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Why You Should NOT Start An Online Start-up in Uganda Just Yet. It will Fail!!!

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startups

By Ian Ortega

Honesty is something that’s not compatible with the Ugandan society at large, especially in the section of Ugandan businessmen and entrepreneurs. Yet, I think it’s high time some of us took that road less traveled and became honest about a number of things. It is this candidness that could help future start-up entrepreneurs in Uganda to be well-prepared for the jungle of business.

I had a discussion with one of my friends. I told him that start-ups such as Kaymu, Jumia, Hellofood and many others were yet to begin making abnormal profits, it was all a matter of time. I told him that everything we can’t seem to see about online businesses will become clear in the Ugandan context the moment internet penetration goes beyond the 50% mark. I know MTN Uganda is working day and night to make that possible. If at a penetration of less than 30% we can already feel the impact of the online industry, what is going to happen at over 50%?

On what elements play a crucial role in the success of a start-up, the following five were listed:

1. Timing
2. Team
3. Idea
4. Business Model
5. Funding

Timing was considered to play the biggest role in start-up success. The difference between Facebook and Myspace was more about timing. Too early and your idea may fail. Too late and you find the industry saturated.

The Team came in second especially the founders. Most start-ups failed because of intrigue between the co-founders, collisions. Some failed because one of the founders didn’t do his role as required.

The Idea itself was ranked third. Notice something crazy here. Contrary to common thought of the idea being the most important thing, it was third on this research done on over 400 start-ups. But it was still important. How good is the idea? Do people understand the idea?

Fourth was the Business Model because regardless of what you do, if you are working with a wrong business model, it will eventually collapse.

Finally, it was the Funding. This is greatly lacking in Uganda. Unlike in America where Venture Capitalists pour millions and millions at start-ups, in Uganda, most funding for start-ups comes from the pockets of the founders.

But what struck me the most was the fact that Timing was everything. Timing is the difference between life and death on the road. Because of timing, a man who was earlier rejected by a girl gets accepted hours later during a night out. Timing at the airport implies that too early and you have to wait, too late and you find the plane gone. Yes, too late and you find your dream girl already taken.

I have taken a special interest in timing because I have seen it lead to the collapse of many Ugandan start-ups especially those in the Online field. I have seen online businesses in Uganda fail not because they had a wrong business model, not because their idea was poor, not because they had an incompetent team, not because they lacked funding but largely because the timing is right just yet.

If some online start-ups in Uganda were honest, they would confess that they are not even operating at 1% of their potential. Why? Because the timing is not yet right in Uganda.

So then, why is the timing still wrong for online start-ups in Uganda? Simple, the internet penetration is still low. Coupled with this, the internet costs are still high, internet speeds are still low and generally the infrastructure required to start and run an online start-up in Uganda is lacking in most areas.

Thus, most Ugandan start-ups are forced to fight over the market of Kampala and its suburbs. It’s as though other parts of Uganda are not present.

As of 1st December 2014, internet penetration in Uganda was 18.1% of the population. We have an estimated 10 million internet users in Uganda. Of these 10 million users, 5 million are not active users. They are once in a blue moon users who still have to buy bundles once in a week if not in a fortnight. Of these internet users, the computer literacy is still at its lowest. In fact, when you measure by internet subscriptions, there are only 4.2 million mobile internet subscriptions in Uganda and just 100,000 fixed internet subscriptions.

Online Start-ups in Uganda ought to have all this at their back as they venture into this field with all their glossy ideas. They are working to win over just 5 million users who spend no more than one hour on the internet per day.

Is the future brighter? Yes it is. But that could be in the next three years. It’s just not yet time for most online startups in Uganda. They would be better off waiting a little longer or probably starting small and letting their ideas grow organically in line with growth in the internet penetration in Uganda. It’s a hard fact to fathom, yet ignoring it could see many get depressed when their expectations don’t much the reality.

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CoronaVirus Uganda

African Queen donates 18 tonnes of maize towards COVID-19 relief efforts

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African Queen, a leading distributor for fast-moving consumer goods in Uganda, has donated 18 tonnes of maize towards COVID-19 relief efforts.

By Our Reporter

African Queen, a leading distributor for fast-moving consumer goods in Uganda, has donated 18 tonnes of maize towards COVID-19 relief efforts.

The donation comes in response to the President’s call to the private sector to support government’s efforts in offering relief to the vulnerable Ugandans most affected by the Coronavirus pandemic.

The African Queen team led by their Managing Director Innocent B. Tibayeita handed over their donation to Hon. Mary Karooro Okurut, the Minister in Charge of General Duties, Office of the Prime Minister on Tuesday.

“Our partners heard the plea of our President H.E Yoweri Kaguta Museveni on offering support to the COVID-19 Task Force that has been mandated to not only lead the fight against the COVID-19 virus but also ensure proper distribution of food to those families that have been greatly affected during this time,” said Innocent B. Tibayeita. “African Queen thus wishes to make a donation of 18 tonnes of maize towards this cause.”

He further lauded the government for their concerted efforts in combating the pandemic.

The government continues to receive donations from the private sector in form of cash, new vehicles, foodstuffs, sanitizers, and essential medical supplies among others. The government has so far received contributions amounting to about Ugx 21 billon.

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Local Business

Letshego Uganda offering repayment holiday to customers in wake of COVID-19 pandemic

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Giles Aijukwe, the CEO Letshego Uganda

Giles Aijukwe, the CEO Letshego Uganda

By Our Reporter

Letshego Uganda has rolled out a Repayment Holiday facility to its borrowers in the wake of the Coronavirus pandemic that has gripped the world.

The repayment holiday involves giving customers a 3 month moratorium- meaning he/she/they (the borrowers) will not be required to pay their installments during that duration.

Different Heads of States, in their response to the pandemic, have implored the business community to augment government’ initiatives to offer financial relief to their customers and specifically lenders to offer repayment holidays and loan restructuring to their customers. It is in this regard that Letshego Uganda; a subsidiary of Letshego Holdings, a premier financial services company based in Botswana and with a footprint in 11 African countries has heeded to the call.

“The Repayment Holiday allows you to take some time out from the financial burden of repayments. It is important however, to note that this holiday mainly targets those customers whose businesses have been affected by Government Intervention measures during the current COVID-19 through business lockdown and closure for example those in sectors like- Education, Tourism, Transport, Leisure and Hospitality,” Aijukwe Giles, the CEO of Letshego elaborated.

The employees/clients that belong to these employers/industry sector will apply for the holiday and be approved based on the case presented. The biggest positive about a repayment holiday is that it relieves some pressure for a while. For a period of time, you have one less thing to worry about when considering outgoings.

“In line with their operational mandate, Letshego practices responsible lending and acts in a customer’s best interests, ensuring affordability, transparency of terms and conditions as well as supporting the borrower if they experience repayment difficulties. This means that by the time they have approved your loan application, they’ve made the effort to determine whether you can repay without substantial hardship,” Aijukwe affirmed.

Letshego has designed a simple application form to be signed by the customer; that will then be scanned and sent to the branch. Customers are also encouraged to use their digital and online platforms (WhatsApp and web application forms) to apply for these holidays. Furthermore, the Repayment Holiday is not only being extended to those in Kampala only but countrywide, across where we have a presence.

Aijukwe added, “A list of qualifying customers has been generated across our 45 branches countrywide and our branch teams are reaching out to them. Customers who are not yet contacted are encouraged to contact their respective branch managers and relationship officers to confirm if they qualify for the Repayment Holiday.”

Microfinance institutions were developed with the common purpose of contributing in the socio-economic changes of communities. As evidenced on numerous occasions, microfinances have exponentially uplifted the economic status of people by providing credit to individuals and skill based groups so that they are able to better their family and community stand.

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Entertainment News

StarTimes GO connects first customer

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Find out information about Coronavirus in Uganda. More here.

By Reporter

With the launch of the integrated e-shopping platform StarTimes GO, the company is excited to have connected with the first customer, Sula, last weekend. After watching the TV programme StarTimes GO, Sula decided to buy a solar kit alongside with a 24″ Digital LED TV. She made a call to StarTimes to order the products and was quite pleased with the door to door delivery and installation. While receiving her order, Sula said, “I like that StarTimes can easily be accessed in terms of customer care services unlike some service providers. I was interested in buying the solar kit which helps during power blackout situations. It will also help us enjoy our family TV-watching time without worrying about unstable power supply. I was relieved to know that we can pay for the solar kit in instalments. This reduces on the financial burden. With StarTimes GO giving a special offer on plenty of products, we got a FREE two-year TV program bouquet for our solar kit!”

The captain of the car fleet for delivery, Charles, escorted the products to the customer’s home which is about 40km away from the city centre of Kampala. He said, “It is not quite convenient for a family living far away from the city centre to carry these products home. We hope that the customers can enjoy their shopping with StarTimes GO from the beginning to the end.”

Together with Charles, the whole team of delivery and installation are quite honoured to complete the mission for serving the first customer of StarTimes GO, among other customers who followed, especially when they see the smile of satisfaction on their faces.

Mr. Franklin Wang, the StarTimes CEO in Uganda remarked, “We have been thinking of the considerate services which make the digital life available to more people hence the e-shopping platform StarTimes GO. We appreciate the support and trust given by the customers; and thanks to our staff in call centre, delivery car fleet and installation team, the StarTimes GO is operating as we expected and will keep providing products of quality to the public.”

StarTimes GO has made it easier to shop digitally for the product you need. Book via StarTimes GO and enjoy great discounts be it on a decoder, TV or solar system. Order with StarTimes interactive e-shopping platform StarTimes GO at ugmall.startimestv.com or call 0701152863/ 0781962712 and your package will be delivered to you.

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CoronaVirus Uganda

Jibu Uganda donates 10,000 litres of drinking water to COVID-19 National Taskforce

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Find out information about Coronavirus in Uganda. More here.

By Our Reporter

Jibu Uganda has made a donation of 10,000 litres of drinking water to the COVID-19 National Taskforce. The donation comes in the form of 2,000 bottles of 5L packaged drinking water.

According to Daniel Komunda, the Country Director of Jibu Uganda, the donation will go a long way in providing safe drinking water for vulnerable communities and the front line health workers.

“We are proud to support our government in the fight against the Coronavirus pandemic, and are humbled to provide safe drinking water for distribution to vulnerable communities and essential workers who are at highest risk during this crisis.” Daniel Komunda said.

Jibu Uganda manages a network of 30 locally-owned drinking water franchises in Kampala, and in 11 other major towns across the regions of Uganda.

Komunda also noted that all Jibu shops across the country have increased their delivery capabilities during the lockdown, and have been offering free delivery and other support services to help customers remain safe at home.

Established in 2014, Jibu Uganda is a social enterprise that capitalizes, equips and trains local entrepreneurs to operate successful franchises designed to serve local communities with radically affordable, high-quality necessities.

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