Realizing "Africa to the World" Through Brand: Part 1

Building the foundation through a broader look at Enterprise Development, with a focus on such efforts in Nigeria

At the start of this series, I talked about the idea of  ‘Africa to the World’ and the motivations for exploring how brand (the combination of product + enterprise at the intersection of commerce and culture) can realize this idea, along with introducing principles that could connect the dots between ideation and realization:

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Operating in harmony as an intentional ecosystem, with the entrepreneurs, the value creators, at the center

Creating the space and providing what’s needed for entrepreneurs to build and pull in what they need for the enterprise to thrive

Focusing on sustainable, inclusive growth trajectories that orients enterprises towards longevity

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Now, I want to take the time to dive into the research that forms the foundation of these principles, highlighting the key thoughts and observations that connect the potential value these principles have and their ability to address the (in)effectiveness of past and current actions.

To do that, I’m going to take a step back and expand the scope a bit; looking at entrepreneurship and venture development more broadly and using Nigeria as a case study, before narrowing back down to brand later on. Ultimately, enabling cultural enterprise is a subset of enabling enterprise in general, and it’s important to go over where we are, where we’re coming from, what’s been done in the context of enabling African (and in this example, Nigerian) enterprise in general. From there, imagining what needs to be done to move forward in my opinion becomes easier, and this approach further emphasizes how generalizable these ideas and solutions can be.

So, let’s get into it.

Entrepreneurship Development in Nigeria - Where Do We Stand, What’s Been Done About It, and What’s Left to Do?

With rising unemployment, lagging economic growth rates, and a weakening currency plaguing Nigeria both during the time of this research and now, many have looked to entrepreneurship and venture development as the key to improve the current socioeconomic situation. This desire is mainly driven by what MSME (micro, small and medium sized enterprise) development has done in other emerging markets¹. So naturally the question then becomes “if such a path has worked for others, why not for Nigeria?”

As you can imagine then, there’s been a lot of energy and activity to support entrepreneurs and their businesses, but a lot of this activity has resulted in mixed outcomes. 

Let’s start with access to financing and capital, which if you were to ask any entrepreneur, would be called out as the biggest pain point they need to overcome. There has been so much activity, both public and private, to address this pain point, yet if you were to talk to most entrepreneurs today it would still be called out as an issue. Programs like the Small and Medium Enterprise Equity Investment Scheme, the Bank of Industry, and the Agriculture and Rural Development Bank were created by the Nigerian government to provide capital to emerging enterprises at generous rates, and also (where appropriate) incentivize traditional capital institutions to do the same. At the same time, microfinance banks, private equity firms, and venture capitalists sought to play their own roles, either by filling gaps still left by the public programs or by focusing on particular sectors (i.e. the near exclusive focus venture capital activity has had on the tech sector). Still, many entrepreneurs still complain about access to capital, calling out the (still) high cost of capital, lack of inclusivity, and the inequitable distribution of funds due to administrative failings, politics, etc².

On the other hand, capital allocators do have a reasonable argument to defend themselves regarding the issue of access: many have noted  that there aren’t many ‘bankable’ MSMEs and entrepreneurs who have the capacity to generate viable financial returns³. Assuming this to be true, then the natural next question is “What will help/What has been done to de-risk these MSMEs and make them more viable?” In comes this idea of ‘entrepreneurial capacity’ or “entrepreneurial competency”.

 In a 2009 paper, Benjamin Inyang and Rebecca Enuoh defined ‘entrepreneurial competency’ as “clusters of related knowledge, attitudes, and skills which an entrepreneur must have” to perform, maximize profit, grow their enterprise, etc⁴. Think business plan creation, financial management, or talent development. They also cited many government-driven programs and initiatives led by educational institutions that sought to address these skill gaps - emphasizing that people are aware of the need to develop entrepreneurial competency to yield entrepreneurial success, and have been trying to address it. At the same time, independent incubators and  programs have also popped up to address these same challenges, coupled with providing shared space, business tools, and other resources. Despite this, the perceived value of these efforts is mixed at best, with access and overall usefulness still being the main concerns for entrepreneurs. At the same time, researchers have questioned the ‘quality’ of entrepreneurial outcomes coming from such programs and the long-term (needed) benefit of mainly short-term/one-off touchpoints.

A New Approach: Guiding Principles for Genuine Entrepreneurship and Venture Development

With many entrepreneurs across various sectors still having to operate and scale their ventures almost in spite of the activity aimed to ease capital access, capacity building, and infrastructure (another big pain point for many, which I’ll touch on later), clearly there’s a misalignment between everyone involved and an opportunity still to make things better. I argue that in order to do that, all of us will need to re-orient ourselves towards three core principles in future actions:

Operating in harmony as an intentional ecosystem, with the entrepreneurs, the value creators, at the center

Creating the space and providing what’s needed for entrepreneurs to build and/or pull in what they need for the enterprise to thrive

Focusing on sustainable, inclusive growth trajectories that orients enterprises towards longevity

An Ecosystem with the Entrepreneurs Truly at the Heart of It

Taking a step back and looking at everything that’s been done and everything that’s been said at this point, I’d argue that the two root causes for the mixed effectiveness of past solutions are:

1. Past initiatives and actions, on both the public and private side, being too ‘top-down’ in their design and implementation, with a general disconnect between them and the current short- and long-term realities of entrepreneurs. The fact that there have been continued complaints of the same issues made by a large number of entrepreneurs, plus the little genuine progress seen at scale, further emphasizes this disconnect. In a way, a lot of these efforts have either not reached their intended audiences or are being misused or misinterpreted by those audiences, either scenario limiting the overall effectiveness of said efforts, and demonstrating a lack of true fit (either due to program/service itself or in the way it is distributed/implemented). 

Ironically, the way to correct this is very similar to the way a successful entrepreneur should seek to meet the needs of and satisfy their customers. Deeply understanding and tailoring solutions to the needs and habits of entrepreneurs (even if the goal is to spur behavior change) is the way. This looks like being intentional upfront on what type of entrepreneur or sector one is serving, and centering that entrepreneur throughout development. This looks like doing everything that is needed to truly enable them to grow their enterprise and thrive. This could even extend to co-creating solutions and programs alongside entrepreneurs, making it even easier to have their needs top of mind. But adopting an entrepreneur-centric approach alone is not enough if we also continue to allow…

2. A severe lack of coordination within the ecosystem, mixed with an overreliance on or genuine lack of trust skewed towards a few entities (particularly the Government). Examples of this today are expressed through sentiments like:

 ‘Stakeholder X is not doing enough and it’s 100% their sole responsibility to do something’ 

or 

‘Stakeholder X is an enemy of progress and we have to go it alone’

Taking a step back and using the positive outcomes achieved in other markets that were in similar situations in the past, this lack of coordination first starts from a genuine misunderstanding of the roles everyone is supposed to play. Professor Fiona Murray and Dr. Phil Budden from the MIT Innovation Initiative laid out what a functioning ‘innovation/entrepreneurial ecosystem’ looks like through their work of analyzing past success stories and partnering with regional ecosystems themselves: from the stakeholders involved, the ideal roles for each, and numerous positive outcomes that can be achieved with this framework in their 2019 paper⁵. 

The key point that I want to emphasize here is that everyone (The Government, Capital Providers, Educational Institutions, Established Corporates, and Entrepreneurs) has a role to play. We cannot be reliant or shift all responsibility to one or a few stakeholders and expect them to operate outside of their true role and strengths. Instead, we must understand how our strengths and capabilities fit, and constantly seek out opportunities to build connections, create space for one another, and align on incentives, a point that other researchers like Onyeka Ofili have also emphasized⁶.

Now, this is not to take accountability away from stakeholders that have significant sway in how things turn out, like the government (a common entity that is called out and many times rightfully so). Especially considering the potential harm such stakeholders can create through their actions. Instead, this is to emphasize and recognize the power of other stakeholders in the ecosystem (especially the Entrepreneur), while also highlighting the true role Government is meant to ideally play: the facilitator and the regulator, which leads me to the highlighting the foundation for the second principle:

Creating the Space for Entrepreneurs to Build & Pull-in What They Need

Infrastructure (along with financing) is overwhelmingly cited by many entrepreneurs, researchers, etc. as the major barrier preventing enterprises (and for the general populace) from thriving. At the same time, infrastructure is something that many see as being the sole responsibility for the government to create and provide, in addition to the responsibility of maintenance, even though history shows us that this is not the sort of role the government has played in the success of other markets.

This is something that Clayton Chrsitensen, Efosa Ojomo, and Karen Dillon raise in the Prosperity Paradox, making the point that ‘infrastructure’ as we understand it was actually born from, and is effectively sustained by, entrepreneurial efforts and commercial activity. It’s only later in the process of developing infrastructure that the government comes in to regulate and standardize for the benefit of the general population, beyond commercial purposes. They further emphasize this point of the infrastructure being truly birthed from entrepreneurial activities through examples like the Aravind Eye Hospital in India establishing its own training program for employees and manufacturing its own subcomponents in order for the core business to thrive, and early American entrepreneurs and financiers being responsible for early railroad development for the sake of transporting their goods before the government came in to regulate and support these networks⁷. 

If we take this to be true, and combine this idea with the first principle, we should actually be looking to enable entrepreneurs to address the infrastructural gaps that prevent their enterprises from thriving themselves, either by:

1. Incentivizing and supporting entrepreneurs in a particular space to incorporate more ‘infrastructural’ elements into their operating model, or

2. Creating the space and means for entrepreneurs to address these gaps in service to other businesses and encourage competition to ensure customer quality.  

We need to allow and encourage entrepreneurs (or even other stakeholders with the capacity and desire to innovate) to ‘pull in’ the infrastructure that they need. Now, this is where I want to re-emphasize the importance of ‘incentivizing’, ‘supporting’, and ‘enabling’, as well as bring up the first principle again to make clear that this is not to excuse the role that other stakeholders have in partnering with entrepreneurs to make this possible and easier to do. Instead, the main question I believe that other stakeholders and we as a collective should be asking ourselves is 

‘How might we make the process of entrepreneurs pulling in infrastructure more feasible, viable, and desirable for them?’

Embracing Inclusive, Sustained, ‘Gazelle-like’ Growth as the Focus

With an ecosystem working in harmony, truly centering the entrepreneur, and creating the environment for them to build and thrive, the next question then is what should these entrepreneurs and ecosystems be driving towards? What is the goal?

Coming back to the idea of ‘Africa to the World’ and enterprise development being the key, having ventures scale and grow beyond micro- and small-sized status should be the end goal, no? But then, to what extent should we look to have these entrepreneurs build scalable businesses? Is all growth the same? This is where the third and final principle comes in.

The quality of entrepreneurship in Nigeria (and by extension the Continent) has been a topic of discussion in the past, with some calling for less ‘distribution agents’ and ‘informal’ storefronts and more high potential enterprises like those in tech⁸. This has been coupled with an increase in tech-based startups and venture capital activity (from both local and foreign investors) over the past couple of years. Along with this has come increased expectations for and value in venture-like growth trajectories and returns. 

Now, while I do think the amount of energy in internet-based tech startups is deserved, should continue, and is critical to a thriving Nigeria (and Continent), the high-velocity growth expectations (among other factors in the current venture/tech ecosystem) is very exclusionary to a whole range of sectors and enterprises that are just as worthy of attention and investment (including many cultural oriented sectors). Not to mention, such a hyper-focus on growth can (and has) lead to adverse outcomes too, with more emphasis being put on raising capital and paper valuations versus genuine value creation and longevity.

Interestingly, there does exist a defined class of businesses that historically contribute the most towards value creation and are oriented more towards the long-term. ‘Gazelles’, as named by Robert Birch, who in during deeper exploration of his previous work around how small businesses drive the economy in the US, refined his previous conclusion by specifically calling out a group of businesses that enter a period of ~20% year over year growth over a four year period and during that time have the largest economic contribution (in terms of job creation and revenue generated), even though they make up 2-3% of all firms⁹. As others have dove deeper into this concept, it also turns out that this dynamic  is also consistent in markets beyond the US as well¹⁰.

On top of this, ‘Gazelles’ (otherwise known as high impact firms) also tend to be more diverse industry-wise, and are older in age¹¹ - both observations lending themselves well towards genuinely realizing ‘Africa to the World’, especially as a part of that reality requires enterprises that can last and become institutions themselves that feed back into the ecosystem.

So then, how does a firm become more ‘Gazelle’-like (aka high impact)? It turns out that beyond the entrepreneur desiring to grow and scale their business, which is key, these enterprises also tend to:

1. Be highly oriented towards the market that they serve, i.e. they are highly in tune with their customer and are able to market to them effectively. 

2. Have a high capacity to innovate and continuously improve their operations and offerings over time - be it product, service, or process.

3. Be highly networked and have the means to access resources (capital or otherwise), and

4. Be relatively decentralized at scale, as in - they tend to be less dependent on the owner, and others within the venture can and are empowered to effectively lead and direct various functions of the business as it scales.

I want to point out, just as many researchers in the space have also done, that these characteristics can be developed at any point in the life of a venture, and aren’t inherent to a specific type of venture, entrepreneur, or industry. Also, note the connection between some of these characteristics and some of the ideas mentioned earlier, such as: the high capacity to innovate and the ability to ‘pull-in’ needed infrastructure to thrive, or the idea of decentralized, high capacity leadership and that being a very important  ‘entrepreneurial competency’. All of these ideas point to the same general principle. Bringing in the first two principles, the objective for the entrepreneur-centric (or the value creator-centric) ecosystem becomes clear:

How might we work together to enable the value creator to build, scale, and have their business exhibit high-impact qualities consistently over time?

Closing Thoughts and Bringing This to Life

Collaborating with each other as a cohesive ecosystem and enabling entrepreneurs and their businesses to demonstrate ‘high-impact’ qualities: marketing well, innovating (including pulling infrastructure in), easily accessing resources, and operating in a decentralized way as they grow, is what we need to make ‘Africa to the World’ more than just a saying or a collection of isolated examples. Creating the space, providing the tools, and sharing accountability with each other as we execute on these principles is what we need to do if we want to realize the growth, scale, and sustained value capture of the cultural and commercial value coming out of the Continent. It’s what we need to do if that cultural and commercial value is to then be used to improve things on ground and create even more opportunity for others. While I used the past and current actions and situations in Nigeria to highlight this, these principles are applicable across the Continent and really aren’t that unique to Nigeria’s situation. To a certain degree, similar challenges are being faced in other markets across the Continent (and even beyond).

With the principles and the approach in place, now the next question is:  ‘How do we actually move into action?’ The next part of this series will be me using the study I conducted with consumer good entrepreneurs based in Nigeria (the second part to my thesis) as an example of what the start could look like. 

The focus of that study (and the first step of moving from insight to action) was understanding the desires, motivations, habits, emotions, and needs of this target group to build the foundation for more effective solutions.  Taking a design-led approach to this (surprise, surprise), it’s important to understand the current context in order to know where things need to go - just as we did to get to this point.

1.  Naude, W. “Entrepreneurship and Economic Development: Theory, Evidence, and Policy”. Discussion Paper. Institute for the Study of Labor, German. 2013

2. Uzoma, Anochie & Ude, Damian. (2015). Small and Medium Enterprises Equity Investment Scheme ( Smeeis ) in Nigeria : Pro or Anti-Industrialization ?. Singaporean Journal of Business Economics and Management Studies. 4. 11-25. 10.12816/0017735.

3. Ihugba, O.A., Odii, A., Njoku, A.C. “Challenges and Prospects of Entrepreneurship in Nigeria”. Academic Journal of Interdisciplinary Studies 2(5). 2013

4. Inyang, B.J., Enuoh, R.O. “Entrepreneurial Competencies: The Missing Links to Successful Entrepreneurship in Nigeria”. International Business Research. 2(2). 62-71. (2009)

5.  Budden, P & Murray, F. ”MIT’s Stakeholder Framework for Building & Accelerating Innovation Ecosystems”. MIT Laboratory for Innovation Science and Policy. 2019. Working Paper.

6. Ofili, O.U. “Challenges Facing Entrepreneurship in Nigeria”. International Journal of Business and Management 9(12). 2014.

7.  Christensen, C.M., Ojomo, E., Dillon, K. ”The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty”. (2019)

8. Thaddeus, E. “Perspectives: Entrepreneurship Development & Growth of Enterprises in Nigeria”. Entrepreneurial Practice Review 2(2). 2012.

9. Birch, D. L., & Medoff, J. 1994. “Gazelles.” In Labor markets, employment policy and job creation, ed. L. C. Solmon &A. R. Levenson. Boulder, CO: Westview.

10. Zvonko, B. Vuklea, V., Divna, C. Importance and Role of Fast Growing Companies – Gazelles in Modern Economies.  48(3-4) 44-61. 2015.

11.  Acs, Zoltan & Parsons, William & Tracy, Spencer. (2010). High-Impact Firms: Gazelles Revisited.