Seedstars World is an exclusive startup competition in emerging markets. Only high quality startups can receive an invitation and are chosen following a strict selection process. The winner is crowned with the prestigious denomination Seedstars World Best Startup.
At Seedstars World, our vision is to build the largest network of entrepreneurs and entrepreneurship organizations in emerging markets. To accomplish this, we visit over 50 countries across the globe and organize pitching competitions to find, promote and invest in the best early-stage startup from each country. Fifty-two winners are flown to Geneva at the beginning of each year to compete for up to $1.5m in investment, and the opportunity to increase their international media exposure. One of the highlights of visiting over a dozen countries in Sub-Saharan Africa, is uncovering the defining traits of each ecosystem. By studying the local realities from Mozambique to Nigeria and from South Africa to Ethiopia, we are well-positioned to identify trends, synergies and opportunities across and beyond the continent. So far this year, we have been to Mozambique, South Africa and Nigeria, and have nine other countries to go. Below are a few observations we have made while planning and running our events across the continent:
1) The rising importance of corporates in the startup world
In a market where having a VC funded safety net that gives you the freedom to wait multiple years to monetize doesn’t exist, fast access to market and buying customers is key. In most African markets, startups face a bumpy and complicated road to market and are under immediate pressure to monetize. Road to market is especially complicated due to a fragmented funding landscape, shorter investment horizons of investors and the lack of bridge financing options. This is why corporates hold a key position in the startup ecosystem throughout Africa: they have the power to help companies get access to their customer base while offering their own clients innovative and useful services that they couldn’t get otherwise. Startups get access to paying customers and corporates differentiate their offering from the competition by working with third parties.
Standard Bank (known to many African consumers as “Stanbic”) is a prime example of a corporate that is playing an active role in trying to resolve these challenges. The South African bank has launched two startup incubators focused on building synergies between startup companies and standard bank’s core business of banking in over 18 countries. They have also partnered with SnapScan, a mobile payment system that emerged out of South Africa’s Stellenbosch University. Standard Bank was able to offer a new unique solution to its customers and to date, more than 12,000 merchants accept SnapScan.
2) The power of execution vs. ideas
We see a lot of similar ideas in our competitions across the continent: companies tackling traffic, marketplaces, healthcare, education, transportation, payments and much more. This is mainly because the major problems that entrepreneurs see are relatively similar across the continent. All startups going through our program have great “ideas” to tackle the big problems, but what separates the winners from the competitive pool is the quality of execution and the degree of focus on that specific idea. It is becoming more and more common-knowledge in startup land that ideas are commodities and the ability to execute has a disproportionately higher impact on the success of an idea compared to all other factors over. That is why when we select and engage with companies we don’t just look at the idea, we also look at the team, the level of traction and the character of the founders. It turns out that even today’s most successful companies were not unique when they started.
3) Talent is everywhere
There’s a misconception that the western world has a leg-up when it comes to the abundance of talent, skills and knowledge. The reality we have seen over and over again is that top-notch talent can be found anywhere, and can flourish independent of physical location. In a world where most information can be accessed from anywhere at any time, an entrepreneur in Kampala has the same potential access to information as an entrepreneur in Berlin, New York or San Francisco. What this means, is that the possibility of creating world-class companies is no longer a strict function of location.
4) The opportunity in cross-country collaboration
Today, most entrepreneurship programs, incubators, investors and entrepreneurs are focused on opportunities within their borders. This is mostly due to cultural affinity, knowledge of local customs and an existing network that can be leveraged. Large African markets, such as Nigeria and South Africa, can offer scope to build a solid business in a single country. But the reality remains that even the largest domestic markets are only a fraction of the global market. This should encourage entrepreneurs to build companies that can capture both a local and international customer base. We see a huge opportunity for incubators and accelerators to collaborate across borders, investors to take their money to new markets, and entrepreneurs to go beyond their borders when building and scaling a company. Internationalization must be a pillar of a company’s growth strategy.
All in all, these trends and developments make us incredibly excited and bullish about the future. We’re inspired by the inventiveness, drive and hunger of the entrepreneurs we meet, and we’ll keep on working on helping them get gain visibility, access to funding, and potential partners. We have another 9 countries to go this year, and can’t wait to visit even more in 2016!