Incubation: Scaling Climate Innovations through Sharing Lessons and Bench-marking

"Give me a B idea with a huge market and I will find the best people. But, give me the market first, please.” -  Don Valentine, founder Sequoia Capital, one of the leading Tech Venture Capital Funds. This statement perhaps captures one of the biggest challenges that face startups and early stage ventures in growing their businesses. There are numerous incubators and accelerators operational in Kenya, including the pioneers iHub, NaiLab, Startup Garage and lately Nest, Intellecap amongst others. Majority of them mainly focus on tech (software) startups seeking to churn the next African ‘Unicorns’, with low focus on hardware. My observation is that despite the advanced enterprenuerial ecosystem, with active seed and early stage investors, there has not been much success in creating businesses that are highly scalable across the world ; a thought echoed  by Kenya’s ICT Minister, Joe Mucheru  in a Financial Times article; “If we organize the businesses well there’s at least $10bn worth of value we can get out of Kenya. But at this stage we’d be hard pushed to get even $1bn because we’re still keeping our businesses in a sense to ourselves. We still haven’t seen the culture and ability to create the value and networks that we need”.

In March 2016, 7 Climate Innovation Centers (CIC) from The Caribbean, Ethiopia, Ghana, Kenya, Morocco, South Africa, and Vietnam seeded by infoDev (World Bank) spent a week in Washington DC networking amongst themselves and with the larger Cleantech startup community. CICs are incubation facilities that provide business support and financing services to clean technology entrepreneurs in the above mentioned developing countries. The forum provided exciting opportunities to interact with some of the members of incubatenergy  including, IC² , Institute’s Austin Technology Incubator (ATI), Greentown Labs, LA Cleantech Incubator, Hawaii’s Energy Excelerator, 1776 as well as the US Department of Energy through the ARPA-E 2016 energy innovation summit.

Some of the lessons I learned from the US Based Clean-Tech Incubators and Accelerators with regard to building highly scalable enterprises included, incubator sustainability planning, makerspace & rapid prototyping, business support services provided to enterprenuers, mentorship strategies amongst others.  An interesting point to note was the heavy public sector investment made by the Government, States and Municipals in these incubators.

My key take-a-way was the session conducted by Dr. Greg Pogue and Richard Amato fromIC² Institute on the ‘Entrepreneurial Storyboard’, how Storyboarding can be used to improve incubation. Storyboarding is one of the aspects of filmmaking that takes your film from the deep, dank, and dark recesses of your imagination and brings it to life in the here and now. It helps filmmakers to visualize their film before they shoot, as well as work efficiently when shooting it. It argues that developing an innovative product in a startup or established company – like doing a stunt on an airplane, is a high risk process – requiring many partnerships and steps. When actualizing the storyboarding, the dilemma is how to connect with the customer through an active learning exercise to produce valid value propositions. A commercialization roadmap is needed for accelerating innovations from minimum viable product (MVP), to market ready products. One can compare this concept to an intense design thinking process as popularized by IDEO.

In 2014 alone, companies incubated at ATI raised $ 116 mn in capital, signaling an over 88% funding success rate! More than 17 of these companies raised over $ 1 mn, with over 5 of them raising over $ 5 mn. So what will it take for Cleantech incubators in Africa to create the next multimillion companies?

Cleantech is a challenging space in Africa, especially where an enterprise has to compete with conservative products deemed to be cheaper. Incubators will have to make a choice of working with high quality companies and facilitate data validated business models. Moreover, incubators will have to create avenues for sharing lessons with comparable accelerators in other geographies. Finally, growing an ecosystem led by enterprenuers themselves is critical. Brad Feld, a former enterprenuer and early stage Investor, in his book Startup Communities opines that leaders of startup ecosystem have to be enterprenuers themselves. The other players; incubators, accelerators, mentors and business experts, service providers, Technical Innovators & University Researchers and government are just but feeders into the system.

So much for local enterprenuers!