Navigating the startup journey is akin to traversing a winding road fraught with challenges. There are many trials, from surviving the pivotal first year in the market to crafting a distinct brand identity and fostering a loyal customer base. However, even after establishing a foothold in the industry, a new mountain emerges: scaling the business. This phase presents its own set of hurdles, including inadequate funding, suboptimal managerial practices, and navigating through sometimes unfavorable government policies. These challenges are particularly pronounced in Kenya, yet they also offer opportunities for innovative solutions and strategic growth.
@iBizAfrica in partnership with WYLDE International hosted a startup and SME mentorship session on themed, ‘Navigating Growth Challenges Scales Strategies for African Startups and SMEs’ to delve into the intricacies of scaling startups in Kenya and uncover strategies for overcoming these obstacles on the path to sustainable success.
Chris Odongo, CEO, WYLDE International, highlighted the grim reality of Kenyan businesses only scaling up to their borders but never beyond. “It’s not enough to solve the people’s problems in your location, you must think bigger,” he asserted, emphasizing the importance of ambitious goals for building a strong business foundation.”.
The session also saw a captivating panel discussion comprising of Aryton Bett, Co-founder of Purpink Gifts and Flowers, Richard Wanjohi, Senior Manager @iLabAfrica, Marion Kago of Venture Partner Jaza Rift Ventures, and Loce Macharia, Lead Strategist, WYLDE International who shared their wisdom and insights from decades of career experiences and journeys.
Mr. Aryton expounded on the importance of bootstrapping and the three main stages of bootstrapping while scaling as an entrepreneur. “Bootstrapping is a sustainable way of growing your business by reinvesting your earnings and profits to make it bigger,” he said.
The three main stages of bootstrapping are:
1. Self-funding – Don’t be so quick to quit your day job. You can seed fund your startup through your current job, family loan or a friend.
2. Setting up the business – At this stage, the business rents their first office and starts making profits.. It’s now crucial to reinvest the funds received to grow your business.
3. Credit – It may be difficult for startups to acquire loans from banks without equity and collateral hence it is recommended that businesses look into SACCOS and money market funds because of the lower interest rates.
Ms. Marion highlighted the types of businesses that should actively pursue venture capital opportunities. She emphasized that companies with high growth potential and scalable business models, particularly those investing in technology and innovation, are prime candidates for venture capital funding. Additionally, she advised early-stage businesses to seek out angel investors, who can offer valuable expertise and networks without immediately demanding equity.
On their part, Ms. Loce and Mr. Wanjohi shared valuable insights on navigating and defining a scalable business model. Ms. Loce emphasized businesses must understand the difference between providing a solution and a need when creating a scalable business model.
“Most businesses come up with solutions without considering what they are solving. What is the actual need in the market? What are the different ways people have solved this problem? Do market research,” she advised.
When asked about scaling geographically, she encouraged the businesses to carry out an internal survey to see if their operations, skill level, and finances are up to the challenge but before leaping, they should endeavor to exhaust all the available opportunities in their base location.
Mr. Richard referred to technology as the ‘enabler’ of business, noting its role in streamlining operations and enhancing consumer experiences, which in turn allows businesses to make data-driven decisions. He urged entrepreneurs to embrace technology, particularly cloud computing, due to its efficiency and cost-reduction benefits by offering numerous services in a single platform. He also recommended that startups outsource their data services to specialists, enabling them to learn from experienced professionals without facing the challenges of being first-time learners.
The session left a profound impact on the attendees who gained valuable insights that challenged the trajectory of the business for the better. The panelists’ answers alongside their decades of experience created clarity on how the startups can prepare themselves for successful growth.
By @iBizAfrica Incubation Centre, Strathmore University.