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Silicon Valley is the next step for African tech companies, says consultant

Dozens of multi-billion dollar companies have come out of Silicon Valley since the 1960s, making it the world’s technology centre and the go to place for ambitious entrepreneurs. Across the world, millions of dollars have been spent trying to replicate Silicon Valley – Africa’s Silicon Savannah, Konza in Kenya, is one such example. Recently there have been increased efforts to create links between Africa’s technology industry and Silicon Valley, with African entrepreneurs travelling to the US.

Nigerian-born Stephen Ozoigbo is a trade and investment consultant based in the US who has been helping companies from outside the US move to Silicon Valley.

According to Ozoigbo, taking African technology companies to Silicon Valley is an important step towards building global multi-billion dollar companies.

While limited human resources on the continent is a constant complaint from investors and managers, Ozoigbo argues that this should not be a concern for companies moving into the highly competitive Silicon Valley ecosystem. The African diaspora, he says, is well skilled and equipped to help African technology companies enter and conquer the international markets.

“You have Africans in the diaspora doing phenomenally well,” he says. “So, when you ask me a capacity question, I go from capacity, to skill sets to actual entrepreneurial activity and it is check, check, check. We are already playing at that level. We just need to brand it.”

Ozoigbo works with the trade office of the Government of Catalonia, an autonomous community of Spain and an officially recognised nationality. Ozoigbo is the mentor-in-residence for all Catalan startup companies within the incubator in San Jose, California, which currently has a 12-company portfolio.

A super highway to success

In a 2012 interview with How we made it in Africa, Mbwana Alliy, co-founder of seed capital fund Savannah Fund, said Silicon Valley can be a “super highway to get a lot of things done, like funding and access to better talent”.

“If a startup is doing well here, they should consider moving to Silicon Valley and compete there in the global market. But at the same time someone can succeed here. But they need to move at some point. Even [Mark] Zuckerberg had to leave Harvard to go to Silicon Valley,” Alliy said.

Despite its many opportunities, moving to Silicon Valley presents a set of unique challenges. According to a survey by industry analyst CB Insights, less than 1% of all venture capital funding went to African American startup founders in 2010, while 87% went to white entrepreneurs. The industry is male dominated with women making up less than a fifth of the US’s technology industry.

“Silicon Valley is still not too friendly to female entrepreneurs and black entrepreneurs represent a low percentage of the entire ecosystem,” says Ozoigbo.

These challenges notwithstanding, Ozoigbo argues that going to Silicon Valley is an important learning process for entrepreneurs on how to compete globally; something that cannot be achieved in Africa.

Understand the environment

“You cannot replicate Silicon Valley in any other ecosystem. It has unique characteristics that you just can’t copy and paste. However, there are elements of Silicon Valley that you can learn from,” Ozoigbo says.

To compete well in Silicon Valley, African startups need to understand the ecosystem.

“Part of what I am doing is reducing knowledge gaps and educating startups on the ecosystem; having them on the ground and having them interacting with the ecosystem is key to their success,” Ozoigbo says. “However, not all ventures are the same, industry wise and stage wise. Every company has unique capabilities, competencies and constraints. It is important to identify individual companies, asses what their needs are and then plug into the solution sets based on those needs.”

Ozoigbo adds that the African diaspora has a huge role to play in engaging with companies that choose to move. But, he warns, going international is not for everybody.

“You have to have an appetite for success and a natural hunger for internationalisation,” says Ozoigbo, adding that entrepreneurs should also “have a vision that is bigger” than themselves and should consistently strive to improve their business models.

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