Think: A Tigo Rwanda Start-Up Incubator Idea Gone Bad

August 8, 2014 Editor 0

thinkRwanda is a new mobile application incubator in Kigali, founded by Tigo Rwanda. It is now accepting applications for a first round of start-ups, who will get close mentorship from Tigo, and access to Tigo platforms across Africa and Latin America. Start-ups will also get $15,000 in seed funding. All Tigo asks is:

• Any application ideas can be used by Tigo.
• Winning teams must move 2-4 team members to Rwanda.
• Tigo gets 10% equity in the company.

At first glace, this might look like a good deal for a software developer hoping to take their idea to a global stage, but before anyone rushes over to Think and signs away their inspiration to Tigo, listen to these 4 points from Teddy Ruge:

1. It is telling that Tigo decided to create their own incubator as opposed to creating a funding/pitching partnership with Afrilabs for promising startups that could add value to the whole telecommunications ecosystem. For example, Klabs is just next door to them, they could have easily supported home-grown startups that already there
2. $15,000 for 10% equity automatically puts a valuation on all the startups agreeing to receive this money at roughly $150,000. For early-stage seed capital this valuation might work for some but would be restrictive to others whose idea is worth a lot more.
3. Only fools would trust Tigo to offer fair remuneration for quality intellectual property. Tying innovation to one mobile network carrier creates too many digital walls in an ecosystem that could use interoperability across networks and countries. Everyone is trying to create their own digital pie, but think what would happen telecom contributed to creating a massive ecosystem differentiated by service/product innovation.
4. Tigo would have done better to open up their API’s to a developer challenge across its 14 countries. Then it could incubate the best technologies and startups out of the challenge. The biggest problem for African tech developers looking to monetize or gain traction in the market is that telcos are very greedy with their APIs. Opening up that API would do more to foster mobile innovation that another start-up challenge

Now Teddy is happy to see an attempt at early seed capital partners. It shows that mobile carriers are starting to be aware and pay attention to local talent bases. And as Mbwana Ali points out, venture capital terms in Africa are now getting standardized and competitive to the global average, which will quickly drive out questionable deals like this one.

So while Tigo could’ve done better, and I would council any decent developer to run from this offer, it’s great to see this lab set up in Kigali, not California.

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Categories: ICT