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At different scales, always has an impact on individuals and communities as it brings independence and prosperity.

Entrepreneurship in developing markets grows economies and can be a powerful social equalizer. To break down barriers, it is imperative to further promote business creation in such nations on a wider scale and as quickly as possible, especially as emerging countries are continuing to lose their brightest minds who opt to move to more prosper regions of the world; a brain drain that further accentuates economic disparities between countries.

According to the International Organization for Migration (IOM), this exodus affects African countries the hardest, since Africa has already lost one third of its human capital and is bleeding its skilled personnel at the rate 20,000 per year. These are highly educated university graduates: doctors, university lecturers, engineers and other professionals who are leaving the continent each year, for good!

Emerging countries desperately need to keep these skilled executives, managers and entrepreneurs. Many developing countries have understood this and have worked on trying to ease the problem by simplifying their company creation processes, and launching business accelerators and incubators. These initiatives remain scarce and are usually backed by the government or NGOs who tend to be the driving force.

Startup Workplace Atmosphere Illustration Courtesy Lean Startup Incubator

Startup Workplace Atmosphere Illustration Courtesy Lean Startup Incubator

NGOs tend to focus on projects that have local immediate impacts on disadvantaged communities. In a few cases, business coaches have launched private mentorship outfits, sometimes with the backing of government initiatives, but success stories are scarce and so often the impact is limited to the mentor having a successful mentorship business.

Developed nations, through regional investment and empowerment authorities, use the same acceleration models to promote projects that help employment and have an impact on local economies, but the most powerful effects, those felt worldwide, have always been initiated by the creation of startups that were backed by private funds through mechanisms like private incubators, accelerators, angel investors and venture capitalists.

Still, wide impact entrepreneurship isn’t exclusive to Silicon Valley, New York, Paris, London or Tokyo, and it is not always about using the latest technology! Simple solutions, developed by entrepreneurs in developing countries, can similarly have impacts on worldwide audiences.

Unfortunately “world reaching” ventures from emerging markets are rare, as entrepreneurs in these countries face major obstacles to building successful startups due to the local culture, the scarcity of experienced mentors and very inadequate funding. In fact the 2015 Africa Competitiveness Report details the most problematic problems for doing business in Africa. They are in order of importance: access to financing, corruption, lacking infrastructure, bureaucracy, and an inadequate workforce

Many entrepreneurs, in developing countries, simply do not trust themselves to compete on the international scene and stick to creating solutions that insure their local prosperity rather than embrace worldwide aspirations by building perhaps farther-reaching solutions, which may fail! It does not help that failure is often regarded as a form of inadequacy on the part of the entrepreneur, which further burdens, those that go through such stigma.

In the few cases where local entrepreneurs go with their ambition, they often have no recourse but go through banks, which seldom finance projects when there are no tangible collaterals and even then, they usually qualify these types of projects as risky and dictate financing at very disadvantageous terms.

Startup Workplace Atmosphere Illustration Courtesy Tech Village UK.

Startup Workplace Atmosphere Illustration Courtesy Tech Village UK.

Even with the Internet being the great equalizer that it is, startups who emerge from the developing word with worldwide ambitions remain very scarce, as investors often concentrate their investment in particular sectors or regions of the world and tend to shun investing in areas that present just too small of opportunities for them and thus, in their mind, are not worth the trouble of their time and investment, when in fact some of these startups can be lucrative investment opportunities, due to this very lack of competition for these projects! RoamStart in Tunisia, Fuzu in Kenya, Custos Media in South Africa, or Pointivo in Nigeria are examples of promising startups but there are still too few of them.

Some companies, especially from Europe, have seized on this opportunity and created private funds and incubators in several emerging countries. These incubators have launched startups for which they basically “hired” local entrepreneurs to develop local solutions based on “what already works” in leading nations. Rocket Internet, Seedstars and NUMA are some examples.

The market for such ventures being so open and at such an embryonic stage, the terms of the deals that the entrepreneurs get are often not as advantageous as those obtained by their counterparts in the US or Europe, but in light of the risk mitigation steps that need to be taken by these first movers and with terms being much more favorable than those of banks, this is an acceptable investment strategy since it is clear progress.

These investment outfits are growing very fast as a result of their first mover’s advantage and the lack of competition from other venture capitalists, so there is a bit of the “Wild West” effect. A few incubators, however, had to close! Hypercube Hub in Zimbabwe and 88mph in Kenya for example closed in 2015, Raizcorp on the other hand is a rare example of a profitable incubator not receiving grant funding. Other brave local outfits are launching, such as Wired Startups, out of Morocco, also a private company, who is launching its own brand of incubation, championing projects aimed at the U.S. market using unique co-founding partnerships.

This is encouraging for Africa, especially as we see in parallel that the number of investments is increasing. In fact, Disrupt Africa reports that African tech startups received funding in excess of US$129 million in 2016, with the number of startups securing funding up by 16.8 per cent year to year. Still, this remains a dismal number for such a large and full of potential continent.

In time, more local players will get over their fear of failure, especially as they accept that most startups can fail but that those startups that succeed can substantially cover the losses of a portfolio and even make it very profitable. Things should also stabilize even further as more local and international players get into similar forms of co-founders incubation types of agreements, and competition for talent and projects grows. [1]

 

7 Incubators That Can Help Your Startup

The idea for early-stage companies to share facilities in a business incubator became popular in the late 1970s. In 1980, approximately 12 business incubators were operating in the United States. These incubators offered startups, entrepreneurs and small businesses the support, expertise and tools necessary to succeed in increasingly competitive markets. They’re also driving high return on investment doing so.

A popular Connecticut study entitled Business Incubation: A Key ingredient to Economic Growth and Recovery, argued business incubators as a “best value” in economic development, based on low program costs and a high return on investment to communities. The ROI of public investment was calculated at $4.96 for every $1 of public operating subsidy.

Some incubators are located in an actual physical space designed for consistent, in-person training, support and networking. Others operate on an off-site or virtual basis, remotely serving start-up businesses independent of geographical location. The latter might be a little intimidating with a seeming lack of in-person support, but can offer new networks, relationships, and options that you won’t get anywhere else. With a number of highly successful, reputable offsite incubators available, I’ve evaluated a distributed handful. While by no means comprehensive, each of these offers a unique set of features and accommodations.

1. CSI Kickstart: Known for their mentorship, impressive toolbox spilling over with resources and the ability to connect projects with the right investors, possible investors, mentors and more, CSI has it all. The incubator offers everything from human resources to knowledgeable entrepreneurs with an in-house production company — and even a virtual candy drawer!

2. 1M/1M: This global incubator is wholly digital and aspires to help one million entrepreneurs achieve one million dollars in annual revenue within the next four years. This will lead to up to ten million jobs. Based on online educational programming, you’ll experience video lectures and get connected with online strategies and mentors. Aspects of this virtual incubator are free, but only approved members can access the entire program.

3. eFactory: Based at Missouri State University, recipients are startups that aren’t physically nearby but are a good match for the program goals. Emerging businesses, startups and job creation are the goals of the eFactory. You can access the incubator program for support services, counseling, admin support and shared equipment. Mail services, virtual conference rooms and access to mailing lists and mentorship are at the heart of this program.

4. DreamIt Ventures: DreamIt focuses on the trifecta of the startup world — startups themselves, investors and corporate innovators. It’s one of the 20 most active incubators in the country, DreamIt is all about helping entrepreneurs scale via securing capital and customers. The incubator also partners with brands and corporations to help with pilot programs and tech advancement. Top angel networks and venture capitalists also connect with DreamIt for a healthy startup ecosystem.

500 Illustration Courtesy 500 Doha.

500 Illustration Courtesy 500 Doha.

500 Illustration Courtesy 500 Korea.

500 Illustration Courtesy 500 Korea.

5. 500 Startups: Thousands of companies, over 3,000 founders and more than 50 countries have worked with 500 Startups to accelerate, grow, scale and get on the right track for long-term success. Known for their diversity in every which way, you’ll find 500 Startups projects around the globe from Mexico City to Miami and Seoul to Berlin. They invest in all types of startups (no niches here) and offer a four-month accelerator approach that provides hands-on learning, office space (if you’d like), mentorship and an investment of $100,000 for just 5 percent of a startup. It’s not technically all offsite, but with so many options around the world, relocating won’t be an issue for most.

6. Amplify LA: Focused on tech startups, Amplify LA understands that not all startups are equal — and that means their goals and paths aren’t the same. Adopting a flexible approach is at the center of the program, with an accelerator customized to each project. There’s no catch-all calendar or required schedule for all. Instead, mentors watch a startup’s performance and offer support. On-site support in Venice Beach is an option, but with the flexible mentorship approach, mandatory requirements are slim.

StartX Illustration Courtesy StartX.

StartX Illustration Courtesy StartX.

7. Startx: If someone in your startup has a connection to Stanford, you can qualify for the Accelerator Program. Your connection can come from your undergraduate or graduate years, but only one person needs to have such a connection. Otherwise, on-site incubator options are available, including a visiting professorship. [2]

 

This Article Curated by Benang Merah Komunikasi’s Editorial team.

We consider to take journalism ethics and contents reposting etiquette seriously, that you can find here about media ethics. We do curation article for our audiences, not for search engine bots. By addressing this growing area of concern we hope reader can be smart to filter and understand between content plagiarism and content curation method.

References Sources:

[1] Taken from Importance of Startup Incubators in Emerging Markets written by Mounir Elabridi for AsianEntrepreneur. Mounir is Co-Founder and CEO of Wired Startups, a startups incubator, based in Morocco.

[2] Taken from 7 Incubators That Can Help Your Startup written by Andre Bourque for ExploreAbout.com. Andre Bourque (@SocialMktgFella) is a cannabis industry consultant who frequently writes about cannabis trends for Entrepreneur.





Editorial Benang Merah Komunikasi

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