Over the last five years, I’ve had the opportunity to have a front row seat in the world of tech startups in Africa- specifically in Ghana. The trends in the industry have attracted attention from international media and investors, and the impact on the local population has also been significant- just take a look at Kenya's MPesa product for example. However, there is a need to engage in meaningful discussions around how entrepreneurs in the space are approaching the use of technology to solve the continent’s challenges. Key questions that for me still remain unresolved are whether or not challenges are being prioritized in the way that they should, and if local context is playing a large enough role in the development of solutions.
In 2011, I developed a cloud and SMS based bookkeeping tool called Start Smart to provide an intuitive and accessible tool for small businesses to leverage in managing their finances. While I had rightly identified a problem- poor bookkeeping practices which in turn prevented business owners from making decisions based on the data provided by their respective businesses, I had missed one crucial detail: incentives. Unfortunately, in Ghana and perhaps in many other African countries, the enforcement of taxation policies is poor. Many businesses do not formally register, and for those that do a large number can fly under the radar of tax authorities, due to the limited scale of their businesses. Beyond the logical desire that I felt businesses should have to understand their businesses from a financial perspective, I made a huge assumption about logic playing a larger role than incentives, making the process of customer acquisition and retention an uphill battle. This dynamic of logic vs. assumptions is not unique to the African context, human beings by our nature prefer the path of least resistance and often require structure to enforce certain behaviors. This is easy to overlook in Western markets, where the process of building incentives, particularly from an institutional/legal perspective is part and parcel of how things work. While I have since pivoted to a more service oriented approach, my experience is sadly not an uncommon one for many who have tried to apply technology to the African market.Have you tried starting a technology business in Africa? What lessons have you learned and what would you do differently? Share your stories with us by sending an email to firstname.lastname@example.org.
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