[kictanet] [A message to all founders, inventors and innovators] Israel lessons on how to fund profitable start-ups

Wed Jun 19 02:45:42 EAT 2019

 Dear Tech Founders, Inventors and Innovators, 

Based on what I have seen and heard in various forums, I think our Government has a lot of goodwill and genuinely wants to help indigenous tech startups and innovators to succeed and grow. This goodwill appears to extend to very senior levels so it is very encouraging - especially now that we have a digital economy blueprint to guide us. 

However Government cannot magically know what everyone wants so it is important for industry practitioners with shared interests to organize and speak up with one voice and with clarity. 

There are some crucial ecosystem mistakes that occurred in the past, which need to be undone and corrected as soon as possible. At some point within the last decade or so, shrewd corporate lobbyists took control of Kenya's (and Africa's) startups and innovations ecosystem agenda using smart influencing tactics. They exploited a tech MSME leadership vacuum that existed due to our own self-sabotaging lack of interest (and/or lack of understanding) of key economic concepts that explain exactly how corporations perceive markets, startups and innovations. 

Just like you, I too was guilty of this lack of interest in economics (yawn) and policy (yawn++) - thinking that I could somehow overcome a bad system with hard work, good ideas, tech wizardry and passion - but after getting some eye opening experiential insights on just how bad things are (i.e. a business / policy climate that heavily favors corporations, while being generally hostile towards tech startups, MSMEs and innovators) and realizing that no one will speak for me if I didn't speak for myself first, I decided to get more interested in policy, economics and advocacy - as should you, if you truly want to implement your ideas in an environment where you have a fair shot at success and achieving your dreams / aspirations. 

Many of you might find this paradoxical - but it makes a lot of sense if you think about it for a moment: Large corporations are, and have to be, anti-innovation and anti-startups - and this is not out of malice, but the simple desire to sustain a working business model for as long as possible. Let's face it, it is extremely difficult to find a working business model (product market fit) and once you have it, and it becomes a reliable cash cow, the last thing any right-thinking corporate CEO or Board would want to entertain is some scruffy innovative startup with a disruptive idea that could potentially spoil a good party; an exclusive, members-only party that, ideally, should go on FOREVER. 

At some point you will realize (if not done so already) that it is normal and expected for startups and innovators to be perceived as (business) threats by corporations. They don't like you (business-wise). In reality, you are a troublemaker because your innovation - no matter how fabulous - adds uncertainty, increases complexity and compounds risk. I know this is contrary to what many of you hear or have been led to believe after watching a lot of ads - but don't just take my word for it, simply observe what corporations (and their foundations) DO when they seek to "partner" or "collaborate" with startups and see whether it matches with what they SAY over the long run. Also look at the number of partnerships (as well as acquisitions of local startups majority-owned by indigenous founders) over the last 10 years. There should be some good case studies / data online over the past 10-15 years by now. 

I worked in the corporate world for ~10 years (before I got into startups) and interacted with dozens of local and foreign tech (mega) corporations around the world (Europe, India, UK, Middle East etc) so trust me - I know what I'm talking about. Status quo is the preferred scenario for large corporations and that's why innovators don't last long in corporations: they keep rocking the boat (hence constantly clashing with their managers who only want to hit their KPIs, avoid trouble, avoid uncertainty and get their ka-nice bonus - which is already budgeted for btw, so stakes are very personal).
Starry eyed startup founders (cough..I used to be one of them...) don't understand this and they see corporations as a quick path to market - forgetting that the corporation sees things differently: Sure, they want the innovation - but they certainly don't want to pay YOU for it (that is a COST and costs are very very bad) so the first thing on their mind is how can we get this 100% FREE - and they want EVERYTHING including the credit (which they see as rightly belonging to "the HoD" or if its a big enough idea, the CEO). So to the corporation, the innovator/founder is viewed as a problematic LIABILITY - despite the fact that not having the idea in the first place creates high opportunity costs for the corporation. Opportunity what?
So when you see corporations scrambling to control the startup ecosystem agenda, recognize that they are not doing it out of warm fuzzy feelings for startups or innovators; look a bit closer and you will see cold blooded, ruthless, calculated, anti-competitive tactics in action, motivated either by a fear of disruption, or just greed.
Stop dreaming about a corporate partnership (or even VC) short-cut. It is a mind carrot that is used to manipulate and exploit you so that large companies can save on R&D and acquisition costs. Instead, start thinking about building your own corporation. Seek validation from markets - not from self-appointed gatekeepers who have no clue about what the market wants. Once you go in that direction, you will quickly realize the value of having a business environment that is friendly to tech / IP-based startups; an environment that gives your startup breathing room to bloom, grow and thrive; while protecting you and your innovations from greedy anti-innovation goliaths who want to be the only guests at the economic party (forever). If you want to build a real company instead of playing startup kalongolongo, you will take an interest in policy and economics.
Please understand this: Your choices have consequences. Even silence is a choice (it is never neutral). If you don't voice your issues, or openly support someone that is pushing your interests, it is assumed, by those in authority (many of whom are good people who can, and genuinely want to help you), that you are 100% OK with status quo - even when that status quo has been corrupted so heavily that it significantly raises the odds that you (or 99.99% of us) will either fail or be limited to operating as a tiny self-employment subsistence hack in the informal economy. 

Silence on policy matters works against you - guaranteed. That's the reality of how things work. If the hinge doesn't squeak, it doesn't get greased. I don't enjoy doing this. I'm learning by trial and error (I'm not even an expert at this). I'd rather be busy running a business and/or inventing / innovating cool stuff - but I'm smart enough to know that when a system is rigged against startups, even the most diligent and sincere efforts will be worthless in the long run.
"If you're not at the the table, you're on the menu" - Michael Enzi. 

It's time to reclaim our seat(s) at the table: Let the tech startup agenda be set by tech startups - not by career employees who have never known what it feels like to depend 100% on a business for survival - and yet somehow they feel qualified to be the ecosystem gatekeepers pushing a fantasy that they can somehow "judge" which startups are the best... really? If anyone had such a talent they would not be a career employee and would be a multi-billionaire by now; let our stories not be told by marketers pushing hidden corporate agendas or opportunistic social media influencers who feed off sponsorship opportunities or even predatory "incubators" that only use your startup as fodder to get event sponsorships (or donor funds) or even NGOs that use the "impact innovation" / "women in tech" agendas as lures to get donor funds for "big show" events  - the way Kibera slums are photographed to fleece donors (yet the slum problem never gets solved). 
Get this please: Everyone - except you - is influencing YOUR ecosystem, and - they're doing it for their own benefit. They have turned you, your startup and your ecosystem into *their* cash cow. Don't believe me? Lookup all competitions and events on the last 10-15 years - where did the top participants / winners go? What about the rest - does any one care about them? Look at startup forums / exhibitions and see where the photographers focus: is it on the startups and their products or is it not the expert panelists who are using the event as a photo-op to boost their own careers? Who gets covered by the media? The startups or the presenters/panelists? How come there is no mega-pullout and mega coverage on TV/radio of your startups and its products? Well, it's because it was never about you fellow founder / inventor / innovator. YOU were the product. YOU were the fodder. YOU were the menu. Please think hard about this and do research on past startup or innovation "events". 

Have you had enough of being a product for others to use, profit from and discard? Get involved in public policy and start articulating and supporting the founders / inventors / innovator agenda in your own words, and from your own perspective.
Does fear silence you? What is stronger for you, the desire to win or the fear of failure? Your greatest opportunity lies just beyond your greatest fears.  If you fear failure, entrepreneurship is not for you. Get a nice, safe career until you retire (or get retrenched before your 20-year mortgage is paid off). When the right thing has to be done, a real entrepreneur feels the fear, but does it anyway.

Some tech founders have told me that they fear speaking up on policy issues because they don't want to be "blacklisted" by companies that they would like to work for or "partner" with. This is a self-defeatist trap and only allows unjust practices to take root, persist or thrive unchallenged. The reality is that companies need your skills (they're not hiring you as a favor; it's a trade where you are selling your skill-time for a monthly paycheck) and they cannot blacklist everyone. The idea of blacklisting is a divide and rule tactic that only works when practitioners are disorganized, disloyal to each other and disunited.
Fellow tech founders and innovators, your talent is (intuitive) intelligence, so I am absolutely certain that you know deep in your heart that the things that I write about here are sensible, sincere and true. As long as corporations are shaping the startup ecosystem agenda, YOUR agenda, startups and innovators will not have any chance to gain traction or cause any disruption.
I refuse to be  a pawn in a rigged game. How about you? Let's organize ourselves better and articulate our own agenda more clearly and with one voice. Let us engage positively with government and policy makers. Don't be afraid to make some intelligent noise against corporate bad behavior and other forms of injustice - otherwise it will be assumed that you are satisfied with status quo - and you will get nothing.
Be blessed and always remember, in UNITY there is STRENGTH. Please share this message with all founders / inventors / innovators and tech students in your network. 

Have a wonderful day and week. 

Brgds,Patrick.
Patrick A. M. Maina[Cross-domain Innovator | Independent Public Policy Analyst - Indigenous Innovations]

   On Tuesday, June 18, 2019, 3:04:29 PM GMT+3, S.M. Muraya via kictanet <kictanet at lists.kictanet.or.ke> wrote:  

 Dear Listers,
December 2017, there was no comment on KICTANET for this article. Singapore vs. Israel: Who’s the better role model? https://www.kictanet.or.ke/?p=36145  

Like we have said on this list, KES 100 Bln, per annum, can do wonders in Kenya..  https://www.kictanet.or.ke/?p=37640  

Now that a foreign diplomat has spoken on how they (Israel) fuelled start ups, will this particular go.ke respond & provide budgetary support next year?

https://www.businessdailyafrica.com/markets/marketnews/Israel-lessons-on-how-to-fund-start-ups/3815534-5156434-jvww1tz/index.html

Israel lessons on how to fund profitable start-ups

By JAMES KARIUKI, THURSDAY, JUNE 13, 2019 19:20

SUMMARY

   - Kenya must generate internal funds that startups can draw from in order to thrive.
   - Israeli is closely working with Kenya to formulate a partnership deal that will see Kenyan and Israeli companies collaborate in trade.
An Israeli diplomat has advised Kenya to provide seed capital to startups to ignite a culture of innovation.

Speaking in Nairobi, Israel Embassy head of economic mission, Arnon Abel said Kenya must generate internal funds that startups can draw from in order to thrive.

“In the nineties, the Israeli government injected Sh100 billion which helped many startups implement their ideas. In some cases, the government suffered losses but in other projects that succeeded, the government got back its money,” he said.

He told a Startup Ecosystem Forum held in Nairobi that emergence of a vibrant startups ecosystem attracted multinational players that established research and development centres across Israel, which serve as incubation hubs for startups.

Israeli is closely working with Kenya to formulate a partnership deal that will see Kenyan and Israeli companies collaborate in trade.

“In Israel, the military, government, private businesses, academia and multinationals among other entities actively fund startups as a way of seeking new strategies to improve their businesses and be ahead of the pack.

“The research and development centres (Cyberhubs) enjoy funding from global multinationals keen on learning firsthand how to improve their products or service delivery channels,” he said.

Finland ambassador for innovations, Jarmo Sareva said failure of startup projects should not lead to despair in funding new enterprises.

“Governments and companies must support startup forums to spur networking among innovators. Companies use the forums to present problems that startups spend time seeking commercial solutions,” he said.
_______________________________________________
kictanet mailing list
kictanet at lists.kictanet.or.ke
https://lists.kictanet.or.ke/mailman/listinfo/kictanet
Twitter: http://twitter.com/kictanet
Facebook: https://www.facebook.com/KICTANet/

Unsubscribe or change your options at https://lists.kictanet.or.ke/mailman/options/kictanet/pmaina2000%40yahoo.com

The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.

KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.kictanet.or.ke/pipermail/kictanet/attachments/20190618/233459a7/attachment.htm>