Kenyan Start up Ecosystem: A case for aggregation of the community
Kenyan SMEs are major drivers of the continents economy accounting for 3% GDP and employing over 30% of the country’s youthful population. Ironically SMEs are the most undeserved in terms of little or no government protection, supporting policies or even an enabling environment as compared to Multinationals and much larger organizations.
Some other challenges faced by African SMEs are; lack of financing, lack of information, lack of business management skills, and access to market among others.
Over the last decade; Kenya has seen the rise of startups and its supporting community. Starts ups are basically business that basically employ a business model that allows for repeatability and scalability. The start up support community is composed of different players such as Hubs, Accelerator programs and co working space among others.
To date start ups have been combined under SMEs whenever Kenyan institutions report on matters micro, small to medium sized enterprises. This has been detrimental to start ups that are unique based on their unique; business model, funding model and structure of business support they need.
Due to their unique business model of repeatability and scalability; start ups have the potential to create a large number of jobs and post higher turnovers per company as compared to both traditional SMEs and legacy companies.
Think of the impact of; Mkopa solar, Twiga, Little cab, Mchanga, Sendy, Lynk, Sky Garden and many others. To put into perspective ;the value of global value economy rose by 25.6% between 2014 and 2016 to reach $2.3 trillion, and 2017 saw global venture capital investments surpass the $140 Billion, a decade high according to a Taglemust report.
Despite Kenya churning out great start ups; Kenya start up eco system is barely recognizable globally; according to Start up blink report 2018 top 200 that ranks global ecosystem communities, Kenya was number 191 behind Africa leader South Africa at number 140. This means Kenyan start up ecosystem is missing out on funding opportunities, global benchmarking, technology and knowledge transfer among other opportunities.
There are several factors that contribute to a high performance ecosystem and therefore successful start ups; Funding, Talent, healthy mix of startup community, global connectedness and global reach.
It therefore goes without saying that for the Kenyan start up ecosystem to perform it has to collectively address the success factors. Global best practice dictate that an eco system association is the most optimal vehicle to achieving the synergy required.
The startup association will bring together all eco system players such as Accelerators, Hubs, Consultants and relevant government entities among others to ensure that the Kenyan start ups ecosystem is on the global map as it ought to be.
https://viffaconsult.co.ke/kenyan-start-up-ecosystem-a-case-for-aggregation-of-the-community/