Co-Creation Hub launched almost ten years ago as one of the foremost technology hubs in Lagos. Many of the technology companies we know now—TechCabal, Fora, Andela, TechPoint—they all, at some point, either began as ideas at CcHUB, made their first hires or worked out of the hub’s space in their earlier years.
At last Friday’s TC Live, co-founder Bosun Tijani outlined the hub’s evolution in the past decade, shared insights into ecosystem building, iHub acquisition, raising capital, team building and a number of other issues pertaining to technology and innovation across the continent.
“We wanted a platform to support ordinary young Nigerian with ideas who believe that they can create a solution to a problem,” Tijani said during the session.
When the hub first launched, Tijani says, a lot of technology solutions and companies were being built by returnees with access to infrastructure and capital to build technology products or services. But the hub was and continues to be about building communities that enable new companies in the technology industry get off the ground and thrive.
In its 9-year history, a lot has changed about the technology ecosystem in Lagos and around Africa as well as how the hub now approaches its mission. Tijani says now more than ever, the industry needs to double down on Africa’s uniqueness both in terms of its challenges and its approach to innovation to address these problems.
“We’ve seen a lot of failed startups,” Tijani said. “And because we invest at very early stages, the success level is quite poor. We’ve invested in over 60 startups at that level and we’ve learnt quite a lot.”
Two of its earliest portfolio companies, BudgIT and LifeBank, have both gone on to achieve a great measure of success.
BudgIt was founded around 2010/2011 around which time the Arab Spring was going on in the Middle East/North Africa and CcHUB was big on transparency. In spite of concerns about how sustainable the organisation could be using technology to bring about government transparency, “BudgIT demonstrated what we wanted to show; building a case for the importance of tech and why we needed to invest in it”, he added.
Between BudgIT and Lifebank, many other startups sprang up: 500Shops that got acquired by Konga, Clive now working with Booking.com in Netherlands, WeCyclers and many more.
Tijani points to the advent of the Tony Elumelu Foundation (TEF) entrepreneurial fund to this period.
CcHUB had approached the entrepreneur and Chairman of the United Bank of Africa, Tony Elumelu who invested US$5,000 in 20 startups at the time when he saw the work that a lot of them were doing in using technology to address socio-economic challenges in the country, which continues to be the focus on the hub in terms of the startups it funds and supports.
Asides TEF, support from companies like MainOne with whom the hub continues to work with till date was also substantial in helping startups in its community, at the time, build and innovate with one less barrier.
Funding as a measure of startup success
Funding was not very easily accessible in the early 2000s when the hub launched, Tijani said, and although capital is important in taking ideas off the ground into viable businesses, he strongly maintains that the amount of money a startup raises is not a yardstick by which its success is measured.
“When we started, we were quite big on bootstrapping and this wasn’t because we didn’t think funding was important,” he said.
At the time, he says, there were startups who had received funding from TEF but were unable to develop a working product with all their time at the hub.
One thing they corrected early on however, from LifeBank, was to encourage founders to go out and seek funding themselves without leaning too much on CcHUB’s support indefinitely. After an initial US$30,000 investment in LifeBank, and support from its GrowthCapital fund alongside other investors, LifeBank was forced to seek out its own fund.
“Temie [Giwa-Tubosun] wasn’t very happy with CcHUB at this point,” Tijani recalls, “But we had learnt our lesson because at this point, we had invested in a startup, about the same money we had put in LifeBank, and a bank had asked them to provide the same service they were building which they did and got paid millions of naira. The founder separated that amount and it became his personal money. It was the intellectual property of the company.
“So we said we were going to force our people to learn how to raise money.”
While funding might still be difficult to access for startups, Tijani said this is not the case across the continent.
In Nairobi for instance, after personally investing in STEMCafe, in less than two months, he says there were about five investors lined up and ready to invest in the business. But with markets like Nigeria, the challenge is that there are a number of more exciting funding opportunities for investors with less risks and higher return on investments (ROIs). But with the pandemic and as more realise the monumental impact technology has in the future of the country and the continent, this is changing.
According to Tijani, CcHUB’s GrowthCapital is raising money at the moment and can invest up to US$250,000 betting on ideas and businesses that are likely to fail but if successful have great social impact. At most, it demands a 7% equity in its portfolio companies.
Effect of coronavirus pandemic on CcHUB
According to Tijani, the pandemic has not impacted the hub’s activities greatly. The only part that has is that which concerns its iHub acquisition.
“When we acquired iHub, we acquired it from someone who had already bought it and was trying to create a WeWork of Africa,” he said. This entrepreneur had also tried to buy CcHUB alongside a number of technology hubs across Africa for this purpose. But since the acquisition, Tijani says they have been working to have iHub move into a deeper exploration of technology and innovation but the pandemic and resulting lockdowns has stalled progress in that regard.
But overall, the hub’s shift from being a co-working space to a more technology and innovation-focused hub has ensured that the business has continued to operate remotely and sustainably.
“The pandemic will impact tech hubs for whom co-working spaces are a huge part of their model but it is also a massive opportunity for hubs really focused on tech and innovation,” he said.
As Tijani says, about 80% of the work that the hub currently does has moved away from the co-working space model to involve a number of things for instance, community building around thematic issues like education or digital security. These communities are country-wide comprising learning institutions, government and corporate bodies, subject experts and stakeholders.
There’s also a lot of work engaging with the government to explore how to use technology in really smart ways across various sectors through research & development. In the health sector, in partnership with Nigerian Institute Of Medical Research (NIMR), CcHUB has done medical trials around tuberculosis and for the coronavirus pandemic, the Design Hub in Kigali developed the systems used in managing testing.
Helping corporates adopt more in-depth use of technology is another facet of the work that the hub engages in.
Teambuilding, challenges with scaling and replicating CcHUB’s success model
Much of the hub’s success in building the right team has come from not just looking for the right talent, but looking for people “who are extremely committed and are excited about what technology can do to Africa.”
With close to 100 staff and more room for hires, Tijani says this has been the best approach at attracting the right kinds of people to the team.
“We’ve been priviledged to work with smart young people who are committed . We’ve never had any bad year in all our years of running CcHub,” he said.
The hub now has presence in West and East Africa and plans to extend beyond these regions not because being a pan African organisation has a nice ring to it but because of something he calls distributed innovation.
Individual African countries do not have strong innovation systems and these are typically what you need to develop and scale innovation. These systems consist of a large number of players and factors including universities, policies, government, local investments and intermediaries like CcHUB. The only country close to having a fully fledged innovation system is South Africa, Tijani says. Kenya and Rwanda come close. In a world that is moving so rapidly, the continent cannot wait for every country to build out its own innovation system which is what the models in American or European markets dictate.
“If we think distributed, our entrepreneurs and innovators can leverage resources from different parts of Africa,” he said.
Funding to scale has been one key challenge in making this happen.
“If you go to a city, start by understanding the strengths of the city and ask how technology can enable the strengths of the city,” said Tijani about replicating the work that the hub has done in the last 9 years.
For would-be entrepreneurs, his advice is to start with value in mind as well as an understanding or clarity of the markets that they play in.
An ecosystem that works is one where every player understands that the roles that they have work towards the strengthening of the sector and building of scalable businesses whether they make crazy returns in the process or not.
“We’re just seeing signs of people trying to do that [become scalable] and we need to ensure that they do not stop at it the way those before them did,” Tijani said.
Whether it is being committed to the expansion of the digital economy, or trying to help countries figure out affordable and accessible internet, or bringing the once-in-a-lifetime opportunities home, every block piece is vital to an ecosystem that can stand its own.