Problem Definition Problem in Africa: Solutions for a Diverse Continent
African innovators often suffer from a chronic problem of “problem definition”– an issue where problems are defined without the right context, wrong assumptions and often cultural conditions that don’t translate well when it comes to seeking out solutions. This is beyond just “cloning” startups, but it can be a key symptom. And often media is part of the problem, but there are rare gems like this Silicon Africa article on top 10 problems you are not thinking of.
e-commerceI have recently started to use the term “solutionism”– for those who jump straight to solutions that are ill fit for often poorly defined problems.
I would argue that many startups might be on the wrong path before they even start due to this issue. Of course some of the most fatal are anchored on incorrect western problems translation to Africa or emerging markets. E.g. mobile gaming for feature phones in Africa, Uber/Taxi share for Africa. They can also stem from classic views on Africa such as “microlending to farmers” or “rural energy for the poor”. Sometimes you will see impact investors or social enterprise focused accelerators or incubators try dive directly into supporting these problem areas mainly due to the way their organizations are structured around key aid pillars; health, education etc… For example, is there such a thing as a “big data for slums” department at donor offices in New York or DC? If mobile money and financial inclusion are such hot topic areas that are generating a TON of data, I often wonder if there are adjacent problem areas we are not seeing addressed if only folks knew the potential of mining such data.
One of the key reasons why “problem definition” is a problem is because of another issue- what one of my friends, Amy Lehman working on the Lake Tanganyika Floating Health Clinic calls a “multifactorial problem”- in other words; a problem on problem- realizing one often needs to solve 2 or sometimes more problems at once to resolve it. Some examples:
- The cashless transit problem of Matatus (buses) in Kenya is also the traffic police corruption problem.
- The online retail and ecommerce problem is really the logistics and payment problem. The prize is unlocking billions of dollars in middle class retail for brands for the emerging middle class.
- Providing e-learning is really a device affordability, availability and affordable bandwidth problem or local & relevant content generation problem.
How investors and donors might interpret this that can be misleading
In investors speak, this might also translate to an industry being “immature” or has intractable barriers- but often the market research study will point to billions of dollars of opportunity (expect to see more of these reports as consultants rush to set up offices in Nairobi, Lagos and Johannesburg if they haven’t already, often to help investors or donors better define the problem and pay for it!). For impact investors and those big social enterprises, it can be addressing a huge unmet social need. Sometimes a sector might need market education to shift traditional African consumer behaviour to a mode that enables them to value products or services they didn’t previously spend on- this is made worse if similar services were made available for free by the aid sector. It’s often important to clarify with both investors and donors of what is needed to expose the problem more for a potential solution (time, education, more research or all of the above?).
Problem Definition Process Ideas: How should one go about in defining the problem in Africa? I advocate working within the design thinking process- a requirement we make all our startups who join our accelerator go through with the iHub UX lab.
- Bound the problem tightly and factor in cultural and political barriers that might prevent you from being able to really address the problem with a solution effectively, sometimes a clear demographic segmentation may help a lot. Electronic utility payment in South Africa will look different than say Kenya or Nigeria for a number of reasons from regulatory to maturity and adoption curves.
- Understand if the problem can really be solved in the timespan that you intend to apply. For example, trying to build a cashless MFI might be impossible if there is low mobile money adoption. Or an ecommerce dependent on mobile payments may not be ready for a country that has high peer to peer mobile money transfer but adoption of person to business payments has not caught on yet.
- Whose problem is it anyway? Is this a problem westerners want to solve or locals (middleclass or BOP)?: The traditional way many entrepreneurs approach solving a problem is on solving a problem that they have. I started Savannah Fund because I had a horrible experience with an angel investor in Tanzania for a travel ecommerce venture, not explicitly to make money- however many investors come to Africa looking for a quick return and from often more formal finance backgrounds- this leads to a totally different fund solution and often even how they identify and find eligible startups. If you are solving a problem you have, check to see if others indeed have the same problem.
- Can you find a solution to take care of one of the multifactorial problems that allows one to focus another? This could also mean the use of soft money that is often available in Africa for some of the problems areas you can’t address yourself directly as a startup.
Check for classic business model and user experience assumptions that need to be completely revisited in the Africa context:
- Unit economics that might check out as favourable in some markets, but are often much harder to make work in Africa and require an order of magnitude of scale to be viable. A scale that might be tougher to achieve. Think logistics, immature payments infrastructure, lower GDP/affordability.
- The time it takes to achieve growth or “product market fit” might require more patience than investors or the entrepreneur might have time for. Often due to lack of market education or even lack of education to understand the benefit of the product or service.
- A completely different way to address the business model- e.g. cash on delivery for ecommerce vs relying on electronic payments
Observe African consumers in different Contexts to generate ideas
- The fact that the internet ISP complain that their networks are clogged with torrenting might suggest an opportunity in digital media.
- The fact that flights from Dubai, India or China to Africa are often full of traders might translate to a retail opportunity at home that’s more convenient.
- Overloaded buses or lorries companies that transport cash, produce and goods from one country to the next might suggest a regional remittance opportunity.
Prototype solutions with a diverse network first
Maybe you have a solution to a problem that you are sure will work, but before rushing in to raise seed financing and start building (or worse, scaling up prematurely) you should start to collect evidence to validate that you indeed have demand and that customers will use your product- at the same time you will help avoid one of the biggest startup killers, building a product no one wants to use:
- Test both the idea and messaging of your solution by talking to as many people about the idea (don’t just focus on expats, diaspora and urban elites) and don’t worry about your idea being copied. Execution is what matters (and yes, execution of your problem definition!)
- Set up a landing page and start capturing e-mails, but don’t announce launch or attract a media frenzy too early.
- Do a kickstarter or crowdfunding campaign, Savannah Fund Partner, Erik Hersman and his team at Ushahidi recently did this with BRCK. You get initial funding plus validate there are real customers at the prototype stage.
Africa, continent of problems. Do it for the right reasons.
Where there are problems there are opportunities and Africa definitely has its share of problems for innovators to tackle, but in the rush to jump into the cool startup scene or be the next Zuckerberg of Africa fuelled by media together with rising number of investment and soft money channels, I often see many wannabe entrepreneurs jumping into startups and hence solutions too quickly. I want more startups to succeed as much as anyone, but first let’s start with defining the problems to tackle well first. I often learn a lot about the authenticity of problem solvers based on the process to which they arrived to the solution they are pitching.