Dreams Talks: Leveraging Entrepreneurship as a Tool to build the Future

According to the African Development Bank, Africa boasts the highest entrepreneurship rate in the world, with 22% of the working-age population starting businesses. Entrepreneurial rates vary across the continent, from 9% in Algeria to approximately 40% in Nigeria and Zambia. This disparity is often linked to the income levels of African countries, as poorer economies tend to have higher percentages of their population engaged in entrepreneurship, frequently out of necessity. However, challenges persist for young people striving to realise their potential as African entrepreneurs.

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Now more than ever, it is crucial to explore how entrepreneurship can empower young people to shape the future they envision for Africa. The discussion of leveraging entrepreneurship as a tool to enable young people to build the futures they want to see in Africa is undoubtedly needed. Start Hub Africa, based in Uganda, is a leading African hub driving tangible progress and facilitating these important conversations.

StartHub Africa’s mission is to enable African youth to build the future of their dreams, unlocking the potential of changemakers to create innovative and scalable businesses across the continent.

In this edition of Dreams Talks, we speak with the co-founder of StartHub Africa, Matthias Möbius, as we are taken into the work being done to unlock those potentials.

Enjoy!

Dreams Talks: As co-founder of StartHub Africa and the lead catalyst, what are your primary objectives for the hub?

Matthias Möbius: It’s truly about addressing systemic challenges in the ecosystem that prevent more innovative and scalable ventures from succeeding. From the investor perspective, the issue isn’t a lack of pipeline, but rather a lack of an investable pipeline. This has implications for businesses, even those that want to bootstrap. It’s interesting to observe what is lacking in some ecosystems across the continent. While they are at different stages everywhere, the general need is for a pipeline of good startups and founders who can solve the right problems in a structured way and within a reasonable amount of time, so they have a real chance of success. This is a major issue that needs to be resolved to help businesses succeed from a very early stage. We have built many of our programs around addressing this need.

Dreams Talks: Speak to us about what triggered your current career path, How and why did you get into this line of work? What was or Still is your inspiration towards founding StartHub Africa?

Matthias Möbius: I studied in Munich, Germany, and pursued physics, which makes me a hardcore scientist. Despite that, I never wanted to follow a career path in science. During my time on campus and at the university, I had the chance to explore various interests, ultimately leading me to social entrepreneurship, particularly in the education sector. An opportunity emerged to collaborate with some Ugandan universities to establish an entrepreneurship program, much like the one that had helped me, as there was a lack of such initiatives.

This personal experience, coupled with the recognition of a structural and systemic gap across universities, inspired me to launch this project. Many innovators and individuals who will transform the business, innovation, and societal landscape on the continent will come through universities, even if they don’t immediately secure a job or start something. Addressing this substantial gap seemed like a worthwhile endeavour. As a result, I committed to the project and relocated to Uganda, where I have now spent five years.

Dreams Talks: StartHub Africa leverages entrepreneurship as a tool to enable young people build the futures they want to see; what has been your core strategies towards achieving these objectives?

Matthias Möbius: I believe at its core, building an organization is the same as building a startup. Be very user-centric, stay close to your customers and users, and create with them and for them. This is what every organization should strive for. To adopt a startup-like mindset, it’s crucial to understand your audience well and focus on quality. We’ve spent considerable time co-creating and improving our curricula, program approaches, workshop concepts, and more for numerous semesters. Throughout this process, we’ve engaged in ongoing discussions with students, lecturers, and members of the business community.

Delving deep is essential for developing something valuable with a superior value proposition that becomes recognizable. Just as every startup should, if you aim to build for retention, which is of utmost importance, your product must be exceptional and truly stand out, offering something better and new. This principle applies to us as well. So, the key is to remain close to your audience and continue addressing the critical challenges that emerge.

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Dreams Talks: What criteria must a Start-up have for StartHub Africa to accept collaborations and in turn incubate said Start-up?  

Matthias Möbius: Naturally, the criteria depends on the program. In our Catalyse Up program, an incubator, our target group mainly consists of tech businesses and scalable impact ventures. We work with very early-stage ventures, even pre-revenue, so traction isn’t necessarily a requirement. However, we are extremely selective. Without traction, you’ll need to demonstrate other strengths, and it’s mostly about the founders at this stage. You want highly intelligent founders who show they can tackle key challenges they’ll inevitably face. Ideally, they possess industry expertise and, very importantly, the hard skills needed to develop the product.

For tech ventures, having a skilled technical co-founder is a significant advantage, especially considering the costs of hiring top technical talent. In essence, it’s about the same criteria an angel investor or investor would consider, with the team being the key factor.

Commitment is also crucial. In the ecosystem, talented individuals making progress might attract companies offering high salaries, tempting them to abandon their startup. What will keep the founders going despite potential job offers down the line, after they’ve grown and learned?

Market opportunity and product are also vital. Even though we often work with pre-revenue ventures, we expect to see deep engagement with the problem and identification of a promising opportunity. These factors are the most important, I would say.

Dreams Talks: What are the Challenges Facing StartHub Africa and the consulting business, and how are you solving these problems, in-turn creating a format that other hubs can follow on as an example?

Matthias Möbius: Financing for hubs is typically a challenge. In 2022, we only had about 5% of grants in our budget. Most of our funding comes from consultancies we provide, and then we essentially donate to ourselves. We have both an NGO and a for-profit organization, and we transfer funds to our NGO to build continuous programs over time. This approach is beneficial because it allows us to delve deeper and refine our projects, rather than merely working in a project context with external funding that may come with certain restrictions and requirements.

Having our own means enables us to address challenges more effectively and build structures that allow us to focus more on internal and systemic improvements. It also helps us foster strong technical expertise and talent within our organization. Our internal projects are led by individuals with experience in the private sector or investment space, which is crucial to supporting early-stage entrepreneurs who may lack such experiences.

Ultimately, the key is to find a way to make it work financially. Fundraising in the very early stages can be challenging unless you have exceptional connections. It’s essential to figure out a strategy that aligns with your expertise and background. For instance, if you’re building an agriculture hub, consider how you can add value in that space, monetize it, and combine it with other gigs to support your mission.

Dreams Talks: As the co-founder of StartHub Africa tell us about your proudest moments in achievements for the Hub gained thus far? 

Matthias Möbius: It’s fantastic to see our progress, considering we’re still a young hub, and our incubator started in late 2019 and 2020. COVID was a significant factor, and it’s only been about a year since the curfew was lifted in Uganda. Businesses didn’t have much money, and now we’re facing a recession and trade wars. However, for a little over a year, our businesses have been able to operate more freely.

Our proudest moments come from seeing the businesses we work with make progress. One of our founders, who worked full-time at PwC, managed to build a tech business while maintaining his demanding job. He accumulated thousands of dollars in profits and is now on a one-year sabbatical to focus on his business full time. It’s incredible to see founders with professional experience successfully building fast-growing businesses.

Within a year, we’ve seen several examples of this progress. It’s always amazing when founders share their achievements, such as breaking even in the first month and feeling better mentally. Being able to think more freely and survive at a low level helps them strategize and build more effectively. Witnessing these stories and progress is truly inspiring.

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Dreams Talks: 20 years from now what will StartHub Africa mean to the next generation?

Matthias Möbius: It’s fascinating to think about what could happen in 20 years. I believe that business success will be closely tied to the next generation benefiting from extensive peer-to-peer support from African founders and angel investors who have made it with their startups. The ideal outcome is having one or two generations of successful founders and businesses supporting the next generation of founders. African peer-to-peer founder support is crucial, especially since these ecosystems are still young.

In countries like Uganda, access to successful founders is limited. However, we’re witnessing angels emerging from growing startups and investing in the next generation of founders, even if at a low level. By increasing this founder-to-founder support, we can foster ecosystem growth and inspire more innovative solutions to tackle existing challenges.