The Startup’s Environment Operating in a Developing Nation Versus a Developed One
by Kareem Panton
on June 27, 2018
Most of the success stories about entrepreneurs turned multi-millionaires/billionaires have a few things in common. In addition to their personality traits or work ethics, many of the most popular entrepreneurs (at least those in the past 20-30 years) built their businesses in the developed world. This environment, while still being home to a significant amount of risk, is also home to several critical support systems which can help entrepreneurial pursuits flourish.
1. Investment and Funding Opportunities
While a few local entities offer grants to entrepreneurs (such as the Development Bank of Jamaica and their “IGNITE” programme), these opportunities are few and far between (in addition to having low public visibility) and may come with more than a few stipulations on how/when the grant can be used. It’s not uncommon to hear about the hundreds of thousands, sometimes millions of dollars that startups overseas are able to raise in funding, but something of that magnitude is unprecedented in Jamaica.
2. Opportunities for coaching and mentorship
In many cases overseas, entrepreneurs rarely stop after a single venture. Many sell their companies and then exit to move on to the next “big thing.” This creates situations where entrepreneurs with a proven track record work on teams with new or less experienced individuals in the space. The members of these teams then learn what they can, and the cycle continues as they pass it on. Take Sean Parker for example. He was the co-founder of the file-sharing computer service Napster. Further in his career, one of his most notable roles was as the President of Facebook, having joined the social media team just five months after it launched. Between him, Mark Zuckerberg (CEO), and Eduardo Savarin (CFO at the time), Sean was the only one with entrepreneurial experience. He’s credited with turning Facebook from a college project into a real company. There aren’t very many opportunities for similar advising in Jamaica currently. Of course, there are well-seasoned individuals with a wealth of knowledge in every industry at home, but very few have built products or services that act as complete disruptors at a national level.
...one benefit that startups in developing countries have over those in the developed world, and that is the lack of red tape.
This is a term I’ll use loosely as it usually recalls roads, bridges, and power plants. In this context, think of it as the loose frameworks or services that make it easier for startups to prosper. There are a few noteworthy frameworks that can be accessed, but much like many critical higher-tier services in Jamaica, they are primarily localized to Kingston and/or Montego Bay. The Branson Centre for Entrepreneurship for example offers bootcamps and enrollment programmes to train entrepreneurs on how to pitch, how to do research, etc. However, they (and other local incubators*) have a significant price point, making them even more inaccessible.
This lack of infrastructure also means that there is less protection from careless or potentially damaging clients. We once had a client whose business shut down as we were finishing his website. We had already put several hours of research, design, copywriting, and testing into it, but he just fell off the radar and we haven’t heard from him since. While we could have gotten lawyers involved, the legal fees would have been more than the quote for the web design, and the lack of infrastructure means that there was no private organization/network that we could use to get in touch with him or to hold him accountable.
With all this said, there is at least one benefit that startups in developing countries have over those in the developed world, and that is the lack of red tape. The lack of structure within and surrounding some industries means that many innovations can be fashioned or pitched with little concern for procedure. This is a double-edged sword however, as the lack of structure means that finding the right person to pitch to, setting a meeting, establishing agreements, and making a sale can be quite the time-sink.
Our advice is to expand your network as much as possible and connect with other entrepreneurs, even those in other industries. There may be few opportunities for mentorship, but do not underestimate the experiences of your peers. Furthermore, feel free to contact us for digital strategy consultations, and join our network. There aren’t very many resources out there, so take full advantage of the ones you find.
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