AfricaLive! is Harvard’s Online Certificate Course developed to identify new entrepreneurial opportunities that generate African solutions to African problems.
Africa’s growth over the last decade is distinct from that in previous periods which were fueled by global demand for natural resources that the continent possesses in abundance. Internal demand, rooted in urbanization and the rise of an emergent middle class, provides a critical newer engine to Africa’s economies. Our novel “AfricaLive!” program provides a unique framework, and a Pan-African online learning community, to contribute to growth driven by domestic entrepreneurship.
The novelty of our program is two-fold. We mix and match pre-existing asynchronous video content about entrepreneurship in emerging economies with live, Africa-specific deep-dives into broad topics of interest to every entrepreneur. Program participants are introduced to a topic each week for six continual weeks and encouraged to apply each week’s insights to their own business plans directed to an opportunity of interest. Second, the program itself is a new collaboration by faculty at Harvard Business School and Harvard University, in partnership with the online learning platforms, edX and HarvardX, and the media company, Africa.com. It is an academia-industry partnership of a sort that tends to be quite rare.
The program is anchored around a conceptual framework that helps think through why would-be entrepreneurs in Bujumbura have to think differently about approaches to their opportunities of interest than do their counterparts in Boston.
Entrepreneurs with great ideas in emerging markets cannot rely on the usual trust-building foundations— clear information, laws, regulatory oversight, government protections—as they might in more mature economies. Smart entrepreneurs in these countries need a mindset shift, focusing not only on creating solutions as they might in Boston but on recognizing that they also need to create the conditions to create. That is, they need to compensate for what we call the “institutional voids” that might otherwise bedevil their efforts.
Curiously, the very launch, and execution of AfricaLive! illustrates the value of being mindful of these institutional voids.
There are broadly two kinds of such voids – informational and contractual. The informational voids are amply illustrated to us in the very different ways people communicate with each other on the continent (and compared to elsewhere). In AfricaLive!, for example, we’ve found that participants rarely respond to email, preferring instead peer-to-peer messaging applications like WhatsApp, Signal, and Telegram as communication channels.
The history of the communication revolution suggests why. Lack of landline infrastructure across Africa led to the continent’s explosive growth of mobile phones in the 1990s. This extensive use of mobile telephony in turn has shaped African use of digital communications. At the time the Western world was adopting email, Africa skipped the trend due to lack of PC penetration, low electrification rates, and low internet connectivity rates – instead, the market adopted a digital communication strategy via texting on their mobile phones. This consumer behavior lives on and has now morphed into widespread adoption of messaging platforms like, WhatsApp, Signal, and Telegram used for cost-efficient messaging and voice over IP (VOIP).
There are other legacy effects of the way in which communication patterns took hold. For many Africans, Facebook is the internet. Getting online to sell products means opening a Facebook page. In contrast, Twitter has no traction. Some of what we in Boston accomplish through Twitter – curating news from people one knows – is accomplished in Africa through WhatsApp.
These are of course obvious in hindsight but did get in the way of our initial communication from Boston to our learners, and this by a group of well-meaning professionals attuned to the realities of Africa.
In fact, Africa.com is itself a response to a giant informational institutional void. African news tends to fall into one of two categories: comprehensive locally produced news in each country, or a Western lens of the continent that emphasizes death, disease, and disaster. Africa.com has filled a void by delivering comprehensive news including business, current events, and lifestyle news on a Pan-African basis.
Africa.com’s filling of the giant informational institutional void is, in turn, itself a source of its enduring competitive advantage. The voids are therefore double-edged swords, they can derail efforts that don’t account for their existence, but they are also themselves sources of entrepreneurial opportunity.
The contractual voids are illustrated by the hoops we had to jump through to enable participants to enroll in the course and pay the tuition. Most of us do not think twice about the presence of a robust payment infrastructure that can facilitate transactions between parties. In Boston, it would be a straightforward credit card payment or a wire transfer resulting in fund flows between financial institutions that are part of the same, well-oiled financial regulatory system. In Africa, credit card penetration is at about 1.5% and bank penetration is about 22%. Credit card payments from most of Africa don’t work to an entity in Boston for a range of reasons, including U.S. credit card processors’ fear of fraud from Africa and their resulting implementation of stringent approval protocols for payments originating on the continent. Unfortunately the latter block, not just the handful of fraudsters, also stymie the majority of the honest consumer class. In fact, our estimate is that only 10% of our target learners in Africa would be able to organize a payment to Boston directly through a card issued by a global financial institution or organized by a relative or friend in the West.
As another example, rather obvious to anyone who has walked the streets of any East African metropolis, mobile payments systems are everywhere (M-Pesa in Kenya being the most celebrated). These do not interface with western payment systems. These are the quintessential institutional voids, essentially making it impossible for a market to operate. Here, the would-be buyers of our course are unable to come together with the would-be sellers, the faculty, because of onerous or missing mechanisms to transact financially.
The marketing of our program provides a vivid illustration of the institutional voids we faced. In the US, a social media marketing campaign would result in email inquiries and closed sales with nary a personal follow-up, all accomplished through a media-rich website. For AfricaLive!, there was rampant ambient mistrust on the part of all – the financial institutions that implemented anti-fraud but also transaction-deterring measures, and consumers who did not trust e-commerce transactions and even mistrust that our course was a legitimate offering by Harvard University. As a result, we had to invest heavily in gaining the confidence of would-be course participants, contacting them multiple times over text, email, and creating an inbound and outbound phone call infrastructure to provide comfort, and setting up payment systems and service delivery processes to accommodate bank transfers made by the consumer in person at the counter of his or her bank. In all, 71% of our consummated sales required such hands-on interventions. This resulted in an extra $20 of costs per transaction, a line item whose severity depends on the revenue that each such closed transaction entails.
A rough and ready measure of our “success” (at least relative to other methods of navigating Africa, by outsiders) is that there are more Africans in our AfricaLive! Course today than there are Africans in all of Harvard. AfricaLive! has enrolled 690 students from 61 countries, including 38 of Africa’s 54 countries. According to Harvard enrollment statistics, in the 2020 fall term, 1,575 students identifying as “Black/African American” were enrolled across the University. Were we to conservatively assume that ~30% of these students are from Africa, then Harvard has a total of 473 African students, fewer than in our course. Were we to compare our enrollment figures to those of HBS’s “Black/African American” students, which was 118, then we find that AfricaLive! has nearly 6x the number of Black students enrolled, regardless of country of origin, than does its most similar comparable at HBS.
Although we outlined many of the challenges faced by a U.S.-based university to accomplish its learning mission by offering a program aimed at African entrepreneurs, the cases we discussed in the course provide much optimism about the future that lies ahead for a Trade-First approach between African countries and Western nations. Andela, Equity Bank, and Zipline vividly illustrated grassroots dynamism; guests from Google and Mozilla enlivened technologies; a panoply of providers of different kinds of risk capital, and experts in branding and intellectual property protection, came together to round out the blocking-and-tackling that every entrepreneur perforce engages in.
These cases and guests inspired our participants to imagine a future of entrepreneurship in Africa that would view the many institutional voids in emerging economies as opportunities for new value creation instead of deterrents to business formation. The community of learners that have emerged from our course are already self-organizing and collectively identifying ways to help each other and support each other in their entrepreneurial journeys
As a result of us launching our program, we understand the individual learner through an online anthropological lens, their user journey through the e-sphere to ultimately “find” our course, validate its authenticity and antecedents, and transact. We understand our ability to “find” a likely learner (consumer) and our ability to close the sale, by micro-geography. We understand some of the inducements to which learners respond and those they ignore, again by micro geography. Ultimately, addressing the informational and contracting idiosyncrasies of Africa – its institutional voids – has resulted in a competitive advantage for our learning consortium, helping us deliver as educators more effectively.
Contributing Authors:
Caroline Elkins: Professor of History and Visiting Professor of Business Management, Harvard Business School
Karim R. Lakhani: Charles Edward Wilson Professor of Business Administration, Harvard Business School
Teresa Clarke: Chair and CEO, Africa.com
Tarun Khanna: Jorge Paulo Lemann Professor, Harvard Business School