Beyond a PR spike and feel-good, there is nothing to show four business quarters down the line.
A for-purpose independent entity that can take full advantage of resources available to it, to pursue opportunities that would add value for its shareholders.
I saw a comment on LinkedIn, one of the more popular professionally inclined social networks as discussions around ‘soonicorn’ businesses progressed, given the activity the fintech segment has seen over the past 24 months.
The comment posed a question, paraphrased, ‘Given that company X is over 15 years old, can they still call themselves a startup?’ Combined with the fact that many established companies are trying to reinvent themselves to ensure continued market relevance makes for a good discussion.
To answer the question and provide a forward model, we need to understand what a startup is. A startup is an organisation looking for product-market fit, can be a body corporate – independent or subsidiary, or a team within an already established business, working on something new or refined. It is a state in value creation and can be permanent.
I see established African corporates still pursuing hackathons, which were great for the early days of technology adoption. Often hackathons are soda and pizza-fuelled events where a mix of independent people and teams explore a given API suite and apply it to a given problem captured by an overarching theme.
Whether taking the more popular 72-hour physical meetup or a longer-period remote model, I have found that the outcomes rarely scale. This is due to mismatched expectations and the framework adopted, where teams are formed on-site, prior relationships notwithstanding, lack of follow-up, and poor fundamentals.
Beyond a PR spike and feel-good, there is nothing to show four business quarters down the line.
The model that I see working is that of a venture studio. A for-purpose independent entity that can take full advantage of resources available to it, to pursue opportunities that would add value for its shareholders.
The shareholder roll can be a single corporate body, but exponential value is possible where two or more corporates serving complimentary markets come together.
This flavour of venture studio would see them access capital – under corporate social investment, research and development budgets or percentage of profits for operations and forward backing of identified opportunities, and talent from within their ranks giving a portion of their time to mentor or give insights to hired teams.
This increases the odds of survival for any startup created, with a direct line to value for the venture studio partners, who have first rights on any innovation. Ideas need time, tooling, mentorship, and proper wind in the sails to come to life.
Njihia is the head of business and partnerships at Sure Corporation | www.mbuguanjihia.com | @mbuguanjihia
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