Over the recent years, the African business ecosystem has seen a notable increase in investor interest, leading to inflated valuations of many startups. This trend has often been mistaken for the ultimate marker of success. However, this perspective is somewhat misleading, as securing a successful funding round does not equate to the holistic success of a startup.
Currently, many entrepreneurs embark on their ventures with the primary aim of attracting investors. Their strategies and operations are carefully crafted to align with the criteria for investment readiness. Engage in a conversation with founders today, and the aspiration for unicorn status—a startup valued at over a billion dollars—appears to be the singular most important ambition. But is striving for unicorn status truly essential for African startups?
The simple answer is NO. Achieving a valuation of a billion dollars is undeniably an impressive feat, yet it should not be the ultimate goal for startups on the continent. Africa faces numerous challenges, and the most impactful startups will be those dedicated to creating fundamentally useful products for its rapidly growing population. If such enterprises eventually attain unicorn status, that should be seen as a bonus, not the primary aim.
Rather than focusing on creating unicorns, it might be more beneficial to concentrate on cultivating “rhinos”. By my definition, rhinos are startups that exemplify the African spirit of resilience and self-reliance. These businesses achieve broad market adoption and make a significant impact, even among the least educated communities, without the need for substantial external funding.
The obsession with becoming a unicorn often leads founders to prioritize short-term victories and valuation milestones over the sustainable development of their businesses. This approach risks neglecting the real problems startups should be addressing, such as improving access to essential services, enhancing the quality of life, and stimulating economic growth.
As we navigate through the complexities of the African startup landscape, it’s essential to remember that a startup’s worth should not be judged solely by its market valuation. True success is found in the ability to effect lasting, positive change within our communities. By concentrating on building resilient and impactful businesses, African entrepreneurs can contribute significantly to the continent’s prosperity.
While the appeal of unicorn status is understandable, African founders must prioritise the development of solutions that tackle the continent’s unique challenges head-on. In doing so, they will not only achieve financial success but also leave a lasting legacy of innovation and progress. Let us advocate for the emergence of rhinos, encouraging a new generation of startups that are built to endure and destined to serve.