So You Think You Are Ready To Launch Your Startup?
Opening the Pandora Box: Part 1
I recently came across a very disheartening story on Twitter where the local founder of Safi Analytics was kicked out by his two foreign partners out of his very own startup which uses the product that he himself built alone while his two partners were away at Stanford University completing their Master degrees.
Safi Analytics, which was initially called Safigen, was started in 2017 by Kennedy Ng’ang’a and Lauren Dunford, and uses data analysis to manage energy and monitor consumption of electricity. In 2018, the company had raised more than 200 million shillings and the plan according to Kennedy was for the both partners who had just completed their MBAs to relocate to Kenya and continue running their growing company. However, he was in for the shock of his life when the two partners started sending letters urging him to resign and give up his shares in the company. After refusing to submit to the pressure, Lauren later presented him with a separation offer which he of course rejected, and eventually led to his dismissal from the company without a severance package.
You can watch the video here: https://twitter.com/bonifacemwangi/status/1219200624291729408?lang=en
Kennedy, an innovative and competent gentleman, was simply shortchanged out of his own efforts and company. Sadly, what he never realized is that this was not the first time he was shortchanged by his partners. As one person commented on the post, the first blunder he committed unaware is signing a contract that regarded him as an employee instead of as an owner, thus giving away his rights of ownership to the company. He was being used by his partners from the very beginning only that he did not know. And now that they had a functioning product in the market and the money, it was time to get rid of Kennedy. So they did!
This is not an unusual story. It is one that can be narrated by many other Kennedy’s out there who have suffered similar fates. Unfortunately, it does not happen only in Kenya. Many African founders can relate to Kennedy’s experience. Remember the guy who came up with M-Pesa and what happened to his innovation? Do you even know his name? Probably not.
The above stories really put my mind into a lot of thinking. What could have the two gentlemen done differently? Did it ever occur to them to patent their ideas? If they did, what could have gone so wrong? If they did not, where and how are we failing our brilliant young innovators and how can we remedy that?
I have been in the tech space for roughly three years. In that time, I have learnt how to design a product that could benefit the community, went out and gathered user feedback and gained the programming skills to develop and implement the product. However, what I do not know and have not had anybody tell me is how I can protect my idea from being stolen, how I can launch the idea into an operating startup or simply how I can ensure that I am not shortchanged out of my efforts by partnering individuals and companies. In addition, I literally have no clue on how to go about getting funding from investors or even how to negotiate with the investors to ensure that I do not end up giving away my ownership stake in the company. It is not once or twice that I have seen investors in television shows such as Lion’s Den request for a 45% stake in the company should they invest. It is heartbreaking to see some of the local founders agree to such terms out of the excitement without really knowing the implications of their rush decisions. Come on, the startup has like 4 founders and they are giving 45% of the company to an investor? Is this a thing?
What I have realized is that there is such a huge knowledge gap in the space. So many startups are sinking even before they can see the first months of sustaining themselves. So many local founders are ending up shortchanged, poor, frustrated with life and depressed. On top of that, Africa is losing so many of its innovations to international companies and western countries parading as foreign investors, so when we move forward two steps, we go backwards ten steps. I have read articles and held discussions with my peers about how young developers are super cautious about participating in hackathons because they are afraid that they might share their unique idea only to come find out that it has been implemented a few months later by a company that was in attendance in that hackathon.
There is so much that young innovators do not know. And we as a community, professionals and leaders in our own spaces, are a continually letting them down. This is going to be a series of articles which will aim to remedy the situation, shedding light on the dark areas of the innovation box. I am going to cover how one can protect their ideas through patenting and how and where to go about such processes, how to evaluate and choose potential partners, how to negotiate with investors, and more.
Furthermore, I will contact local founders of various startups to have them share what their experiences have been like, the things they wish they knew before getting into tech-entrepreneurship and mistakes they committed that formed lifelong lessons. In addition to this, as a community organizer, I will forge ways in which these conversations can be introduced, carrying out talks on such matters and encouraging everyone in a position to help fill in the gaps to do so.
Starting a startup is literally opening an entire Pandora box, and if you are not well guided and informed, it is a maze that will see to it that you get lost. So, are you truly ready to explore inside the Pandora box?
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