I was asked to give a little speech this evening to a large group of entrepreneurs discussing some thoughts on entrepreneurship and venture capital in Africa. It was a great opportunity for me to reflect and synthesize my thoughts on many of the key takeways I have had during my time here. From discussions with my colleagues and from the many business ideas I have seen, I definitely do not think there is a lack of entrepreneurs or interesting ideas in Africa. In fact, there have been some very exciting ideas and I think they could even make some top American VC’s take a second glance. One of the biggest challenges, though, is finding the entrepreneurs that really want to take their idea global and be the next huge company. Many entrepreneurs and companies here are quite happy with their lifestyle businesses, making good money in the domestic market and don’t really see a need to go further.
I would argue that the entrepreneurs here should really dream big. They are all looking at the domestic market, rather than the global market or the African market as a whole. For example, the African mobile market is huge and growing at unheard of rates. As Joe Shoeendorf from Accel Ventures said in a recent VC Insight Report, Africa has the next billion customers waiting to be served. Entrepreneurs here need to see that market and take advantage of it.
Israel is an interesting case as it is the country with the greatest amount of VC funds as a percentage of its GDP in the world…even though the Israeli market in itself is miniscule. Israeli entrepreneurs are coming up with great ideas and unmet needs not for the Israeli market, but for America, Europe, Asia etc. There is a great opportunity for a country in Africa to follow this model of being the place bringing about amazing innovations and a large amount of venture funding to take great products all over Africa. South Africa is the natural home for that, in my opinion, as it has developed infrastructure, a strong stock market (Johannesburg Stock Exchange is the 10th largest in the world), a mature private equity industry, top notch educational institutions, and innovative technologies. Now, all it needs is for the entrepreneurs to dream big and target the whole of Africa as their market and it will be off to the races.