As part of our ongoing data collection effort in support of the Network Science Center at West Point’s research project entitled, “Developing Network Models of Entrepreneurial Ecosystems,” we previously visited the Dar Teknohama Business Incubator, the Buni Collaboration Space, and the KINU Incubator. After those visits we visited with the Mara Foundation. Mara was founded by Ashish Thakkar, a serial entrepreneur and Chairman of Mara Group, an African conglomerate. Thakkar grew up in the United Kingdom and Uganda and considers himself, a native son of Africa.
Mara Foundation is Mara Group’s social enterprise that focuses on emerging African entrepreneurs. Its goal is to create sustainable economic and business development opportunities for young business owners through their initiatives.
The Foundation is now active in a number of countries across Africa. We visited with their office in Kampala, Uganda during our data collection visit in the spring of 2013. During this visit, we were hosted by Jennifer Mbuya, who leads the Dar es Salaam office.
As we learned, the Mara story is, perhaps, a precautionary tale about the buzz and excitement for tech incubators that are popping up all over the African continent. While these organizations may be the necessary catalyst for aspiring entrepreneurs, not all local environments may be mature enough for these business models.
The Mara model in Dar es Salaam was based on the more traditional models around the world. They acquired a large, modern space, equipped it with the latest equipment, and offered important capabilities for new entrepreneurs like broadband internet, reliable power, a shared support staff, and copiers/printers. They also supplied services such as mentorship and training.
The overhead for this effort was significant and, after a recent assessment, it was determined that the local environment was not developed enough and they changed their model.
Since that assessment, they have closed down the original incubator space, opened up a much smaller office, and modified their business model. Mara now has leveraged their network of local business leaders to act as mentors to aspiring entrepreneurs. These entrepreneurs apply for entry to the program and if accepted work through a 6-month long program. The mentors have agreed to spend at least two hours a week with each entrepreneur, either in person or virtually.
Mara has had about 35 participants since they modified their model and they are currently on their 3rd cycle under this model. Jennifer told us that Mara has made similar changes in their models at their other offices in both Kampala and Nairobi.
Based on the maturity and business viability of many of the small tech firms that we have met with over our data collection visits, and the modification of many incubators’ business models, we completely understand the thought-process behind this “pivot” in strategy. For example hubs that we have previously visited like iceaddis and iLab in Liberia, and HiveColab in Uganda have all scaled back their original lofty aspirations. These hubs originally planned for a multi-tier membership model, charging rent for office space, and acquiring equity of the companies that were the most mature. Based on these assumptions, they thought they could be self-sustaining in a short period of time. All have scaled back their expectations and operate more as collaboration spaces for the local tech community and offer technical training and mentorship.
Based on our observation and conversations, we wonder: Is this rise of tech incubators a bit premature? Are the local ecosystems not ready for the more traditional incubator models?