A Path to Success for Young ACP Entrepreneurs

A Path to Success for Young ACP Entrepreneurs 14
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AustinMcmahon,United Kingdom,Researcher
Published Date:16-07-2017
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CTA Handbook An ICT Agripreneurship Guide A Path to Success for Young ACP Entrepreneurs 1 Introduction Agriculture is so important in the African Big opportunities continent’s evolving income, population and The role of information and communication urbanisation dynamics that, in 2003, governments technologies (ICTs) in strengthening and promoting endorsed the Maputo Declaration on Agriculture agricultural enterprises has never been greater. 3 and Food Security. The agreement aimed to slash Furthermore, governments, private sector, the continent’s food import bill of nearly US35 multi-lateral and non-governmental organisations billion by earmarking 10% of public spending (NGO), and especially young people, are towards agriculture (Africa Progress Panel, 2014). increasingly viewing the intersection of ICTs and With increasing population, food security has the agriculture sector as a prime means of tackling become a critical issue, especially in Africa where the global youth unemployment challenge by the population will double, from the current 1 enabling enterprise. The opportunity for youth estimate of about 1.2 billion, to 2.4 billion by 2050. employment in a merged ICT and agricultural Therefore, agricultural productivity needs to be sector represents a potential boon for enterprising strengthened radically to increase food availability. young people in African, Caribbean and Pacific ICTs, which are often spearheaded by youth 2 (ACP) countries. (Rahman and Fong, 2016), can contribute to this. Below: © Jake Lyell / Alamy Stock Photo2 ICT Agripreneurship Guide Through ICTs, youth are thus well positioned to Who should use this guide? help advance agricultural transformation, while This publication is intended to be used in two improving their own livelihoods. Clearly, they also primary ways: need adequate support in this process. • A s a step-by-step road map for those about to start an ICT-enabled agribusiness. Why this guide? • A s an accessible resource that can be used to This guide is designed to equip young aspiring ICT provide guidance on specific aspects of setting up entrepreneurs who are interested in creating (social) and running a business – from idea generation, businesses that address challenges in the to funding and scaling up. agricultural sector (including fisheries, livestock This guide is intended for individuals/teams who and forestry) with key information and knowledge are interested in creating enterprises in the ICT and that can help them to use ICTs eec ff tively to launch agricultural sectors and also for those who are agriculture-oriented businesses. It is aimed at 4 engaged in the sectors but are struggling to thrive. helping young entrepreneurs, in particular, to deal It is relevant for social enterprise or commercially- with the intricacies involved in conceptualising, driven enterprise endeavours. It will be most useful launching and succeeding in a merged ICT and to readers with at least a secondary school agricultural enterprise. Therefore, knowledge education, basic business skills and computer contained in this document covers agricultural literacy. Resources and pathways listed throughout value chains and stakeholders, ICT business the guide will assist young entrepreneurs to leverage challenges, eec ff tive business plans and models insights from others who have developed ICT4Ag of designing, funding and scaling ventures. ventures and push forward their own initiatives. Developed by a team of international agribusiness New entrepreneurs can use the information and ICT consultants with over five decades of 5 provided in this guide either prior to exploring cumulative experience, this guide presents users possible business ideas or after embarking upon with a road map for starting a business in the their ventures. Though sections are written in agricultural sector using ICTs, and outlines key order of a new company’s formation and growth, opportunities and challenges that will be individual sections can be used as needed. encountered when creating a business. Leveraging real examples of challenges faced while developing 1 Issues such as youth unemployment are predicted to worsen businesses, the guide provides strategies and with rapid urbanisation. By 2030 50% of Africa’s population pathways for averting common mistakes faced by is expected to live in urban areas (Leke et al., 2010). early-stage entrepreneurs using ICTs for agriculture 2 The African, Caribbean and Pacific (ACP) Group of States (ICT4Ag). As well as containing carefully selected is an organisation created by the Georgetown Agreement in case studies, business and product development tools, 1975. It is composed of 79 African, Caribbean and Pacific states, with all of them, excluding Cuba, also signatories to the guide showcases interviews from 17 the Cotonou Agreement (known as the ACP-EC Partnership entrepreneurs – from countries such as Ghana, Agreement) which binds them to the European Union (EU). 6 Jamaica, Kenya, Nigeria, Senegal and Uganda There are 48 countries from Sub-Saharan Africa, 16 from the – to highlight best practices. Other inputs (boxes, Caribbean and 15 from the Pacific. 3 excerpts from articles) are from secondary research. The Maputo Declaration on Agriculture and Food Security was signed by the African Union (African Union, 2013). The guide is designed to serve as a comprehensive 4 CTA defines ‘youth’ to be people in the age range of 15 to 35 introductory reference to entrepreneurs. The reader years old, as per the African Union definition. 5 is strongly encouraged to read additional relevant Spanning ICT incubation and start-up management, virtual ICT consultancy services, agribusiness development, youth publications detailing the issues discussed. Some of entrepreneurship and policy development. these publications are referred to throughout this 6 Full list of organisations interviewed can be found in Appendix 1. document, or in the appendices. Right: © Tetra Images / Alamy Stock PhotoI dea generation, key skills and overcoming early challenges4 ICT Agripreneurship Guide The early stages of any company are fraught with challenges that require: a) a strong focus on the core idea being developed; b) leveraging of necessary skills and human resources to develop the idea; and c) overcoming business and technical barriers. This section provides a selection of strategies to aid emerging ICT4Ag entrepreneurs. The chapter starts by outlining suggestions on how to develop and test a business idea by understanding the value chain – from research and development to retail. In understanding the value chain, the entrepreneur can then implement the process of market analysis and pretesting of a developed product. Identifying the key skills of the entrepreneur and The end of the chapter examines how, after all their team is an important next step which is of these considerations, the entrepreneur can explained. It is noted that outsourcing the key skills determine the potential success of the business to start and operate a small business is costly. With by using a three-step method to review what is in this in mind, early challenges of moving from idea demand and what is possible and engage in an early generation to execution are then identified, and strengths, weaknesses, opportunities and threats suggestions are provided on ways these can (SWOT) analysis of the business. be managed.Ideas, skills and challenges 5 As illustrated in Figure 1, an entrepreneur can Developing and testing the provide services to various customer segments and business idea: Understanding stakeholders besides farmers. An ICT solution could be created to improve the efficiency of input agricultural value chains suppliers, cooperatives, processors, exporters or When beginning an ICT4Ag venture it is important point-of-retail-sales, yet many entrepreneurs do to understand the agricultural value chain. not consider all of these existing gaps. An example of an agricultural value chain Young entrepreneurs who wish to venture into framework is presented in Figure 1. e-agriculture service provision should carefully Key cross-cutting enablers not illustrated in Figure consider specific areas and value-chain and 1 include financing and policy-making. These stakeholder segments that they could target in value-chain segments are also relevant for the other order to oe ff r unique value propositions. components of the agriculture sector such as fisheries and livestock. Figure 1. Agricultural value-chain segments and stakeholders Input supply Production Post-production Marketing Consumption 1. Government 1. Small farmers 1. Butchers1. Government 1. Individuals agencies agencies (trade 2. Large commercial 2. Abattoirs 2. Restaurants foreign affairs etc.) 2. Farm stores farms 3. Processors:3. H ospitality • Trade policy 3. Service providers: industry • Milk • Traceability • Livestock • Meat • Regulators 4. Households association • Food (EPA) 5. S chool nutrition • Extension 4. Farmers 2. Wholesale/retail programs officers • Fresh markets 5. V alue added • Agricultural 6. Prisons • Supermarkets intermediary society 7. Military/national • Retail shops • Packaging/ • International security labelling organisations 3. Trade & • Traders 8. Hospitals promotion 4. R esearch • Transporters agencies institutions • Storage • Animal Breeders 4. Exporters companies • Training institutions 5. Veterinarians 6. Water providers 7. Financier (Agri Dev Bank) 8. F ood/nutrition experts 9. Regulators (e.g. public health) Source: Infocomm Technologies (2014)6 ICT Agripreneurship Guide Case study 1 Case study 3 Hello Tractor: Integrating AgroCentral: Connecting agriculture with technology small farmers and buyers A great example of a young company taking AgroCentral, a Jamaica-based start-up, advantage of the broader value chain is Hello works to overcome the lack of market access Tractor (www.hellotractor.com), a social for farmers and help businesses access local enterprise focused on improving food and produce. They were able to achieve this income security throughout Africa by pairing by developing a marketing platform for the owners of low-cost ‘smart tractors’ with agricultural producers and a complementary farmers via an innovative SMS-based service. purchasing platform for businesses. In addition to individual farmers, Hello AgroCentral leverages both a web and mobile Tractor targets organisations that work directly platform, suitable for the level of ICT access and with farmers, including NGOs, financial connectivity of both buyers and farmers in the institutions, extension service providers and Caribbean nation. Additionally, the company farmer cooperative representatives. Examples oe ff rs online purchasing via the service, of the groups with which the company have simplifying procurement and tracking processes formal and informal marketing and distribution for all parties. As a result, AgroCentral tackles relationships include Fortis Microfinance major challenges in the local agricultural sector Bank, Cellulant and the National Agricultural such as the lack of transparency, access to Cooperative Organisation in Nigeria. larger market and mistrust between farmers, middlemen and buyers. Case study 2 Modisar: Livestock Case study 4 management made simpler M-Farm: Serving farmers in Modisar (www.modisar.com), a Botswana- Kenya based livestock information management In Kenya, during a 48-hour technology start-up, was created when one co-founder, competition, Jamila Abass and fellow teammates, a livestock farmer, wanted a system to better produced an application, M-Farm, which monitor the health of his cattle. From this helps farmers obtain more accurate market experience, and noting the broader needs of price information regarding their produce. other farmers in the country, the co-founders, Previously, a farmer’s only knowledge of market Thuto Gaotingwe and Tebogo Dichabeng, price was the price oe ff red by middlemen developed a web, phone and SMS-based system trying to buy their produce. Combining their that provides support for farm management computer science and entrepreneurial skills, the and financial reporting, while providing a team set out to produce an SMS- and web- knowledge bank of articles and resources about based solution to provide current retail price on-farm management. They have modules information directly to farmers. Understanding to support animals, farm equipment, human the value chain further, the team later developed resource management, sales, costs and overall means for groups of farmers to benet fi from financial reporting. A social media presence pooled inventories of crops, and discounts on also provides an additional platform for inputs gained from collective buying. All the distributing resources and best practices to information is put in a database and tracked via their target audience. By empowering farmers the service. The platform has enabled farmers to to keep better records and obtain rich farming access larger markets and better prices, and stay knowledge, Modisar works to increase their up to date with agricultural market trends. likelihood of long-term economic sustainabilityIdeas, skills and challenges 7 on concrete customer feedback, which can boost Entrepreneurs generally develop ideas by either prot fi ability potentials and avoid costly mistakes. connecting with a problem they have encountered or When the product is deemed to be ready for its by identifying existing needs in a given community. targeted market, it is then officially introduced. Ideas are then generated in response to the needs observed. Using a three-step method: What’s in demand, An initial solution is conceived in order to respond to what’s possible, SWOT analysis the demand or need identie fi d. Market analysis is There are three levels of analysis that can be then conducted to gather information about the conducted when determining the likelihood of demographic composition (age, sex, education level, success of a particular ICT4Ag venture, using what civic associations, profession/job etc.) and trends in the is referred to as BMS (Big picture items, Middle community to determine the target market and its view considerations and Self-assessment of the nuances. Funds would then be sought from investors, start-up). The BMS model proposed here does not the government or other stakeholders. Further customer replace business model analysis (our recommended development can be done. These steps are not Lean Startup approach or Business Model Canvas necessarily chronological. (BMC) tool will be discussed later in the guide). Once the target market has been defined, the product Though some middle view considerations can be or service is developed and pretested with the target incorporated into the BMC, the BMS is focused group. Pretesting involves the entrepreneur trying to on providing a start-up founder or team with a gauge the reaction of potential buyers and users of the framework for understanding their readiness to product and/or service. Pretesting is very important invest in the sector and prepare them for this. for obtaining feedback and making adjustments based Figure 2. BMS (Big picture items, Middle view considerations and Self-assessment of the start-up) analysis Big picture: Macro trends in the Agrifood landscape, ICT connectivity, ease of doing business Middle view: Identifying what part of the value chain and what ICT platform to use Firm SWOT analysis Source: Authors.8 ICT Agripreneurship Guide Case study 5 Box 1 Mlouma and Mkulima Young: Country prolfi es Understanding the problem Key sites for general information on the agriculture or ICT profiles of countries can For Aboubacar Sidy Sonka, the founder of be gleaned from FAO’s country profiles Mlouma the problem was clear. Because of (http://www.fao.org/countryprofiles/en) and their lack of reliable market information, the International Telecommunications Union’s farmers are often shortchanged and oe ff red country profiles (http://www.itu.int/en/ poor prices by middlemen and farm-gate ITU-D/Statistics/Pages/default.aspx). buyers from the big cities. His solution was to Local ICT and communication regulators create Mlouma, a web and mobile platform also provide key data on information and that will give farmers, and buyers and sellers communication status. of agricultural produce, current market information and guide their decisions on where to buy or sell their produce. The World Bank’s Ease of Doing Business Index provides For Mkulima Young, the problem is the founders with a quick and high-level view of what it declining interest of youth in agriculture will take to register a business and pay taxes, and and agribusiness. A clear picture of youth the ability to enforce contracts (World Bank, 2015). perspectives and tendencies lead to an This may not impact a go/no-go decision to start innovation that provides an online marketplace the ICT4Ag company, as all companies within the for young people wanting to buy or sell country face the same conditions, but it will provide agricultural produce. This improves the image useful background information for early-stage of many young farmers as users of new planning and resource allocation. technologies and attracts more youth to the platform and to agriculture. To manage this Considering the middle view new set of youth demand, the platform then ICTs can be leveraged across the agricultural value added a Q&A section to provide answers to the chain to improve areas including research and production and marketing questions of its users. development, access to inputs, production, marketing, wholesale distribution, retail and traceability. Therefore, firms need to identify which Understanding the big picture part of the value or service chain they seek to serve. Apart from using pre-existing knowledge of the Dalberg (2013) noted three areas with the highest agricultural makeup of a country or region the perceived ICT need within the agriculture sector: start-up wants to serve, the best approach is to supply-chain management; communication, search for recent publications, for example, by the awareness and marketing; and information country’s Ministry of Agriculture and international management. Two ancillary cross-cutting segments institutions such as the Food and Agriculture that also present opportunities are agricultural Organization of the United Nations (FAO) or finance and risk mitigation (notably through CTA. Information to seek includes a government’s insurance schemes). priority cash and food crops, and livestock and/or Start-ups should identify gaps in services oe ff red along fishery data. This information should also point to the value chain and avoid, if possible, areas where the region in which the agriculture activity is taking competition is very strong. For example, many apps place. In addition, knowledgeable agricultural are developed to improve general access to markets, experts could be consulted. but most of them struggle to generate revenue. Other Similarly, in a quickly developing telecommunications areas for which (social) entrepreneurship can be market, one must identify what level of connectivity ventured into are agriculture-related sectors such as and models of ICT use exist in the country/region livestock or fisheries, or issues and segments such as and, more specic fi ally, for the potential target consumption of agricultural products, drone uses, etc. audiences of the proposed ICT4Ag service. The determining factor, however, should be the existence of actual needs and the ability to address customer values.Ideas, skills and challenges 9 Using ICTs in emerging markets requires a broad view of what technology will be used, its availability Case study 6 and whether there are adequate devices within the Musoni: Cloud-based target population. Table 1 lays out a number of options for mobile-based services. micron fi ance Self-assessing the start-up Musoni is a cloud-based microfinance system Lastly, young entrepreneurs should evaluate their that leverages mobile money, SMS and mobile actual potential to address the needs of the sector. apps to improve financial inclusion for people We recommend that they perform a baseline in rural areas in Kenya. For the founder, this SWOT analysis of their business. Following this is based on an understanding of both the assessment, the start-up can begin developing strengths of the platform and the increasing their business plan using tools such as the BMC. microfinance needs of the environment. To illustrate the SWOT self-assessment, we will Musoni’s platform improves the ec ffi iency of take the case of a company created by two young microfinance systems and safety of the sta ff software engineering graduates from a top while boosting clients’ ease and satisfaction with university in Benin. They learned of a significant the transactions conducted with microfinance opportunity in the agriculture sector and, after institutions (MFIs). With its system, time taken looking at the big picture, realise that shea butter for loan disbursement has been largely reduced is a growth opportunity and that a specific ICT from the traditional 2 weeks to 2 hours. The application could improve its commercialisation e fl xibility of mobile access has been central processes. The description below is limited and is to its increasing adoption, as clients in rural provided only as an illustration. communities no longer have to disrupt their schedules or travel to conduct their finances. Strengths Other MFIs in Kenya are increasingly adopting The entrepreneurs have current and relevant ICT Musoni’s software to manage their operations. skills for developing a prototype service. Additionally, they will have access to other technically trained individuals who attended the same university. They have a high appetite for risk. Table 1 Options for mobile-based services Minimum delivery method requirements Minimum device requirements Basic: SMS Basic: Basic mobile phone Intermediate: Interactive Voice Response Intermediate: Basic mobile phone (IVR) Advanced: Feature phone, smartphone, tablet Advanced: Mobile and web-based applications Source: Woodard et al. (2014).10 ICT Agripreneurship Guide Weaknesses As youths, who have not been exposed to businesses Case study 7 from their family contacts, they have insufficient Mkulima Young and training to make adequate business decisions and Ensibuuko: Identifying gaps limited understanding of the regulatory framework for ICT-based services/products. in the market Mkulima Young, an online platform, taps Opportunities into the drive to enhance youth involvement Given ‘big picture’ and ‘middle view’ research, the in agribusiness in Kenya by assisting young graduates know that more farmers are cultivating people in agriculture with information, market shea trees to service growing local and global access and financing. The platform provides an demand. From the value chain, they have come to online marketplace for young agripreneurs to understand that the process includes separating/ sell and buy agricultural produce and inputs. cracking, crushing, roasting, grinding, separation In addition, there is a Q&A section where its of the oils, then collecting and shaping the final staff and fellow farmers respond to agribusiness product. The graduates are now positioned to questions submitted by young farmers. investigate where their ICT skills, from database Although, the platform started with Facebook, support to online marketing, can be applied to which is its most popular online marketplace reduce costs or increase sales for farmers. They with over 60,000 followers, it expanded to other have identified local incubation and other business social media platforms like Twitter and now has support programmes, and have identified potential an Android app. sources of funding their venture. Ensibuuko, a Uganda-based company, exemplie fi s the ability of an ICT firm to adapt Threats its products to market needs. Launched in May The graduates have to contend with the lack of 2012, the company sought to help farmers reliable infrastructure (power cuts, stagnant ICT improve their access to markets while cutting connectivity), and limited ICT literacy among the out middlemen to save money. target audience. Additionally, there are also regional competitive threats from Ghana and Once Ensibuuko began providing SMS-based Nigeria where more established ICT4Ag companies services to connect local farmers to buyers, have developed ICT services to support the shea they noted that increased demand for farm value chain and could expand into Benin. products meant that the team had to assist Having carried out this exercise, the entrepreneurs farmers to access financing support. This should ree fl ct on how to mitigate the weaknesses and led to the identic fi ation of another gap in the threats revealed by this SWOT analysis. For market, as local savings and credit cooperatives example, regarding the threat of regional companies (SACCOs), which traditionally provided loans expanding into Benin, the entrepreneurs could to individual farmers, had been struggling research these companies to identify how they serve to manage information and ensure ec ffi ient their customers and decide whether obtaining reporting of their members. In response to licences to operate these businesses in Benin is more this, Ensibuuko provided a platform that helps benec fi ial than creating a new service. They may SACCOs to manage information and reporting decide to identify gaps in the services the competitors and better deliver financial services to farmers. oe ff r, notably the market segments they serve. After this SWOT analysis, they may then take Given the fast-developing nature of the ICT sector an initial decision to move ahead with their and previous work done in the ICT4Ag domain, business idea. new entrepreneurs can learn from a wealth of cases, which may be a source of inspiration. Analysis of the competition can also assist with unique product/service design. Box 2 lists a selection of tech-innovations developed by Africans in the agricultural sector.Ideas, skills and challenges 11 Case study 8 Box 2 Ensibuuko and Farmerline’s Some popular ICT4Ag winning strategy: A variety innovations in Africa of skill sets • Daral Technology facilitates livestock Uganda-based start-up Ensibuuko has 10 sta ff management (Senegal) members who are knowledgeable in finance, • F armerline provides accurate and timely ICT and agriculture. One founder, Otim agricultural information to farmers and also Gerald, has financial experience and has provides technology to stakeholders so that managed start-ups, while the other founder, they can work more efficiently (Ghana) Opio David, has first-hand experience in • iC ow is an app that enhances and facilitates rural farming communities. To complement livestock management (Kenya) the current staff, 400 model farmers have • M-Shamba is an interactive platform for now been trained through Ensibuuko to share smallholder farmers and traders (Kenya) their knowledge at the community level. • Mobipay provides technology solutions to From acting as a means to connect farmers to various economic sectors to drive commerce available markets, Ensibuuko has been able and trade (Namibia) to use its existing presence in the marketplace • Mobis (Ensibuuko app) is a mobile platform and relationships within the agricultural for the management of credit and loans for value chain to branch out and oe ff r additional smallholder farmers and agricultural services such as providing access to solar cooperatives (Uganda) power kits and mobile banking. • Rangerland Solutions is an online In Ghana, where there is one extension agent livestock marketing platform that directly for every 2,000 farmers, Farmerline was connects buyers and sellers, reducing founded to improve the collection of data marketing costs (Kenya) from small-scale farmers while providing • Redcore Interactive is a platform for them with information related to price, online international money transfers to weather and farming techniques. Farmerline’s mobile money services (Uganda) platform provides this information via • SmartMoney provides free branchless traditional outbound text messaging, an mobile banking to unbanked rural Android application and voice-based communities (Tanzania and Uganda) messages in local languages for farmers with • Y ieldUganda sources high quality, low literacy levels. The founders of Farmerline traceable food products for local and export brought together a team that included people markets (Uganda) with master’s degrees in ICT, electrical engineering and business development to 7 Source: AGRA (2015); Village Capital website (2015) build the original multiplatform system and ongoing web features. Additionally, the team includes staff with experience in building 7 http://vilcap.com/ relationships with agricultural extension agents who are key in maintaining relevant and appropriate content. In the face of growing demand for their services, they performed internal skills assessments and looked for additional staff.12 ICT Agripreneurship Guide Reviewing and improving the Box 3 team’s capacity A common feature of ICT4Ag businesses is the Partnership: Key for challenges faced in recruiting and building the team. Esoko and Daral It is important to evaluate team members’ skills to ensure that they are able to work together to realise Technologies the goals set for the enterprise’s success. New skill sets Esoko, a Ghana-based service that provides should be brought on board when they are needed. market prices and other value-added To execute an ICT4Ag idea, knowledge of information to farmers, has partnered with agriculture and value-chain dynamics, the United States Agency for International business skills and technology skills like Development (USAID) to launch a farmer software development/coding are key helpline call-centre, which operates in requirements. For example, if the team has business 12 local languages. and agriculture skills but lacks technology skill sets, Daral technologies is a Senegalese innovation an entrepreneur may be able to compensate by that uses nose rings to track cattle in order to partnering with technology companies. The benet fi s prevent theft. It enhances the traceability of of such a partnership should justify the cost of the animals and prevents the risks and outsourcing technical development of the product. proliferation of infected meat on the market. In addition, by working with government Overcoming early challenges institutions it has been able to prevent an Moving from an idea to execution poses many epidemic at least once. Daral works with challenges for early-stage entrepreneurs. The Ministry of Agriculture in Senegal to promote following are key challenges often faced by the adoption of nose rings in its herds and is surveyed start-ups: working on developing a national register of farmers and livestock. This database will help Lack of available partnerships between government planning for the sector and start-ups and existing financial and/or enhances Daral’s prot fi ability through governmental institutions information-sharing with agricultural insurance companies. The ICT4Ag sector is a relatively new sector that established institutions – government and financial – are generally still struggling to understand. This Capacity building and role of incubators/ is even more so in ACP countries. Because ICT4Ag accelerators innovations are often ahead of existing regulatory Incubators are institutions that provide aspiring or and financial frameworks, entrepreneurs may find young innovators and entrepreneurs with a variety of themselves labouring more than expected to support services to help them develop, launch and establish partnerships with government and scale up their products and services (Box 4). Services financial institutions. Support from public oe ff red can include oc ffi e space, internet connectivity, institutions is critical and possibly what is most advanced coding skills, business development skills lacking, usually because of this inadequate and contact with business partners, including potential understanding. investors. Accelerators oe ff r advanced services and are However, research shows that these key challenges more relevant to young start-ups that have already can be managed successfully at the early stage developed a working prototype or that have already through a variety of means. Businesses can work begun oe ff ring their services. Incubators or together to build partnerships with donors, and accelerators can be run by civil society, academia, non-governmental and private-sector organisations government or private-sector institutions. In ACP interested in promoting agricultural activities or countries, there are more incubators than accelerators interested in investing in making agriculture more and many young ICT4Ag start-ups lack the support of productive. accelerators that can help turn their innovations into viable businesses and assist in scaling up. Many start-ups are still young and fragile, and need to be strengthened.Ideas, skills and challenges 13 • entering competitions sponsored by MNOs • attending pitch competitions, events and meetings Box 4 co-sponsored by MNOs to establish relationships • s eeking co-founders who may have worked for Incubators and MNOs co-working spaces • n egotiating with MNOs via a network of start-ups, or supported by another powerful partner/ The recent launch of co-working spaces and stakeholder – and not individually. incubators across Africa allows entrepreneurs to reduce office, electricity and connectivity Whereas many start-ups try to form direct constraints. For those in Accra, these include relationships with MNOs, they take a significant spaces such as Hub Accra and iSpace amount of time to develop, and are not transferable Foundation. Most major capital cities across from one country to another. As an alternative, Africa have similar locations, for example, start-ups can work with players that already have Jokkolabs in Senegal, Etrilab in Benin, Buni relationships with MNOs and have integrated into Hub in Tanzania and mLabs in Kenya and their value-added service platforms and payment South Africa. systems. These include Cellulant, Voto Mobile and Kopo-Kopo, all of which are service providers that allow you to bypass direct collaboration with an MNO. Apart from ICT incubators, agriculture incubators also exist in ACP regions. They are certainly best Most MNOs tend to take, unsurprisingly, a very placed to provide knowledge and networking related commercial approach to partnerships with young to agribusiness. An ICT4Ag start-up will benet fi the start-ups. Young companies should strive to most if it receives support from both ICT and 9 demonstrate their value and augment their traction agriculture incubators working in collaboration. in order to improve their bargaining power with MNOs. If possible, negotiating with them as a Some key initiatives are worth mentioning: network of start-ups, and not individually, may be InfoDev has been involved in the promotion of a winning strategy. This however depends on the incubation at die ff rent levels and has supported capacity and willingness of young operational incubators interested in agriculture and ICT companies sharing the same strategic objectives (among others); AfriLabs, a network of African to join forces. incubators is an adequate interface to reach incubators in Africa; finally, a new African Agri-business Incubator Network has Staff turnover recently been launched. Appendix 4 includes In many instances, staff members leave the contact details of such initiatives and a list of company after becoming highly trained and move selected incubation centres. to other businesses that may provide higher wages. To plan for this type of staff turnover, it is best to Poor relationships with mobile network consistently maintain a roster of potential new staff operators (MNOs) prevents start-ups from or create an internship programme for recent connecting with their value-added service graduates who can gain work experience while you 8 platforms including mobile payment services evaluate them. To date, many start-ups operate outside of MNO 8 infrastructure, or have difficulties collaborating Telecommunications’ value added services can be defined as services enabled notably by new technologies, rather than with them to use their platforms. Telecom operators other standard services such as the standard voice and fax own infrastructure through which developers of offered by telecom companies. ICT applications can reach agricultural 9 Market traction can be defined as a proof that services of stakeholders who own a mobile phone. If a young a company are requested by the market – this may be the entrepreneur wishes to use these platforms to number of clients who have strongly expressed interest or have already paid for/subscribed to the service, promises or provide information services (through, for example, contracts secured, etc. a short code like 222) to connected stakeholders, they have to pay fees that are usually beyond their financial means. Ways to overcome these challenges with MNOs include:14 ICT Agripreneurship Guide Case study 9 Agripro: Connecting young farmers Agripro, a youth-led venture based in Accra, Ghana, provides farm-to-market advisory services. These include investment finance, training, technologies that provide market access for organic fresh fruits and vegetables, and awareness programmes that encourage young people to pursue farming as a career through university-based farm clubs. To raise awareness of their services, Agripro has elected to use free social media tools such as Twitter, Facebook, YouTube, Google+ and Pinterest. They engage their followers by sharing topical information and keeping their clients informed of upcoming products, services and events. Right: © Gallo Images / Alamy Stock Photo Below: © CTADeveloping the business plan16 ICT Agripreneurship Guide As we move further into the digital age, ICT4Ag entrepreneurs are increasingly able to launch a start- up cheaper and faster than ever before by leveraging technology, access to wider range of skills, grants, competition money, crowdfunding and accelerator and incubator programmes. But everything starts with a plan. The ability to convert an idea to a business plan is essential, but few young entrepreneurs ever bother to complete a proper plan. Additionally, there are some ICT4Ag entrepreneurs The traditional approach entering the so-called start-up world in search of A traditional business plan covers a wide range of repeatable scalable business models, but since this topics necessary for a company to obtain financing, is a nascent sector there are no particularly trusted make future projections and eec ff tively market to business plans or models that entrepreneurs can customers. adopt. They will either have to import models from other industries or create new ones themselves. ICT4Ag entrepreneurs can choose to take a traditional approach to developing a business plan or they can examine new approaches, such as the Lean Startup approach and its key tool, the BMC, which has become a standard tool used by many ICT-driven start-ups. Below is a brief overview of the traditional approach followed by a detailed explanation of the Lean Startup approach, which we recommend for ICT4Ag entrepreneurs.Developing the business plan 17 Table 2 Typical elements of a traditional business plan Executive summary Description of business Your executive summary is a snapshot of Your company description provides information on your business plan as a whole and touches on what you do, what die ff rentiates your business from your company profile and goals. others, and the markets your business serves. • What is the business? • A brief description of the business idea and why it • What is the market? should be a success • W hat is the potential for the business? • History of the enterprise and its ownership • F orecast prot fi figures • Information about the entrepreneur’s qualifications, • Funding requirements experience and financial status • Prospects for the investor/lender Products and services The market • A description of the product and what it does • S ize and expected growth of the market • A n explanation of ways in which the • Analysis of market by segments product is distinctive and unique • I dentification of target segments • A nalysis of the competition • C ompetitors: who they are, ownership, size, market • H ow the product will be developed and share, likely response to the challenge what new products are being considered as • C ustomers (existing and potential): who they are, replacements where they are, how they buy, why they buy • Intangible assets and protection • D istribution channels (e.g. copyright, trademarks) Strategy and tactics Marketing: key questions to be answered • How are we to get there? • Who are the customers? • O utline the broad approach to achieving • W ho are the competitors? the objectives • W hat is the size and growth rate of the market? • Describe the tactics (the details of the • H ow is the market segmented? strategy e.g. the promotional mix) • What is special about the product or service? • T he detail will be contained in • W hat are the product/services’ competitive programmes and budgets advantages? • What is the marketing strategy? Marketing plan Operations plan • M arket research • Physical location • Segmentation and targeting • The production process • Detailed outline of the product or service • F acilities • U nique selling points • E quipment • C hosen pricing strategy • S cale and location of operations • P romotional plans • Capacity – potential and actual • D istribution strategy (including online) • ICT strategy • C ustomer service strategy • S taffing requirements Management and organisation • Organisational chart • T raining • Details of senior management • Rewards for sta ff and even service providers if • Corporate governance relevant (financial and non-financial) • S taffing requirements • Labour relations • K ey personnel • Employment and related costs • Recruitment and selection18 ICT Agripreneurship Guide Table 3 provides an example of the headings found within their traditional business plan. Box 5 According to many experts, such as entrepreneur Developing an and Lean Startup Advisor, Paul Foster, “a traditional business plan is full of assumptions and initial business plan: guesses” (Foster, 2014), which is why the Lean Startup approach and BMC tool are being seen as AgroCentral far superior methods, and can be used to start and AgroCentral is Jamaica’s first digital launch an ICT-enabled agribusiness. agricultural clearing house, using web and mobile services to connect farmers and Lean Startup approach businesses. Businesses have the ability to 10 source large amounts of agricultural produce With the Lean Startup approach, an ICT-enabled directly from farmers and farmers are able to agribusiness is focused, first of all, on developing sell their produce directly to businesses. The what is called a Minimum Viable Product (MVP). solution aids farmers in locating markets for Popularised by Eric Ries, a consultant and writer their produce without the involvement of a on start-ups, an MVP is a technique in which a middleman. AgroCentral also helps businesses new product or website is developed with sufficient to streamline their purchasing processes. features to satisfy early adopters, yet the final, complete set of features is only designed and Their business plan was conceptualised by developed after considering feedback from the Janice Mcleod, a co-founder of the business, product’s initial users. who has a bachelor’s degree in economics and has been working as a business development 10 The Lean Startup approach is a method for developing consultant since 2009. She has assisted the businesses and products first proposed in 2008 by Eric Ries. formation of several start-up companies Based on his previous experience working in several US based in Canada, Jamaica, the United Arab start-ups, Ries claims that start-ups can shorten their product Emirates and United States by using the development cycles by adopting a combination of business- traditional business plan method. hypothesis-driven experimentation, iterative product releases, and what he calls validated learning. Table 3 Examples of headings found in a traditional business plan Executive summary Description of business Products and services The market Management team Milestones Market overview Market segmentation Information hub through blog Future product development Advertising strategy Revenue business model Revenue drivers Regional forecast Financial model Proforma balance sheets Expansion plans LogisticsDeveloping the business plan 19 So in simpler terms, an MVP is the most pared down The BMC tool version of your product/start-up idea. Yet it still: This tool emanates from the Lean Startup • has enough value that people are willing to use it approach and can be used to launch ICT-driven or buy it businesses. Simply put, “it enables both new and • d emonstrates enough future benet fi for early existing businesses to focus on operational as well adopters as strategic management and marketing plans” • p rovides a feedback loop to guide future (Osterwalder, 2004). development. It has nine sections: Key partners, Key activities, The ideas behind Lean Startups can be drilled Value propositions, Customer relationships, down to a few straightforward actions: Customer segments, Key resources, Channels, Cost structure and Revenue streams. A further • Deploy resources stringently, incrementally description on each element of the BMC tool can proving assumptions that drive the business be found in Table 4. model. • G et customer feedback as early as possible. The BMC tool allows for ICT4Ag entrepreneurs to • R evise your product or service as quickly as plot out their ideas for any new or existing possible. businesses and test die ff rent scenarios before writing a single line of code. It’s a quick test and can be carried out in only 30 minutes, provided the required market information is available. Delivered on a single page, this tool is fast becoming the global ‘go-to’ method for plotting strategies and seizing ICT-driven opportunities. It can be used for both non-prot fi - and prot fi -focused agribusinesses. Table 4 Components of the BMC Key partners Key activities • I dentifying private- • What key activities does the value proposition require? sector partners • W hat activities are most important in distribution channels, customer • Connecting with relationships, revenue streams etc.? partners (government, private sector, funders) Key resources Value proposition • W hat are the key • What core value will be delivered to the customer? resources that are • Which customer needs will be satisfied? already available The value proposition of the ICT-enabled agribusiness is about the collection and will be needed? of products and services the business will offer to meet the needs of its customers. It should speak to various elements such as newness, performance, customisation, getting the job done, design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability. The value propositions can be, for example: • Quantitative: price and efficiency • Qualitative: overall customer experience and outcome

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