Student Perspective: 5 Lessons Learned from Social Entrepreneurship in East Africa

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Call me a glutton for punishment, but I love working in challenging environments that require difficult and entrepreneurial solutions.

That’s how I wound up working with East African startups for three years prior to Wharton and again for my 2015 summer internship. I am passionate about supporting entrepreneurship in emerging markets to create social impact, so what better way to do that than by getting my hands dirty and directly mentoring these aspiring entrepreneurs?

This past summer I interned with startup-incubator and investor African Leadership Network-Ventures (ALN-V) to once again immerse myself in the world of African entrepreneurship. When ALN-V assigned me to exclusively mentor one of their more promising portfolio companies based in Kenya, I jumped at the chance to return to the forefront of the action. Given my own entrepreneurial endeavors in the health and wellness industry, I looked forward to my assignment with Stawi Foods & Fruits, an award-winning food processing company in need of new direction for their nutritional breakfast foods. Over the course of ten weeks, I moved quickly to analyze and execute priority decisions to improve sales for this fast-moving consumer goods (FMCG) company.

Despite working in a very different context from Huntsman Hall, it was remarkable how many classroom teachings I was able to apply to this real-life situation.

These are the top five lessons I experienced while preparing an East African FMCG company for their next round of investor financing:

  1. Initial Analysis: It doesn’t matter how much you sell to retailers – what matters is how much your retailers sell to the end consumer. And numbers don’t lie.

Wharton MBA’s are trained to live and die by quantitative-driven decision-making. But what happens when there are no numbers to drive a decision? Upon arriving in Nairobi I was greeted with very little historical company data with which to construct beautiful Excel models. So I met with each of Stawi’s retailers – from the standalone grocery store to Kenya’s largest supermarket chain – to pull sales analyses for the first time in the company’s history. The findings were both surprising and worrisome: our supposed “best outlets” had less-than-stellar sales; we thought we were selling to one demographic but the numbers pointed to another; we fancied ourselves a geographically evenly-distributed product but we were selling largely in urban areas. Gathering these numbers was like pulling teeth, but without understanding the true landscape of our sales and how much of our product was sitting in retailers’ inventory, my strategy for the remainder of the summer would have been incredibly misguided. Do your research and dive into the numbers before embarking on a new strategic direction.

  1. Product-Market Fit: If you can’t describe your ideal customer, they don’t exist.

If a company answers “Who is your ideal customer?” with “Everyone”, you know you’re in hot water. Luckily we now had sales analysis data and retailers’ insights to refine Stawi’s target market. By pinpointing age, gender, socioeconomic status, and location of our end consumer, we re-branded and honed our marketing efforts to reach these customers throughout their daily routines. Identify your ideal customer as thoroughly as possible and tailor your marketing strategy to reach that one person.

  1. Product Development: If you don’t ask customers what product they want, customers won’t ask for your product.

Differentiating qualities are critical to get ahead of the competition. If you don’t talk to your customers to tweak your product and meet expectations, these qualities will soon dissipate and render your product undesirable. When I was told that Stawi had never conducted focus groups, and that the only opinions driving product development were those of our factory workers, I knew we had to be missing something. I sent our team to distribute samples to Kenyan boarding schools, testing both the family and junior products. We soon found out that the junior product was not sweet enough for most children’s liking, an important revelation for product development. We have since designed sample packaging and arranged point-of-sale tastings to continually gather customer feedback. Keep a pulse on consumer preferences and adjust your product accordingly.

  1. Distribution: If your product isn’t on the shelf when your customer arrives at point-of-sale, you’ve wasted your time and money.

You can do all the marketing you want but if your distribution system is inefficient, your product won’t be available for purchase to generate cash flow. To save money and deliver in bulk, Stawi would wait until several outlets in one area had submitted orders. This meant the first outlet in that area to submit a purchase order would sometimes wait up to two weeks until a delivery was made. Empty shelves represented unrealized sales and diminished brand recall. When I saw we were creating huge gaps in deliveries to retail outlets, I began discussions to find a distribution partner who could quickly and affordably ensure our product’s delivery. If your customer can’t purchase your product, then all the work throughout the production process up to that point might as well be forgotten. Make sure your product is consistently and readily available for your target consumer.

  1. Organizational Structure: If you want an A+ company, surround yourself with A+ people.

Once we had executed on these various strategic decisions, I knew Stawi would need a strong team to keep these processes moving. I identified the critical roles the company was lacking and proposed a new organizational structure. Once the board approved these measures, I drafted job descriptions, interviewed dozens of candidates, and created Key Performance Indicators for their three-month probation periods.

When the CEO commented that my recommended candidates were overqualified, I knew I had selected wisely. Given our lofty goals, we needed staff who exceeded expectations. Hire top people into your organization and let them scale the company to match their skillsets and qualifications.

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Thanks to my Wharton classroom knowledge and the opportunity to work with ALN-Ventures, I was able to generate social impact by supporting aspiring entrepreneurs to create jobs and invigorate local economies. Throughout the summer I witnessed the impact made by Stawi across their supply chain, from offering fair market prices to farmers to providing nutritional products to children and families.

And despite the unique location of my summer internship, I have found these lessons to be applicable across all startups. Hopefully they can help you succeed in your entrepreneurial endeavors, and potentially create social impact along the way as well.

OlsonCorp_4247 - Version 3Marypatton S. Davis is a full-time MBA student focused on Entrepreneurial Management. She has spent the majority of her career scaling startups and restructuring existing organizations in Sub-Saharan Africa, and has launched several of her own companies both abroad and in the U.S. Read more about her on her website, MPisforMarypatton.com.