monthly revenue of around $200.

At the moment we have over 30,000 of these merchants and hope to cross the 50,000 milestones soon. We generate revenue by taking a cut out of every transaction and a one-kwacha processing fee, at the moment we are experiencing 20,000 transactions monthly and processing a $500 daily average.

Although the majority of our transactions come through the USSD (Unstructured Supplementary Service Data) platform, our dream is to roll out the Digital Paygo services which will allow us to serve both low and high-income customers. Once we start to bring in partners, we plan on splitting the profit 70:30.

The earlier version of our service allowed us to learn that we needed to simplify the customer journey. Our research focused heavily on Wechat and Alipay and ineffectively tried to place those models in the Zambian market. This ultimately failed due to our transactions mainly taking place from featured phones. We also realized that there is a prolonged process in using USSD which we ultimately edited to become a simple three step process.

If a micro-merchant would like to use the more cost effective QR code from Digital Paygo, they would start by selecting a bank. It takes the bank just a few minutes to open a digital wallet account for a customer. Next, they register themselves on our platform using a simple USSD.

Finally, our team will provide the merchant a QR code and provide the proper training required. If a customer would like to use the Digital Paygo service, all they would have to do is a quick scan of the QR code while making the payment.

This service is effective because although there are 13,000 POS terminals from all different banks – it is an expensive process. This makes it impractical to the lower tier of the market which the cost effective QR code could remedy.

Building a startup from scratch isn’t easy. We are currently challenged by the fact that the decision-making process takes weeks to complete, however, we are aware that this is necessary due to having to send proposals and present our case so that we can onboard clients.

COVID19 has been a blessing in disguise for us, although a terrible thing, due to the new market wide push for digital payments. This has caused a surge of interest in our service and allowed us to onboard more partners.

How does the competition look like in Zambia market?

We have a few competitors, however the market in Zambia, which we aim to be the center platform for, is wide open and up for grabs. We desire to be a collaborator with the following companies and we firmly believe in co-opetition.

The only potential competitors that we have found in Zambia are based out of South Africa (Paygate) and Kenya (Cellulant). But they have only set up minimal QR codes at major Zambian shops.

MTN also has a QR code payment service. They mainly rolled their platform into different shopping malls, that deals mainly with credit cards, to analyze customer behaviors without doing a full launch.

Also, an indirect competitor, Zazu digital wallet is on the market. They have a great start and we are in good terms with them; however, they do not offer a QR code payment which we believe is a necessary factor to success.

A competitor a little farther from home is Swish from Sweden. We tested the market around the same time in 2019, but beat them to the market. They came to us and proposed that we join efforts, which we are now discussing.

The goal of Digital Paygo is to connect all of these partners to one platform so that we can focus on the necessary branding and expanding upon public awareness for the client.

Who are your role models and what advice would you offer to other female entrepreneurs?

My role model in this business sector is without a doubt the CEO of Barclays Bank of Zambia, Mizinga Melu. I recently participated in one of her webinars and heard her explanation of how people at the higher level aren’t always have the fresh eyes that we need.

Young female professionals can be looked over in a male driven workforce. But what is inspiring, is her drive to conquer a division that is typically male powered and go on to succeed in her endeavors to become the first Zambian woman to hold such an exalted position.

Another role model of mine is the former CEO of Airtel, Charity Lumpa. I was one of the first graduate trainees that was selected to join her management program and I was fortunate enough to meet her. Charity gave me the inspiration to thrive in the company regardless of my gender.

Worldwide, females are not regarded as forceful beings of power in business situations. Of course, success stories do happen and it is up to the women of today to make them a more prominent reality.

You need to be resilient. It takes a multitude of hard work and trials to start from nothing and build it into something. Also, take heart in building the right team, one that is open, honest, and realizes your dreams.

Lastly, remember that you can always improve and have confidence in the fact that you never stop growing.

Recently I had a chat with Moses Katala, CEO of Mago Farm. In this interview, he shared his 10 months journey of helping farmers get access to better animal feeds in East Africa.

Why are you passionate about entrepreneurship?

After graduating from high school in 2017 in Dar Es Salaam, Tanzania, I made the move, shortly after in September, to Kigali, Rwanda where I am attending the African Leadership University. This is when I started to develop a strong interest in innovation and entrepreneurship.

In October of that same year, I participated in the Hult prize entrepreneurship competition and my team won a $30,000 investment which allowed us to validate our first business idea.

We progressed on our business endeavor by interviewing smallholder farmers all over Kigali and the surrounding areas. After a few field trips and spending weeks surveying the farmers, we developed a solution to provide a more cost-effective irrigation technology.

With the developed technology, the farmers can use cycling materials to generate electricity, which would then be used to pump water from nearby sources, directly to the farm. This idea felt right, and I wanted to do more.

Then I started a second startup, a software development service, which focused on e-commerce to help SMEs with effective advertising using a low-cost budget. This is atypical due to SMEs normally not having the knowledge in digital marketing or the budget to attempt.

Why and how did you start Magofarm?

My true passion lies in agriculture and I noticed that there was a common denominator of livestock farmers struggling with the relative cost of animal feeds that prove to be expensive and inefficient. I wanted nothing more than to assist in any way that I could.

The livestock market in Africa is booming from the ever-demanding need for meat and fish products. With a growing livestock presence, the issue of needing more animal feed arises, which our continent currently lacks the production for. This results in a domination of foreign companies in the African market.

Without Africa being the leading force for animal feed production in its own market, we are losing 50-70% of the potential profit gain, the largest opportunity for profit, to foreign suppliers.

Africa also has a population that is rising faster than many other places in the world and without effective animal feed– problems with food security and widespread hunger could begin to become a reality.

This was why I started to explore other protein ingredients that were more reasonable for African livestock farmers. We realized that insects could be a good alternative.

I wanted to propel this idea into a reality, so I participated in the Ignite Africa challenge; this competition allows Africans to annually collaborate for ideas in problem solving scenarios.

My team and I came with an idea in mind and left with an award of $100,000 to proceed with our animal feed project. In June 2019, Magofarm was then created as an insect technology startup focusing on producing organic proteins from insects.

We are aiming to bring inclusivity to the international animal feeds industry by producing affordable, nutritious, and eco-friendly protein ingredients and making them available to small scale livestock farmers.

What does Magofarm offer?

There are 150,000 poultry farmers and several large animal feed manufacturers, located in Rwanda, that are struggling with costs and the availability of alternative proteins.

Magofarm has the potential to provide a sustainable solution and become a reliable figure in this market. We aim to provide only the finest protein derived from insect larvae, guaranteed to reduce farmer’s costs for feed and improve their overall production yield.

We breed black soldier flies for their larvae to be commercially used as an alternative protein source for livestock feed. This is done in two steps: First, we breed the black soldier flies at a fly farm in Musanze in order to collect eggs and produce larvae and second, we feed the larvae solely on organic waste and allow them to grow to the harvestable size of 220mg.

Within the facility, we dehydrate the larvae and package them in sacks of 25 and 50kg, ready for the client’s distribution.

Additionally, we work closely with the farmers in our network to determine exactly how much protein the animals need in order to maximize potential yield. We then take that amount and deliver it weekly directly to the farm.

We firmly believe that if the 45 million small scale livestock farmers worldwide were able to access the right information and feed ingredients, we could feed the world sustainable and nutritious food.

What are the challenges working with local farmers?

When we present the farmers with our idea, they are typically drawn in by two things.

First, the overall animal health in terms of productivity. Insect protein is far nutritionally superior to soy, with the protein composition increasing up to 15%, which really excites the farmers.

Second, the cost for insect-based protein is $480 per ton, less than soybeans and the farmers are able to save on logistic costs due to our direct delivering capabilities.

However, this idea is new to the farmers, which makes it a challenge to get them on board. Therefore, we have put a tremendous amount of effort into building trustworthy relationships.

Rwanda has the unique situation of allowing the farmers to have their own associations and cooperatives. In order to adapt to this, we plan on working with the Rwanda Agricultural Board and other associations in order to increase our outreach potential. Once we can establish this partnership, we will have greater accessibility to share our product and service with new clients.

We also remind farmers on the original food source for animals, such as chickens, and how they naturally gravitate towards insects.

In the meantime, we are working on an SMS education subscription service, at no cost, to provide regular information about animal feeding for interested farmers.

We plan to launch a demonstration on this topic, comparing chickens that eat soy with those that eat insects; the farmers can then come to their own conclusions.

What is your long term vision?

So far, we have close to a hundred livestock farmers in our database and are strategizing on how we can foster interaction with them to learn how they best can be served.

One of our current verbal agreements is with an animal feed manufacturer, they want to make the switch from using soybeans to using our insect-based protein. Our agreement states that once production begins, fourteen tons of insect larvae will be supplied each week.

We have started this project at a small-scale level, in order for us to acquire samples to show to potential investors and farmers. We are now in the process of raising $1.5 million for us to create a large-scale facility to begin mass production.

Our founding team is made up of talented students from the African Leadership University. We are currently in the pre-revenue phase and our four-year goal is to target at least 15% of the addressable 22,500 farmers and four animal feed manufacturing companies in Rwanda.

We are not a short-term company looking for a temporary solution. We want to become the leading insect technology company in East and Central Africa.

Our focus is not limited to one insect; however, we are looking to provide a variety of options for a diverse group of organisms, including a long-term goal of introducing insect protein for human consumption.

Recently I had a chat with Mignane Diouf, the founder of Afrikmart, a early stage Senegalese company with a mission to improve farmers' lives. His stories helped me understand the challenges of the Senegalese farmers. The company is currently fully funded by the founders and it has already started to generate revenue.

How did you end up in the agriculture sector?

As I was growing up, I was introduced to many enriching opportunities that I used to further my education. My education was built from a mesh of different cultures and it allowed me to spend time in Belgium, Senegal, France, and China, gaining an advantage that very few people have. This gave me the ability to leverage these experiences and deliver innovative businesses to people of all backgrounds.

My time in France was where I began my experience in entrepreneurship and I started my own IT consultancy fueled by my curious mind and desire to build something benefiting others; I ran the business for almost three years. However, this proved to not be as challenging as what I was looking for.

I began to search elsewhere. This elsewhere came to me in a discussion that I had with my younger brother, who was delving into import and export business practices between Africa and China.

He told me that a Chinese client had asked him for 6000 tonnes of peanuts. This is not a surprising request considering that China has been the main buyers of Senegalese peanuts since 2014. According to the Chinese embassy in Dakar, Senegal exported 100,000 tonnes of peanuts to China in 2015, rising to 200,000 tonnes in 2019. The question now becomes where can we source the peanuts that the consumers demand.

In order to answer our question, my brother and I decided to look deeper into the agriculture supply chain and logistics sector. We found that nearly 70% of the working population is involved in the agrifood industry with 57% of these jobs being agriculture oriented.

Due to these high statistics, we interacted with a lot of farmers and found quite the multitude of problems, such as: sourcing, quality control, and digital payment. This was the moment where I began to envision that a platform would potentially be an easier endeavor, thus Afrikamart.com was born. The purpose of Afrikamart was to connect producers of fruits, vegetables, and cereals with local and international B2B buyers.

What were the challenges in the early days?

When we began the launch in 2018, we started with a web platform accompanied by a simple mobile app in order to organize and mediate the distribution of products between the farmers and B2B buyers.

However, we faced many challenges. For example, people were required to pay to join the platform. But the farmers that we were trying to reach were not as digitally oriented as what we had hoped for, with only 50% of mobile penetration in West Africa.

Although mobile usage rates are rising, most farmers wanted a physical connection to establish trust, and this led to a drastic decline in our outreach capabilities.

We rectified this problem by removing the payment requirement and allowing sellers and buyers to interact without interference. Yet, the clients were hesitant in making deals in our platform.

Some obstacles that we ran into included not having a payment escort system which resulted in clients worrying about scamming, logistical troubles, and not getting provided with export assistance.

These problems made us realize that a pure marketplace may not be the correct approach. After putting some considerations into the problems that we were facing, we extended a new offering to the clients.

How does Afrikamart help the local farmers and buyers?

First of all, we hired field agents who are responsible for bringing farmers to the platform and checking the quality of the delivered and produced goods.

Our field agents collect various information about the farm which we then can use to check the farmers's production forecast and contact farmers with our needs, such as the price we are buying for, and when collection will be. We pay our farmers on a weekly basis working up to triweekly payouts, which builds our overall reliability.

In traditional situations, the farmers have to harvest the products and then go directly to the market. This results in them losing potential profit from having to sell what they have immediately, due to not having proper storage capabilities. Our services completely eliminate this occurrence and allow farmers to maximize their profit.

Specifically, we give farmers the ability to plan ahead and organize their production. We inform our clients weeks in advance, that we are in need of a certain amount of an X product at a Y price. By working with a reliable buyer, farmers are able to have more visibility in what is upcoming.

Secondly, we offer farmers a higher price for their products because we are able to eliminate the middleman. With us being the only intermediary, we have a higher margin of profit that we can extend to the farmers.

This is of extreme importance to us due to these small-scale farmers being the building blocks of our society. 80% of what we eat comes from them and yet they are the ones living in poverty.

As for the B2B buyer side, we are currently focused on working with supermarkets. The supermarkets require the suppliers to send in bids every week. It is our job to secure prices from the farmers that will offer consistency to the supermarkets for consumer purchase.

We also ensure that the quality of the products is up to our high standards and consistent, while handing all of the paperwork needed to transport the goods from the seller to the buyer.

How has the business being affected by Covid-19?

The first thing we focused on was cereal products in Senegal and we shortly expanded to the vegetable market. By the end of 2019, we had collaborated with nearly 400 suppliers and have delivered 365,000kg of vegetables in four cities within Senegal for an annual turnover of 270,000 Euros with 45 recurring customers.

The Coronavirus pandemic has had a substantial impact on our business. We were planning on directing our focus to supplying to restaurants, which could not be completed.

All of our logistics are currently outsourced for the protection of ourselves and others. Once the situation declines in severity, we will continue offering in house logistic services and partnering with other logistic service providers.

In May of 2020, we received a total of 214,770kg in purchase orders, but due to the pandemic only 53,814kg were delivered.

Previously, we had a goal to raise 500,000 Euros, but currently, we are looking to raise 35,000 Euros in financing to consolidate our gains and rise to our full potential.