Start-up snapshot: Manufacturing electrical hardware in Ethiopia

Start-up: Diyes Technology

Olana Kudama

Olana Kudama

Olana Kudama is co-founder of Diyes Technology, an Ethiopian-based start-up which manufactures electrical hardware such as printed circuit boards (PCBs) used in laptops, radios and mobile phones. The company also produces home electronic systems such as alarms, automated gate openers and temperature controllers. Kudama tells How we made it in Africa about the risks his business faces, and his most exciting moments of being an entrepreneur.

1. How did you start the company?

I started my career working in a power generating factory. While there I realised a massive machine would become useless if it broke down and the manufacturer was either unreachable or had gone out of business. Some elements of the machines were also not specific to the needs of the factory. So I learnt to modify and adapt machines to fit the factory’s needs.

I realised that there are opportunities to do this at a wider scale. For example, a local stove manufacturer approached us to develop a temperature control system. Although his business is well established and his stoves popular, users could not regulate temperatures. We also do a lot for individuals. We have developed five key products that perform various functions. These include motion alarm systems, cold room temperature control, and a remote-controlled curtain and gate opener and closer. Our focus is on building products that are cost-effective and functional.

2. How did you finance the business?

My co-founder and I both have jobs through which we raise money to finance our business. We are currently seeking financing. The machines we use are very expensive.

3. If you were given US$1m to invest in your company now, where would it go?

We would purchase some machines we need to expand the business. We would also hire more people.

4. What risks does your business face?

The biggest risk is Chinese manufacturers. Some can probably copy our designs and manufacture them in China. We have applied for a patent to mitigate that risk. Limited access to financing is also a risk.

5. Describe your most exciting entrepreneurial moment.

When you have the big dream of starting your own business, you mostly think about the outcomes. You don’t think much about the challenges because you haven’t faced them yet. So it was so exciting when we purchased our first PCB-making machine from Belgium. Making our first product was also exciting. The design and prototype process has also been exhilarating.

6. What has been the biggest mistake you’ve made, and what lessons have you learnt from it?

When we started the business we purchased one very expensive machine with the latest technology. We should have bought a cheaper machine. We also hired people and made brochures and business cards which were costly. We were very ambitious. We should have engaged in a more cost-effective advertising method. We spent nearly Birr 200,000 ($9,700) in those early days. That experience taught us about financial management and decision making.