The State of the Egosystem - A report from the perspective of the Participants in Entrepreneur Support Programs in Rwanda
The State of the “Egosystem” Report 2022
By Oggy “Ogonda” Nduka
A detailed report into the current state of the Rwandan Entrepreneur Support Ecosystem from the perspective of those who participate in Entrepreneur Support Programs
FOREWORD
When I moved to Rwanda back in 2018, I can remember the feeling of seeing this beautiful country for the first time. I came armed with only the knowledge of “Hotel Rwanda” and news articles about the Rwandan genocide. My expectation was not very high if I am being honest. Within 30 minutes of being here I had made the decision to stay longer than my 6 month engagement. The feeling of home, comfort and excitement had swept over me. Fast forward 4 years and I call this land my home. I feel like this is exactly where I am meant to be in order to fulfil my purpose. My purpose is one of contributing to the prosperity of Africa as a whole and, being in a country that has turned itself around to be a shining light on the continent, it is logical to be here. I decided to use my skills and experience to make a difference in the world of Entrepreneurship and people development.
My connection and affinity for the country has lead me to think very deeply about the ecosystem and how we can help to improve things. I spent a year working for an entrepreneur support organization (ESO) called Inkomoko. It was, and will remain, one of my favorite roles. Why? Well, what it did was open my eyes to the brilliance that is all around this continent. There is a desire, a want and a determination to improve livelihoods. The team I worked with had been struggling but one thing was clear, those in the team had so much to offer given the right guidance and direction. The same can be said about all the businesses and entrepreneurs that we worked with. One of the key things I tried (I believe successfully) to instill in the team was to approach everything with a mindset of understanding. Understand the situation in order to positively influence it. My standout moment was a conversation with a cooperative leader as part of a project with UN Women. She was over the moon and delighted to be part of the program. What she loved was how we took time to understand her hopes, her dreams for her family and how we would always explain what we were trying to do in that context. “I’m so excited to do well for my family” was how she felt and it filled me with pride to hear that.
When setting up GPS two years ago, I wanted to see more of those experiences, looking to help by showing people a different perspective and encouraging a mindset of looking forward with hope rather than just a survival mindset. I am a firm believer that when you look at people as their best possible self, rather than with pity, you are influencing them to want to get there. I saw a gap in the market and decided to explore it. In 2020 - what a great year for us all (please forgive my sarcasm) - I stumbled across a report commissioned by Swiss Contact written by Benjamin Meier, Aneth Batamuliza & David Ross titled “Connecting the Kigali Entrepreneurial Ecosystem”. I found it fascinating and reached out to the authors to talk more about it. One thing that became clear is that while there is a real desire to improve the fortunes of entrepreneurs, there appeared to be a lack of cohesion or direction in terms of how it was being done. The more I looked into the subject the more concerned I became. Are the beneficiaries the client or are they the product? As such are the “interventions” (I actually prefer to call them partnerships) designed with the beneficiaries in mind? This was the question that kept popping up in my mind. However, I could not find much reporting that was specifically designed to understand the entrepreneur perspective.
So I embarked on a journey to find out. Initially I had hoped to get funding to undertake such a discovery but soon decided that I could do this myself. I am fortunate to work with ESOs, funders and corporate businesses, who value my coaching, training and ability to help transcend change and find transformation. So I decided to self-fund this report because I feel the entrepreneurs need a voice in the conversation too.
INTRODUCTION
Ecosystem or Egosystem?
Ok, so the title is a bit controversial. The term Egosystem was coined by Benjamin Meier and myself as a result of our numerous conversations. Simply put, having the entrepreneurs as the product meant that the incentive is there for the ESOs to focus more on what Donors and funders want. As such, the focus tends to be on highlighting the short term victories rather than a combined and collaborative long term effect. This became the focus of my research. How do the entrepreneurs view and feel about the numerous programs and opportunities available to them? The sole focus is on them. In the process there has been no contact with ESOs, rather they are the focus of the assessment. I must caveat here that I have had the pleasure of working with a number of the ESOs that are mentioned, I am part of a few networks of funders and investors. One thing that made me stop and think before embarking on this journey, was how it might be received by them. They say “never bite the hand that feeds you” but the more I thought about it, the more I realized how necessary it is to understand how the beneficiaries feel.
So by the end of the report you will be able to make your mind up as to whether we have an ecosystem or an egosystem here in Rwanda. While this report is solely focused on the Rwandan market, I do believe there are potential insights for anyone who is in the field of entrepreneurial support across Africa. The questions and methodology can be used by anyone who is interested in understanding the state of play in your own market.
Methodology
This report has been put together in my own time speaking to 250 participants who have taken part in 1 or more entrepreneur improvement programs. It is not a definitive of the state of play but a perspective from those who have taken part.
Prior to speaking to any of the participants we first had a conversation about them, their hopes, their dreams and the possibilities that are there to explore. It was a conversation to help me get to know them and for them to get to know me. As a lot of people reading this, who have worked or lived in Rwanda, will testify one main challenge, when dealing with problems, is an avoidance of “conflict”. People here in Rwanda (and, yes, this is a general view) tend to be conservative in talking about issues. There are many factors that lead to this, too many to discuss right now, so my intent was to make the participants feel comfortable to answer freely and understand how I am trying to help foster change if the evidence shows it is necessary. Those who know me will have likely said at one stage or another “it is so easy talking to you, I feel comfortable opening up.” This was what I wanted to achieve ahead of the questionnaire.
The Questionnaire
The questionnaire was designed to have open, guided and closed questions. The thinking here was to allow for open, honest conversation while staying on the purpose of this research, to get an honest idea of how entrepreneurs feel about the programs and opportunities available. I also wanted to make sure, as much as possible, my own biases would not influence the answers.
1. How many business/entrepreneur support programs have you been in?
2. Which ones?
3. What is your current status?
4. Is the business/idea that was part of any of the programs operational?
5. Has your Business grown to the point where you have hired permanent staff?
6. What is your main reason for taking part in these programs?
7. What are your thoughts on the variety of these programs?
a. A great deal of variety – There is lots of new material in each program to draw from
b. Good variety – A good amount of new things to learn and draw from
c. A bit of variety – There are some things that are different that I can utilize for my business
d. Little Variety – It is very much the same with a few differences in each
e. No variety – Same thing each time
8. How would you rate your overall experience?
a. Amazing – I found it transformational and am in a much better place because of it.
b. Great – I really enjoyed it and learned a lot from it that I am practicing today
c. Good – I found it very helpful and learned from it.
d. OK – I learned from it but wanted more
e. Could be better – I did not really learn as much as I would have liked and felt it could have been better
9. Have you seen a tangible difference in your business?
a. Yes – My business has grown and I am in a much better place
b. A bit – I have seen improvements but still have many challenges
c. Not really – Not much difference/No longer in business/pursued other things
10. What did you like about the programs?
11. What would you like to see more of?
12. What topics have you found the most useful?
13. How would you rate your energy towards taking part in programs?
a. Energized – I get excited about the programs and would love to be part of more
b. Enthused – I am enthusiastic and would like to take part in future programs
c. OK – I can take it or leave it with new programs
d. Tired – I feel a bit tired of these programs as I have done a few and seen little or no difference
e. Bored – The effort to apply and the lack of variety means I do not see the point in a new program
14. Do you feel there is flexibility within the program?
a. Yes – I feel the programs are designed to be flexible and unique for my business
b. Kind of – Not massive variety but they change and adapt depending on my needs
c. No – No real difference. They do what they feel is beneficial and do not really adapt for my business
15. What are your thoughts on the application processes you have done?
16. Have you ever altered your idea or core business to better fit the program?
17. Have you received funding?
18. What type of funding?
19. Do you feel supported post funding?
20. When dealing with funders/investors how confident do you feel communicating when things do not go to plan?
a. Confident – I can approach them with anything and I know they will help
b. OK – I can approach them but they then put pressure on me
c. Not confident – I feel they will be upset and might ask for funding back
TAKEAWAYS
At the start of the paper I mentioned that one of my fears was upsetting the people I work closely with. I was worried that this paper might appear to some as an indictment of their hard work. Luckily I use fear, when not life threatening, as an indicator to switch my focus to what I DO WANT. I wanted to get the perspective of those we claim to serve. To be a voice for them and to highlight what we can do to make THEIR experience better. I am very happy to report that it is not all doom and gloom. Below are the takeaways, looking at both the strengths and the challenges:
Strengths
· We have an ecosystem that wants to make a difference. The number of programs is growing and shows that we are prepared to persevere.
· Entrepreneurs going through an average of 2.6 programs shows a commitment on their part to seek improvement and opportunity
· While we have made a small dent in employment indicators (17.5% of respondents had hired a permanent staff) every business that was still operational had hired people in both a formal and informal capacity. We are on the right track.
· The ecosystem is providing funding and networking opportunities and the participants love this.
· The general mood of participants is one where they see the benefit of self-improvement through these programs.
· ESOs are providing a positive impact on the whole which we can be proud of.
Challenges to consider
· There seems to be a lot of theoretical teaching and a desire for more practical on the job learning
· There appears to be a need for more expertise and practical help when it comes to business management (time management, operational management, sales and marketing); business growth (post finance support, revenue growth, access to finance); and greater guidance and support to implement new ideas. Over 80% of respondents want this.
· Program fatigue is real with 77% of participants feeling tired or bored. Coupled with 73% wanting more flexibility and 95% feeling there is little or no variety in the programs, you begin to understand why this is happening.
· When it comes to flexibility we need to remember that we are in Rwanda so need to ensure our programs are for Rwanda. We adapt for Rwanda and not Rwanda adapting for us. The participant whose business partner could not take part fully because of the language barrier should never be a thing.
· Application processes are too generic with 78% of respondents finding them too long. Add to that 75% of respondents have changed their idea or business to suit the application. With the additional knowledge that 85% of participants are doing it for the access to finance, you begin to see that the incentives for application are geared towards funding and not necessarily business growth.
· There is a need for a better spread of funding with only 16% of funding, for those who have received it, comes from debt or equity. This suggests we need to better prepare participants for the requirements of equity and debt funding.
· There is a lack of post funding support. 65% of participants feel they are forgotten once they get funding. Even when there is post funding support 98% of respondents do not feel confident in communicating problems. An improvement in the environment we set post funding is needed here.
Impact of the Challenges
I am well aware that some people might read this report and read the challenges and think “my program takes care of those challenges”. To those people I say well done. This report is here to raise the awareness and how people move forward, knowing what the participants think, is up to them. Some people might see only one or two challenges that apply to them and think it is not that big a deal. Once again it is about awareness.
Recently at a round table of ESOs, that I had the pleasure of taking part in, we had an aim of understanding our purpose in the long run. What was agreed was:
· Our ultimate aim is to be part of the growth of the private sector. By helping businesses achieve their potential, especially here in Africa, we enable a larger private sector, taking the pressure off Governments to solve all the issues.
· We want to provide businesses with the skills and capability to grow even once our partnership has ended.
· We want to help create more permanent jobs
· We want to help more people achieve prosperity
· We want to create a market for consulting and rely less on funding. Where businesses and owners see the value and when they need help know where to seek it.
· We want to create a marketplace of choices. Where our clients know that they have quality choices, further pushing providers to constantly increase and improve the service to keep the clients happy.
When I look at what it is we want to achieve and then look at the challenges, it becomes apparent that these challenges are the blocks to achieving this. When I look at blocks and the impacts I tend to focus on 4 main elements, money, time, emotional cost and welfare cost. So how do I believe these challenges are impacting?
· Money – Wastages. Looking at the effectiveness of the programs, we are having a positive effect, however the efficiency could be so much better. Companies are not going through their full life-cycle due to chopping and changing of ideas; the focus on theoretical knowledge means less practical experience which is vital for business growth; and the lack of the topics participants really want more of all add to the wastage. Considering there is $2.4bn+ of investment in Rwanda each year even a 1% improvement in efficiency equates to $24m. Imagine how much businesses could do with that?
· Time – Time is the most precious of commodities especially for business owners and startups. Time taken to do complex or long applications; time spent in the classroom rather than in the business; time spent worrying about how to communicate a challenge to someone who could potentially help; and time spent doing programs that are tiring or boring all adds up. Just for the participants in this report, one lost hour a week equates to $9.1m per year (1x 250 participants x 52 weeks x GDP per capita c$700) lost in productivity.
· Emotional cost – This is something I believe we tend to gloss over yet is probably the most important aspect. Emotions are what drive us as human beings. It is what helps us reach previously insurmountable heights. It is the single biggest thing that will help drive success. When we have beneficiaries who are engaged and can see the value (and see it in a very tangible way) the results are incredible. Conversely, when going through these programs, if they are not seeing it, they will lose belief, lose hope and lose enthusiasm. Anyone who has ever been faced with someone in that state will know how difficult it can be to get results.
· Welfare Cost – When I speak of welfare cost, I speak of the local and community costs. Right now there is a real drive and desire to invest in startups and entrepreneurs. However, the reliance on funding is not sustainable. At some point there will be a need to move away from this model. In order to encourage a range in funding, getting businesses to a self-sustainable level has to be at the heart of the program. Currently the areas that the participants want to see more of are the areas that can help with this. Sales, marketing, increasing revenue & better business and time management are all tools that will help with that. However, at the heart of those areas is behavioral and mindset development. If we do not understand or change our own behaviors and mindset then how can we possibly expect to do the same for others? Without this the enthusiasm, effectiveness and sustainability of the market and programs is at risk.
CONCLUSION
People who know me know that my signature framework and philosophy revolves around consistency. I believe it is the vital step before we start to worry about results. Consistency is what will lead to results whether positive or negative. Consistently do things well and we accelerate good outcomes. Consistently do things less than optimally will lead to less than optimal results. The only thing we have any control over is ourselves. We cannot control people or participants, we cannot control situations and we cannot control outcomes. All we can do is try to be our best in order influence and aim for the stars.
Why is this important? When looking at things holistically I encourage people to look at 3 key areas. Accountability, the systems and processes we have in place; learning, inputs and reflection; and the most important mindset, behaviors and perspectives.
I am someone who is all about identifying problems and then turning them into opportunities. Right now we have an opportunity to listen, learn and act in a way better conducive for consistency and in turn results.
How?
It is not easy to implement the right solutions. That is because we have to first take a look inside and ask the question, “Who are we ultimately doing all this for?” We coined the phrase “egosystem” because from our point of view we felt that as a whole we were more focused on the donor and funder wishes than we were on those actually participating. It is not a slur, more a warning that while we are making a difference, to make it sustainable we need to direct our focus away from where the money is coming from and towards where the money can be CREATED through effective partnership.
I have some areas to suggest further looking into:
· Accountability
o Creating programs that have mindset and behavioral transformation (I believe change is temporary, transformation is permanent) at the heart of what we do. Are your programs incentivizing short term change or long term transformation?
o Are the programs designed to encourage business growth? There are some positives out there that are showing the way. I am hearing positive feedback regarding the Jasiri program, Deep Dive Africa, Ignite food systems, and Norrsken. The feedback focuses on how these programs are taking a more practical and participant focused approach to entrepreneurship. Preparing the businesses for both pre and post investment as well as helping participants understand their role in it.
o Can increased specialization help? Specialized sales and marketing consulting, investment readiness and operations consulting could really help kick start transformation in these areas that are fundamentals when it comes to business growth. One question I ask when I am on a funding or selection panel is, “if you had to go out and get 15 new clients in order to get funding, how would you go about doing it?” In the last 2 years and over 200 ideas or entrepreneurs I have assessed, only one business has been able to answer the question to a satisfactory level.
· Learning
o What is your balance of theory and practical help? Theory is vital, especially when dealing with people who are new to entrepreneurship or have limited expertise in multiple areas. However, this cannot be the only thing we do. In my sales consulting, my theory always leads into practical exercises. These excercises leading to techniques and processes that can gain actual new clients and revenue. The purpose is so that with or without me they have the ability and knowledge to do the right things to grow their clients and business.
o Listening. How well are you listening to those you are serving? Now when I speak of those you are serving I am talking about the beneficiaries. If we are to teach the fundamentals, are we leading by example? From a funding/investor perspective are we listening to the ESOs and what they need or are we imposing our own goals, targets or politics on them?
o Coaching is the key! I see a lot of ESOs who talk about coaching but struggle. What is coaching? I believe this is something we do not quite get right. I see people implementing new systems who call that coaching. I see people telling and instructing clients what to do calling it coaching. I see people lecturing to participants who call that coaching. In my view coaching is helping people to unlock their natural brilliance through support, questioning and holding to account. Understanding people becomes a huge and vital element. Are you coaching well?
· Mindset
o Do we understand how mindset and behaviors affect outcomes? Majority of the time we believe we do, but, can we do better? There is clearly an appetite for these programs and for improvement. Are we capitalizing on this? We can have targeted application processes if we know what we want to accomplish. What do we want, a great idea that can help improve lives but a business owner who is arrogant? Or a great business owner who has massive potential but needs help with the idea? My answer is yes. It depends on your program and what you want to achieve. If your focus is on the idea, your application process should test the robustness of the idea. If your program is about people development, the application process should test for the type of people you are looking to attract. As a 6 foot 2, 100kg+ man, who has tried to buy off the rack clothes in Rwanda, I can attest that one size does not fit all.
o Are we about the journey or the destination? While aiming for something is vital when it comes to business and life, it is not the be all and end all. We cannot control outcomes, but we can control how we approach the journey. A successful business is a journey. Are we doing the right things for those at the start of the journey? Do we have people or processes in place to elevate businesses who are in the growth phase? Are we promoting self-sustainability or is funding our only goal? These are all questions as an ecosystem we can be asking ourselves in order to do right by the participants. If we can get in the mindset of enjoying the journey and learning from it, the rest will come.
o My final thought is one that usually cuts. Are we approaching this whole thing from a place of pity/superiority or with a mindset of unity? It cuts because majority of us are coming from a place of pity/superiority. I used to have a feeling of being here to help and people should be listening to me. I came to the realization that actually I have to earn the right of people to listen to me by listening first. When I look around me I see great opportunity, great people who with the right tools and belief can reach heights previously unimaginable. My role is not to impose but to influence through being a good example. So look inside and ask if you recognize yourself as someone here to help others or someone who is a facilitator for transformation? If you are wondering which one is better, you are proving my point.
With that comes an end to this report. It has been an absolute pleasure speaking and engaging with the brilliant people who have taken part in the report. I am honored by how candid, open and honest they were with me. Most of all I am happy to be able to share this with the community and ecosystem as a whole. I know I have been a little tongue in cheek at times, but my purpose has and always be to open dialogue and awareness. I hope you have found this useful and should you want to discuss anything further or gain more clarity my details are below.
Turikumwe my fellow ecosystem partners.
GPS stands for growth, purpose and Sustainability. GPS Development Consulting is a business that aims to help with human capital development here in Rwanda and across the continent of Africa. At the heart of what we do is understanding Mindset and Behaviors to facilitate Transformation. We work with corporate businesses, NGOs, SMEs, ESOs, Donors and Investors. If you enjoyed this report or want more information contact: