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How to ignite a boom in Caribbean Startups and the Top 3 countries that will lead
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SC. How many years or months away is the Caribbean from seeing a ramping up of Caribbean startups?
MM: Generally, I think no more than 3 years in a few countries. Most countries still have a way to go and one might not necessarily see any appreciable ramping up of startups into the foreseeable future.
It should be noted that the telecoms liberalization process that resulted in lower rates and increased access to services is relatively recent. Although telecoms, especially mobile, teledensity is relatively high in most English-speaking countries, access to computing and Internet services is not at equal levels. Further, the differences in prices for a mobile phone vs. a PC, or with respect to mobile calling/SMS rates and Internet pricing is drastic. Hence across populations, the exposure to computing facilities is not is intensive or extensive as that for telecoms.
SC: What are the top 5 things that are needed for us to stimulate this?
MM: (i) Education – Our education system needs to encourage innovation. Most of us who have been schooled in the Caribbean have been conditioned (perhaps subliminally) have we have to “get a job” – be in someone else’s employ. It is truly the rare individual, who perhaps has limited options, that becomes a lifelong entrepreneur.
(ii) Financing – In most Caribbean countries, small business/entrepreneurial ventures have limited options to financing. There are few venture capital operations, or avenues for development funding. Frequently, the only option is commercial banks, which tend to be reluctant to lend money for entrepreneurial activities. However, when they do, high interest rates and stringent measures are the norm. Often, even though a business has limited its liability, the banks tend to require people to be personally liable for loans given to a business, meaning that they can lose their homes and all of their other assets. When all of this is considered, such measures can be a significant deterrent to people hoping for a chance to pursue an idea.
(iii) Business support services – This could range from mentoring to incubator programmes and serviced offices. Many people who have ideas, and I would venture to say tech ideas, might not necessarily have the business acumen to manage a business well, and especially in the start up period. Having support, which could be in the form of advice, and even access to office facilities at discounted prices, could improve a startup’s chances of success.
(iv) Societal reconditioning – There is a grave stigma associated with small business failure in most countries in the region. People are thus less inclined to take a chance. Naveen Selvadurai from Foursquare recently gave some insight on that on GPS on CNN. In the interview, he noted that in the US, people are more inclined to take a chance if they have an idea. The fact that is possible to do so in the US (and not in other countries) will continue to stimulate innovation and entrepreneurship there.
(v) Increased exposure to technology – To stimulate tech business startups, I am of the view that the novelty of technology needs to wear off, so that (prospective) entrepreneurs become aware of needs or deficiencies that they could address. I also think that the exposure needs to start young, to improve proficiency and skills. I am concerned that for people who are starting to learn about technology in earnest in Uni – the horse has already left the stable. One should begin to see strains of innovation and thinking outside the box before Uni. Tech startups seem to be a field for youth – people are unfettered by convention, but are also able to commit the time and energy to their ideas.
SC: Which 3 countries you believe would lead this and why?
MM: Trinidad and Tobago – T&T has the money, but it also has been working assiduously on implementing its National Strategic Plan. T&T also has a number of local homegrown businesses that have become huge forces within the region, so there is a history of high businesses achievement.
Barbados – Similar to T&T, Barbados has implemented widespread and far reaching changes across a number of sectors in its economy. It is actively repositioning itself, and is trying to show itself to be a leader. I am sure that you are aware that before the end of the year the entire country will be covered/accessible by Wi-fi, also plans are afoot for it to become a “green” country. I feel certain that the fact that the Barbados is actively pushing ahead, this will trickle down to its citizens and stimulate entrepreneurship.
St. Kitts and Nevis – Similar to T&T and Barbados, St. Kitts and Nevis has been focussing on stimulating its economy – I don’t think that the plan is as structured or elaborate as the other two, but there is some effort. The Prime Minister/Govt has been very vocal in its support of technology and ICT development; the country has a relatively strong economy – decent GDP; it is not necessarily plagued with problems as severe as what obtains in other countries; it’s population is small. It thus has the potential quickly mobilise and improve its position.
What is a Startup?
To be a startup, a company has to be a product business, not a service business. By which I mean not that it has to make something physical, but that it has to have one thing it sells to many people, rather than doing custom work for individual clients. Custom work doesn’t scale. To be a startup you need to be the band that sells a million copies of a song, not the band that makes money by playing at individual weddings and bar mitzvahs. – Paul Graham
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