Toby Hanington – All Eyes on Africa
Toby Hanington – All Eyes On Africa
NOVEMBER 02, 2016
The striking silhouette of a baobab tree at sunset is a familiar site to anyone who has spent time in rural Africa – a symbol of community and shelter, they grow in thirty two different African countries, and reach up to 30m high and 50m in circumference. Toby Hannington co-founded The Baobab Network with Tom Fairburn seeking to address the demand for strategic support amongst Africa’s start up system. Baobab trees can live up to 5,000 years, and Toby and Tom’s ambition is to provide the development these businesses need to become sustainable entities within the African ecnomy.
Favourite Book/ Blog
The Lean Start-Up – standard entrepreneurs answer – is a great book and I would recommend to anyone starting their own business. Favourite book ever would be the Curious Incident of the Dog in the Night time, one of the only books I managed to finish in my school years!
Hottest UK Tech Company
AI/VR is something I find intriguing at the moment. Livestage is a 360 Degrees digital platform for live music that streams concert live music an on demand with an array of interactive features. There is also a fantastic opportunity for this to be used in sport.
Inspiration in Business
For me it was in fact a lecturer at university in Vancouver, called Terry Beech. He is an entrepreneur by trade and lectures on entrepreneurship, and is now an MP for Burnaby North-Seymour, in Vancouver. He gave me the buzz for starting a business of my own – his way of lecturing was inspiring; you have a semester to start your own business and then you have to pitch it to him in a dragons den. It was a very open – ended format, far more practical and less theory than studying in the UK.
What does disruption mean to you?
Disruption can be a word that freaks people out a little bit. Being disruptive is never connoted as good thing in conversation – think back to the disruptive kids at school! We work with ‘disruptive technologies’ over in Sub Saharan Africa, and but we try not to describe in that like because it is much more about a positive change for us and having a social impact.
The Baobab Network
Tell me about The Baobab Network, the evolution of, and what you are currently working on?
We started off called New Venture Africa – whilst my co-founder Tom and I were still working – about a year ago. The concept was to develop corporate training programmes for people, taking employees from large organisations and placing them in start-ups for a two-week consultancy programme. In March, we went on our first Pilot trip, taking six consultants out with us from the likes of Diageo, CitiGroup and Fidelity– and consulted the start-ups pro bono. A lot of these start-up founders have amazing tech ideas, but perhaps needed help in taking them to market, or developing a revenue model.
We tried to match the skill sets of the consultants we took over to the specific challenges that the start-ups are having in East Africa. Since March, we’ve run a few trips and decided that we wanted to be more than simply a consultancy programme. We rebranded as The Baobab Network – we see ourselves as a community of consultants, start-ups, and investors. We realised that the work we were doing was improving the investment readiness for the start-ups, who are all in need of working capital. If we can provide deal-flow for investors in that space also that is progressive.
Currently, we are working on Crowdcube campaign in order to go into other countries in Africa next year: Rwanda, Zambia, and Ghana. We also want to hire a CIO to help with the investor side of things.
What skills from your previous business ventures or corporate roles have you found most relevant since founding TBN? What are greatest skills you have developed?
I was a sales trader at an Investment Bank. A lot of that is making quick decisions in a high pressured environment. That taught me almost to become quite emotionless in the decisions you are making. I think that it’s very important to be able to take a rational look at what you’re doing and evaluate what you’re doing without becoming overly emotional.
Also making quick decisions; you can spend hours and hours with a whiteboard coming up with ideas but I almost think it’s better to go with an idea, test it, and work out what you’ve learnt from it. Don’t fret about the business working immediately – get an idea to market and make that decision quickly.
In terms of development, confidence in what I’m talking about. Doing something that you’re really interested in and know everything about makes having conversations with people around what you do much more interesting and rewarding. I knew that I wasn’t going to be in banking forever, and didn’t go out of my way to make a huge network of people within the industry. Whereas now, I speak to everyone and anyone I can, and never think it’s a waste of time to grab a coffee with someone.
What do you wish you had known before setting up The Baobab Network?
Initially, we thought that we would be pitching to large organisations – that was perhaps naïve to think that as a start-up come in and change how large organisations operate. Even though there were obvious benefits, we weren’t experienced enough to be pitching at that level, and therefore wasted a bit of time there. We should have focused on our bottom up strategy; getting consultants and individuals on board. With hindsight we would have been clearer on knowing our target audience before starting; we had a few different people we could target and tried to target them all.
What were the largest obstacles faced when launching and what is the biggest challenge today?
Because of our model there were limited financial costs involved. The biggest obstacles were trying to convince people that whilst you think it’s a good idea, they do too. Getting people on board was also an obstacle. We decided that we didn’t want to spend any money on advertising in the first year and focus on other challenges – that created some difficulties.
Biggest challenge today in similar fashion is getting the word out there. Our feedback when we speak to people is great but it’s finding the right people to be speaking to. You get passed around a lot in large organisations and what you really need to do within those is find trigger pullers in those places. Therefore, it is finding the right corporate partners – who want to do something different, have talent retention, activate their CSR, and be more entrepreneurial.
TBN is certainly making it much easier to conveniently plug the skill gap that smaller ventures face and access to the investment community – do you encourage follow on programmes? Is this is a fad or does it have staying power?
We introduce the consultants to start-ups a month before working with them, and do a big data overview from pitch decks to customer overview. Beforehand it’s all about preparation, and afterwards it’s all about becoming part of the network. The consultants that come with us become alumni, and continue to help the start up’s longer term, sometimes remotely.
For us the start-ups also become a crucial part of the network. Instead of taking a fee from these companies, from next year we will take an equity stake as a fee for what we are doing – be that plugging them into investors or connecting them with the next consultants that we vet to go out there.
With the growing interest in start up’s worldwide and in your instance, Africa, what factors do you think will have the greatest influence on your business model going forward and of these what do you see as the most important?
Exits in Africa. They have barely been any so far – people are still concerned about investing in Africa because they don’t know how they are going to get their money or returns back. I hope that it will be a domino effect, once we see a few happening people will become more comfortable in the region as a place to invest.
The other key factor is behavioural from large corporations, knowing that they have to become more entrepreneurial. Firstly, to pique the interest of those working for them and also to broaden the skill set and exposure of their existing workforce. This requires an attitude change however – it’s all very well expressing interest but the proof is in the pudding until they actively go through with it.
Can you share fundraising history and advice? What do entrepreneurs want in an investor? When is the right time to raise money in terms of the life of the business? How do you retain a meaningful enough stake?
Know what you want from your fundraising – in a non-monetary sense. We have taken the crowdfunding route via Crowdcube because we saw it as a great opportunity to have some ‘free’ publicity to a wide network of individuals within London. Also a good way of getting our name out there, they run a very slick process and it is all conducted of an intensive 3-month period. It gave us some focus on who we were and what we were trying to achieve. We decided to redo our website, we decided to rebrand, neither of which we would have done prior to fundraising. We are trying to raise £115 – 150k as a seed round for 14% equity. The spend is focusing on growth; different markers in Africa (Rwanda, Zambia, Ghana), and our network – trying to build a portfolio of start-ups that we work with.
With crowdfunding you’re not going to have a huge number of people trying to influence, unless they come in for a big stake. It is a way of retaining power without giving away too much equity.
We have set what we are willing to give away at this stage, on the basis that we are going to have do the same again going forward to help us grow.
We believe crowdfunding was a good option for us right now – but it definitely isn’t right for everyone. Having some skilled, influential angels on board can be an excellent way of driving a start-up forward.
What are some of the KPI’s that you measure success by for both you and your team? What are the unit economics of TBN model?
Number of consultants/ successful trips run. Number of start-ups in our network. Our key KPI’s are often dependent on those of the start-ups that we are consulting. We work with such a range of start-upsthat can be sourcing investment to talent development. It is important we hit the deliverables for them, which can obviously vary.
Next year focus will be how many corporate partners can we engage with, and how many start-ups we can build into our network. We’re a social impact business – we therefore want the companies we’re working with to be having a deeper impact on the grass roots of the countries we’re working in – we’re unlikely to work with the next snapchat for Kenya for example.
In terms of my own KPI’s? We want to have an impact on an area of the world that really needs it and are not in this to make a quick buck. I want to work with the smartest businesses in Africa, and build a community of people who I can rely on for a wealth of different advice. We want play an integral part of Africa’s growth story and doing that is very important to us.
What values do you hold and what kind of company are you looking to build? How easy has it been to build the business in terms of finding people with the right skills and culture?
Values are integrity, honesty and openness in what we’re trying to achieve. We love what we’re doing and therefore anyone that wants to come and work for us and be a part of it must share that hunger. I believe that you can teach people most things and therefore it’s much more important having people with the right attitude and desire to do something different.
What is the long term vision as well as the more immediate milestones?
Long term is to have a portfolio of 100+ start-ups and have changed the way large corporates deliver their talent retention and CSR by doing something a bit more meaningful. We want to be the go-to for deal flow into start-ups in Africa. Short term is to finish fundraising, move into more countries next year, and sign up our first corporate partnerships.
What is the biggest competitive threat?
Incubators in Africa who often provide office space etc. for these businesses. We believe that we have an edge here as we also often the consultancy element, which perhaps is lacking in the incubators. However these are still integral in helping the ecosystem grow in SSA – which is by no means a bad thing.
There are also other people getting into talent development with corporates or make them more entrepreneurial. We see that that’s less of a competitive thing and more positive however; if they are becoming more entrepreneurial it’s a great thing for us and therefore anyone in that space is helping us in our operations.
Do you have a key business partner?
The nature of what we are doing means multiple partnerships – every start up and consultant is a key partner and therefore maintaining each of those relationships is just as important as the new ones we build.
How important is a good board or other advisers?
It’ not something we have currently. We see a real positive in having a network of people you can reach out to. Currently we have liked the fact that we can reach out to different people at different times, and seek advice from different pools of thought. We will be putting together our board early next year – its important to get this right and not rush into appointing a board for the sake of it.
Burn the Boats
Burn the Boats moment – what enticed you to co-found TBN? What advice would you offer anyone trying to conceptualise an idea/problem.
When we did our pilot trip we realised that there were some unbelievably clever people out there with great ideas, but felt that we could add value to what they were doing. It was inspirational. The impact some of these small businesses were having was so great that it made me think, I need to be involved in this in some capacity.
Don’t think about it too much. You can faff around with business plans – you can spend a month putting a plan together and that’s a month lost in my opinion. Your business plan will change time and time again as you test the idea and pivot when you first start your company.. Personally, we didn’t do this – we knew what we wanted to do in our heads, and definitely had regular discussions on the direction we wanted to do but didn’t spend time typing these up and making the look pretty.
How do you think founders can identify nascent and attractive markets that are ripe for disruption?
Personal experience. If you’ve seen a problem most people have probably seen that problem too. Being a person that is able to address it is important. I think that a lot of start-up’s work because of the people that have had the guts to go out there and do it. It’s how effectively you can go out there and change a problem that you see day to day because most people will have seen it as well.
What is your motivation/ what makes you tick?
One thing that I love is having a co-founder. It’s a roller coaster – every single day is different and its great to know that every decision we make impacts the direction of the company. You’re going to have tough days, the likelihood of both of you feeling unmotivated at the same time is unlikely whereas you can get them if you’re riding solo. I’m a big advocate of a problem shared being a problem halved. Tom is fantastic at what he does and we are both good at picking up the slack from each other if needed.
I like having an effect on other start-ups. We can drive the strategy of the businesses we are working with and you can actually see how you’ve been involved after a two-week period. It’s very rewarding and motivating.
Who do you surround yourself with/ what business support networks do you value?
People will be surprised how much you can get out of people wanting to help you. People like helping other people – it’s in our nature. Our network has broadly been built by reaching out to people that we knew. That is how we have evolved rather than joining any specific groups, incubators etc. If you’re doing something interesting and reach out to someone who shares that interest it can be very powerful, and even if they can’t help they normally know someone who can.
What’s keeping you awake at night?
Trying to get a corporate partners on board at the moment is my main focus. They can be slow moving and making that happen can be frustrating. We’re excited though, we’re moving in the right direction.
In ten years’ time how would you like people to talk about you and TBN? What does success look like?
We want to be the go to people for African Investments and start up’s looking for support within Africa. We would also like the name to roll off the tongue – even if Baobab is a difficult word to say! Great name but bloody tough to say it properly… Ultimately, success would be having a platform that can provide the right help to develop some of the great businesses we are meeting. People are worried about corruption as well in Africa, and wewould like people to understand that business can be done very well there. It’s changing at a rate of knots and we want to have been at the forefront of that change.