Toward an Ecosystem for Early-Stage Incubation of Social Enterprises in East Africa
This past December, 55 participants gathered in Nairobi for a workshop on early-stage incubation of social enterprises in East Africa. The workshop was hosted by ANDE, CARE, The Rockefeller Foundation, USAID and the Acumen Fund and facilitated by Open Capital Advisors. The workshop was designed to be a forum that would allow participants to develop a deeper understanding of the ecosystem and identify initiatives that can address the gaps that exist.
After three intense days of discussion and brainstorming, it was clear that while there is a lot that needs to be done to enable East African entrepreneurs to grow their businesses to scale, there are several challenges that we can address as an ecosystem. Three actionable initiatives emerged from the workshop, all of which are now under development.
During the first day of the workshop, participants attempted to map out the social enterprise ecosystem in the region. Even for the participants in the room, it was difficult for us to identify the role that each of us plays. The question then becomes: If we, the organizations that are positioned to support entrepreneurs in the region, do not understand each other’s role in the ecosystem, how can we expect entrepreneurs to do so? Though numerous resources exist in the form of organizations, research publications, tools and programs, these resources are underutilized because many entrepreneurs do not know they exist. To address this issue, the first initiative will attempt to map available resources in the region and create a comprehensive map that will identify all the actors in the social enterprise ecosystem and define what role they play. We also plan to develop a list of “tough questions” for entrepreneurs that will help address investment readiness by requiring entrepreneurs to answer the key questions that every potential investor will ask.
Talent also featured prominently in the discussion. As a graduate of a local university, my first choice for employment was one of the “Big Three” audit firms. This was not for my love of auditing, but because these firms invested in campus promotion and were able to position themselves as the first choice for any graduate. They did not necessarily present us with the opportunity to work at an audit firm, but rather the opportunity to engage with various industries through diverse audit assignments and to explore career options within their consulting and research divisions and work-abroad opportunities. These recruiters painted a picture of an exciting career path that appeared to be unrivaled, and they have managed to secure top graduating talent every year using this approach. The end result is that very few students even realize that other avenues exist, such as launching your own business or working for a social enterprise.
With this experience in mind for some of us at the meeting, we decided that the second initiative should be the creation of a fellowship program that will select and place top local talent in social enterprises. The goal of the program is to grow the talent pool for the sector by exposing more graduates to the opportunities in the sector, making the sector more attractive to top talent. We hope to do this by finding ways to fund competitive salaries comparable to those offered by other management trainee programs in the region. The program will also provide supporting infrastructure including continuous education, coaching and mentorship to help the fellows in the execution of their work assignments as well as chart a course for their careers in the sector.
Participants also identified middle-level management within social enterprises as an area needing improvement. This initiative will also help address capacity challenges for these managers by partnering with a local business school to develop a training program that will be tailored for this category of managers in the sector.
Finally, the third initiative will center on accelerators and incubators, recognizing the vital role they play in the ecosystem, but also the challenges they face in being able to sustain their own operations and invest adequately in their portfolios. Leveraging ongoing research that ANDE is conducting on accelerators (some of which is discussed here). We will benchmark accelerator funding models in an effort to identify best practices, and explore the possibility of setting up a catalytic fund to provide technical assistance to accelerators in the region and enable them to better invest in their portfolio companies and prepare them for later-stage funding.
Through these three initiatives, ANDE and our partners will address fundamental gaps in the social enterprise ecosystem in East Africa. For more information, please refer to the complete white paper here. An executive summary of the workshop’s finding is also available here.