iSpace Foundation Technology Hub: A Co-Working Space for Entrepreneurs and Start-Ups in Ghana

Interview with Josiah Kwesi Eyison, Co-Founder and CEO at iSpace Foundation

How would you assess this sector in Africa? How are the tech hubs perceived? What is the difference between hubs in Africa compared to the rest of the world?

The problem is that many of these African tech hubs are trying to operate like the normal European tech hubs. The idea is that you open a coworking space and entrepreneurs would just flock in, investors would come, and then you have a unicorn of a start-up. In reality, it should not work like that. Africa, as a continent, is dynamically different from Europe, in any shape or form. In everything we do, we are totally different, from our music to our films, to our culture and even our food. Therefore, our approach to entrepreneurship will also be different. When you look at European entrepreneurship, the average entrepreneur is fully equipped with access to resources, the best mentors, people who if they have a good credit system can buy a laptop and do not have to pay for it up front, investors, and properly structured investment systems. We do not have that here. The people that want to solve our social problems or challenges are graduates who are tackling technology and trends that they have never created. We are always reacting to trends that are coming from Europe. In Ghana, we have computer science students graduating from universities, but some of them cannot code. Where do you start? As a hub, are you attracting the community entrepreneurs or are you attracting expats that do not understand what entrepreneurism is, who then live in your neighbourhood or your community? They then come to your hub and use it as a coworking space. Currently, our sector across Africa is varied. Kenya and South Africa are completely different, and different still from Nigeria, Benin, Ghana, and Ivory Coast. In Kenya, traditionally, the NGOs and the multinationals have already centralized around that unit. Kenya has Google, Microsoft, Intel, so by that virtue, the Kenyan technology system would be much higher. In South Africa, they have infrastructure electricity work. They have energy. They have investment banking systems in place before entrepreneurship. It is easier to get funding for some of the start-ups there, and because of the connection with Europe, easy access to resources. When you look at Ghana versus Ivory Coast, we are all in West Africa, but one is francophone and one is anglophone and we operate totally differently. West African entrepreneurs might be two steps ahead of their French counterparts. There is no way to compare the tech ecosystems across Africa. The only thing that we share as a continent and the only thing you can compare is that we all have social challenges. Whether it is health, education, financial, fintech, etc., we have systems that are now working so the entrepreneurs can solve those issues.

Why would a fund from the US or Europe invest more into a Ghanaian fund than a Kenyan fund? What does Ghana have to offer in this respect?

If we have access, then we are able to demonstrate the work that we have done. Being able to highlight our track record will attract the funds easily. The challenge is always having access to the people that can potentially give you those funds.

Ghana is new, so why should you come to Ghana when you can go to Kenya? Kenya is saturated. It depends on whether you want to have a social impact, or the kind of fund you want to set up. If you just want a straight off investment, to get equity and get out, then Ghana would make sense because you would have the first mover advantage. If you are the first person to come here as a VC, you can then set the agenda the way you want. But if you go to Kenya, you will have all the competition that comes with that. Competition is great, but it does not offer you that piece of the pie that you are looking for. Plus, we are politically stable compared to other African countries. You will not invest money here and then get scared that in two or three years when it is near the election, your money will be lost. In terms of education, Ghana has one of the strongest and best educational systems across Africa. That makes us unique. In many aspects, Ghana is the gateway to the rest of Africa.

What are the trends in terms of what works and what does not work? What kind of social investors do you have here?

In the beginning, we had grants. NGOs would give us money and then forget about it. It was very trendy at the time. Now, people are calling themselves social impact investors. That in itself is something that is very new, and many of these NGOs are morphing into this new concept. They want to look at social impact, but at the same time look at revenue generation. Which one comes first? They would say for grants that they are not giving money for free, they want to see financial return. But then, you cannot have the same commercial metrics that you would give a start-up with no social impact versus a start-up that has purely social impact. The irony about all of this investment is that any time you invest in a start-up in Africa, it is social impact because they are creating jobs, expanding the economy, employing people, and you are changing the lifestyles of people that are in poverty. Even if you change an individual’s lifestyle or their circumstances, that is a social impact because you are enabling them to employ people. It does not always have to be charity, such as helping poor children go to school. Changing somebody’s life so they are able to impact other people, or their society, is social impact. Across the board, all investments, especially in Africa, are a social impact. It would be different if you invested in a start-up in Silicon Valley where you are given $250 million to create an Instagram type app. That is not social impact because it is not affecting or changing lives. It is aspirational. Anytime you invest in an individual in Africa, it is social impact.

What is iSpace? What is your competitive advantage? What can you bring that is different from all other hubs in Africa or Ghana?

What makes us different is that we are focused on the community. We are not trying to replicate any other person’s ecosystem, whether it be India, China, or Silicon Valley. We are very focused on the community because we identify the problems there that need to be solved. We focus heavily on capacity building, both from a technical point of view and a women’s point of view. No other hub invests in women the way we do. We did not start this because it is a cool thing to do. We started this three years ago before everybody started investing in women and girls. Women make up 52 to 53 percent of the population, so why would it make sense not to invest in them? We would only have to invest 80 to 90 percent of our resources. In capacity building, in the past, when we have had hackathons we have seen some great ideas. People win the hackathons, but no products come out of it. We did not have the skill sets that were creating those products. We then decided to be proactive instead of reactive by starting coding programs that would train people in different coding styles and give them technical skills. People might think they can go on YouTube and learn, but this is where people misunderstand the dynamics of our society. Data is very expensive. Even having access to a laptop is a problem, on top of the data cost. For someone trying to learn how to code, it is not that easy. It takes a long time. If you want to watch YouTube to learn how to code, and the electricity goes out, what do you do? We opened this space so we can take out all of those problems. Clients do not have to worry about data costs or energy. They are here to learn and to develop a skill that will be beneficial to their environment and their community. That is what makes us different from all the other hubs. We are not responding to a need to replicate Silicon Valley or create start-ups that want to be the next greatest thing in Silicon Valley. We just want to help and develop individuals that have the skills to solve social problems.

Why do you invest equally in all different start-ups, and not just the ones that you think are the coolest?

We have seen in the past that investment is very selective. If you speak the right language, wear the right clothes, hang around the right networks, then you get the investment. But then we decided that we are not here to select winners. This is not a horse race where we pick the best pedigree and then get them to work. We want to invest across the sectors because we are trying to build synergy. If a health start-up is successful, then you will find that a fintech start-up can leverage on the success of that particular health app. If you build an app that people need to use to purchase food for example, now they can purchase the food but how do they pay for it? I have invested $100,000 into your idea. Now, we need a payment system to enable you to collect revenue. But maybe we cannot move ahead because we did not invest in a fintech start-up that was creating a platform that would enable you to make those payments. So now you have just wasted $100,000. A better way would be if you split that across the board and say, because you love this food idea, you will invest $70,000 in the food, and then $30,000 to give to the fintech so they can ride on the API. That way, as an investor, you have both interests. You must invest in interest. If that start-up is able to create their payment platform, they make money and you make money both ways. This is what we encourage people to do. Do not just invest in cool ideas, but invest in feasible, sustainable, and supportive ideas. This idea is cool, but find out what other ideas you need to support this, and then push that agenda. You can have a cool idea, but if you cannot launch because you did not put all the sensible structure in place, then what is the point?

You are based in Accra, but do you have an international reach?

We partner with Google, Indigo Trust, Comic Relief, and other organizations. Now, we are able to host events internationally. On Monday, I will fly to the UK where we are having an event for a conference on tech in Ghana. We will look at how we can connect the diaspora and the international community to Africa. It is about creating relevant products and solutions to problems that people can use internationally. The international market also wants to tap into Africa and our ecosystem and we want to work with them. We might have people in San Francisco, for example, that use some of our developers to execute certain projects for them. We have people doing work of an outsourcing nature for international companies because we have those international connections. We are very local, but we do have an international reach.

What fields are your start-ups in?

Our start-ups range across the entire sector from healthtech to edutech, fintech, agritech, entertainment, music, lifestyle such as tourism, to purchasing luxury goods. We have people that are creating web apps, mobile apps, and solutions. Many people focus on the health sector. We have created platforms to solve health issues like blood donation or gaining access to doctors. For example, for pregnant women in the rural areas who do not have access to doctors, or who might have to travel back and forth every day, it takes a lot of time to see a doctor and it becomes very expensive for them. To solve this, we have created both a feature phone platform and a smartphone platform for them to be able to have access to doctors, eliminating the travel and the time that used to be necessary.

What is an example of one of your applications?

For health, we have the MoJa app. This app helps people and emergency services find nearby blood donation banks and in case of emergency, it helps people find out where they can go to donate blood. They also have patients that need bone marrow transplants and when you advertise on that platform, you gain access to a lot of potential donors. That platform is currently very effective, and many people use it. We have a fintech start-up called Flippify. It helps people save for anything, for example, buying a car, or a nice Nikon or Canon camera. When you get paid your salary, through the system you are able to allocate percentages to different things you are saving for. It encourages financial literacy, but the beautiful part of it is it helps with credit scoring. They have a partnership with five banks currently. They look at your expenditure and use that to give a credit score and points for the user. The credit score will then allow the user to buy things on credit, which they would not have had access to before. We are very passionately proud of what these two start-ups are accomplishing.

What challenges do you face? What funds do you want to attract?

Funding is always a challenge for all start-ups around the world. Africa is not new or unique in that sense. One of the problems is that if you get the grants that will give you $5,000 and there is no due diligence, you cannot check anything, and there are no background checks. It is just a grant, so you are not motivated to pay it back. Or, you have investors that are looking to invest upwards of $250,000, yet we do not have start-ups that are at that stage for you to invest in. You might have a start-up whose idea might not attract a grant because it is not a social impact idea. It does not fulfil the grant’s objective, but yet they will not get a VC fund because they are not worth giving that $250,000 to. They have a lot of ideas, and potential start-ups are dying because we are not able to address that issue. Funding is always a major issue. We need to look at human capital, as well, which is a challenge. We do not have a lot of skill sets in our ecosystem. You might find a select few developers at a higher level and CEOs that do not have the soft skills that are needed to manage companies. HR is very difficult to get for start-ups. Gaining the right skills to even manage the start-ups is a challenge. Funding and human capital are definitely the two key priorities in our ecosystem.

What is your current priority? What can you do to get the amount of funding you need faster than going through this whole process?

It is about having visibility and having platforms for you to be able to showcase the work that you are doing. If we are able to access the right panels, have the right access to the government or founders when they come into the country, or even invite us to come and speak abroad, once you are in the room, then you have access to those people. Having access is always the key thing for us. If we have access, then we are able to demonstrate the work that we have done. Being able to highlight our track record will attract the funds easily. The challenge is always having access to the people that can potentially give you those funds.

Project yourself ahead two to three years’ time, if everything has gone well, you have gotten the money and investors, launched your products, and reached the next level, what will iSpace be? What is your mission?

My mission is to set up a fund that will support locally based start-ups. The founders have to be local, natives of the particular country they claim from, and not expats that have that mobile and resource advantage and move here to create start-ups where it is easier for them to get funded. Also, we want to “invade” Europe. We have seen the opposite effect where many European programs come into Africa. In two or three years, I want to do the reverse. In Europe, there are immigrant communities that have similar problems to those that we have here, such as access to resources, training, and funding. Why can’t we have hubs that address these issues? If those immigrants in most of the European communities are not seeing or cannot see themselves attending a majority hub, we should create hubs that identify those issues and then work with them over there. In two or three years, I want to have iSpace hubs in France, the UK, and hopefully in the US. We can then tackle minority communities and work with the diaspora over there. For the first time, it would be us bringing knowledge to you as opposed to the other way around where we are the ones always taking in knowledge. We are able to then share our knowledge with the outside world and able to set out the funds for local start-ups for them to be able to address issues that are relevant to their community.

What is your personal background? What is your experience?

I was born in Ghana and moved to the UK at 14 or 15. I went to school in the UK and started working for a record label. I worked with a lifestyle management company and moved to Nigeria when I was fortunate enough to be selected to open an office for them there. In Nigeria, I worked for a while, launched a company, and trained staff for them to then manage the company. I then moved to the Ivory Coast to set up a similar company there, but unfortunately, because of the war around 2009 and 2010, we had to close that office. It was not conducive. We then went to Kenya and helped open a similar office. From Kenya, I went back to London. I was working in event management for a tech company. Through that, I came back to Ghana to organize tech events. The product of me being here, was that after organizing the tech events, we realized that the start-ups and entrepreneurs needed more than just an event. They needed training, a route to funding, and mentorship. So, we decided to open a space for that purpose. I have always cut across the corporate world anyway, so I understood business, but not in the African context. Having the pleasure of working in all these African countries enabled me to then identify the problems that needed to be solved in the community.

Do you have another business?

On the side, I do consulting for other businesses. If you want to come into Africa, rather than having the mindset of coming in to conquer, we help you and tell you when and where to invest, what to do and not do, and how to hire the right staff members. At the moment, we are consulting for more international start-ups as opposed to multinationals.

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