Tech Incubator in Ghana: Why This Successful Silicon Valley Entrepreneur Started It

By Jasper Kuria On 6:59 pm

 

Silicon Valley based Jorn Lyseggen is the founder and CEO of the Meltwater Group which he bootstrapped to $200 million in annual revenue. In 2008 he started the MEST tech startup incubator in Accra, Ghana. Jorn has also founded three other successful startups, including one IPO. He is South Korean by birth but grew up in Norway, then moved to San Francisco in 2005. He shares his story with Capital & Growth below.

From Capital & Growth Q&A: Useful answer of the week

Why did you decide to start a tech incubator in Ghana? You’re South Korean by birth, but grew up in Norway. What is the MEST founding story?

The idea for MEST came out of my own disappointment with formal schooling. I was always bored and felt that schools and universities killed creativity and individual thinking.

MEST was an attempt to fix this by focusing on entrepreneurship. It is three things: a school, a seed fund and an incubator.

I chose Africa because I could have the biggest impact there. South Korea and Norway already have lots of investment. We settled on Ghana because it is English speaking, has direct flights to major European capitals, is not South Africa and is peaceful! I send my staff there and don’t want to worry about their safety.
 
How do the three work together? (The school, seed fund and incubator)

The school is a graduate level program that emphasizes learning by delivering real-world projects. The selection process is rigorous and we have applicants take an aptitude test, write essays and do three sets of interviews— phone, in-person and group. I also personally interview them.
 
Upon admission, you learn coding, business models and marketing strategies. At the end, the students simulate the process of starting a company by forming a team and building a prototype. You get some startup mileage in the safety of a school environment.

The final exam is a pitch to investors flown in from Silicon Valley. We then fund the students who can convince this panel of professional investors–typically about $60,000 to $100,000. At that stage, the funded companies move into our incubator.

In addition to the Accra Incubator, we also have one in Lagos (Nigeria) and will soon set up more in Nairobi (Kenya) and Cape Town (South Africa). Our vision is to have a network of African incubators.

Why the aptitude test? Research has shown that academic merit is usually not a good predictor of success for entrepreneurs. There’s the old saying that A students become professors, B students become mid-level managers at large corporations and the C students endow buildings and professorships. 

Haha, that’s funny! The aptitude test is important because one of the things that we don’t require for people to join the program is coding experience. In fact, over the year long duration of the program, many of those with four-year computer science degrees are surprised to find that the other EITs (entrepreneurs in training) have caught up!

A high IQ is a necessary for to complete the advanced software development training we provide–the MEST program is challenging!

You’ve said that even though MEST is Ghana based, your goal is to create companies that can compete on the global market. Do you have success stories? 

Yes, our goal is to build global software companies. I believe that talent is universal and once it is trained, it build software that serves a worldwide market. For instance, we bootstrapped Meltwater in tiny Norway and it is now a global company with $200 million in annual revenue.

The UN predicts that Africa’s population is going to double by 2050, meaning there will be that much more talent to tap. Like Asia before it, Africa is also becoming an increasingly important market.

We’ve had a few successes. One of our companies was acquired by an Accel backed company.

The other is Saya, the first African company to pitch at TechCrunch Disrupt. Weeks before the event the founders didn’t even have passports! They jumped into the madness of Silicon Valley right after their first trip on a plane and finished in the top 5! Their idea was basically a WhatsApp for feature phones, which are still widely used in Africa. They were also acquired by a US company.

And then there is a company that has grown profitably to become a major player in Ecommerce. It is now used by more than 10,000 merchants all over the world.

You mention this “Africa is rising” narrative. One of the criticisms I hear about the African tech startup scene is that it’s over hyped by well-meaning Westerners but the actual impact of the companies is low. I think we would be better off without all the hype about peasants resurrecting failed crops with mobile apps! What do you think? 

The truth is probably somewhere in the middle. Well-meaning Westerners can create hype and false hope in a way that doesn’t always contribute positively, and then disappear soon after!

My view is fundamentally different. I believe the most valuable currency today beyond talent is commercial skills. If you can transfer high value commercial skill to talented youths in economically disadvantaged areas, that is a net positive. This is essentially what we to do at MEST—take people with no background in computer science and teach them how build and monetize mobile apps.

When I came to Ghana I was told “your project is too naive, too ambitious and will definitely fail.”

My response was, “I cannot see how I could possibly fail by transferring high value skills to talented people. If I help just one person that is a net gain”. We do this for 60 people each year and one of them will eventually build a company worth at least $10 million, which is a lot of money anywhere. For a poor kid in Ghana it is truly mind boggling— creating something so valuable purely out of their intellect!

What are some challenges the MEST companies have faced? 

One challenge has been the lack of engineering expertise to build infrastructure that scales. The ‘WhatsApp for feature phones’ company got more traffic than they could handle and could not scale up fast enough, despite attracting mentors from Skype and ICQ. Had they done this, they might have continued as an independent company and been even more successful.

The other is that our entrepreneurs lack Western business etiquette and need lots of mentoring before they can, say, close a deal with a US company. We must provide hands-on training on how to reach out to someone on LinkedIn, exactly what to say in an email and how to conduct themselves on the phone and in person.

How is the MEST program perceived by the community? Is it considered cool like, say, YCombinator? Do parents still want their kids to get a regular job? If I am a 22-year-old grad, will I get more dates by joining MEST? 

First, yes, most parents want their kids to get a safe job after completing university but are gradually warming up to entrepreneurship.

As for more dates, absolutely! Our students often tell us about strangers seeing a MEST sticker on their laptop and saying “Wow. You got into MEST? I tried a few times and didn’t make it”.

We are more selective than Harvard and only accept 60 out of over 4,000 applicants and so it is prestigious to be associated with MEST.

Employers also view our EITs (Entrepreneurs-In-Training) favorably and most have no trouble find high paying jobs should they choose not to be entrepreneurs.

As a successful tech entrepreneur and investor, do you have any parting thoughts or advice for founders? 

Do something you believe in and that is worthwhile. A friend of mine, a Harvard MBA, came to me with this idea for a gambling business. I had to ask him “With all your talent, is this really how you want to spend your short life?”

Sure, he could make lots of money, but if you have the luxury of being an entrepreneur—and it is a luxury—it should be about more than just money. Create something that the world needs.

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