People & MoneyUncategorized

African Incubators Need Clear Monitoring Framework for Impact – Eric Kacou, CEO ESPartners

By Michael Ajifowoke

But, more than anything, what is critical for entrepreneurs to realize is that incubators and accelerators are not a silver bullet. No single incubator or accelerator can eliminate all challenges. Ultimately, the success of every venture lies with the entrepreneur.”

Across Africa, there are over 600 tech hubs ranging from incubators and accelerators to co-working sites, catering to the needs of the continent’s burgeoning tech startup ecosystem. We sit with Eric Kacou, co-founder and CEO of Abidjan-based Entrepreneurial Solutions Partners, to discuss the importance and impact of these programmes, misconceptions about incubators and accelerators among entrepreneurs as well as the exigency for government regulation to ensure standard practices and greater access.

  • How important are incubators and accelerators to entrepreneurs and how can they impact the economic environment they operate in?

I think incubators and accelerators are paramount because when we look at Africa as a continent, the main issue that we face over the next 20 to 50 years is whether or not we can create the right quality and quantity of jobs for African Youth.

If we think about it carefully, joblessness is the biggest challenge we face as a continent. But this is beyond the continent; this is actually a global challenge because, by 2100, 47% of world youth are projected to be African.

Joblessness takes two forms – those who can’t get a job at all, in the case of basic unemployment, and then underemployment, those with survival jobs often not in line with their qualifications or worth. You find somebody with a master’s degree who has to drive Boda Boda or taxi motos to make ends meet.

And at the moment, we are at the point where securing a job with a certification from a vocational training school is far easier than with a university degree. 

Consider this. The continent needs to create at least 14 million jobs every year to meet the demand for young Africans entering the job market yearly, according to the African Development Bank. The combination of these factors explains the focus on entrepreneurship. Everyone sees entrepreneurs as the magic solution to deliver the jobs African youths need. 

Once entrepreneurship is seen as the solution, incubators and accelerators emerge as the instrument or tool to not only create new entrepreneurs but also take the existing ones to the next level. 

But, more than anything, what is critical for entrepreneurs to realize is that incubators and accelerators are not a silver bullet. No single incubator or accelerator can eliminate all challenges. Ultimately, the success of every venture lies with the entrepreneur. 

For the economic environment where entrepreneurs operate or the ecosystem, incubators and accelerators become the first point of reference for anyone looking to start, grow, and/or support entrepreneurs. It is a reference for entrepreneurs themselves as well as for government players and development partners alike. 

Incubators and accelerators can become the place where, if you have an idea or business, you can get the help that you need, that is, either in structuring your business or accessing the market with your product or service. 

  • How would you gauge their impact so far, across Africa? Would you say they’re actually delivering on expectations or has it just been performative? 

My sense is the impact so far across Africa is around 30 percent of expectations at most. Why? Clearly, existing incubators and accelerators don’t have enough capacity to meet the actual demand. If you look at a country like Nigeria, you think about the youth which will be roughly 100 million. Let us say 10 percent of them want to be entrepreneurs. Today for sure, incubators and accelerators in Nigeria would not be able to host 10 million youths.

Then because there isn’t much in terms of barriers to entry for people to get into the incubator or accelerator business, basically everybody who has an office, some desks, and some sort of connection, thinks they have what it takes to be an incubator. This creates a problem because you might find out the quality of services being offered is not up to what it should be.

Finally, judging impact that is not being measured is impossible or at least difficult. Most incubators and accelerators would struggle to document their impact or even tell you how many jobs are being created through their interventions, or the number of businesses that have graduated from their interventions that are still in operation after 2 or 3 years. 

In summary, the disconnect between supply and demand, the low barriers to entry, and the lack of a clear monitoring framework undermines the ability of incubators or accelerators to impact Youth in Africa. 

  • How does an entrepreneur know an accelerator or incubator program is right for her business?

It boils down to three things. Firstly, the needs of the entrepreneur. What is it you need? Are you looking for financing, better structure, mentorship, or new deals? Which is the most pertinent at the time? The life of an entrepreneur is the life of milestones. By that I mean you start small, then you have two employees and then grow to 100, then you expand to two or three countries. At the different stages in the life cycle of an entrepreneur, needs are different. For you to know what is right for you, you need to know what your next milestone is and what you need.

The second thing is the availability of the entrepreneur. Do you have the time to engage with this incubator or accelerator because what we see from experience at ESPartners is that a number of people sign up and then don’t show up. Often, for you to figure out the right program for you, you need to know how much time you have and whether or not the timing is right.

The last thing is the fit between an entrepreneur’s needs an incubator offering. It is extremely important to make sure that there is a fit between who you are as an entrepreneur and the culture of the program. Some people do better in structured environments, with presentations and training sessions. Other people do not learn that way, they learn by doing themselves. If you belong to the latter, do not go to an accelerator that will promise you 100 hours of training because you are not going to get the results from it. 

  • Do you think everyone should consider entrepreneurship?

Definitely not: entrepreneurship is not for everyone. I think there is huge confusion in Africa between business people and entrepreneurs. For me, business people are the ones looking to survive or for an opportunity to make money. It is like a person that learns there’s money to be made in sugar and then becomes a trader. Then the next day, the same person hears about someone who can help them secure some construction deal, and immediately, they open a construction business. Then the person learns about people who went to China, purchased some goods, and retailed them for more money at home; then does the very same. That person is a businessperson, which is different from an entrepreneur. 

The entrepreneur starts with a vision, a certain problem they are trying to solve for which they want to develop a solution overtime to help the customer fulfill a specific need. Those entrepreneurs often end up building big businesses and organizations, creating a lot of jobs. Whereas the business people do not create as many jobs or build strong businesses because they are going from opportunity to opportunity. You may make a lot of money, but you never really build a real organization. There is a difference.

That being said, both share some characteristics that set them apart from everyone else. Whether you look at entrepreneurs or business people, the mindset of taking risks, the pressure, stress, and the ability to sell, are not skills that everybody has.

Some people are better off working in a corporate organization because it fits who they are as a person, their values, and what they want. It is not everybody who wants to start something and has the patience for it. 

Although not everyone can be an entrepreneur, I strongly believe that everyone would benefit from entrepreneurial training. You learn certain skills, a way of approaching problems and situations, which can only help you as a human being. For example, if you start learning how to come up with a business model or how to sell, some of these skills will make you a much more productive citizen or professional.

  • What do you think are the biggest misconceptions regarding accelerators?

I think that good incubator and accelerator programs can be life-changing. If an entrepreneur or someone with an idea for a business, ventures into the right-fit training program, it can be life-changing. 

The problem is the chances of finding the right program which is of good quality, matches your learning style, and can address the stage that you are at, are very low. It is highly unlikely. 

To me, it is the disconnect between the needs of the entrepreneurs and the quality of incubator and accelerator services, that’s where the problem is. 

  • In Africa or elsewhere, what entrepreneur support programs can you say have been successful, and why?

Your question puts me in the delicate position of being both judge and party. It goes without saying that I believe ESPartners provides some of the best ideation, incubation, and acceleration programs out there. 

Let us approach this question differently: what makes a good program? 

Generally, the good programs often focus on key levers that are going to help an entrepreneur grow, in terms of technical assistance, access to markets, helping the business structure itself, and helping train the entrepreneurs themselves into getting the right mindset, skills, and courage to build. 

Some of the programs that are also successful have a connection with finance because it is very difficult to help an entrepreneur if at some point you cannot facilitate access to finance to help the company move from point A to point B. 

Finally, good incubator and accelerator programs have extremely qualified staff who are running it. It is particularly important to work with an incubator that has qualified and trained people working with processes and technologies. If these qualities are there, you have a good program. 

  • Do you think the government should regulate or monitor accelerator programs and from your experience running such programs, do you think that will dissuade organisations looking to create such programs?

I think the government has a role in monitoring accelerator programs because these platforms provide a public good: a service that is going to impact a large number of people often with public support. Therefore, some level of monitoring is essential. 

That being said, governments may not always have the skills or expertise to perform monitoring well. In my experience, creating a gold standard is to really ensure that people know how to recognize the right program for themselves, and to do this, it is important to develop an absolute minimum standard that each incubator must meet. 

Then it is also important for the government to create a market for incubation and acceleration. Often governments are tempted to compete with existing incubators and accelerators which is not necessarily their role in the system. 

Having a voucher system is something that could make a huge difference in improving the quality of accelerators.  Instead of trying to provide the services themselves, they should give entrepreneurs $100, $200 vouchers to pick the program they want to go to. Doing this would create a scenario where the bad programs do not get support because entrepreneurs are going to naturally select the better programs to get value for their vouchers. 

Finally, it is important for the government to have a mechanism to catch people who pretend to be incubators and accelerators but are basically scammers. And then there should be consequences that discourage such people. 

And this should not dissuade organizations. I believe that a minimum level of regulation is important in any activity. It would be unfortunate for incubators or accelerators to say they can’t operate because of government intervention. I think that would signal there is something that the stakeholders are doing that is not right. Because at the end of it all, we live in a society and societies require a minimum level of rules. And it is the role of the government to provide the framework for the private sector to thrive. 

  • Can you share the biggest lessons and insights you have gathered supporting entrepreneurs through your firm?

The biggest insight or lesson from ESPartners’ work is that the attitude and mindset of entrepreneurs are particularly important. It is not necessarily the best business plan on paper that wins the day. It is the best entrepreneur. The best person is resilient, flexible, and always looking for opportunities.

The good news is that I am grateful to see many of such entrepreneurs every week. Because ESPartners worked with 420 entrepreneurs across ten countries on the continent for the year 2020 alone. Those entrepreneurs—women and men, youth and youth at heart alike— keep us at ESPartners and me as a leader, thriving. For me, it is my biggest lesson or inspiration from our work at ESPartners.

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