Funding is a challenge faced by many entrepreneurs working in Africa.
Our search for funding our pilot started in December 2017 when we identified the need and realized that resources beyond just our time would be needed to truly take this to the level we envisioned. At that time, we had started initial conversations with the Big Four accounting firms (a logical partner for an accounting education initiative) and selected a few NGOs with a focus on education initiatives in East Africa. The initial feedback we received was that the idea was great, but that they needed to see a proven model, results, and a measurable impact before committing funds to any project. For anyone who’s interested, the first iteration of our pitch deck can be found here.
To us, that feedback could only mean one thing: pilot your idea and then come back to us.
The results of the pilot exceeded our expectations. A snapshot of these is below, and the full results can be seen here.
The key takeaway from the pilot was that the content worked. There was no doubt about it.
However, the boot camp, as we structured and delivered it during the pilot, would not result in a breakeven business model. This meant that if we wanted to keep running in-person multi-week boot camps, we would need a significant amount of cash from grants or donors. We didn’t want to become like every other NGO, soliciting large grants and delivering expensive programming.
Within weeks of completing the pilot, we knew that if we wanted this to work and reach the number of people we knew needed this content, we had to lower the cost to under $50 (compared to the $100 we charged for the in-person boot camp) and transform the course into an online learning format in order to 1) achieve scale, 2) lower the delivery cost and therefore the course fees, and 3) not be restricted by physical or geographic location.
So, we went back on the road to solicit enough grants and funding to convert the program into an e-learning format. Our goal was to raise approximately $150,000, which would cover 1) development of the website, 2) converting the 120 hours of lessons and exercises from PowerPoint, Word, and Excel documents to an interactive e-learning format, 3) hire a few employees and cover ongoing operating expenses for a year, and 4) frankly, provide us a small salary so that we could keep personally afloat.
Without going into too much detail, our search for funding failed. We had conversations with many organizations, including the Big Four offices across four countries, large NGOs in the education space, social impact VC firms, and government organizations. Although we felt very confident about the impact, quality, and potential to scale our program, we were ultimately unsuccessful.
Reflecting on this, I think the key takeaways are:
- Accounting is not sexy. It’s evident that qualified accountants are necessary for successful economic development, yet, accounting education is sorely neglected by education funders in Africa. Conversely, tech is sexy, and an excess of capital is flowing to software and programming education.
- Our budget was just too small for many organizations. Practically speaking, it takes the same amount of time to deploy and monitor a grant of $150,000 as it does for a $1 million one. We could have requested that much and created a bottom-down budget to make the numbers work, but we were aware of the fact that there’s a ton of waste and inefficiencies by grant recipients, and we wanted to fight this by being lean. We felt that our impact with $150,000 would not be materially different than with $1 million, and that this would be seen as a strength rather than a weakness. In reality, this was viewed as a negative.
- A lack of funding goes to post-tertiary education and is instead diverted to primary/secondary-level learning. This is understandable. However, there’s a neglected generation with a lack of job-relevant skills. Without tackling this problem, the current high unemployment issues prevalent in the regions are, in my opinion, not adequately addressed.
So, what did we do? In October 2018, we set out a budget of $10,000 USD (not including our time) and a target launch date of January 15, 2019. This was a fraction of the estimates we received to develop the website and content, which ranged from $50,000 to $75,000. We had no e-learning experience and no web development skills. A little optimistic, perhaps! But we were ready for the challenge and jumped in headfirst.
In the next post, I cover how we developed the Haystack Africa platform.