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Tips on Setting a Tech Startup in Africa

by Roveen Anyango
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From Cape Town to Tripoli, from Monrovia to Mogadishu, Africa is full of promising tech startups which are working towards solving the multitude of problems on the continent.

Furthermore, people from other continents have seen the opportunities present on the continent for tech startups and are now rushing to the continent to set up.

Africa offers unique challenges to tech startups. Thus, you need to be aware of what you need to do to improve your chances of getting your enterprise off the ground.

Solve a problem

Many of the most successful tech startups in Africa solve problems. While tech startups in the US or any other developed world are robotics that adds luxury, in Africa, the best tech startups solve everyday problems.

So, ask yourself what problem your startup will solve. Will the market need the product? And what trends in your chosen industries are there?

While capital and labor-intensive, this process can give you a pivotal advantage over your competitors moving in blind.

Be aware of regulations

Regulations in African countries are often a challenge to navigate. In fact, one can say that the African continent suffers from overregulation.

So, before setting up, take your time to familiarize yourself with the country’s laws and regulations, especially when they relate to foreign startups. Also, understand tax laws and what is expected from your company as a CSR (Corporate Social Responsibility). This will save you the trouble of running into government officials down the road, a move that will cost you time and money.

Do not hire permanent staff yet

Before getting any client, you are best advised to not hire permanent staff until you establish yourself in the market. People will often be skeptical of new technologies and thus, this could delay the pace at which your company picks up. This is due to lack of exposure, as a majority of the continent is still behind in technological exposure.

So, don’t rush to hire permanently until your product is well-established in the market.

Consider your fundraising options

In many African countries, borrowing from banks is often the last resort for small business owners. The banks have very high-interest rates.

So, if you can fundraise from friends and family, or consider other fundraising options from companies such as Google or Global Startup Awards – Africa.

These challenges are in no way only unique to Africa; how you encounter them will often be very different when compared to other continents.

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