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How to Help African Entrepreneurs

Ashish Thakkar survived horror to become one of the central figures of African business. Here's his view of the continent's startup ecosystem.
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This column is part of an ongoing series, originally published by McKinsey & Company, about how entrepreneurs are making a societal impact around the world.

 

 


After surviving the Rwandan genocide, Ashish Thakkar left high school in Uganda to launch a small computer business that would later become Mara Group, one of Africa’s most successful conglomerates. Sixteen years later, Thakkar runs a group of closely-held companies that employ more than 7,000 people and operate in 19 African countries across a range of industries, including information and communication technology, manufacturing, real estate, and agriculture. He is also an active philanthropist. In a recent conversation with Voices from McKinsey & Company, Thakkar explained how the Mara Foundation provides mentoring and start-up capital to young entrepreneurs across Africa.

Voices: How did you get started as an entrepreneur?

Ashish Thakkar: My family’s been in Africa for more than 120 years. My mother was born in Tanzania, and my father in Uganda. They were living in Uganda in 1972, when Idi Amin’s government declared what he called “economic war” against Asian Ugandans. My parents were kicked out of Uganda, lost everything they had, and moved to England, where they both worked in factories. Then they built up capital, set up a small business, built some more capital, and bought a home. In 1993 they wanted to come back to Africa. So they sold their home and business and moved us to Rwanda. Nine months later the genocide started. After three-and-a-half weeks we were refugees. Luckily we came out alive, but unfortunately my parents lost everything once again.

We moved back to Uganda, coming full circle, and at that time we literally had nothing. The clothes we were wearing were the only assets we had. In those days people would avoid my parents because they were scared of being asked for favors. I was old enough to understand what my family was going through, and I wanted to do something about it. So at the age of 15 I quit school, took out a $5,500 loan, and set up my first business -- a small computer company.

Voices: Why is your foundation dedicated to promoting entrepreneurship in Africa?

Ashish Thakkar: We focus primarily on young entrepreneurs. I know from experience that when you are young, the concept of networking is very alien and you don’t know how to go about raising capital. Learning the hard way, on the job, helped me understand why unemployment is such a big issue in Africa and globally. According to our government, the answer to unemployment is foreign direct investment. But I don’t believe that’s the only option -- we should also look to nurturing Africa’s small and medium-size enterprises (SMEs). The Mara Foundation’s philosophy is to enable, empower, and inspire young entrepreneurs by providing mentorship, incubator space, and venture capital. Our mentorship program gives entrepreneurs guidance and advice, the incubator program gives them visibility and credibility, as well as workspaces, and on top of all that, we provide venture capital to help grow their businesses.

Voices: What sort of impact has the Mara Foundation had to date, and what do you hope to achieve going forward?

Ashish Thakkar: Today we’re having an impact on almost 140,000 young entrepreneurs across Africa with mentorship schemes and a number of other valuable initiatives. As an example, we recently sponsored a youth-entrepreneur prize through the Africa Leadership Academy in South Africa. The academy screened 600 entrepreneurs, of whom 18 were shortlisted for the final round. I was one of the main guests at the awards ceremony, where they gave the winning prize to a young Ugandan entrepreneur. That was very touching for me to see, as I am part Ugandan, but I’d never seen or heard of this kid. When he went on stage to accept the award, he thanked the Mara Foundation for helping him get to where he was today. That put a lump in my throat because I realized that the Mara Foundation is really working and starting to make a genuine impact on the lives of young entrepreneurs in Africa.

Voices: How will you know when you’ve moved the needle?

Ashish Thakkar: I’ll know I made a difference when I start seeing small and growing businesses creating jobs in a sustainable manner. On average, SMEs provide 65 percent of private-sector employment in Africa. But in South Africa, for example, only one out of five businesses succeeds. That kind of statistic knocks you back a bit. I’ll know that real change is happening when I see the percentage of failure rates come down. I frequently meet with entrepreneurs all over Africa, and my first question is always, “Look, what can I do for you?” They never tell me that money is their primary need -- what they are really looking for is guidance. Many young African entrepreneurs are the children of civil servants or farmers. They don’t come from business backgrounds, so where can they turn for advice? With the Mara Foundation, we’re trying to create an enabling environment that will inspire entrepreneurs to pursue their dreams.

Voices: Who mentored you when you were launching the Mara Group?

Ashish Thakkar: My father played a bit of a role, but he wasn’t so seasoned or experienced. So I found inspiration by reading biographies of business leaders like Richard Branson, Steve Jobs, and Ratan Tata. We sometimes underplay the inspiration piece of this, but it’s so important. For example, I mentioned that I started my business with $5,500. In reality I only had working capital of $2,500 after buying equipment and spending some money on rent and furniture. As I grew that working capital from $2,500 to $3,000 and then $4,000, I used to wonder how I was ever going to build a meaningful business. And then I would read about Branson or Gates and think, “Oh, wow, other people have actually done this.” Some of them may have taken five or ten years to find their feet and scale up, but it is doable.

I also found mentors by talking to everyone I could. Anytime I was on a flight somewhere I would bug the life out of the person sitting next to me, because I wanted to learn. I had no shame in asking ridiculous questions. Not everybody I talked to was spot on, but I learned so much in the process. And yet I still learned the hard way. My hope is that the Mara Foundation’s programs can help young entrepreneurs condense what I did, so that it doesn’t take them quite as long.

Voices: How will you ensure that the Mara Foundation’s work is sustainable?

Ashish Thakkar: I want all of our programs to continue having an impact, even if the Mara Group’s businesses suffer or if there’s a general downturn in the economy. We have set up a venture-capital fund that belongs to the foundation, so any money it makes will keep on feeding new start-ups in new countries. But not all our work is sustainable in that way. Take mentorship, for example. I can’t charge money to mentors or mentees, so I’ve had to come up with a way of making the program fully sustainable.

One of the ways we’ve solved this is through launching communication products that generate income to fund the mentorship program. For example, we launched a voice-over-Internet Protocol (VoIP) product called Mara Connect that we’re marketing online through the Apple and Google app stores. We’re also launching a mobile-messaging app called Mara Messenger.

We originally built Mara Connect and Mara Messenger because our mentorship program needed a messaging platform and a VoIP platform for training. But these products also have commercial value, so we put them under a company called Mara Online, which Forbes recently named as one of Africa’s hottest tech start-ups. We’ve kept the ownership of Mara Online in the foundation’s name. Right now, that revenue covers the cost of Mara Mentor, and I think it will support more programs going forward. We’re going to be operating in 22 African countries by the end of this year. There are 46 countries in sub-Saharan Africa, so we still have a long way to go.

Ashish J. Thakkar is the founder and managing director of the Mara Group, a conglomerate of IT, real-estate, and manufacturing companies, with headquarters in Dubai and operations in 26 countries. Mara companies employ more than 7,000 people worldwide. A serial entrepreneur, Thakkar started his first company in 1996, when he was 15 years old. He devotes much of his energy to commercial and philanthropic initiatives in Africa.

This article was originally published on McKinsey & Company's Voices, voices.mckinseyonsociety.com. Copyright (c) 2013. 

 

Last updated: Nov 11, 2013

VOICES FROM MCKINSEY & COMPANY | Columnist

In Voices, McKinsey & Company showcases expert thinking on some of the world's most pressing social problems. The latest series of Voices features on-the-ground stories of how entrepreneurs are making a societal impact across the world. Contributors range from trailblazers in fragile states to founders of multinational companies to forward-thinking millennials.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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