Why tech start-ups fail in sub Saharan Africa

May 8, 2014

The rate of tech start-ups failure in sub Saharan Africa is unfathomable. More than three quarters of them fail before their third year of existence. Last evening, I had a chat with a tech analyst blud based in Pretoria South Africa who informed that people look at international brands in technology like Apple, Google, Twitter among others and what they see is extremely successful tech companies and many usually think that it’s a cakewalk. In South Africa, he shared with me that truth is that all rainbow nation successful tech companies had passed through rock bottom with Kalahari, an ecommerce site being a prime example. Most others have failed again and again before they eventually succeeded.  Tech hubs like iHub in Kenyan capital Nairobi, Tanzict located in Kijitonyama, Dar es salaam Tanzania have become the places where tech entrepreneurs visit to experience the magic formula behind the success of local start-ups companies.

I had the opportunity to visit Tanzict’s slightly over a year ago and met some interesting developers who shared their exciting insight stories. In South Africa, my blud shared with me a story of a start up involved in robotic development ran out of money and they decided to shut down the company three weeks ago yet their potential is immense. It was a hard but inevitable decision, as there was so little money left to pay for employees’ salaries. The story is duplicated across sub Saharan Africa where American and European ideas are copied and pasted hence the high rate of failures as there is inadequate originality. The South African start-up story was a reminder of how fragile building a start-up is in Africa and how creating a user-centric product is the most important thing. This is probably the single most important thing that African start-ups should learn.

Contador Harrison