Slides from my recent talk at Rollins College in Winter Park, Florida
Archives For Business
This past weekend I attended Diaspora Demo Day, the inaugural startup competition organized by the people at TipHub and held at the World Bank in Washington, D.C.. The day was not without its hiccups but for a first-time event really exceeded my expectations.
As the name implies, Diaspora Demo Day is an event where the best companies founded by Africans or targeting Africa are invited to pitch their concepts to an audience of attendees and esteemed judges (which included myself). Oddly, the judges didn’t judge anything, the audience choose the ‘winners’, we were there just to offer our opinion’s and advice on each companies presentation and business model. However, as the founder of The Appfrica Fund, the trip helped me survey new investment opportunities.
Overall, I was impressed by the quality of pitches but three really stood out when rated on three criteria: the organization of the deck, their ability to succinctly explain their business, and the viability of their business. Here they are in no particular order:
1. Hello Tractor
Description – A company that combines software with hardware to build affordable ‘smart tractors’ that they sell to small scale farmers in rural parts of Nigeria (and later the rest of Africa). I like to call them ‘the Tesla of tractors’.
Opportunity – As pointed out in the majority of the African continent is touched by the agricultural sector. This is huge market and getting even bigger as more of the world comes to depend upon Africa’s exports.
Risks – What business are these guys in? Are they making and selling hardware or software? Are they in the business of financing farming equipment or selling to third-parties who can handle distribution? I think the fact that they (seemingly) are trying to do it all is a huge potential risk for the company.
2. Tastemakers Africa*
Description – TSTMKRS Africa is like Jetsetter.com meets Lonely Planet meets Conde Nast. It focuses on style and exclusivity. Travel in Africa has been done to death, but a focus on luxury experiences and hip nightlife in Africa (Sub-Saharan Africa, specifically) feels fresh and timely.
Opportunity – The African continent has some 300 million people rapidly ascending into the middle class which means expendable income and free time. Where will they spend that money? They increasingly don’t want to live like their parents and grandparents who came from rural parts, rather they want to live the lives portrayed in shows like An African City or any number of Western pop culture shows and music videos. Likewise, millennials around the world do not travel like their parents. They want to meet people, have a great time clubbing (no matter where they are on the planet), and enjoy the finer things. My prediction is that African countries become the home of the world’s next *must* visit travel destinations…because, well, have you been to Europe lately?
Risks – Although travel trends are rapidly changing, public perception and bias against the African continent (and its people) is a much tougher enemy to conquer. Tastemakers biggest risk is that it’s too early to market and that the world may not be ready for that penthouse vacation suite in Kenya for another 20 years.
Description – Like Scottrade for the Nigerian stock market. Buy, sell, and manage a portfolio of listed Nigerian companies.
Opportunity – Of the 22 stock exchanges on the continent, the Nigerian Stock Exchange is one of the most vibrant and attractive. By focusing on Nigeria first, Afritrade have ensured that they have both demand for their product and a healthy supply of inventory (attractive stocks) to sell.
Risks – Afritrade is in a great space. Africa’s private equity markets are screaming for more efficiency, transparency and accessibility. However, it’s going to be a long haul to get there. Right now users of their product have to essentially be savvy investors in the NSE already. They need a broker, they need to do their own due-diligence, they need to have navigated the countries regulatory framework etc. If AfriTrade can figure out how to make all of this “push button” simple then they are a clear winner with a huge advantage. If they can’t there’s still an opportunity to be a niche product for savvy investors.
* I’m currently an advisor to, and a potential investor in, Tastemakers Africa. Other portfolio companies in attendance were Market Atlas (via my other fund) and Upstream Analytics (which couldn’t make the event).
Over the past few weeks it has been an absolute pleasure getting to know Ethel Cofie a socially minded programmer, serial entrepreneur, and YALI/Washington Fellowship Fellow. She will be temporarily working with us with us from August to September.
I met Ethel a few weeks ago when I was invited to speak at Yale to address the Mandela Washington Fellowship YALI Fellows. They asked me to talk about my own personal journey from starting Appfrica in 2008 to what I’m doing now across various ventures and projects. When asked to go deeper about what we actually do here at Appfrica, rather than talk about tech, I choose to talk about our work in areas of investment like Market Atlas, The Appfrica Fund, and how to deal with failure as an investor and as an entrepreneur.
It was this focus on capital markets and investment that sparked Ethel’s interest as she gets her own accelerator started. Before I could make my way out the door she let me know that she would definitely be working with us one way or the other. Here’s what Ethel had to say about that encounter:
I went up to Jon after his talk and asked him if there was a possibility for shadowing him and the Appfrica team as part of the Washington Fellowship.
The Washington Fellowship implementation team approved and today I start shadowing the Jon Gosier and Appfrica team for 8 weeks. I will be learning how to create a venture fund and learn how to run a virtual accelerator whilst launching my accelerator program at the same time.
I bring my special attitude of getting things done, my technical skills and passion, to make a difference on the Appfrica Fund and Appfrica’s D8A and Market Atlas projects. I will be contributing my expertise as much as I will be learning. This is going to be a fitting end to my summer and to my time in the Unites States under the (Mandela) Washington Fellowship.
The great thing about the five-hundred YALI Fellows is that they aren’t ‘interns’ or ‘apprentices’ in the traditional sense. It’s more like the White House has flown some of the brightest most accomplished people from across the planet to be embedded in various multinational companies operating in the U.S., from big ones like Coke-A-Cola to little ones like us. This means the companies housing them should be open to learning as much from them as they might expect to learn from us.
It’s with great pleasure that I look forward to the coming weeks with Ethel, learning from her, working on the great things that will result from our time together before she returns to her home in Ghana! You can read more about Ethel Cofie’s background here.
In a post about Africa’s growing tech hub community, researcher Dan Evans (whose work we’ve covered previously), writes:
“Based on the maturity and business viability of many of the small tech firms that we have met with over our data collection visits, and the modification of many incubators’ business models, we completely understand the thought-process behind this “pivot” in strategy. For example hubs that we have previously visited like iceaddis and iLab in Liberia, andHiveColab in Uganda have all scaled back their original lofty aspirations. These hubs originally planned for a multi-tier membership model, charging rent for office space, and acquiring equity of the companies that were the most mature. Based on these assumptions, they thought they could be self-sustaining in a short period of time. All have scaled back their expectations and operate more as collaboration spaces for the local tech community and offer technical training and mentorship.”
In a tweetstorm response, I argue the following:
— Jon Gosier (@jongos) August 13, 2014
— Jon Gosier (@jongos) August 13, 2014
— Jon Gosier (@jongos) August 13, 2014
To expand on this, most hubs really overestimate the ability and desire of what the market will bear. While cheap/fast internet, nice furniture, recreational areas, and a stimulating environment of peers and mentors is a nice value prop, it’s not a business model that subsidizes the cost of running the actual hub itself. This is because the overhead of a hub (rent, staff, electricity bills, internet bills etc.) is high enough that to charge a rate that actually covers the bills is inversely proportionate to what startups and entrepreneurs can afford. The better the space, the more attractive it becomes to people want to pay but can’t. The cheaper the space, the less attractive it becomes to people who can afford to pay but don’t want to.
So if the market can’t bear the price of hubs, who can? How can we fix the African tech hub model? People don’t realize this but HiveColab in Uganda (the hub we seeded and still advise) was operating as a tech hub for about a year and half prior to adopting the current branding.
At that time it was fully sustainable because it also doubled as Appfrica’s home base. It was our office and we shared it with anyone who wanted to come in and use the space. This was well before ever accepted any grants or donor funding. We were, thus, operating under a cross-subsidy model which means one thing pays for another. In our case, we offered technical consulting services to earn a profit and a portion of those profits were used to subsidize activities that were inherently unprofitable (giving away desks and free internet to entrepreneurs). Running a profitable company created the opportunity to carry-out unprofitable activities for social benefit without hurting our ability to survive.
If you look at the handful of hubs that are working, they are employing similar cross-subsidy models. MEST in Ghana survives on such a model given the success of software company Meltwater. The iHub in Kenya has iHub Research and its mLab for testing and other initiatives, that are producing revenue. However, given the size and scale of the iHub, from what I can tell, though it is producing revenue, I doubt its broken even from revenue when you exclude all grants and corporate sponsorships.
Both of their models work because they understand that donors are only a part of who pays, but not the only customer who pays. In tandem, donors/funders are being encouraged to give more to initiatives that are working towards sustainability versus not.
@danevans87 6 – I think so, donors have be more discriminate about why they are funding hubs and propping up a broken ecosystem
— Jon Gosier (@jongos) August 13, 2014
The biggest risk to the first wave of tech hubs is that they will implode under their own weight as soon as donors start to realize that the hub model will never be sustainable without some creative thinking about business models. This is already happening, in fact. Many donors like Indigo Trust and Hivos already have started to ask more of hubs in the area of business development. They and other donors don’t want to have account for 90% of any project’s revenue. Will they continue to be the ‘angels’ for the select hubs that have achieved notoriety? Possibly, but at some point that’s not sustainable and therefore, not attractive. One hard lesson many hubs learn is that running a non-profit or community oriented services does not equate to having no business savvy whatsoever.
In my opinion, any hub or accelerator struggling with financing has to think about a cross-subsidy model in order to survive. They also need to follow the iHub model of inviting corporate parters to the table as key stakeholders. But more importantly, they need to stop thinking about what they do as being justified because what they do is inherently ‘good’ or ‘needed’. Anything that is needed is invaluable to someone, and by definition will be supported by the stakeholders that can’t afford to lose the resource. Things that are ‘good for the community’ may well be that, but if they aren’t critical to the community, they are simply nice-to-haves. Unfortunately, most hubs haven’t yet found their ability to become need-to-have versus a nice-to-have.
The donors also have to get smarter about what they fund and why. The old NGO/Donor model allowed for the indiscriminate spending of money whether it was on solutions that worked or didn’t work. The new NGO/Donor model demands data, accountability, and sustainability. Increasingly the philanthropic community is moving from that old world and into the new. This puts any hub that primarily relies on grants in the precarious position of risk due to not having enough impact or being able to demonstrate enough impact to justify their survival. The only answer to that (other than having undeniable impact) is to have an undeniable sustainability model. This also makes the hub more resilient even if donors pull-out.
It also seems that donors should focus more on the infrastructure the hubs require to exist versus funding the hubs themselves. Organizations like AfriLabs that support the network of hubs or the recently announced ‘Hub fund’ democratize how resources are spent and build a better ecosystem. Outside of this, donors simply are attracted to the dominant players; which risks propping up ‘monopolies’ in what should be a more merit-based community. Organizations like the United Nations or the Africa Development Bank might do the same, a plan recently put forth by my colleague Bahiyah Robinson was one attempt to encourage their involvement in this network.
Finally, the other thing hubs have to resist is scaling too quickly. Having a large, well-decorated, and high-tech space is not a good thing if you haven’t yet figure out how to pay for it all. In fact, all of those assets then also become your biggest liabilities. Overhead is the inescapable common denominator of any organization, business, or non-profit. Scale should come when you truly understand your own business, it’s working, and you have to grow to meet demand. Scaling prematurely is the kiss of death.
Fundamentally, all of this stems from a gross misunderstanding of what a tech hub or accelerator is and why they work elsewhere. When you look at the hubs and accelerators in other markets, like YCombinator, 500Startups, The Hub Network and others they all have realized that the community they serve is not what keeps them alive as businesses. In the case of YCombinator the accelerator can be thought as cheap R&D for an investment fund. It’s a loss-leader. The fund invests money up-front to get the best companies in its doors, they take equity, and then as the companies mature they reap the benefits of their early investments. The first few exits (when a company they’ve invested in sells) offset the cost of running the accelerator. From then on the accelerator essentially pays for itself and the cycle repeats.
Africa’s tech hubs misunderstand this because they assume that simply having access to companies is the critical component. It’s not. You need the best companies. Only the best and only ones that will exit. YCombinator essentially sells the best companies in the the most mature market in the world (The United States) to its audience of venture capitalists and corporate acquisition departments. If you aren’t doing the same thing in your own market, you aren’t like them. This is particularly a problem in most African markets where there simply aren’t enough mergers and acquisitions going on to justify a reasonable expectation of such a model (which is dependent upon exits) in the first place.
Does that mean you can’t have companies that aren’t going to exit? No. But not having companies that exit means you’re in the business of selling something else. I’ve already pointed out that expecting the companies to pay enough to offset the costs of running a hub/accelerator is pointless. Expecting VCs or acquisitions to offset the cost is also pointless. So what works? Cross-subsidy. Figure out some other service the compliments the unique skills or offerings of your hub’s team and get profitable from that, use those resources to maintain your hub, use your newfound success and sustainability to invite other partners to the table to help you scale.
So if it’s that simple, why is this so difficult for hubs to implement? There are many reasons but ultimately boils down to the lack of experience in business development from people who fail to prioritize a working business model versus accolade and attention grabbing activities. This is usually a mistake of many first-time entrepreneurs (as hub managers often are) who mistake ‘attention’ for success. It’s a type of success, but it’s not necessarily the type that leads to sustainability.
As we move into the second life of Africa’s tech ecosystem, I look forward to seeing the new entities that emerge that embrace some of these core principles.
Slides from my talk at Yale University to current Fellows of the White House’s Young African Leaders Initiative.
The UN Global Compact Conference, held on June 9 + 10, 2014, convened 300 public and private sector players from across the continent to facilitate knowledge sharing for local, regional and continental planning. The organizers did a great job in accomplishing something that is no small feat, bringing together U.N. agencies, NGOs and various companies from the private sector (such as consulting firms, BoP technical assistants and regional financial institutions) to discuss ways to come together to discuss the problems facing small and medium size enterprises (SMEs) in Africa.
The setting was the rather impressive: The UN Economic Council on Africa building is housed just minutes away from the Palace. The building, like much of the city of Addis, was partly under renovation, but that did nothing to take away from the feeling I had once we stepped onto the grounds: the people who worked there meant business. In fact, Addis Ababa is home to other convening bodies in Africa like The African Development Bank and the African Union. The city’s air of power, influence and rebirth is evident by the people who live and work there. And for the first time, The UN Global Compact decided to have their conference in the very place where it mattered the most: on the continent.
It was great to see so many different players committed to exploring how we can strengthen public-private partnerships. As I see it, there are two distinct challenges that have to be overcome to deepen the impact of these discussions.
The Main Challenges
First, we need to be clear about the specific ways our organizations want to support economic development, whether a company or organization has specific country, regional, or Pan-African goal they are trying to accomplish. The goals of a company like Coca-Cola has around investing in a local business will look very different than a local UNDP office trying to bring more services to local entrepreneurs. The question then to ask ourselves and our colleagues is: exactly how do we want to impact the communities we serve? Where are we lacking? How can we partner with an organization that has had success to close our gap? How can we pool resources together to accomplish a single mission?
Second, we need to have the mindset of open and inclusive knowledge sharing with local experts. To accomplish this we need to find more robust ways of working together to create environments to which foster economic growth and equitable opportunities.
Supporting Technology Hubs, Long Term
There were two panels I spoke on. The first was about strengthening public-private partnerships to support SMEs. One of my big points, was that we need a coalition of public and private supporters to pool resources to support entrepreneurship and training hubs. I am convinced this is one of the most overlooked ways to drive economic growth AND job development for youth.
What could this look like?
Think of what could be done if, similar to the Virgin Entrepreneur labs, multinationals committed $20 million USD to fund technology hubs that provide skills and training for youth? With $100,000 committed to each hub, say, in the AfriLabs Network, this could mean 3 years of organizational support for over 60 similar hubs across the continent, with $2 million to spare for a yearly convening event and small M+E team.
There are nearly 100 innovation hubs in Africa most of which are struggling to survive. I’ve spoken with many their managers who share the same concerns and struggles, lack of finance opportunities and their inability to come up with sustainable models. Their fears are often the same: “How many more months can we keep our doors open and provide consistent programming for our communities?”
If a public-private consortium came together with a larger operational grant, similar to but on a larger scale as Hivos and Indigo Trust’s recent TECH HUB INITIATIVE, we could scale up opportunities for youth to have consistent access to vibrant innovation hubs where staff salaries, internet connectivity, and space is stable.
Tech Hub sustainability will rely on committed partners, mentors and managers to determine what services they can provide their market that will add value to local businesses. This doesn’t mean renting desks or holding events. It means harnessing the power of the tech developers and organizers within the hub to provide expertise that companies are lacking. Until those gaps are filled, tech hubs will have a difficult time staying alive.
Strengthen Intellectual Property (IP) resources across the continent
For the second panel discussion, WIPO hosted a trip outside the city to the rather impressive Oromia Coffee Cooperative, where the Ethiopian organization has successfully licensed the use of coffee for the world market. As most of you may know, Ethiopia is the birthplace of coffee. The Oromia team welcomed us with a facilities tour, special coffee ceremony and presentation about the growth of the cooperative and how their model has helped increased economic growth for the region as well as health and training services for the workers (most of those in the factory were women).
The market for coffee globally is massive and it’s Ethiopia’s primary export. Ron’s team assisted the Ethiopian government in receiving a fair share of that profit, and getting fair trade coffee retailers such as Green Mountain Coffee and Starbucks to agree to paying Ethiopian exporters for these licenses. My other panelist, Ilmari Soininen from Sanaa Consulting, spoke on the importance of these type of IP initiatives in strengthening trade relations on the continent.
From a technology perspective, I spoke about registering and protecting the IP of young African entrepreneurs- something that WIPO is keen to work on in the coming years. The point here is, if technologists can’t protect their IP, then they cannot reap the type of success and growth that their American and European counterparts have.
As we concluded the conference, there was a strong feeling of commitment to work together to create the type of equitable and stable environment for economic development that other regions have enjoyed.
It’s up to us keep working to make this happen.
After five years of funding companies through partnerships like the Apps4Africa initiative (2009-2013) and our own team’s angel investing, we’ve decided to change course. While there are are more competitive funding events like A4A planned, the focus of our funding efforts has shifted over the past five years. We are still very committed to discovering, mentoring, virtually accelerating, and investing in the founders and upcoming entrepreneurs of Africa and we’ll be doing so through our fund.
Why the name change? Partly to reduce confusion. Since we launched, newer brands like Microsoft’s 4Afrika initiative and others playing on the ‘4Africa’ meme have popped up which creates a lot of confusion. This isn’t a bad thing and rarely is this kind of brand confusion intentional, but it is less than ideal.
Primarily, though, it’s because of how our fund will grow moving forward. We will continue to offer seed capital up to $25,000 for companies and grants for social ventures and non-profits. Currently we have about 19 companies in our portfolio across 16 African countries. While we won’t rule out future future competitions and hack-a-thons, they will come under a different moniker.
All our past companies are already members of this fund, so nothing changes for them. Internally, we’ve always done our deals as Appfrica, since that’s our company’s legal name in both the U.S. and Uganda. In fact, we’ve been doing deals quietly since 2008 when we made our first investments in companies coming out of Kampala at the time.
As the fund grows, we aim to do more early stage deals across more diverse countries in Arica, particularly in countries with less interest from early-stage investors. We also have plans to do follow-on financing for our existing portfolio as they grow their respective businesses.
Today’s African citizens are faced with a set of unique challenges: an unpredictable job market and poor global economic conditions. They choose to voice their opinions through social media, or more vocally in the streets. New generations of women and young people throughout Africa are emerging and developing innovative strategies to overcome daily problems at a local and national level, but their combined capacities have not been fully harnessed. And alongside this increased activism is an increased entrepreneurial spirit, a willingness to cross borders to seek opportunities, and an understanding of the increasingly interconnected world. How do today’s leaders (corporate and government) communicate with them? How can we tap the full potential of women and young people?
This panel discussion took place on May 25th in Libreville, Gabon at NY Forum Africa between Jon Gosier (Appfrica, Market Atlas), Akon (R&B Singer), Auma Obama (Writer and Activist), Maggy Berre (2CS), and moderated by Christine Kelly (CSA), Arnauld Engandji (Advisor to the H.E. President of the Gabonese Republic).
This past week I had the pleasure of speaking at the third annual New York Forum Africa in Libreville, Gabon. NY Forum is the brainchild of Richard Attias, who one of the people responsible for the annual World Economic Forum (better known to the world as Davos).
The first question everyone asks when they hear about the New York Forum Africa is why it’s called ‘The New York Forum’ if it’s a conference focused on Africa.
I can’t claim to know for sure, but there are a few things that I can say. The conference was always meant to be for the same types of people who might go to events like Davos or TED: foreign investors, banks, celebrities, media, government officials. It originally took place in New York where the name makes a lot more sense. This particular event included two sitting African presidents (Rwanda President Paul Kagame and President Ali Bongo Ondimba), three former presidents from Latin America (Former President of Peru Alejandro Toledo, Former President of Mexico Vincente Fox, and former President of Bolivia Jorge Quiroga) as well as African superstars Youssou N’Dour, Akon, and Dikembe Mutombo (pictured below).
At some point a partnership was forged with the country of Gabon to bring the event to Libreville. The benefits of having such a high profile event in Libreville is obvious: it’s a boost to tourism. it attracts investors, it encourages multinational partnerships. In other words, it puts Gabon on the map for people who tend to overlook it for better known countries on the continent like Kenya, Nigeria, South Africa, or Ghana.
This is a really smart move by Gabon’s President Ali Bongo Ondimba. By investing in partnerships like this, he’s quite literally presenting Gabon as ‘open for business’ to the very people who have the desire, positions, and capital to actually do business.
WHERE NY FORUM DIFFERS
There has been some critique of the very idea of a ‘New York Forum’ Africa. But the forum is so unique and diverse in its offerings, it’s hard not to find it compelling. In my experience doing business on the continent over the past six years conferences in Africa tend to fall under the following archetypes:
- Small local events that discuss important subject matter usually organized by NGOs, local Government or Civil Society
- Larger pan-African events that discuss the same subjects, but with participants from across the continent
- Africa industry specific events (think multinational organized banking, telecom, and mining conferences)
- Events focused on social entrepreneurship
- Events focused on tech startups
These are events are fine, and are more than exceptional for those close to the issues discussed. Most of these events are dominated by discussions around developmental aid, to the point that the conversation never moves past what I call ‘naval gazing’ at what new NGO programs are working or aren’t – while forgetting there are other things to give thought to. For instance, what do we do for the individuals living on the continent that aid has actually helped to move out of poverty and into the middle class?
But there are few, dare I say no, African events that are trying to position themselves like a World Economic Forum or TED. Both conferences are smartly composed: part entertainment, part industry insider event, part corporate retreat, and part marketing. The goal of NY Forum is to get people to come to the continent, to learn about opportunities, and the develop either a personal or professional affinity for Africa’s Markets. Why does this matter?
I think back to how important TED Africa in 2007 was for changing the awareness of African issues for some. Though I wasn’t there, it was a talk from the event that I saw by Andrew Mwenda that inspired me to invest on the continent.
Those who challenge the content of events like NY Forum Africa and TED Africa, I argue, miss the point. There have been leaders, intellectuals, and writers exploring the state of the continent for as long as Africa has existed. And for as long as they have done so, they’ve been followed by those wh know of them, but oblivious to most because they are too far removed from the problems or the solutions. So how do we get the World to care? You present the same ideas in a package they are more likely to find compelling. Conferences like TED, WEF and NYF are diplomacy in disguise. Good PR to help open people’s eyes just a little bit, and to expose Africa’s own movers and shakers to the otherwise oblivious world.
This, New York Forum Africa does better than most conferences on the continent. Hands down. While development is important, making it the complete focus of discussions on Africa isn’t progress. We know of the challenges, we’ve discussed the solutions, as Rwandan President Paul Kagame said at this year’s conference, “what matters now is implementation”.
SO, WHAT DIDN’T WORK?
The whole conference was incredibly productive and, as always, it’s the people who come, and the side-conversations that really make things worth while. Rarely is any anything said from the stage at a conference like this ground-breaking or different from what has been said before. That isn’t the point of such events. The point is is to convene the people who will actually do what Kigame alluded to: execute.
That said there was one thing about the conference that just didn’t work. ‘Taskforces’ which were held in smaller breakout rooms that were one part panel, one part workshop. Each was focused on discussion and ‘problem solving’ around topics like Improving Education, Entrepreneurship, and other matters. Around 30 minutes was reserved for the discussion, while 20 minutes or so was reserved for the workshop portion. Nothing done in 15 minutes is really going to be accomplished around such issues. Clearly not enough time.
I, as did many others judging by the side-chatter, felt these workshops were a complete waste of time. To come up with anything tangible, it would require almost an entire day or more to capture all the complexities of the issues and to explore what could be done, and that’s before coming up with an action plan. It would have been way more practical to just make these conversations more intimate discussions and skip the ‘tasking’ altogether.
The other thing that was made clear was that there were too many all-male panels. I personally thought NY Forum did a better job at not falling into this trope than other conferences on the continent. Still it’s a valid concern and one that will hopefully be addressed in the future.
A few months ago I cam across a fascinating study by Daniel Evans and Dr. Charles Thomas, two researchers at The Network Science Center at West Point. They set out to undertake one of the more ambitious studies of the business space in Africa, a network mapping study about who the key players in each market and how the influence or affect one another. Why? To quantify the entrepreneurial network in such a way that the analysis provides concrete policy recommendations.
The results tend to look something like this, where each node represents different key players or actors in the respective entrepreneurial spaces of each hub or country:
The trip was several months long, taking them to various countries and innovation hubs all over the continent and the results are fascinating. A description from the authors themselves from their first paper “Who do you know?” Developing and Analyzing Entrepreneur Networks:
Our research goal is to quantify the entrepreneurial network in such a way that the analysis provides concrete policy recommendations. Our Center has experimented with several data collection methodologies and we have developed an innovative yet simple technique that allows us to develop quantifiable entrepreneur networks. Our innovation is not to develop each individual entrepreneur’s network but to understand the entire entrepreneurial network of the community in which the entrepreneur lives and operates. In order to develop this model, we have adapted a technique used in sociology to measure social capital called the Position Generator (Lin & Dumin,1986; Lin et al, 2001). This technique circumvents the massive effort of mapping an individual’s social network before locating the social resources in it. By approaching the entrepreneur’s network through the analysis of his connections to prominent structural positions in the community or society, researchers are able to construct measures that obtain information on the strength of ties and structural holes (Lin, 2001).
Dan Evans has been doign a fantastic job blogging his research over at the WestPoint blog but gave us permission to make his work available through our open data portal, Statfrica. The first of three of their papers are now available for download here. They are:
- “Who do you know?”- Developing and Analyzing Entrepreneur Networks
- Quantifying Entrepreneurial Networks: Data Collection in Addis Ababa, Ethiopia
- Network Science Center Research Team’s Visit to Kampala, Uganda Daniel Evans and Dr. Charles Thomas
Each paper is supported by even more in-depth supplemental material at his blog. For instiance here, here, here, here, and here…there’s way to much to link to so I encourage those of you who are data-driven to dow your own digging to find out some of of their fascinating discoveries. These papers are freely available here and elsewhere but please contact the authors for citations, references, or future publishing.
We’ll post follow up research of our own based on these papers in the coming months.
For more details on these particular studies, contact: Network Science Center at West Point | http://www.netscience.usma.edu