Rethinking Entrepreneurship support in Africa: How Glamour is hindering Real Progress.

One ordinary day, as I engaged in a deep conversation with a Commissioner from a government agency about the pulse of entrepreneurship and small businesses, a slight misstep in terminology—my casual use of "SME" instead of "MSME"—sparked a significant conversation. This moment, seemingly minor, opened my eyes to a broader reality underscored by the latest tax data: the critical role of Micro, Small, and Medium Enterprises (MSMEs) in our economy's fabric and their contribution to the tax base. It became clearer that for a thriving economy, enhancing the quantity and quality of MSMEs paying taxes is paramount. To achieve this, we need? taxation? to reward value creation over value extraction, and to steer value creation towards building an economy that is more inclusive and sustainable. A conversation we can have another day.

Africa's population is expected to double by 2050, with the majority being youth. However, informal employment is widespread, and the continent faces the challenge of creating millions of jobs to meet sustainable development goals.?

Amidst this, Entrepreneurship continues to emerge as a ray of hope.? In a world that often romanticizes entrepreneurship, the harsh realities are frequently overlooked. The journey is far from the glorified narrative of "anyone can do it," with startups navigating through a tempest of challenges including scarce funding, plummeting valuations, and dwindling exit opportunities. This stark contrast between perception and reality serves as a rude awakening for many in the entrepreneurial arena. When it comes to how we are supporting entrepreneurs, we celebrate the basics of? training, bootcamps, business development, award competitions and grants as our path to building strong entrepreneurs. The harsh reality being, If we don’t build ecosystems and corresponding infrastructure that expands the systems of opportunity, it will all be in vain. We will not motivate, compete or award our entrepreneurs to better ecosystems and growth from the MICRO category where most fall.

The entrepreneurial landscape we admire in other regions didn't sprout overnight. It was meticulously constructed through persistent effort, planning, and an unwavering commitment to fostering innovation. We must adopt a similar approach, recognizing that there's an optimal path to cultivating a vibrant entrepreneurial culture.? There's an undeniable art and science to nurturing this environment, a methodology that if followed, paves the way for innovation and growth. We cannot be observers in this journey; we need to be architects and builders, tasked with laying down each brick with precision and intent.

What's the missing piece in the African Entrepreneurship Ecosystem puzzle?

My journey with The Innovation Village has placed me at the forefront where the battle is at its peak and the excitement of potentially groundbreaking ideas is palpable. Yet, the harsh reality is that the landscape is fraught with challenges. The initial acclaim entrepreneurs receive quickly fades, leaving many to confront the tough market conditions alone. If you do not have tales of battle with the tax man yet, you haven't even started to build.? Entrepreneurship is about building the future – and the future is clouded in extreme uncertainty – and not everyone will be supportive.

The disappointment some entrepreneurs feel towards our efforts at The Village is understandable. However, the problem often lies way beyond us. A thriving entrepreneurial environment requires not just great ideas but also supportive policies, skilled talent, technology infrastructure, adequate funding, and market readiness.

The bad news? Even in functioning ecosystems, startups often struggle and often fail. The list is long, but fresh off the press is MarketForce. In his reflection, the Founder remarked that “Venture capital is not for good, or even great, companies. It’s for companies that are so excellent that they produce outsized returns at the right time in the right market.” Very few people will understand the journey to this realisation and many analysts will explain what went wrong - often blaming the founder.? I know you are not looking for more bad news but the situation is even more daunting in emerging markets.?

As much as it might seem repetitive, we need to keep emphasizing this: “Training alone won't build successful businesses.” Without the right infrastructure, supportive policies, lifecycle funding, talent development, and market access, our efforts can only go so far. These gaps create weaknesses that undermine the ecosystem where entrepreneurs are supposed to flourish stacking the odds against entrepreneurs from the start, making success an arduous journey.

1. The Dichotomy of Aid and Market Capital. The absence of proper funding mechanisms has led to a complicated relationship between aid and market-based capital. This often results in aid taking precedence over market-driven solutions, encouraging entrepreneurs to pursue short-term, project-based ventures instead of building sustainable, long-term business models. Consequently, these entrepreneurs become less appealing to market-based investors precisely when they need them the most.
2. The Evolving Role of Incubators and Hubs. Incubators and innovation hubs are at a critical juncture; they could either become key facilitators or influential power brokers in the entrepreneurial ecosystem. The question is whether they can move beyond the lure of simply focusing on “capacity building,” which tends to reinforce existing imbalances, and choose a role that actively shapes how the ecosystem is built.
3. Market Making for Entrepreneurs. Who's actually building the market, or do we assume it will somehow build itself? Markets don't just materialize on their own; they require deliberate effort and planning. If we don't initiate projects that create and shape future markets, they simply won't emerge. To build a robust entrepreneurial ecosystem, we need to expand opportunities by encouraging angel investors, implementing supportive policies, developing comprehensive infrastructure, and forming viable public-private partnerships.
4. Corporate Entrepreneurship Responsibility. Large corporations are increasingly required to shift from traditional corporate social responsibility (CSR) to a model of shared value investments, and ultimately to Corporate Entrepreneurship Responsibility. This new approach aligns corporate activities more directly with the success of entrepreneurs, fostering a more dynamic and supportive relationship between businesses and the entrepreneurial ecosystem.
5. Right Money for the Right Stage of Growth. Many of our entrepreneurs run social enterprises that are pursuing venture capital (VC) funding, but they struggle to meet the aggressive growth metrics VCs require for subsequent funding rounds. Often, venture capitalists realize too late that these social enterprises cannot sustain such rapid growth, leaving entrepreneurs to face the consequences of this mismatch. The solution lies in developing innovative financial tools that can facilitate more investment into strategic sectors, fostering growth at a sustainable pace.

Towards a Solution - Embracing a Market Creation Process.

We must extend our efforts beyond just enhancing skills to fill the critical voids in infrastructure, policy, lifecycle funding, and market accessibility. Our goal transcends job creation; we aim to nurture industries capable of scaling up and supporting substantial workforces. The formation of new companies alone is insufficient; our strategy involves constructing entire industries from the ground up, encompassing both emerging startups and expanding businesses, and formalizing current industries. This approach is exemplified by our work with MOTIV , which seeks add structure and elevate the Creative Economy.

I am a student of Market Creation and have diligently worked with my brother Efosa Ojomo at the Clayton Christensen Institute in mapping his brilliant ideas in the context of our work in market making for entrepreneurs.

Here are some fundamentals of what I have learned?

• There is a predictable process to build markets. The process starts with Discovery (a new product or business model is invented or created, and access goes from zero to one or just a few consumers; the next phase is Distribution (access moves from just a few to many in society); and the last phase is Democratization (the goal is for access to go from many to all). Distribution is the critical missing link for Africa.
• Discoveries happen through experimentation, failure, learning, and ultimately—with enough perseverance—success. Discoveries typically take the world from zero to one, or a few. They make a product or service available to few people who have access to the discoverer. But a Discovery by itself isn’t enough to change the world. After Discovery, a Distribution mechanism must be developed to enable widespread adoption of that Discovery. Distribution takes access from one to many. Distribution is the infrastructure of society.
• Democratization is the final phase in the market creation process. This happens when an innovation is deemed too important or critical—often by the government, large multilateral organizations and foundations, or civil society—that everyone should have access to it. In Democratization, the hope is to take access from many to all. Regardless of how important a democratization initiative is, without Distribution—the infrastructure of society—it languishes.

In short, Distribution is what makes Discovery profitable and Democratization possible—without Distribution, Discoveries languish, and Democratization programs never succeed.

Many entrepreneurship support interventions, and activities focus on Discovery. Although important,Africa’s core challenge is Distribution, which will unlock the continent’s potential to create new markets that will serve hundreds of millions of non-consumers and generate millions of new jobs.

We need to move beyond capacity building to tackle core issues related to infrastructure, policy, lifecycle funding and market access. To create effective markets, we should build upon what we have already discovered—whether it's new products, approaches, or business models—then focus on distributing them at scale, ensuring broader access. This ultimately leads to the democratization of opportunities, providing universal access to the systems that entrepreneurs require for success.

What’s next? Our Strategic focus.

A crisis brings you clarity about what is truly important. Bad companies are destroyed by a crisis, Good companies survive a crisis, Great companies are defined by a crisis. I see the crisis to build ecosystems as one that will continue to define the type of organisation we become. In a crisis, you make principle decisions not business decisions. A business decision is a decision you make to determine the best possible outcomes, a principle decision is a decision made regardless of the outcome, how you want to be remembered.

There is value in the Discovery phase—it provides a space for entrepreneurs to experiment, learn, and provide their products to few people. It also gives people hope for change in their lives. Given the success of The Village in this phase and what Discovery provides for people, we shall? continue providing this space for entrepreneurs but are now in the processing of expanding into Distribution to increase sustainable impact. This might also mean a phased reduction or even shut down of some of the activities we are currently involved in to build a fit for purp0se organisation before we head back out into the distribution phase.?

As I have reflected with fellow entrepreneurs on my own countless failures and succesful interventions, I remind them of the fact that making progress isn’t always about moving forward. Sometimes it’s about bouncing back. Progress is not only reflected in the peaks you reach—it’s also visible in the valleys you cross. Resilience is a form of growth.

In conclusion, forging a dynamic entrepreneurship ecosystem in Africa demands bold vision, courage, and concerted action. Given our demographics,? this mission is critical, not optional, and requires a unified, determined approach to break down silos and drive innovation across the continent. It's also not just about following a proven blueprint; it's about adapting it to our unique context, infusing it with our local ingenuity and spirit, and boldly marching forward towards a future brimming with entrepreneurial success.