Ecosystem Building Fundamentals Series - Introductory Summary

Currently sitting in Nairobi Airport on my commute back from a very successful ecosystem-building series in Dakar Senegal, with impactful conversations and meeting various actors from public and private sector, has me reflecting on documenting the journey we've had in the African Tech ecosystem.

Join me as I unpack the tool kits we use to build the foundation of the African Tech and VC landscape and look forward to sharing my findings as we explore Africa and its various regions.

What is Ecosystem building and how do you do it?

Collaboration, empathy, social responsibility, and technology are the core principles we need to employ to build a more stable world. In this article, we explore the nature of startup ecosystems, how to create them, and how they can take a significant role in reshaping the modern workplace.

Through many years of ecosystem building across the 4 regions of Africa it's important as an ESO to understand that it takes a village to grow an ecosystem, leveraging various organizations through stages of a startup's life cycle.?

It's important to know that there are various actors contributing to the ever-evolving and maturing landscape in Africa and we need to understand that every organization from Early stage startups, ESO, VC, Corporates, DFI, PE, and LP. Each has its place and there’s room for more collaboration between the above actors to mature a market to a next-tier evolution in tech adoption.?

Engage the entire ecosystem at every stage of the process: listen, communicate, and engage.

The starting point in building any ecosystem must be listening to what startups need and ensuring they help to shape priorities and processes. It is imperative to have a laser-cut vision that everyone understands and agrees on.

Drafting legislation aimed at facilitating the growth of startups, such as startup acts or bills, requires a continual conversation between the private and public sectors, civil society, and the general public to ensure the priorities of different stakeholders are considered.?This is a ‘Big tent approach’ bringing together the private sector, founders, and government actors on a shared platform, enabling the co-creation of an inclusive, comprehensive law. A key challenge is getting actors across the private and public sectors to work together to develop legislation was aligning different ways of working to create shared processes and timelines.?

As AfricArena with a pan-African Overview of the ecosystem, we play with various actors in the ecosystem to drive the above. We host “ VC Unconfrences” and founders forums in order to garner data to streamline the way startups scale, VCs invest, and co-create toolkits to help scale and mature the market quickly by creating the village and assisting actors in the Macro Ecosystem to collaborate, co-invest and solve the issues we currently face in VC on the continent.?

Once the legislation has been drafted an important next step is to start - campaigning for widespread buy-in. Sharing the spirit and essence of the legislation early on can also garner support from the public. Using a transparent, bottom-up approach to develop legislation facilitates the start of a collaborative conversation, laying the foundations for relationships between stakeholders which are essential to building thriving tech ecosystems in the long run.?

Get buy-in from across the government at an early stage?

Another critical determinant of legislative success is securing senior champions within and across the government. Governments are always juggling hundreds of competing priorities, and policymakers across government – even those who are less tech-savvy - need to understand and feel the importance of investing time and resources in growing a thriving tech startup ecosystem.

The startup technology ecosystem is nascent in many African countries, and many government entities don’t fully understand or embrace the digital revolution. In a world of competing priorities, investing time and resources in supporting tech startups can seem to some like a luxury rather than a necessity. There are clear benefits of growing the tech ecosystem and engaging with actors across government, as a critical part of the picture.

Startup acts aren’t a silver bullet – they’re a platform for dialogue and a focal point for action.

"law is a good start but isn’t enough on its own to make progress". Legislation is foundational for creating the right business environment and creating a platform for dialogue, but startup acts are not a panacea. They are the beginning of a continual conversation between the ecosystem and government. It must be an iterative process with modifications made over time drawing on learnings and developments.?

Participants stressed the importance of coherence across legislation:?a startup act alone is no good if it is undermined by aggressive tax or regulation in other areas of government.?

Draw on global best practices, but always contextualize

Many countries are already taking bold steps to grow their tech ecosystems. Dakar, Kenya, and various African countries are inspired by early adopting countries across the continent and beyond in building out legislative models to facilitate startup growth. They highlighted models from Silicon Valley in the United States and Tunisia, the first African country to implement a startup act, and explained the value of learning from their successes and challenges. While drawing lessons from other countries is crucial, it is also essential to adapt legalization to the local context.?

Startup Benefits

Launching a startup comes with many challenges and any mistake can make or break a company.

An ecosystem can provide the company with the competitive advantage to succeed in uncertain times through:

• Tax breaks and financial incentives
• Shared workspace to decrease costs
• Access to qualified workers and customers
• Affordable resources
• Collaboration and idea-sharing
• Education and training
• Legal and regulatory assistance
• The balance between open innovation and intellectual property protection

Such ecosystems can set startups up for success, possibly reducing the current failure rates by around 90%.

How to Build an Ecosystem

There are two basic approaches to startup ecosystem creation.

The top-down approach is focused on building ventures, and it measures success through immediate outcomes such as the number of startups, capital raised, and startup valuation. This approach is used by most entrepreneurship programs today and it requires aspiring entrepreneurs to get it right the first time around. The support system consists of government agencies, industries, universities, and existing entrepreneurs.

The bottom-up approach, on the other hand, focuses on building the entrepreneurs of tomorrow. It merges a community of forward-thinkers and mentors?with resources in collaborative workspaces. This approach provides a steady supply of entrepreneurs. The ecosystem itself is the support, providing the entrepreneurs that have failed once get back on their feet and try again.

Combining these two approaches would provide a steady supply of ideas and initiatives and the institutional and financial support required to keep the ecosystem running for the long term.

Conclusion

The advantages a startup ecosystem can bring to the local area include both tangible and intangible benefits:

• Increased employment rates
• Access to investment capital
• Increased tax income
• Increased tourism income
• Cultural exchange
• Improved living standard
• Innovation and idea-sharing
• International recognition
• Prevention of brain drain

Attracting talent and investment both locally and worldwide can provide the economic boost to improve both the living standard and interpersonal interactions.?

In the next coming week, I will expand on?

• How to build an ecosystem effectively in more depth with step-by-step experience and knowledge sharing with a few case studies
• Common Mistakes to Avoid
• The future of ecosystem building an ever-evolving model.?