Guiding successful entrepreneurs into profitable ventures. Starting a new tech business is hard anywhere. And Tanzania holds some added challenges, not the least of which is intermittent electricity, slow internet, lack of affordable office space, and a maze of regulations governing new business formation. But more importantly, there’s very little history to go on in terms of information & communication technology (ICT) entrepreneurs who have made it.
Enter the incubator
In 2012, the World Bank’s InfoDev and the Tanzanian Commission for Science and Technology (COSTECH) formed a public/private partnership and created the Dar Teknohama Business Incubator (DTBi) to help foster innovative high-tech entrepreneurs. I joined in August of 2012 as Entrepreneur-in-Residence to help provide mentoring and guidance to the cadre of ICT entrepreneurs who were “incubatees.”
Government is not your best customer
Many of the first cadre of incubatees were companies that addressed problems of government — schools, health systems, voting, police. While some of these solutions were innovative, relying on the government as your customer is a losing proposition. As much as they say they support ICT innovation, the government doesn’t have any money to buy tech solutions.
Entrepreneur: “I showed this to the ministry of health.”
Me: “What did they say?”
Entrepreneur: “They said they loved it.”
Me: “Great. Did they buy it?”
Entrepreneur: “No. They said maybe…we need to wait for the next budget, or if we could find a donor to pay for it, then …”
Show me the money
Many of the incubatees had the idea that they would build a website and make money from online advertising. That’s a tough proposition in today’s world, especially if you’re based in East Africa. It’s hard to build enough traffic to be relevant enough to advertisers. So we started to fine-tune the business models of incubatee companies to look for other sources of income for their project. Who are the real customers? What benefit do we offer? What’s that benefit worth? How does money flow in this market?
Focus on real business problems
So we started to focus the entrepreneurs on solving real business problems. If you’re not solving a real problem for real customers, then what you’re doing is simply a luxury. And by and large, East Africa is not a luxury market.