Discipline, sacrifice and creativity are what make a start-up become a giant, according to the Nigerian billionaire. Asked what makes a successful entrepreneur, Tony Elumelu runs off a list that may be discouraging for anyone hoping to make a quick buck with a start-up.
“Discipline, hard work, sacrifice. Success does not come on a platter,” he says in an interview from his hotel suite in London. “You have to work hard to be successful. You have to be disciplined and you have to make sacrifices. In addition to being creative, these are things you must have.”
Apple founder Steve Jobs is famous for his creativity, but it was organization and discipline that took the company from a garage business to the largest technology company in the world, Elumelu says.
“We talk about discipline and structure and creativity, it seems like they’re completely contradictory. But even if you’re creative, you have to think about vision and organization.”
Elumelu says that successful Africans have an obligation to give back to the next generation of potential business leaders, and to contribute to society at large. His view – that entrepreneurship and business will be the drivers of Africa’s social and economic development – has been refined into a philosophy of ‘Africapitalism’, which prioritizes patient capital, mentorship and investing with clear social, economic and governance filters.
“That is what Africapitalism is about: the intersection of economic prosperity and social wealth,” he says. “The intersection of making profit and doing good, and not waiting to finish one before you do the other.”
It is this philosophy that has driven Elumelu to focus on entrepreneurs. Through his eponymous foundation, he has committed to identifying and supporting 10,000 African start-ups that will form the next generation of corporate trailblazers. The first 1,000 were identified and accepted onto the inaugural annual program. Each entrepreneur receives $5,000 in seed capital and a place on a ‘boot camp’, where they will learn business and management skills.
Last year’s program had more than 20,000 applicants, Elumelu says, and the Foundation hired Accenture to sift through and identify the finalists. The large number of ICT companies, particularly coming out of Nairobi, was no surprise, he says, but education, agriculture and fashion were heavily represented.
“What I’m thinking about these entrepreneurs is a cradle-to-grave concept. We catch them young, we provide capital, we provide training, we provide mentoring, then we provide a platform that showcases them to the world,” he says.
African entrepreneurs face a number of well-known challenges, not least access to capital. In many countries, the banking environment has been set up to lend to the sovereign and is not geared towards offering small business loans.
Interest rates are typically in double figures, and many banks still require significant collateral before they will lend to a start-up, putting debt out of the reach of many new businesses.
Equity is also often hard to come by. Angel investing networks and venture capital industries are developing, but lag far behind the demand.