African entrepreneurs reveal the toughest situations they’ve had to deal with

How we made it in Africa asked some of the continent’s most dynamic entrepreneurs to share the toughest situations they’ve found themselves in as business owners, and how they overcame these challenges.

1. Tumi Phake, founder and CEO, Zenzele Fitness Group

Zenzele Fitness Group is a South African gym management business which operates fully-equipped health clubs for, and in partnership with, various large companies and universities.

“The toughest situation was being able to source funding and meet my deadline with a client to be able to open on the specific date. I remember about a year ago, it was a very tough situation, because banks at the time had a very slow turnaround time because of my lack of track record and lack of proven concept. Sometimes it would take three to six months to source funding – just back and forth of wanting additional information. The client didn’t even know. From the client’s point of view, everything was perfect.

“How I mitigated it was I spoke to my suppliers who I was buying equipment from, and they trusted me – so they actually delivered the goods before I paid them because they trusted that I would be able to pay for the equipment. On the day the stuff was delivered, I think the money was just confirmed – I hadn’t physically paid my suppliers. But my suppliers went and installed the equipment. And normally people wouldn’t do that. I actually had no deposit, I had put zero deposit on the deal. But they still took the risk to install the stuff – this was R2m (US$138,000) worth of equipment. I think I paid them a week later.

“I think it is all about creating good relationships and people trusting you, because you will find yourself in situations like that where you can’t deliver things on time and people that trust you will back you up, they will support you because they know at the end of the day you’ll stick to your word. When you’re first starting up as a business, when people invest in the business, they also invest in the person.”

2. Raphael Afaedor, CEO, is an online retailer that allows users to shop from supermarkets and retail outlets across Lagos, Nigeria.

“It’s difficult to talk about a particular group of experiences being the toughest because every week comes with incredibly tough challenges. Many a times, I wake up thinking this week is when it all ends – the week when I will be unable to make payroll or some other important thing breaks. But I learned that companies die when the entrepreneurs give up, not when the entrepreneurs are executing. So I wake up and forge on and somehow things sort themselves out.”

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3. Trevor Gosling, CEO, Lulalend

Lulalend is a Cape Town-based online lending platform for small businesses.

“When I left investment banking to pursue entrepreneurship I made sure I had a six-month runway in terms of personal cash flow to keep me going. Little did I know that it would be 18 months before I would see my first pay cheque from my startup. Those were some dark days but taught me to live lean, which I encourage every entrepreneur to do.

“Don’t be afraid to eat dirt and get uncomfortable for a couple years because the pain will all be worth it.”

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4. Henri Nyakarundi, CEO, ARED

African Renewable Energy Distributor (ARED) is a hard-tech company based in Rwanda and Uganda. It developed a business-in-a-box solar kiosk that offers customers phone charging and airtime top-up services, wifi, an intranet with free digital content and a Bluetooth printer. ARED leases the kiosks out through a franchise model.

“The toughest thing for me was finding money to develop the technology. That was extremely hard. It took a long, long time – it took me almost two years to get that done. And because the technology was complex it was very expensive.

“The way we overcame that, and the strategy we implemented, was partnerships. Because to develop a technology you need grants mostly, you can’t get a loan to develop a technology because it’s a long-term investment – there’s no quick return. If you get a loan, they want their money immediately. If you get a equity investor, it’s a little bit more complex, because most investors now don’t want to invest in research and development. They want to invest in an existing company that already has revenue.

“So, the only things we had left were grants and competitions. So those are the two strategies we did. For competitions, we applied and we won, so far, 10 international competitions. The second strategy was finding grants. Unfortunately, in Africa there are no grants. And what I mean by no grants, there are no grants that are financed by African governments. One-hundred percent of all the grants that exist on the continent are funded by European or American governments or enterprises, or companies. So, unfortunately, those organisations don’t give directly to African entrepreneurs. So we had to partner with European organisations and NGOs, to channel some of that funding for our research and development. So those are the two key strategies we were able to implement to solve that problem.

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5. Lexi Novitske, principal investment officer, Singularity Investments

Singularity invests in visionary entrepreneurs in technology-enabled, early-stage companies in sub-Saharan Africa.

“When I first moved to Nigeria I faced tremendous disapproval and biases from family and friends. My parents worried for my safety while my mentors were concerned that my promising career in the investment world would shift into charity work. While these anxieties were driven by genuine care and unawareness about Nigeria, the lack of support behind my decision to dedicate my career to growing African investments made the choice much harder.

“Likewise, driving the launch and growth of Singularity Investments as a young, female outsider has drawn its own judgment locally. I regularly encounter questions like: Are you committed to long-term development or just here to cash in? Will you ever understand the culture where your investee companies are doing business? Are you strong enough to fight for your investee companies against difficult regulatory environments and dominant industry players?

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6. Bruce Dube, MD, Nine80 Digital

Nine80 Digital is a pan-African digital media publishing company. Its presence includes South Africa, Botswana, Kenya, Nigeria and Zimbabwe.

“Being bankrupt and in debt was a tough phase of my entrepreneurial journey that impacted many personal and professional relationships negatively.

“I overcame the challenge by adopting a more frugal approach with the overall business model, [thereby] fostering a business that focused more on giving value to consumers at lower costs by stripping down all the excess that doesn’t speak to the core of the business and translate to revenue growth.”

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7. Deepa Dosaja, CEO, Deepa Dosaja

Deepa Dosaja is a Kenya-based fashion house that has dressed global stars, including actress Lupita Nyong’o.

“There have been many…

“The one that comes to mind immediately occurred during the recent general election period in Kenya. Many businesses were severely impacted by this, including mine.

“We experienced a terrible downward spiral in sales from August to December 2017, with this came many challenges.

“I am proud we managed to retain all our staff – both sales and production – and maintained our headcount.
While the lack of domestic sales hugely affected our bottom line, [we] were supported by our foreign-based clientele.

“Obviously, the uncertainty during this period reiterated to me the importance of continually forging strong bonds with clients and the challenge of converting clients into long-term relationships once they have left Kenya.”

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8. Jason Njoku, CEO, iROKO

iROKO is a multimedia company that provides paid-for, on-demand Nollywood content to audiences worldwide.

“In 2015, it was abundantly clear that we were ‘losing Africa’. By this I mean that most of Africa could not stream and therefore watch iROKOtv content because our customer base couldn’t afford or didn’t have access to reliable broadband required to watch our content.

“So, as a company, we had aggregated an incredible and peerless catalogue of Nollywood content – as well as producing our own original TV series and movies – but the majority of our potential audience simply couldn’t access it. No access means no subscriptions.

“While we started as a diaspora-focused platform, the goal was to grow our audience aggressively in Africa, starting with Nigeria. So I had to take the tough decision of switching off the streaming capability of iROKOtv and rebuilding the product from scratch into a mobile-focused app that allowed for downloads.

“This was time and resource intensive – we had to hire and train international tech teams, go back to the drawing board in terms of product design and UX, and we also caused some small confusion among our customers, which led to a drop in numbers, at first.

“It was painful all round, in terms of redirecting resources for the new app, time and energy spent on building and product-testing, and then the difficulties of educating our audience about the app. The pain was short-lived, however, as within a few months, we saw our Africa number soar and mid-last year, we saw Nigeria become our number one subscriber base.”

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