The Kenyan government has spent a lot of money trying to solve youth unemployment. One of the main steps taken is through giving funds to young people to start businesses. Billions have been spent so far but there is little success. One of the ways I believe is through establishing business hubs in various locations within the country. A keen look at Silicon Valley shows that it is not so much about the location but building a culture. It is the way it is because of the culture that has been cultivated in the area. For a nation to establish successful startups, potential founders need to be in an environment that is not toxic to startups. This means that majority of people surrounding you need to be doing something similar. There is some bit of craziness and ‘outlierness‘ in a startup environment that is not necessarily present in all areas. This type of environment can only be created by a bunch of people trying to create business within the same location with resources and support. Of Course some will fail, in fact, most will fail but over time they few that succeed create synergy for others to follow. I think that there is a way in which YEDP can be modelled to play a better role. How about we find a way of bringing these people together so that learn from each other and create that ‘startup culture’. For example, the government funds 100 business but then they are incubated/accelerated in one environment for a period of like 3 months. In this period, they try to build viable businesses while learning from each other and also frequent advice from mentors, or even other established entrepreneurs. This is replicated in various locations based on environment that is most likely to support them.
This might require seed fund partners that can provide the know-how and the abc of biz. The nature of businesses currently funded through Youth fund projects are mainly non-technical in nature. Therefore after the money is advanced to those who qualify, they can go work on their business while at the same time comparing notes, getting advice or other type of support. This can be done even without incubation as long as the funded guys are within the same locale, say a town. They could meet once a week within the period of building their enterprises to share the challenges they are facing and receive some support and advice from investors or other appropriate individuals. I think can reduce the chances of failure. There is really a no straightforward way of knowing which businesses will succeed and which ones that will fail at the initial stages. This is the model used by many startup incubators such as Y combinator. We could have some centres in various locations that support people who are funded through Uwezo Fund or other Youth programmes. Offering feedback on weekly basis can enable these funded startups to track their growth from among peers, etc. For a startup ecosystem to work, there needs to be a lot of people trying to do business and stick around for long and hopefully succeed. The few that succeed can pay forward by supporting others that come up. slowly, people can start to believe and many more could be created.
As Paul Graham (Y Combinator) says, other countries do not lack entrepreneurial experience but many examples of people who have succeeded doing startups. To achieve this, fund as many startups as possible and make sure they stay close to each other other, at least in the early months of founding. It is easier to attract investors, partners, etc when they are within the same locale.Information and knowledge also flows easily and can be of benefit to founders. Randall Stross says “encouraging everyone to start a business is healthy and harmless. The problem is giving significant amount of money to start unproven businesses”. This is where angel investors and government come together, the little amount given by government can be used as start fund of some sort and then the startups are guided to see if they can make sustainable businesses.On a larger scale a startup ecosystem from one location would still be necessary. This entails a combination of universities, investors, service providers and people. This is is still necessary to build silicon savannah.