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Is starting a tech startup just too costly for us?

Developers at a tech event in Zimbabwe
Developers at a tech event in Zimbabwe
Developers at a tech event in Zimbabwe

I usually argue on the side of “lack of funding is just an excuse”. If you work hard enough, if you’re solving a real problem, if you’re passionate enough, if you think outside the box etc… But sometimes I wonder if the problem is lack of funding, or if it’s more an issue of young people having so much more to lose if they decide to take the startup route and its high risks. More to lose compared to their counterparts in, say, Europe, the US or Cape Town.

Is it that most young people have come very far to get to the relatively good jobs they have and that there’s so much extended family responsibility and expectation it becomes a really dicey issue venturing into the unknown?

For a lot of young people, not only are they trying to start a company, but they’re also the bread winners for the the extended family. To generalize a bit, this is unlike their counterparts in the west whose parents usually own a decent home and their children can use the family garage to start a startup, or validate their ideas at least.

It’s a system in which, if one blunders chasing an idea that comes to naught, it’s not just them that pay dearly for the failure. It’s their young brother in primary school for whom they pay tuition fees. It’s their parents as well who depend on the $200 he sends them every month. And even for the entrepreneur himself, that one failure could result in the city spitting him out into the midnight train back to the small town where opportunity space is even tighter. Are these realities what keep people grounded to the 8 to 5?

Faced with this, one way to approach it  is to get a very good education, get a very good job and save enough money to take you (and the family) through, say, one and half years of startup uncertainty. The risk here often times is that it’s easy to get addicted to the 8 to 5 rewards especially if the company coats them with that all important company car to make you one of the first members of the extended family to ever own one. It’s an achievement a lot of friends and family will call you crazy for even thinking of leaving.

The other option is to work on the startup as hard as one can at night and dutifully report for the regular job at day and execute so good you still get promoted to get some additional ‘disposable’ income. Leave days and off days (or too-sick-to-come-to-work days) become the precious opportunity to do the day stuff for the startup like physical meetings with prospective customers etc…

There’s another group that has a different problem. It’s the unemployed group. For them the issue is actually that, even armed with a good education there are just no jobs to absorb them in the economy. Companies are closing down so the job market is shrinking. Starting their own venture becomes a means to survive as opposed to having dreams of making it big one day.

But for this group, starting their own venture is still as difficult if not more; Still relying on their parents even for the $1 bus fare into town, their prospects of owning their own computer, let alone a broadband connection, are distant.

They may not even yet have a startup idea to work on that’s going to make them money. But access to resources is still important and access doesn’t come cheap. It is important that they get basic exposure to the tools they could use; a proper PC, a broadband connection and knowledge of development platforms and the possibilities. Of course the power to keep all these things on has clearly become a component that’s not a given as well. It’s a dull picture right? But maybe this is the picture we need to see and find solutions to before we proclaim that lack of funding is just an excuse.

I guess this is why co-working spaces (you can call it a hub, innovation centre, or whatever else you prefer) have been great enablers on the African continent. I imagine they’d have the same effect in Zimbabwe. Of course the resultant benefits won’t be apparent immediately, but slowly they enable more people to access tools, knowledge, a community of similarly venture minded folks and, hopefully, people with money that are prepared to back great ideas & teams.

Is starting a tech startup just too costly for us? How can we lower these barriers?


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51 thoughts on “Is starting a tech startup just too costly for us?

  1. This is a spot-on assessment of what is going on in our local start-up scenario. I contend that by nature starting a successful start-up is no easy task regardless of where one is – location wise. The barriers are presented in different formats and an equal amount of effort/determination will be required to beat the odds which happen to be universal in existence and certainly not in form. It is for this reason that start-ups fail in their droves in the US, Europe or India all the time. By addressing some of the issues raised in the article we find a new set of barriers presenting themselves simply because that’s what start-ups are. This is not to say these issues must not be addressed. But there is a start-up DNA which stubbornly refuses to go away. At the end of the day, it appears the call is for those who can beat the odds to come forward or is it?

  2. Well said and true. We’ve even discussed some of these issues before on this site, particularly explaining why there isnt much on the startup landscape and justifying the use of opensource tools. Money(start up capital) is important is to sustain you whilst you build your product. Bills, resources, livelihood, responsibilities and expenses. It may be more difficult in Zim but the challenges are the similar for any environment.

    For us, some of the most restrictive things we have discussed are lack of property for you to have a business bank account to then trade, relatively expensive hosting(for web-related projects), most of the stuff you said regarding extended responsibilities and financial security.

  3. Spot on TZ. We have too much baggage dragging us down.

    1. Fear (of the unknown) – most employed pipo r afraid to be unemployed. But imagine the effort you put on your job, if it was your company.

    2. Poor “grass roots” support. We don’t have the necessary support from our immediate families all the way to the nation at large. One thing I always envy about Americans is the way they support each other in basically everything. Somalis are also good at that. Zimbos, we have more bad things to say and do than good. I bet if Facebook had been started in Harare, dai yakaparara kudhara!!

    3. Lack of funds. If you are really serious and you have a REAL idea, you will get some funds. Difficult, but you will get them.

    4. Dreaming too big. Most of us want to create a Microsoft out of nothing within a very short space of time. Those companies took years to build. We need to respect that fact.

    5. Extended family – almost everyone has a kid their are paying fees for and thoz parents u send $$ every now and then. We take for granted those things, but they really pull us BIG time. Most white are brought up in a financially stable set-up to the extent they will never send money to their parents cse the parents have their own retirement packages. infact, for most whites, by the time they turn 25 their parents have secured a car + flat for them, fully paid. So they have no rent to worry about. This is the biggest challenge with the black setup….extended family. Its pulling us down.

    6. Analysis paralysis – we tend to analyse every idea until it looks worthless! Sometimes we just need to dig into the maze and come out bruised but full of lessons learnt.

    1. well i agree with you especially “analysis paralysis” there is a good number of very bright ideas but they jus go to waste because of too much analysis…try and learn!!!

  4. Insightful article, thumps.. A big determinant of tech start ups is environment. In western countries the guys already have access to the basic resources such as computers and internet connections(which is always live unlike isu vemabundle). So a kid takes his pocket allowance and works part time jobs if he needs to buy special resources to implement his intended project. This maybe in the form of server resources or even a programmer to do the coding.

    Also these guys have grown up with the technology and so have an idea of using such things as youtube, google ads, facebook to aid in marketing.

    Where as in Zimbabwe people first to know what a computer and most peopleare now forced to do that when they go for tertiary education. That is the time their western counter parts are scheming ideas to implement.

    I believe we should create an environment that identifies startups who need the basic reources like laptops and internet connections gives them these things and not expect anything in return but hope they will grow big enough and move to paying their ownbills so as to create space for the next group. An example would be is a kid able to write code…then give him a laptop and hook him up with seasoned developers in the industry. The worst case scenario is the kid will work for some IT company but he will develop coding experience beneficial to the industry. But a few will blossom into startups

  5. Well on the bright side, at least with web startups the barrier has been lowered, there is a wealth of information, not to mention free code that you can use to begin building your idea on the internet.

    Learning to code, is no longer the preserve of Computer Science graduates, so one can start there, the basic understanding of how this technology works. You don’t have to buy a Macbook if you cant afford one, a simple P4 will do.

    The Idea is to start small and gradually work your way up. You only will need serious money when you have a viable Idea. I think what would help is to join a community of like minded individuals and you try ideas there.

    Web hosting is cheap especially if you go for the international providers, and I am sure everyone knows at least 1 person in the diaspora who can arrange payment for these services if it is too much of a hassle to do from Zimbabwe.

    If you want it hard enough you will find a way to make it work. I always ask myself this question, Do I really need money yet?

    thats my $0.02

    1. Web hosting is cheap especially if you go for the international
      providers, and I am sure everyone knows at least 1 person in the
      diaspora who can arrange payment for these services if it is too much of
      a hassle to do from Zimbabwe.

      I agree that web start-ups are easier, more accessible and require less resources than, say a brick and mortar/more physical biz.

      If international hosting meets your requirements, its good. But, depending on your target audience and market-identification(if any)…you may want local hosting with no latency overheads.

      1. Whats important is getting something out there, you can host locally when you can afford it, the difference in latency when hosting in say South Africa and hosting in Zimbabwe, is not very significant.

        You can host in Zimbabwe when your business can afford to do that. This website here is hosted internationally from what I can see, but its not amazingly slow. Its usable.

        1. Ok, agreed I was speaking from past experience. Not knowing how
          connectivity is today. The issue I had mostly had to do with timeouts
          during uploads. That was an internet service issue that also related to
          how much I could afford, as well as a latency issue related to Zim
          connectivity to the rest of the world.

          Latency was a major issue
          then. I guess things have changed drastically now. But a reliable connection for
          the developer still comes at a cost today.

      2. With the fibre cables running on the both sides of Africa, internet speeds have improved drastically to the extent hosting in Zim is now just a personal choice that has very little to do with access speeds. I once had the privilege to connect to the SEACOM fibre and the speeds I got simply mesmerised me – I managed 80 Mbps! And I am told the cable is currently operating at 100Gbps… with a design capacity of 4 000 Gbps. (4 Tbps)

        4 years ago I used to struggle to access my (cnr 4th/Jason Moyo hosted) internet banking account from SA, but now its opening in mili-seconds….Zim speeds are now comparable to the rest of Africa and parts of the world. And you might not believe this, my Econet 3G (on HTC Desire HD) is faster in Harare, than on MTN SA in Sandton!!! Zim isnt that bad after all.

        On another related note, I offer heavily discounted hosting rates for Zimbabwean start-ups (most host for free). Its the little I can do to see my country of birth taking baby steps towards the new world. So if u feel ur start-up is being milked dry by we-know-who, contact me…I can try to help.

        1. Econet 3G (and others),though fast, are too expensive for a developer’s use. Browsing requirements for research, downloads, uploads are very demanding

      3. I don’t think latency is as big an issue as most people think it is. Link speed is more important in my guesstimation. Besides, with the pathetic local peering scenario, you just might get better latency (on average) by hosting abroad rather than hosting locally and having some visitors from other ISPs routed internationally due to lack of peering

        1. If it is no longer a big issue, then international hosting becomes AN OPTION. Outside connectivity related issues, there are various reasons justifying local hosting. It is not always a clear cut decision. Also, depending on your expected traffic, small issues can become big

          Ditto the local peering scenario. I had the “pleasure” of being bounced between two service providers. An ISP-for internet and another hosting a website. There were interconnection issues and each was blaming the other. The solution from either…”use our service instead”. I am naturally composed, and never scream. But that just had me going all nuclear, asking for names and managers and all that silly stuff.

    2. You saved me some typing by saying exactly what I was thinking! I don’t think the author provided adequate reasons why local tech startups are inherently costly/risky. I fear our perception is being warped by overseas startups and their multi-million dollar rounds.

      I guess the central argument is “Why should you risk it and leave employment to work on your startup fulltime?”. I too ask the same question as well but coming from a different mindset. If your product hasn’t proved itself to have legs yet, you’d be crazy (or infinitely confident) to do so. Instead, why not work on it in your free time and see if the market has a place for it. Most of the big-name companies came where spun out of other work (Twitter, Google), or from garages (HP, Apple), not from people who suddenly left gainful employment.

      Most startups fail; the Silicon Valleys get to do so in a sea of venture capital. Quitting your job to work on your unfunded, unproven startup which is statistically likely to fail is entirely up to you. You can afford to wait until it’s ‘proven’ (ironically, by then, getting funding will be easier)

      1. inadequate reasons why local tech startups are inherently costly/risky.

        Didn’t say i was going to give reasons for startups being inherently costly. I have no answers there. What I think is that starting one in a place where access to a PC or a broadband connection is not a given is quite an uphill battle. I say this from difficulties I personally experienced and I think coming from an NGO managerial job, I was in a much better position than your average high density surburb youth.

        our perception is being warped by overseas startups and their multi-million dollar rounds.

        Like the first line in the article says, I actually argue on the side of startups not needing any heavy investment upfront. the article is not about raising money.

        If your product hasn’t proved itself to have legs yet, you’d be crazy (or infinitely confident) to do so. Instead, why not work on it in your free time and see if the market has a place for it.

        for the few lucky folks that have jobs, that indeed is a great way to start and, as suggested in the article.

        for the unemployed: I am convinced most of the reasons are excuses

        That line there is what I also sing everyday. it’s easy for you and me to say it from the comfort of a broadband connection and a decent PC. But I also realise we are not the majority and that the situation is dire. Broadband is very expensive. A decent P4 is not within reach yet for the majority

        Ofcourse there are also those young people who, even without the resources, are natural born startup pirates, and will find a way. but even those are few and far between. The rest would benefit from a little help; hence talk of a co-working space

        1. I conceed on your first point, I misunderstood your basis and I was more angsty than is reasonably justifiable: apologies.

          The point I was trying to raise is well-funded overseas startups can afford to pay decent salaries. So it’s not much of a personal sacrifice (comparatively).

          As for needs: Access to a computer is a given, but broadband? I don’t think its necessary. Dial-up speed internet is adequate (even via bundles) methinks. I think Tutorial videos are the only possible reasons why someone might require broadband speeds, and think they are mostly for apple too lazy/impatient to read text

          1. understood.

            however, a dial up, as slow as it is, is not a given. I know many startups, friends even, for whom just getting a $1 to get town is a big problem. You think such a person will afford broadband on their phone, or a gprs modem? Let alone a $100 PC.

            1. Such a person won’t be helped at all by a hackerspace / incubator-type facility either (if it’s located in town), I had assumed we were talking about people with some limited means.

              My point is most people do not bother to explore their options/ seek more information. Has any one of your acquaintances asked to borrow your computer/laptop? or asked to stay late at your residence while utilizing it? They are blocked by a problem of ‘ownership of a computer’, instead of decomposing it to the easier-to-solve problem of ‘access to a computer’. I’m not sure if that even qualifies as ‘thinking outside the box’, but everyone could do with more of it.

          2. You need a fast connection, not necessarily broadband. Dial up is certainly not adequate. If we are thinking of the same kinda (web) start up scenario where at first you need software(an IDE/code editor, web-hosting environment, version control tools, API docs or manuals if applicable) then for regular access(to upload/test your updates if you need to, access forums and any online knowledge-sharing platform when you encounter bugs or hit brickwalls or have how-to questions<- very important)…then you need a connection way better than dial up. And a regular one.

            1. And so many people out there don’t have that connection! maybe we need a small reality check. Imagine we take away all you have right now, your job, your laptop, your internet, your wallet, your smartphone and tell you to start something that can be sold to real clients. You will hit a brick wall immediately. And such is life out there.

            2. I am speaking from personal experience, but perhaps my situation was unique (though I doubt that). It was a while back, and believe me, it forces you to use your internet time wisely. My routine was roughly Go to cafe, do a Google search, open a bunch of forum pages, ‘Save as -> Web page, complete’ onto flash disk before time ran out, go home and code. Create a project deployment (Visual Studio), save to flash disk, deploy from slow internet cafe (via net2ftp, with countless timeouts). It certainly can be done, lack of broadband was not a blocker. It took me longer, for sure, but was it was not a blocker. Looking back, I would have killed to have mobile internet. This is the POV that informs me that broadband speeds are handy, but not a necessity.

              For your hypothetical scenario, assuming you are not forced to use a microsoft stack, you can get an Ubuntu mirror image on DVD and install offline to your hearts content – and this is somehting you only need to do once. You also get an environment for testing (similar to ‘web hosting’), and you can use decentralised version control tools like git/mercurial, which do not require connectivity/central server.

              1. Been there too. Working late hours in the office or asking for a laptop over a holiday. Others dont have that job, or that priviledge but the idea is there. Its not an excuse to lose your drive to do it, but it certainly is a challenge worth talking about..

                You can make do if you have alternatives. Not sure about you but outside casual browsing, internet is very important for me to research on best practice, common pitfalls and any codeshare. I can rely on my own experience but thats just too limited.

    3. Part of the point in the article, and maybe it didn’t come out well enough, is that most young people cannot even afford that simple P4 you talk about, so the means to access the “free code that you can use to begin building your idea on the internet.” is not even there. The internet is damn expensive. Equipment is.

      Yes you can hassle and you have to hassle, but these are the realities for the majority.

  6. I also blame Zimbabwean ISPs for the entry barriers to becoming a startup. Getting the reliable fast wimax outdoor kit costs $500 plus the monthly subscription price for developer friendly speeds which costs between $80-$150 from most ISPs I’ve seen. Already this is a huge expense for the startup

    1. what exactly do ‘developer-friendly’ speeds mean to you? I’m genuinely curious why you think fast internet is a must

      1. Fast internet is a must because it comes down to pure busineness basics – productivity. You try building a web application with powertel like internet. Uploading a simple 1mb file can take 30min and you cant use the internet during this time as the upload kills the downlink (yes its true for powertel) whereas with fast internet it takes about 1min to upload and the other now available 29 minutes can be used productively thus efficiently utilizing ones time.

        And developer friendly speeds dont have to be fiber fast but maybe range between 512kb-2mbs.

        1. In my view, that’s just for convenience – not a show-stopper. A similar argument can be made for acquiring a car for a developer vs. using public transportation. My point is: you don’t need a car to move from point A to point B, but it will be quicker/convenient to use one. And there’s less waiting, therefore it boosts productivity, but can you say a car is developer-friendly mode of transportation? Oh look, an unintentional car analogy 🙂

  7. Hmm food for thought…I believe that the starting point would be the right mindset..believing that one can get out of the 8 to 5 circle..followed by an idea and then the capital will follow. Its an overstatement to say that those in developed countries are better off in this matter..especially immigrants.

      1. Kabweza why reinvent the wheel. Personally l am always on the look out for products that l can take and improve on…add value to..Steve Jobs did so why not me

  8. If you are talented enough, resourceful enough and brave enough your circumstances do not matter with regards to starting and running a successful business enterprise.

    A reading of some of the biographies successful entrepreneurs will show a common thread of moving heaven and earth to make their ideas a reality.

    Circumstances are no sorry excuse for not achieve your entrepreneurial dream.

    One of the reason why Zimbabwe has low entrepreneurial activity is because of our education system that focused too much on academia.

    Its only thanks to the lean decade before the GNU that people started being entrepreneurial although this lean decade also came with the unintended consequences of moral decay.

    We need to tweak our education to instill entrepreneurship especially with the high levels of unemployment.

    Its high time Zimbabwe utilizes its high literacy rate to its advantage. I believe that Zimbabwe of all countries in Africa we have a comparative advantage in knowledge intensive sectors like ICT if and only if we convert the high literacy rate into a high entrepreneurial activity.

    1. “One of the reason why Zimbabwe has low entrepreneurial activity is because of our education system that focused too much on academia.”

      Totaly agree on this, all we car about are 10 A’s at O level and 15 points at A’ level….no one takes a moment to teach us essential life skills.

  9. It depends what one calls a tech start-up. If its a joomla website on shared hosting, then it is not. But if you mean a real and serious business like Econet or ZOL in its early days, then indeed it is too costly. I, however, just read that Zuckerberg started Facebook on shared hosting. So even if it is a joomla site, starting may be cheap, but expansion costly. it now depends whether one just wants to start and worry about expansion capital later or not. If i remember well, Amazon was started with US$150 000 in capital. Even Apple produced its first computer with personal savings but expansion was costly….As Mai Chisamba alays says – Zviri kunzungu ne kunyimo.

    1. The words “expensive” or “costly” are relative to each individual’s financial position. A varsity undergraduate will tell you a $300 laptop is very expensive but for a Senior IT manager at a bank, that’s not expensive. In the same way, Chiyangwa will tell u funding a start-up for $100,000 is cheap where as that’s a fortune for most ordinary Zimbabweans….So before you dismiss a joomla-based startup as “cheap” please be considerate….(I personally dont like Joomla)….

      1. What ever you have to say. I don’t appreciate impersonation. I would have been really interested in what you have to say and to discuss.

      2. What i meant was that one can download joomla, and install it on a shared hosting account which can evene be free with 100G traffic. You also spoke of undegrad students, – they can even use free internet on campus to develop their sites. So it becaomes less costly to start. But I agree, expensive or cheap is relative.

        1. So you’re saying any website built on Joomla could never be classified as a start-up?…You have very weird logic for a person living in this day and age.

            1. Maybe…but most people forget that joomla is just a CMS…you actually can still can build something totally unique on it. Its just that some are getting comfortable using the extentions that are already there and trying to apply them to the wrong market.

    2. The Joomla you think you know isnt limited to just installing; creating articles,sections and categories and slapping on a pre-made-template. That takes 30mins. And is like 5% of what you can do with it.

      Then also, a start up isnt defined by how simple or complex your idea is. You can have a simple blog-roll(wordpress or your “beloved” joomla) but the content and nature of the service being money-making or game-changing.

      1. We need a definition of what a start up is. Right now i can install Joomla or evene WordPress with scriptaculous and that wouldnt make it a start-up. There will be no business model, nothing just a website. I can create a blog on WordPress.com, that doesn’t make it a start-up, by my definition. However, if there is a business model of some sort like in the case of CNN blogs i would call it a start-up. As you said the context is what makes the start-up. A definition of what a start-up is would have helped the article.

  10. I believe, if you have a dream, so big, so great. And you have friends smart enuff to help and give it at least a good run anything is possible. Beethoven was deaf, Steve Jobs dumped by his real parents as baby but it did not stop them from achieving greatness. My piont is, always follow your heart, if this is ur thing it will work out, trust me.

  11. The fear of failure is the greatest obstacle. The African economy is very poor and does not give one a second chance once failed. So your best bet is to play it safe 8-5. Most times the people that go the entrepreneurial path are the unemployed. The employed do not want to risk the comfort of their paid jobs. These were just a tip of our experiences starting RadioVybe – Africa’s next biggest social network!

  12. The costs of starting a Tech Company are just always too high for the majority of us(i am an under 30 Ugandan),i have personally started lots of start-ups i am a programmer so i write all the code,pay for the servers but then that’s where i run out because my “disposable income” can only go that far, I’ve got a daughter and i have to do my 8 to 5..i never stop coming up with the ideas but i can only go as far has paying for servers..i don’t have the money to do the Advertising and to push the business to a point where it can truly be profitable.
    So i find myself in this dilema..i can’t afford to leave my 9-5 but then again i can’t stay way from my start-up ideas…

  13. ICT Business Start up is a very expensive exercise as it takes you 1-2 years to develop good skills then you can start offering your products in the mean time the costs are really without good back up and also lack of government incentives for IT makes the situation worse. Countries who have managed to build the ICT industry deliberately put incentives to stimulate the industry and also exposed this industry to the Foreign market eg India and Mauritius. Another issue is business start up is a risky the government must put legislation that allows companies that fail soft landing so that they can try again.
    Finally the market is very small with an economy with a budget of USD3.8B per year this tells you something about our market size. If anyone wants to start an ICT business they must consider focusing on other markets. and cheap sources of funding.

  14. I think the cost of a tech startup is indeed too high in this Zimbabwe. And by cost I’m not just talking about financial cost. The article touches on a number of these other cost issues. From my personal experience it’s a real challenge for the entrepreneur to balance the issues of survival and those related to building a viable business and financial resources have to be split between the two to the point that the startup will always come second best. And yes I’ve seen people with drive, commitment and even a good product failing to make it and in cases they revert to the purgatory of the 8-5. Talent & resourcefulness alone are not enough to make it

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