How can your business improve society for good?
The idea of starting a business and owning a startup has sprung up in recent times within the African continent. Whereas entrepreneurs try to find solutions that would reduce poverty through social enterprise, some Africans are basically searching new ways to make lives easier through technology and other financial means. Gone were the days when people graduated from school to actually join a workforce in their country whiles working for years just to earn a decent salary and for security.
Today, even the gainfully employed have had to leave their well-paying jobs to start or cofound a company. What fascinates me anytime I hear of a new budding startup is the intriguing titles of the founders—let’s leave that for another day. In short, there is rising interest in the area of entrepreneurship. Then, comes the educational and schooling bubble where people attend school to acquire certificates which do not end them up with a good job. There is so much rote learning lately. But there’s a more particular reason for this article—to decipher reasons why the focus of your startup or business should have a social effect in helping curb problems in society whiles creating maximum impact.
Does poverty and high cost of living affect startup progress?
Social issues of which poverty is no exception has become a global concern causing fear and panic in the lives of people. Not to talk of the so called 'rich' some of whom are also greatly indebted with credit card debts as well as loan debts. In every economy, the cry of most citizens seems to be that of lack of finance. It is a serious problem which needs redress. Poverty, as simply defined, refers to the state of lack of material possessions or money. It could be measured absolutely or relatively.
Absolute poverty refers to a set standard which is consistent over time and between countries whereas relative poverty measures unequal income. But in these entire scenarios, one recurring question comes to mind. And that is: 'What causes poverty? This particular question has undergone major studies by professors and academicians but they all seem to be talking about one thing, which is the human attitude. Other causes much range from economic outlook to population size and there are interesting facts to back them up: Sadly, over 3 billion people, comprising half the world’s population live on less than $2.50 a day. In addition to this, the GDP (Gross Domestic Product) of the 41 Heavily Indebted Poor Countries (567 million people in total) is less than the wealth of the world’s 7 richest people combined. Further, nearly a billion people entered the 21st century unable to read a book or sign their names. Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen. Till date, 1 billion children live in poverty (1 in 2 children in the world). 640 million live without adequate shelter, 400 million have no access to safe water, and 270 million have no access to health services. To end it all, 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day).
Let’s try to relate this with Startup development. In the mist of this poverty situation is something I find inspiring- innovation. The youth of Africa are endowed with a lot of business ideas which have the potential of changing how things are done. The ecosystem in Africa is brimming with new technologies that are pushing frontiers and this is the right time to join the ecosystem. We need to get graduates to join the movement and revive a new hope in the next generation of the youth. The problem most startups face is the guts to push their ideas forward and not lack of finances. Most attribute the inability to start businesses to lack of funds but let’s look at it this way – do you really mean to start something? Then get up on your feet and do something. You earn peoples support when they see some amount of seriousness in what you’re doing. For the past six years that I have been consulting for corporations, one common trend that that they face (even large corporations) is doing the right things- having an action plan. What most people face, especially with startups is that they do not have the right state of mind, vision and direction for their startups. When they are able to get a few customers and gain some revenue, then they relax and expect everything to work perfectly. In the world of business and entrepreneurship work and passion are vital. If you lack funds to start a business but have the passion, it shouldn’t be a hindrance. There are many ways of pushing your ideas forward. But in all, Work is paramount.
Why then do we complain of poverty when the solution lies right within our reach? It means we are not taking the right decisions. It means we are not working hard enough. Let us surprise ourselves by trying our hands on something we felt lazy to do. That would make all the difference.
As Les Brown would say: “if you do the hard things, life would be easy. But if you do the easy stuff, life would be hard”. And of course, you would have to remember that: “Life is short. Do the Stuff that Matters”
Does the current economic environment predict ineffective social responsibility?
Let’s take a closer look at the following observations. It’s a necessity if we want to see significant and massive improvements on the continent. Following are sample views:
Institutions: most of the institutions within the region only focus on providing a particular kind of education which is strictly based on learning by rote. Individuals climb the educational ladder and aim at achieving book knowledge which does not provide the necessary skills necessary to create an economy. Others have termed our current system of education, as a scam. This is because most people’s dreams of acquiring a decent job after school only becomes an elusive imagination and never gets materialized. Our schooling system is only producing job-seekers and not job-creators. Only a few universities and educational system provide the necessary and high quality skills training that can shape the future of the nation .Notable among them is the African Leadership Academy(ALA), Ashesi University, just to name a few.
Initiatives: In as much as the level of entrepreneurship in Africa may be low, innovative programs to encourage entrepreneurship have sprung up. Such initiatives aim at bringing out the best within African innovators. Most of such projects either validate a business idea or prepare businesses to acquire venture capital investment. No matter the value of such programs, they make a very remarkable impact in the lives of young Africans and need to be commended for that. Most initiatives have made millionaires of young people who had the slightest idea of where they’re going to on the entrepreneurial journey. The United States Government has made remarkable strides in recent times. The Mandela Washington fellowship has created massive influence among Africa’s social entrepreneurs. The Anzisha fellowship, which is an initiative of ALA and the MasterCard Foundation for some years now, has been the leader in providing young businesses with the requisite training and capital to boost their businesses. Most recently was another initiative by the Tony Elumelu Foundation, which aims at providing 100 Million dollars to Africa’s entrepreneurs. TechnoServe’s ENGINE Programme is also making remarkable progress in building businesses especially in Ghana. Interestingly, the UN Foundation is also supporting entrepreneurship in the main Millennium Development Goals through one of its flagship projects, the Social Good initiative.
Investors: My work as an entrepreneur and business developer hovers around VC and investments. One of the VC firms that I work with, iYa Ventures, based in New York, focuses on channeling North American capital towards investment opportunities in Africa. Till date there are similar diaspora investors coupled with African Angel investors that are willing and hungry to invest in African startups and businesses. In the year 2014, an encouraging number of startups successfully raised funding for their business. One most recurring challenge that startup founders proclaim is the lack of finance to boost their businesses. But I have a different view here. With my involvement in the Startups and investment scene in Africa, I see hungry investors, both local and foreign who are very willing to
inject funds into budding businesses. The only problem they usually face is whether they’re investing in the right business or not. Most founders do not do their homework well, to place their startups in the right position for investment. There are a lot of things that an investor looks out for before making the decision to invest in any business. Some areas include viability, team work, scalability, customers, profitability, etc. which most founders are not aware of hence, cannot attract the needed funding. This is the reason I keep encouraging every startup to have at least one mentor, an expert in their field of business to guide them throughout every phase of their entrepreneurial journey.
Worsening economies: Some countries within Africa have been named among countries in the world with the worse economies. Reports from Forbes and CNN Money indicate that not only are these countries becoming worse-off by the day, but less significant amounts of work is been done to improve upon these standards. Worse economies were measured in terms of the level of production in each country, with respect the Gross Domestic Product (GDP) as well as overall standard of living. Africa is a very huge continent with 54 different countries, and each country’s success or economic progress is essential to contribute to the growth within the continent.
In a nutshell, due to a failed schooling system, increasing number of entrepreneurial initiatives and investors, coupled with a worsening economy, there’s a dire need for entrepreneurs to focus on the social good in communities. Individuals need to discover their passions and carve a niche within their markets to bring out new and better innovations that would shape the African continent. Just like the Social Good project, which is inspired by the Social Good Summit, and supported by its partners and funders: The Bill & Melinda Gates Foundation, the Case Foundation, Caterpillar, Cisco, Enactus, Mashable, the Rockefeller Foundation, the United Nations Development Programme, the United Nations Foundation, and the 92Y, I believe that the early we develop and raise awareness around the highly anticipated Sustainable Development Goals (SDGs), especially through Social Good Summits around the world including Ghana, the better for us to promote the United Nation’s 17 Sustainable Development Goals and encourage entrepreneurs to have them as their focus in building a better nation.
How Can You Contribute Towards a Sustainable Solution?
STEM and Basic Education: Right from the basic stage, individuals need to have a mind change whiles been educated in the various schools. There is the need to teach students the essence of entrepreneurship whiles focusing on their individual traits.
Local Goods: In a bid to encourage a robust economy. Countries should encourage the production and consumption of locally manufactured or produced goods and services other than importing such basic necessities from foreign countries. This would cause GDP to increase which earns foreign exchange for African counties and increases revenue to governments in the form of taxes and levies.
Encourage Women Entrepreneurship: Women are vital in the development of any nation. Each country should therefore encourage female entrepreneurship through innovative initiatives. Already, there is the Africa Women Entrepreneurship Program (AWEP), another U.S. State Department programme as well as other budding programmes.
Government Intervention: The government can also intervene to make entrepreneurship attractive by investing more into the private sector and instituting checks to ensure that local products are consumed. This would help in the long run.
There are endless opportunities in Africa. It’s up to us to find them and create massive economic impact through them, for the Social Good of Africa!
The next time your friend or business partner tells gives you an excuse for not starting something, let them know that it’s possible. The current conditions with a country can never limit your entrepreneurial ingenuity. Poverty stricken or not, there is always a way. Find it! Take that risk! email@example.com