This post is about newly formed businesses in Rwanda.
With a view of starting my own (either here, or elsewhere in the region), I have an interest in understanding “the scene” as deeply as possible: this post distills what I’ve learnt so far.
Rwanda is young.
I recently found out that 50% of the population is under the age of twenty. With a life expectancy in the sixties, this means a disproportionate number of people are about to leave the education system and enter an economy geared towards providing employment to a smaller workforce.
Releasing lots of energetic, young people into a world where they don’t have the skills or opportunities to contribute to society in a meaningful way leads to a whole host social issues down the line. That’s why efforts have been taken to teach the population a relevant skill set (such as getting coding on the school curriculum) and create an ecosystem around job creation.
Whilst NGOs have been incredibly helpful at providing basic amenities to those at the bottom of the pyramid, the act of fostering an environment where private sector companies can start, scale and grow has a positive social impact on the whole population through the employment it provides.
Undertaking this sort of analysis, it then becomes unsurprising that the Rwanda government has made efforts to promote burgeoning businesses.
One of the things I was quick to hear was the speed in which people can set up a business in the country.
It takes 6 hours.
There’s plenty more that the government does, though I’ll let the state-owned newspaper tell you in its own words.
Through a combination of this general business-positive atmosphere and more formal public-private partnerships, organisations have sprung up to support and nurture individuals pining to create a successful business.
From my conversations and research, these are the main players
Government sponsored and also with support from a Japanese corporation. It offers free space/ wifi/ advice to entrepreneurs who are starting out on their start up journey.
Who comes here: students/ graduates/ those working on an idea
Part of the wider African Entrepreneur Collective, entrepreneurs hire Inkomoko for a 12-month contract, and in exchange for strategy consulting, classes, mentorship, website development, and access to their loan fund with rates at half those of local banks.
Who comes here: businesses with customers/ revenue, but who still benefit from high-level advice such as feedback on their business model
An accelerator programme with strong links to Israel that has just started out. They invest/ take an equity stake of the companies in each cohort, and in exchange help them with skills necessary to scale.
Who comes here: businesses happy with their business model and are at, or close to “product-market fit”
An international organisation offering similar services, but more focused on social enterprises. The Kigali office had their 1st year birthday at the beginning of August.
Who comes here: individuals/ organisations looking to grow their social venture
As my main motivation in this early stage of my journey in East Africa is to understand what it’s like to “do business” in different countries across the region I’ve spent a not insignificant amount of time working from entrepreneurial hubs, and speaking with start ups operating in the country.
As a result I can report on some of the start ups currently operating here. Whilst not exhaustive*, it feels pretty representative.
Software for distributors in the brewery industry. 95% of the country’s beverages come from one brewery, Torque creates software so the distributors can track orders and replace stock.
Solar energy as a service. Started by three Imperial graduates they are now one of the largest “off grid” energy suppliers electrifying the country.
Drones delivering health packages to typically inaccessible rural areas. Huge Silicon Valley investment, pushing the boundaries of tech/ healthcare in the country.
A way for people to transfer money between different mobile networks. Two brothers hustling around an incumbent system.
Mobile remittances for services, rather than money. Relatives abroad can directly pay for school fees rather than send cash via Western Union.
Food delivery to hotels and individuals. Orders placed on WhatsApp arrive the following day.
Rwanda’s first private sector dialysis centre. Successful first opening, about to operate across the region.
Uber for motos (driven safely). Consumer opens hailing app and technology tracks driver performance to incentivise safe driving.
Professional food delivery to hotels and individuals (similar to GetIt). Looking to professionalise a large ad hoc market.
Not necessarily a start up, but they have a lush safari lodge in Rwanda, and a few in Uganda
Part of wider organisation backed by Rocket Internet, the Africa Internet Group has been coined Africa’s first “unicorn” ($1 billion valuation) and I can report that the Rwanda section of their food delivery division is slick.
From talking with start ups on the ground, and generally a sense of how businesses operate in Kigali (and somewhat in other areas of the country) I can report on the following findings.
Internet good, not great
Only around 15% of the population has access to the internet.
Whilst the coverage is pretty decent (I’ve had 4G in the provinces) a large portion of the population don’t yet have the devices to be online. With technology prices only going one way this hopefully won’t be forever, but is a useful consideration when devising any sort of “digital marketing strategy”.
Labour is cheap
I won’t go into the geopolitics around this statement but instead comment on the fact that if you want something done, there’ll be someone willing to earn a wage to do it.
This became evident when chatting to GroceWheels (who do food delivery) and how their company may one day look like Amazon/ Ocado. For the foreseeable future they won’t need to invest in expensive automated packing machinery as there will always be people on hand to do it manually.
Lots of software opportunity
Despite this apparent Luddite sentiment above, I strongly believe that there is a lot opportunity in businesses here that take offline processes, and bring them “online” through software. The motivation here is less from money saving, and more from the insights possible once repetitive processes are brought within a digital framework.
Prize money can distract
Competitions have the chance to be a key source of revenue for start ups.
Organisations such as Seedstars do tours promoting “the best startup in X” and typically tag on some prize money in the tens of thousands of dollars. This has led some to commentate that incentives for start ups are geared more towards winning prize money, than working on their business.
Follow the leader
My local friends here say that once one person has a good experience with a product/ service then their recommendation carries a lot weight. Companies report that if their product is good, customers are very happy to recommend it to others.
Consumers are willing to experiment
I’ve also been told that the Rwandan consumer is generally open-minded to trying new products/ services. If you can craft a good proposition then chances are, people will give it a go.
This post summarises the beginning of the end of my (first) time spent in Rwanda. Whilst I don’t yet have first hand experience to compare it with, my conversations with people who have, imply that it’s one of the easier places to “do business” across East Africa.
Before moving out here, I’d read a lot about how Rwanda looked to foster entrepreneurship and from the experience I’ve had so far, that seems to be pretty on point.
Next stop is Uganda, and so add yourself to the Newsletter section if you’re interested in hearing what it’s like!
* I should also note that I’ve met with all of the companies/ organisations mentioned in this post, so if you are interested in hearing more, or being introduced to the founders I’d be happy (with their permission) to connect you. If your company hasn’t been mentioned, please get in touch – I’d love to add you!