Tag: uganda

Impact Investing: Beyond Capital’s perspective, with Brian Axelrad and Nicholas Java

Overview

In this episode I speak with Brian Axelrad and Nicholas Java: investors at Beyond Capital.

They are a special type of investor, which is the topic of our discussion.

Beyond Capital operates as an impact investor, an interesting player in the East Africa business space.

Like traditional investment, impact investment is fundamentally a vehicle for injecting money into ventures, the difference lies in that the success of the investment is measured not just in financial terms, but also for social good.

As we discuss, this can be a tricky concept to define – but the broad sense is that these investments will accept a trade off on pure financial return on investment, in exchange for promoting pre-defined societal objectives.

For Beyond Capital they invest in businesses that address the lack of access to basic goods.

We go through how they whittle down opportunities in their pipeline, the challenges of reporting on impact and, where they see the greatest opportunity for impact in the social entrepreneur space.

With this episode there are also lots of links and reports that we mention, and so be sure to check out the show notes for more information about both Beyond Capital and impact investment in general. You can find more info via https://theeastafricabusinesspodcast.com/2018/08/16/impact-investing-beyond-capitals-perspective-with-brian-axelrad-and-nicholas-java/

 

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Beyond Capital’s criteria

In the investments they make, companies need to be financially stable, with long term prospects for financial return, but also how it’s going to behave as a responsible citizen. On the impact front, lack of access to basic goods is what drives their definition of impact.

Intentionality is important for impact investment

In order to be classified as impact investment, the consensus is that the initial intention behind the investment should be for impact reasons. i.e. most people invested in Uber not for impact reasons, but through a different lens, it’s reduction of greenhouse gases through the sharing economy could be classified as such.

9 capital investments

Half in India and half in East Africa. This has come from looking at 500 companies.

Deal flow comes from a local presence

This has been with Ben Grozier and Mehak Malik. They meet with businesses and are able to find opportunities in different stages of the pipeline.

Beyond Capital avoids education

Difficult to measure the impact. It also almost always involves the public sector which makes things difficult. Instead, B2C models which more directly provide access to the basic needs that people are missing is a much more direct fit.

Investors don’t sign NDAs

Their reputation is their lifeblood. There’s a level of trust between the entrepreneur and the investor which will develop over time.

“We play in the capital gap”

The area that Beyond Capital play in as at the “seed” and “pre-seed” areas.
In other parts of the world there would be disposable capital from angel investors which would fill that gap, but in East Africa and India there’s not as much to in the market to do so.

Aligning reporting on the impact

There are different levels of how to quantify the impact that the business has. This goes from the entrepreneur doing it anyway, towards more hands on approaches of how to measure the impact. It’s difficult to legal bind someone to their impact goals.

Biggest opportunity?

Brian: Using technology to facilitate financial inclusion
Nicholas: Agriculture supply chain development

Website links etc.

Website: https://www.beyondcapitalfund.org/
One of Beyond Capital’s investments is Kasha, which you can learn more about at: http://kasha.co/
Matt’s blog post on impact scorecard: https://www.linkedin.com/pulse/beyond-numbers-how-why-measuring-social-impact-matt-raimondi/
Global Impact Investors Network (GIIN): https://thegiin.org/
Brian on LinkedIn: https://www.linkedin.com/in/baxelrad/
Nicholas on LinkedIn: https://www.linkedin.com/in/nicholas-java-083a9226/
Beyond Capital on LinkedIn:https://www.linkedin.com/company/beyond-capital-fund/
Beyond Capital on Instagram:  https://www.instagram.com/beyondcap/

*SPECIAL* Silicon Savannah: Business Lessons from East Africa Talk

Overview

We’ve got a slightly different format for this episode – it’s a recording of a talk that I gave on a recent trip back to London.

It was held at a co-working space (@huckletree) to an audience of people interested in learning more about the business scene in East Africa.

We have a bit an intro and overview of the main industries in the region before delving into a few other topics which haven’t really been covered so far on the podcast

  • Some thoughts around how technology in the region is being adopted quicker, leapfrogging the developed world
  • How the education system means it can be difficult to hire in East Africa
  • And a discussion around the implications of Brexit and the Trump election on the region

About half way through we get to Q & As which, in my opinion is the best bit as we get to cover some more contextual questions of the business scene.

Some of the questions might be a bit tricky to pick up, but you should be able to work out what’s going on from the resulting discussion.

In any case, this is a slightly longer episode than you might be used to, but with the diversity of topics we cover, I hope you find it useful.

If you have any thoughts, questions or comments, just drop me a message on Twitter @Sam_Floy or by email [email protected]

Presentation slides

 

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Escaping the rental poverty trap: how Tugende gives motorcycle taxi drivers the ability to own

Overview

A recurring theme across East Africa is how owning an asset is a path out of poverty.

It’s a bit of a chicken and egg problem, as banks typically require an asset as collateral before giving a loan.

Tugende gives people their first step on the ladder.

Starting as a side project of some bikes that Michael bought for his motorcycle friends, Tugende has now grown into an organisation that thousands of drivers use on their path to ownership.

Michael and I discuss the issues of the rental poverty trap, the process around how they mitigate risk, and how he sees is customers as micro venture capitalists.

It’s a very insightful about the financing industry in Uganda, and across the region. I hope you enjoy.

 

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Here are some of the key quotes:

“Tugende means ‘Let’s Go’”

In both Luganda (the local Uganda language) and other East African languages it’s a common phrase.

“Motorcycle taxis are very popular”

The 100,000s of motorcycle drivers in Uganda can’t get access to credit, and therefore end up renting their bikes.

“The rental poverty trap”

This is where all money is being spent on renting an asset and there’s none left to save to then progress.

“I bought three bikes”

Tugende started when I financed three friends so that they can own their own motorcycle. It was very much a side project which turned into my main endeavour in 2012.

“Customers know their economics better than we do”

Some people have several motorcycles which they buy, own and then sell on for cash.

“Payments go towards ownership”

The weekly payments are about 15% higher than when they pay a landlord, though the light at the end of the tunnel is that these are all going towards them owning the asset.

“Motorcycles are the lifeblood of the economy”

They move agriculture, people and goods in a quick way, and provides employment and earnings for a large swathe of the population.

“They’re a good asset”

Motorcycles are fairly durable and can have fairly regular/ predicatble cash flow. It helps us mitigate against the risks involved.

“We don’t fear running out of customers”

Exact numbers are difficult to gauge but our best guess is 400,000 motorcycle drivers in Uganda.

“Almost every driver is male”

In Kampala there was one female driver who was well known. She know works for Tugende…

“We have a robust screening process”

This is to cover for not having a collateral asset and some of the other constraints that banks have. We look for “responsibility and roots” – will other people vouch for you? Benefit of the doubt is given.

“Buying bikes isn’t our gig”

Drivers will find a bike that they want to buy and come to us. We don’t bother with sourcing motorbikes and leave that to the customer. We’re brand agnostic.

“Micro Venture Capitalism”

Our customers know their communities better than we ever could. The cash they earn from selling a second-hand bike is like a seed fund.

“We hire for problem solvers”

A big part of our business ethos is resilience and being prepared for the unexpected. People who work for Tugende might not have the best academic results, but they’re great at acting under uncertainty. A lot of people have been hired from the boda boda community.

“Tugende is an economic opportunity company”

We don’t look at ourselves as a motorcycle leasing company. We’re in the business of giving people assets for them to own and leave the rental poverty trap.

“Insurance is a growth area”

Looking forward, as well as offering different asset classes we will also look to extend our insurance partnerships to our customers.

“Helping people help themselves”

This is our mantra. We’re about finding people who already know how to make money, they just need some help unlocking the opportunity. This isn’t bound to just motorcycles.

Social Media Follows etc.

Facebook: TugendeDriven

Website: www.tugendedriven.com

The effusive Dr Suudi gives us a taste of his Ugandan radio adverts

Overview

Coming from the UK, one of the biggest differences in East Africa has been how products are marketed.

In the co-working space I was at in London we would talk about Google Ad campaigns and reaching users online through content marketing. Here though, the radio is a dominant form of advertising.

In this episode I talk with Suudi who runs Wave Records.

We discuss his extensive experience in the radio industry, why old car radios can only play on restricted frequency and listen to some of his catchy jingles, including a slightly… interesting one about a Ugandan girl getting a Chinese boyfriend (at around 18 minutes)

We were in his recording studio and so there might be a bit of activity/ phone interference going on in the background and it gets a bit echo-y at the end.  Sorry about that.

Hopefully it won’t detract from one of the… most unique interviews I’ve had.

 

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Here are some of the key quotes:

“I’ve been doing this for 15 years”

I do lots of things in the music industry and I started Wave Records a couple of years ago.

“We have all the customers”

The banks, telcos and other industries in Uganda who have radio adverts, they all come to us.

“TV as well”

Whilst most of what we do is radio, we also offer TV.

“Our adverts are like hit songs”

People are informed of what products through the catchy jingles which we produce.

“93% of people in Uganda listen to the radio”

Most people listen to the radio when they are in the taxi. In old cars you can only listen to frequency of 88-91. Newer cars have more stations.

“In urban centres there are 30 radio stations”

There are some popular stations and unpopular ones. It’s all to do with both music and the chat that the presenters have.

“I’ve been radio since I was 12 years old”

A lot of the population will know me. My business partner Ronnie is also a bit of a radio celebrity.

“Clients don’t follow machines”

They follow the people. When we left our old jobs and started Wave Records these clients came with us.

“We create according to the audience”

Some clients will want a simple voice-over. Others will want one with more catchy jingles. Often the same company will have several types of adverts out at the same time.

“Here are some jingles”

Go to around 16 minutes to listen to some jingles that we recently produced.

“We pay voice over artists a day rate”

Typically we’ll find people through friends and those who we meet. The more experience you have, the more you can charge, because clients can recognise the voice.

“I see opportunities in billboards”

They make a lot of money. If you’re doing a radio advert it’s also useful to follow it up with a billboard campaign too.

“I’ve done a million radio adverts”

I do 150 adverts a week. This is because we do adverts into lots of different languages. In Uganda there are 54 languages spoken.

“Social media has been tough on us”

These days clients are also using Facebook and WhatsApp which means there’s less room for radio adverts.

“Reach 10,000 people in 10 minutes”

Just set up a WhatsApp group have people share it and suddenly you’re getting good coverage.

“There’s coverage all over Uganda”

The government has a station in each region. There are also the private companies, like us, who exist. Unlike the BBC, the state-run radio stations here are probably the worst.

Social Media Follows etc.

Facebook: Dr Suudi

Email: [email protected]

Supporting Ugandan small holder farmers with affordable services, with Peter Nyeko from Reparle

Overview

During my travels in East Africa, time and again people would point to the low prices that farmers receive as the main blocker to development.

Low prices come from not being able to store produce, nor do the basic milling to give it more value. It’s difficult though, as much of the basic infrastructure such as transport, power and facilities are absent in the many rural areas that exist in the region.

Peter Nyeko set up Reparle as a marriage of three organisations to solve exactly this. We talk about the environment that many rural farmers are living, how Reparle learnt about the conditions they worked in and the considerations with planning out a large scale project like this.

We also talk a fair bit about biomass, and so if you’re interested in learning more about this solar alternative to clean energy creation, look out for the Clean Cooking episode I did with Ziwa from Green Bioenergy.

 

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Here are the key quotes:

“Reparle stands for…”

Renewable Energy Empowering Agriculture and Rural Livelihood Enhancement

“It’s a project made up of others”

Mandulis Energy (which focuses on biomass energy), Dream Shuttle (for logistics and distribution), Acted (French NGO) which helps us focus on social impact.

“We provide small holder farmer services”

We give them access to processing facilities as well as means to have electricity and clean cooking facilities.

“Selling raw means a poor price”

When a commodity has no processing, it needs to be sold at a low price to traders. Reparle gives facilities to farmers (such as storage and milling) which means they can add value to their product and receive a higher price.

“We provide milling within 10 miles of where they live”

There are up to 6,000 farmers who can access each milling facility at one of the Reparle hubs. We are also able to link up farmers to electricity in the off-grid areas.

“Reparle for profit but…”

It’s also a social business. We offer farmers agricultural services, clean fuel and electrcity at below market price .

“Solar is really expensive”

And so we offer biomass electricity which is a quarter of the cost of solar. It’s all about getting the logistics of moving reliable biomass to generate electricity.

“Lack of infrastructure has been a barrier to entry”

Larger organisations have been put off doing this because they have needed electricity and transport systems to run the business. Reparle have been able to build this infrastructure and so are creating the market.

“There’s also not the capacity”

Millers can’t run their factories any more. Most of Ugandans don’t have electricity or these other services, and so we go to these virgin markets.

“We’ve had awesome knowledge transfer”

Between the three entities (renewable energy, logistics and social impact) we’ve had recognition from reputable international organisations around what we’ve achieved.

“In Africa the one thing you can’t control is political risk”

For this I mean instability just popping up. You have to leave that to insurance. Other than that we built a system to mitigate other risks that we might face.

“Our on grid project took a decade”

Supplying electricity from our plants to the Uganda Electric Grid has taken time, but nevertheless has been pretty straightforward.

“We prepared for many scenarios”

Lots of things such as if regulation changed, deadlines were missed, and costs were to jump. Projects are planned to cater for 1.5 times the worst case scenario.

“We walked in the fields with farmers”

From the start we have worked as farmers ourselves which allowed us to design a system that was built for them and what they would need.

Links etc.

Mandulis Energy Dream Shuttle Acted NGO CFO World Economic Forum Top 10 Female Innovators

Social Media Follows etc.

Website: www.mandulisenergy.com Facebook: Mandulis Energy

Why biomass charcoal cooking stoves are saving lives, with Ziwa Hillington from Green Bioenergy

Overview

Cooking is an everyday activity that most people engage in.

In places where you don’t have gas, charcoal is often used to fire up a stove.

Whilst people have been doing this for years, it is not very environmentally friendly, and it generates smoke in often confined areas of a home.

Green Bioenergy is a social enterprise all about creating a clean cooking environment.

Their two products are an improved cooking stove and smokeless charcoal briquettes.

Ziwa and I discuss how they sell briquettes through rural agents, how they keep the complete supply chain produced in Uganda, and the prospects for taking this approach internationally.

We conducted the interview in the garden of the Green Bioenergy office/ house and so there might be the odd bird tweeting in the background.

Either way, I hope this doesn’t distract you from the interesting chat that we have.

 

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Here are the key quotes:

“It was founded in 2011 by two French expats”

The foundations were around finding environmentally friendly solutions.

“Green Bioenergy (GBE) is inclusive”

All of it is around involving the local Ugandan community in the complete supply chain.

“Our two products are charcoal briquettes and improved cookstoves”

The cookstoves have 40% less emissions. They are durable and help people save money by using it.

“Cleanliness comes too”

It’s not just financial savings. By using the cookstove and briquettes, they are smoke free and so users get health benefits in cooking in a clean environment.

“Briquettes are made from recyclable waste”

They are produced through a carbonisation process which removes carbon, and therefore smoke becomes absent when it’s burnt.

“Everything is done locally”

Stoves and machines are produced locally as is the whole value chain.

“People take time to adapt to briquettes”

We need to undertake internal activities and work with the government to help promote the benefits of using the charcoal briquette product. People have used charcoal for a long time, and so it takes time to change their mind.

“… but once they start, they don’t stop”

It’s healthy, harm free and people have been using it for years.

“We sell through agents”

They’re like community ambassadors. They are entrepreneurs who go to villages and sell via a micro-enterprise. They find GBE through conferences they attend.

“The agents cover 50 households”

There shouldn’t be any reason why customers who talk with an agent should not start using the briquettes.

“This can exist internationally”

The requirements are getting the machinery and passing on the training. Our founders worked with local engineers and academic research.

“Our roles a social enterprise to create employment”

We currently have 70 people and when we look at the mandate for expansion, adding more jobs is critical.

“The biggest surprise has been externally”

Such as trying to understand why people would not use a briquette. The other factors include whether policy will support the business.

“Biomass is the biggest resource for the next 20 years”

People will still be using these cookstoves for many years, even with developents in gas and electricity over time.

“GBE wants to grow beyond Uganda”

They can grow to other countries which are very keen to use this in their communities around the world.

“There’s no fundamental reason why it can’t be done elsewhere”

So long as there are banana skins, it should be possible to do this process. And if it’s not straightforward, then the R&D team are always developing ways to do this.

Links etc.

MIT D Lab

Biomass review report

Green Bioenergy

Products: Briketi and Cookstoves

Website: www.greenbioenergy.org

Facebook: Green Bioenergy/ Briketi

Email: [email protected]

Phone: (+256)0393-514-710

Pictures from the interview

Green Bioenergy Charcoal Briketi

Green Bioenergy Charcoal Briketi

Green Bioenergy Cookstove

Green Bioenergy Cookstove

Coworking Space: giving entrepreneurs in Uganda a collaborative place to work

Overview

When people start on a business idea, they typically go and work out of a co-working space so they can be amongst like-minded individuals, and also get support in starting their venture.

The first of these hubs in Uganda was called Hive Colab, and I speak with Gilbert, the programme manager about his view of the interesting businesses coming out of the space.

He really has his finger on the pulse of innovative companies being created in Uganda, and we speak about plenty, including how and why Hive Colab are looking to attract the top university graduates in the country, the exorbitant cost of internet access, and how he sees opportunities for the government to help promote what they are doing.

 

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Here are the key quotes:

“Hive Colab is a tech innovation hub and coworking space”

We’re the first of our kind in the country (started in 2010) and we’re all about using tech to help the development of the country

“We have 27 start ups in the hub”

With 25 more coming in by the end of the year, mostly from universities

“University students have final year projects which could be start ups”

But currently they leave it and instead go out job hunting. Hive Colab want to change this by encouraging more to start their own company

“… but most just want the grades”

Students are researching innovative areas in health and education, but just to get a good grade to then get a job in a bank

“GPS for chickens probably won’t work”

This is a type of project which might get good grades, but wouldn’t be a viable business. Ugandans are still trying to adopt GPS systems for their cars.

“Most help is needed with start up road maps”

We come in and help start ups with the business development bit and ensuring they are designing it for the right clientele.

“Hive Colab gives training, space, mentors, and reliable internet”

We offer a whole package. Our mentors keep monitoring the progress of the businesses and also link them up with potential investors.

“Hive is not the only option”

There are other hubs that offer services like Hive Colab in and around the city (links at bottom).

“One start up offers malaria testing on smart phone”

Another successful start up was a company called Done Deal that did group offer deals that got bought out.

“There’s a big opportunity in the governance and justice system”

A lot to do with citizen engagement and to get leaders to be accountable. It could be around removing the vices in government.

“Demand for health innovations will always be there”

There are some things which always have demand for ideas. Also education and agriculture.

“More university students will come to Hive”

Once they understand the value that Hive Colab comes, we can help most so long as they have an interest in tech.

“It’s likely that Kenyan start ups will come too”

It won’t just be homegrown companies that thrive here, we are very open for good ideas to start here as well.

“Ugandans are very welcoming people”

They try out everything that comes their way. If you give value for money and support, they will use your product and catch up fast.

“Our internet bill is $1,000 per month”

It’s really high. Also rent and other costs are meaning that it’s difficult for us to stay in operation.

“We don’t have support from government”

In Rwanda hubs like kLab have much more help. If we get more help, we can provide a better service.

**Note: you can listen to interview with the head of kLab here.**

Links etc.

Other innovation hubs in Uganda

Outbox

Innovation Village

Venture Labs

Start ups in Uganda

Access Mobile

Matibabu (malaria testing with no skin prick)

Done Deal (Groupon)

Yoza (Laundry service)

Mdundo (music service from Kenya)

Social media follows etc.

Facebook: Hive Colab

Twitter: @HiveColab

Website: www.hivecolab.org

Email: [email protected]

Why Ugandans are demanding “masculine” motorbikes, with Pankaj Tiwari from Miracle Motors

Overview

Arriving in Kampala (the capital city of Uganda) one of the first thing people notice are how many motorbikes there are.

It’s the de facto mode of transport for getting taxied around the city, in a place where car congestion is heavy.

Near where I was staying was a showroom for Miracle Motors, a subsidiary of the larger Indian conglomerate Mahindra Group.

After walking in, the head of the office Pankaj agreed to an interview, and we spoke about the many customer types of motorbikes, considerations of importing unfinished goods, and the evolution of the personal transport market in the region.

 

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Here are the key quotes:

“We are the sole distributor of Miracle Motors in Uganda”

Mahindra Group is an Indian conglomerate that manufactures many types of vehicles. We are concerned with motorbikes in Uganda.

“85% of Uganda is unemployed”

They are getting their employment through being motorcycle taxi drivers

“We have different types of customers”

Direct buyers, finance customers through banks, fleet owners and we provide spare parts across the country.

“Bikes are assembled in Uganda”

Bikes come in a box from India and are put together in Uganda. This is because there are lower tariffs when it comes to importing goods.

“Competition is tough”

There are many options in the motorbike market in Uganda. Around 5,000 bikes are sold per month.

“We offer a part exchange”

Customers can bring in an old bike and receive up to a 40% discount on a Miracle Motor.

“‘Two wheeler’ market is different to other vehicles”

It has many applications and uses which mean that there are lots of different customer types

“Our dealership networks exists upcountry”

People can come to us to get bikes and then sell them locally. We interview them, send 10 bikes, and go from there.

“Motorbike taxis used to be bicycles”

This was the main reason for starting in East Africa. People were already being used transported on two wheels, motorbikes gave more power and so it was something people wanted.

“Most customers are unaware of the benefits of our bike”

Our sales and service teams communicate to the customers the benefits of using Miracle Motors and how

“Miracle Motors are only in Uganda”

In East Africa at least. They may look to expand elsewhere.

“People need a more masculine vehicle”

Which means that the type of two wheeler that is sold has a higher CC as the market evolves. This type of vehicle upgrading is what we’re seeing in Asia.

“Even with a car, people keep two wheelers”

This is to avoid traffic that is inherent in congested cities. People will get cars, but still benefit from the time and cost savings of using a motorbike.

“Corporates buy two wheelers as a ‘company car’”

It makes economical sense for bigger customers to buy two wheelers for their employees to be driven around in.

“All motorbikes in Uganda are Indian, Japanese and Chinese”

They all send over boxes of parts and assemble them in Uganda. There are no Ugandan made motorbikes on the market.

“We do 360 degree marketing”

Billboards, TV adverts, telephone calls, test drives. The lot. It’s a huge operation that keeps the sales team busy. We have a mutual agreement with the larger Mahindra Group.

“There’s a social side to business here”

Not only are you selling them a bike, you are providing them employment.

“We teach drivers how to drive safely”

We check their driving permit, give them a free helmet, give them insurance, and go through how the bike works.

“We sponsored a football tournament”

Boda boda drivers get together an organise a football tournament. Miracle Motors sponsored it and also submit a team.

Social Media Follows

Website: http://www.miraclemotors.org/

Facebook: https://www.facebook.com/miraclemotorscoltd/

Twitter: @MiracleMotors

The exciting ways brands can engage with a growing youth market in Uganda, with Belguin Prosper

Overview

Uganda has the world’s youngest population.

Brands are waking up to the idea that if they can create loyalty amongst this large section of society, they will reap the rewards for years to come.

But how?

Well a lot of them are going to Belguin, who started Young & Free International, an organisation that helps brands engage with the youth of Uganda.

Belguin gives an excellent overview of his journey so far, what campaigns he has seen work best, and what he learned from hosting a cultural exchange with students from Somalia…

 

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Here are the key quotes:

“We are a youth engagement company”

We link exciting brands with young people in Uganda.

“The youth of Uganda needed a lot of things…”

Talent, academics and business. And we get brands to help sponsor these activities through engaging them in marketing activities.

“We’re sort of a marketing agency”

However we don’t do the field work, instead we do the brain work

“For the university we organised events”

In order to unify the cultures of people from China, Somalia, Nigeria we created the Annual Dinner to showcase different cultures.

“I found the Somali culture most interesting”

It’s very communal. Everything they do, they do it as a group: eating, even talking. I learned that you are stronger if you do something as a group.

“Our most recent event was a pool party”

Youth from around the country come and party with their celebrity idols by the poolside.

“It raises funds to support the youth”

Such as the studio we are recording this episode from. The next events will be going towards building a hostel for homeless youth.

“The music studio is called M-Rod”

It means Moses’ Rod, which was used to separate the sea. This will be the pathfinder for the youth of Uganda.

“There’s brand recognition and brand appreciation”

Brands not only want to be recognised, but also appreciated. When the youth use things like the music studio for free, they will remember the brands there who helped to pay for it.

“Uganda has the youngest population”

The youth of today are the market of tomorrow. Brands want to engage with the youth.

“The main products are…”

Lots of products. Beverages, banking institutions, telcos.

“The youth of Uganda and Rwanda are very close”

At the weekend, all the Rwandans go to Uganda to go have fun. We’ll be expanding to Rwanda next due to the similarities.

“Be fun, the youth will be there”

This is how we’re attracting young people in the region. In Rwanda, clubs close at 10pm whereas Uganda goes til the morning. This is a competitive advantage for us.

“The best campaigns are persuasive, not just informative”

Understanding this, and being able to implement it, are why Young and Free is prospering. They push a person to act, not just get aware of the product.

“People aged 18-35 the interests are food and entertainment”

Most of our brands are related to these industries. Otherwise we use these means to engage other types of industries.

“We haven’t yet felt the pressure of competition”

For now at least we seem to be going well. We research our clients before approaching them. We show them what they should want before they have thought of it.

“Preparing for one meeting takes three weeks”

We do lots of research to understand their needs and ensure we go into knowing as much as possible.

“Customer goals are to penetrate the market”

They come to Young and Free International to understand how to achieve this goal.

“Brands also want sales”

We work with the sales teams of the brands we have to reach their annual sales through the events we hold.

“Our biggest challenge is…”

That brands don’t want to expose that we are the people responsible for their successful marketing efforts. This hinders with building our reputation.

“We will understand youth better than anyone else”

What we do best is study youth behaviour. Understand their pains, pleasures and be able to direct other brands towards them.

Links etc.

Pyramid Italia

Kampala International University

Club beer

Social Media Follows

Twitter: YoungNFreeIntl and Belguin Prosper

Facebook: Young and Free International

Website: www.youngandfreeinternational.webs.com

Make up for African women – why imported cosmetics don’t work and no-one trusts the Chinese

Overview

Make up is not an industry that I can profess to know much about, but after speaking with Sylvia, the founder of Paramour Cosmetics, I feel I know a lot more

In this episode we talk about how Western make up is unsuitable for African women, the way that Sylvia trains her staff to help customers with their mental wellness, and how the business is looking to expand in the US after Sylvia was accepted onto a programme designed by President Obama to find the next 1000 African leaders who will make an impact.

Sylvia was also the person who introduced me to Gloria (the founder of Kampala Fashion Week) and so if you’re interested in more about East African beauty and fashion, be sure to give that episode a listen too.

For now at least I hope you enjoy Sylvia and I’s conversation all about make up.

 

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Here are some of the key quotes

“We are a cosmetic range designed for the beauty needs of African women”

After working as a make up artist for 10 years I noticed a gap in the market and so started Paramour Cosmetics.

“Chinese products don’t work well in Africa”

It’s designed for a lighter complexion, and the products don’t work well in the climate or the heat. Quality and importantly perception of quality isn’t the highest too.

“We design products so African women can feel beautiful”

They can feel comfortable in their skin and learn how to use the products. Globally, women of darker skin wouldn’t be able to find make up that isn’t for lighter tones.

“It was tough to convince resellers that the customer would sell…”

There were difficulties with initially selling to resellers, having celebrity endorsements, or having a presence in expensive malls

“… the winning strategy was starting our own make up studio”

10 months ago we opened a studio and have now had over a thousand customers come through our doors.

“We haven’t been able to produce in Uganda”

Our products are brought in from California because the infrastructure isn’t in place to manufacture the make up in Uganda. The US has women of dark complexion and expertise in creating make up.

“There are multiple routes to market”

We try to get to them directly. Free testing at the make up studio. Free deliveries to customers in Kampala. Online sales.

“The 1% are our main customers…”

It’s a high end product, so the customers are the middle class and income generaters.

“… but for interest, it’s the young people”

We have 40,000 followers on Facebook most of which are young people who are understanding the market and enjoying the promotions

“Ugandans don’t really trust online shopping”

It’s rare for customers to have a Visa or Mastercard, and even when they do, they prefer other means of payment. Most of our online sales come from Kenya.

“Employing people is energy consuming”

You need to care for people and believe in them when you hire people. We have 12 people who are mainly young, single women. But I enjoy it!

“‘What’s your real job?’”

Make up is a new industry. Most people don’t believe that it’s a feasible business for people to be doing in Uganda.

“It’s hard to convert customers who use Maybelline”

The biggest customer is a Ugandan lady who wants to look good for their husband and feel beautiful and confident. Most have never worn make up before.

“We’re mid-market”

Not as expensive as the imported products, but not as cheap as lower quality goods. Roughly $35 for a product.

“We’ve had to create a new market”

It takes time to combine tradition with modernity and create the market in Uganda.

“Paramour will be selling on Amazon soon”

There is demand in the US for our cosmetics, and so we will be selling our products over Amazon there.

“I was part of Obama’s African Leadership programme”

It was a 6 week cultural and business exchange for 1,000 potential leaders from Africa. This led to connections with Amazon and other businesses. There is also help for Africans to set up a business directly in the US.

“Individualism is what I learnt most from being in America”

In Uganda they come to learn about what the right make up product is for them. In the US though, people go to make up shops to just buy what’s right for them.

“Africa is the way to go”

Africa is the next America. We’re young, and willing to work harder than elsewhere and then spend that money on products.

“It’s time for the creatives”

People are used to doctors and lawyers being the respectable professions. I’m seeing that more and more people in the creative industry earning a living.

“If I wasn’t a make up artist, I’d be a psychologist”

It’s something that doesn’t happen much in Uganda, but by being a make up artist I speak with women about their problems when they come into the studio. That’s often the main reason they come.

“I think mental wellness is a business opportunity”

It’s not really done in Uganda and I see a lot of it when people come to buy new lipstick. I’d also do something that utilises young people.

“University graduates were too demanding”

I mainly hire people who haven’t been to university, and instead work with single mothers. They come from a social enterprise that I work with and have been amazing.

“There’s a 3 month probation period”

We pay someone to see if they’re up to being a make up artist. When they are, they go and train other artists to join.

“A good make up artist needs to be…”

… able to change a life. It’s not just about pasting, but instead it’s a about personality and ensuring someone can be confident and comfortable in what they do.

“We just talk to people”

Make up is just part of it. Our training is about building trust between the customer and the artist and once they do, people feel better about themselves and buy again and again.

“We want to set up an example”

If others move into the market then that will help us keep our standards high. But it’s a difficult type of company to build!

“Paramour means ‘true love’”

By being true to ourselves we are trying to instill in people that it should be celebrated for people to express their own beauty.

Links etc.

KiliMall Kenya

Jumia Market

Young African Leaders Initiative

Social Media Follows

Website: http://paramourcosmetics.com/

Facebook: https://www.facebook.com/ParamourCosmetics

Instagram: ParamourCosmetics

Twitter: @ParamourBeauty

Sylvia Kawalya: LinkedIn profile