Monday, June 11 2012
What does it take for Africa’s women entrepreneurs to succeed? Tradewinds asked a woman entrepreneur whose success in two sectors makes her an authority on the subject: Magatte Wade of Senegal founded Adina World Beat Beverages in 2004, producing Senegalese bissap drinks. In 2011, she launched a personal care brand, Tiossan, which offers premium skin care products based on indigenous Senegalese recipes to the U.S. cultural creative demographic.
The cultural creative demographic in the U.S., which spends upwards of $290 billion annually, loves culturally exotic products from around the world. They are eager to buy from us – if and only if we can master quality control, professionalism, branding and marketing, and sales and customer service.
And, yes, we can compete.
I recently participated in the launch event for Youth Trade, a new initiative modeled after Fair Trade designed to assist young entrepreneurs in getting their products into U.S. retail outlets. The Northeast Region of Whole Foods Market has already agreed to carry Youth Trade products. The CEO of Whole Foods was on hand to welcome the young Youth Trade entrepreneurs as was a former vice president of Nordstrom’s.
The program was founded by Poonam Ahuluwalia, an Indian woman who wanted to see more successful retail products founded by young entrepreneurs. But while Youth Trade aspires to include young developing world entrepreneurs, few of them were from those parts of the world.
Over and over again I’ve seen young American entrepreneurs succeed at bringing exotic, new developing world products and ingredients into U.S. retailers. How can we get more entrepreneurial African women bringing exotic, new African products and ingredients into these retail outlets?
Four bottlenecks must be opened in order to create such a pipeline:
Quality and Professionalism: Too many African producers are not currently producing products to U.S. quality standards. In my first company I had to travel to Senegal numerous times to train hibiscus growers to produce to U.S. quality standards. When I started, their “finished product” contained stones, hair, feathers, and other contaminants that were simply unacceptable. Today, I would like to be able to buy shea butter from Senegal, but I can’t find a sufficiently reliable Senegalese supplier of Certified Organic Shea Butter. I have, however, found great producers from Benin and Ghana. If Africans want to be taken seriously, they have to produce to world-class standards and have world class supply chain or representation. At present I find it is often an ordeal to get vendors to provide pricing, samples, detailed information and other critical information. Americans are used to fast, professional service, and stop doing business with vendors who don’t provide it.
Design, Branding and Marketing: In Africa, if an entrepreneur even bothers to create a brand it is simply a matter of printing a label. In order to sell at high-end retailers in the U.S. market, it is crucial to devote real talent to branding and marketing. Insofar as most Africans themselves don’t have access to such skills, they may need to partner with a U.S. branding firm, either in exchange for equity, as a pro bono client, or after raising capital to pay them market rates. In addition, even if an entrepreneur has a good product concept, the final product may benefit from professional design expertise. We need to develop world-class design, branding and marketing firms owned by Africans (there are some in South Africa). Too many Africans dismiss the notion of spending money on “fancy labels” while remaining clueless about a sophisticated branding process. Few would consider hiring a professional design firm. Many NGOs that aspire to help Africans are just as clueless about this. Retail products succeed through design, branding and marketing - if you want to succeed in the U.S. retail market, you must commit significant resources to doing this.
Sales and Customer Service: Many Africans are brilliant sales people back home, where they know their culture. But if they want to succeed in selling to U.S. markets, they need to take their natural talent for selling and learn enough about their target customers so that they can close the sale - to the retail buyers and to the end customer. They need to really understand the U.S. customer, not just assume that they know them from watching American movies. There are many excellent sales books written by great American sales men and women. Read them. Finally, a crucial component of the sales process is customer service after you’ve sold the product. If you don’t provide great customer service, bit by bit your reputation in the marketplace will erode, and your sales claims will ring hollow and be unsuccessful.
Capital: Most Africans (and most people) think that if they only had access to capital, their businesses would be successful. I left this point last because unless and until an African (and anyone for that matter) has mastered the first three, she/he won’t be ready to make appropriate use of capital. That said, Americans interested in “helping” Africans create businesses need to become more sophisticated about these issues as well. At present most investors focused strictly on ROI won’t focus on African businesses targeting the U.S. consumer market until those businesses have already been successful, largely because of the dreadful impression most Americans have of African business and African governments. So insofar as we need to depend on investors who are motivated by the desire to “help,” we need to train them to take real business processes much more seriously. I’ve seen too many of them get excited by the idea of Africans producing some good to sell in U.S. markets without at all understanding the challenges involved in bringing African entrepreneurs up to par with respect to quality control, branding and marketing, and sales. (I’d also like to see more Africans of means investing in African entrepreneurs.)
All of this is not intended to be discouraging: While I respect the right of American young people to travel the world and bring back exotic products for U.S. retail markets, why can’t more of we Africans participate in these business opportunities as well?