28 August 2018

Uganda: How Zulu Is Nurturing Entrepreneurs

At Outbox, one of Uganda's innovation hubs, tens of men and women, probably in their 20 and 30s are busy typing on their laptops. One thing they have in common is their passion for innovations. They are working on new ideas that should solve problems, not solved before or in ways by the existing institutions.

The question, however, is how did entrepreneurs from different walks of life converge in one working space, with each one of them experimenting and developing their own idea?

Seven years ago, Mr Richard Zulu, learnt that the country lacked someone with a deliberate goal to nurture and support technology entrepreneurs.

The man in his twenties then came up with an idea that would bring the country's tech minds together. Today, he is leading a new wave of entrepreneurs who want to solve Uganda's problems through digital innovations but at the same time eke a living from them.

The start

Mr Zulu's journey began in Jinja district after he saw his first computer in a secretarial bureau.

"It was in 2000. I was in primary seven and I was amazed at seeing a computer. I was amazed at the possibilities that machine could offer," he narrates.

Luckily, he joined Namilyango College which had a computer laboratory, something that grew his interest in information technology further. There, he spent a lot of time, running the laboratory as a prefect and mobilising fellow students to join a computer club he formed. Soon, he developed his first website about HIV/AIDS.

By the time Mr Zulu finished his bachelors' degree in Information Technology, he was a Google student ambassador at Makerere University. His role? To spread word about Google products such as Google maps, Google Baraza and Google mail. Together with other students, he also mapped urban areas of Uganda onto Google maps. During that time, he went on to build student communities which were interested in discussing Google developer technologies from the software perspective such as building products using Youtube or Google maps.

Creating business

While running the Google developer groups, he realised he could actually merge entrepreneurship with software to create new businesses. He started by running Garage48 in 2011, a technology hackathon where the innovating groups produced 11 prototypes.

"It was amazing to see the talent we had," Mr Zulu says, "By then, the ecosystem was young so the people that were participating were quite mature in their thinking."

He hosted another hackathon called "Startup weekend" where he realised that there was hardly anyone in the ecosystem that was very deliberate on how digital entrepreneurs are supported.

One of the teams that came out of Garage48 got a chance to pitch at the World Mobile conference but had no way to support them, be it financially or otherwise. He saw an opportunity beyond hosting one or two events.

The university had retained him after graduation as a network administrator. One and half years later, he quit the job and set up Outbox, an innovation hub and co-working space in Kampala.

"It was about working with entrepreneurs, making sure they succeed, taking them through the process of how they go about the legal aspects, marketing, branding, building structures of a company and going as far as helping them to launch to market," Mr Zulu says.

The start was rough because few people thought of the need to support entrepreneurship. Unlike some businesspeople, he did not use his savings to invest.

"I started with $12,000 (Shs45 million). We got some support from Google, I was able to bring cofounders on board to raise money," he says. Google also gave him a workspace whose rent he paid after five months.

Attracting tech entrepreneurs was easy because he knew who was working on new ideas. Providing free rent to the startups made it even easier for him.

"Any business would want free rent. This was one of the few co-working spaces so we started to get walk-ins, someone who needed space for one month to one year," he explains. After drawing in innovators developing solutions for gaming, financial services and agriculture, he ran his first incubation programme which later proved that engaging young people without promising them any money would make work difficult.

The hub remained a convening space with some sessions on software development. Keeping the enterprise's doors open soon became challenging.

Six months into the enterprise, he introduced a rent fee of Shs300,000 per month. The hub started hosting other groups that wanted to run entrepreneurship programmes.

He also found new partners in Google, MTN and United Nations Population Fund (UNFPA) and this improved the company's cash flow.

"The partnerships matter a lot for such an organisation. They bring the resources you do not have," he says, adding: "Partners subsidise costs and because they do, you are earning. So there is always someone who has to pay for you to work and the key is getting a lot of those people so you meet your costs."

Challenges

But training young entrepreneurs how to run companies is still difficult as he has realised majority of them lack a growth mindset.

At the startup stage, there is a belief in the idea but patience and focus disappear along the way. Leadership, skill sets training, business literacy, strategy support, product development support and launching on the market have now become priorities of the innovation hub.

Unfortunately, digital access and a cash flow problem persist. The little funding available is out of reach for many entrepreneurs because they are hardly ready for investment.

"There are best practices on how to do it but at the end of the day, it boils down to the character of the entrepreneur, how fast they learn, how well they believe in the problem, the type of resources they put in. Once you match the right entrepreneur to the right problem, everyone would want to work with them," Mr Zulu says.

Achievements

Outbox has had some success stories including registering a growth in health entrepreneurs but Mr Zulu says the company needs to multiply ten more times to reach its potential. His dream is to scale up the company's reach to at least 2,000 entrepreneurs every year and bring more partners in the ecosystem. He hopes to democratise information and empower people who want to run an "Outbox" in other parts of Uganda.

What is the secret to successfully running an enterprise that manufactures entrepreneurs? Mr Zulu, now in his early thirties, says an innovation hub is a long-term initiative that needs patience and a 10-year roadmap. For the money to flow, investing in some startups is a good start but there is a lot one can benefit from partnerships.

The other is one has to spend a lot of time reading to hone a broad range of skills such as finance management because then one has a good understanding of the company's operations.

Supporting start ups

Outbox has supported close to 120 startups from early to growth stages such as Ensibuuko and Tunga. These have been able to tap into Outbox's investor and resource network with Google, Facebook, Amazon, UNFPA, Seacom and Ministry of Information Communication and Technology. Some have failed unfortunately because of their founders.

Whereas some entrepreneurs simply come to share office space, majority of the startups today come through the incubation programme.

"We look at things like team composition, problem being solved, progress of the product, potential impact of the product whereas for the walk-ins, we look at how far down the process they are like if they are mature enough to afford their own resources," Mr Zulu explains.

CHALLENGES

Majority of entrepreneurs lack technical skills and Outbox is now using boot camps to train skills such as coding.

Unfortunately, digital access and a cash flow problem persist. The little funding available is out of reach for many entrepreneurs because they are hardly ready for investment.

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