The notable Businesswoman and Entrepreneur Elleni Gebre-Medhin, (PhD) sat down with Fortune at her new office to discuss what she is working on. She had just unveiled a new project to the world that focuses on young people. It was a sunny afternoon and she was excited about her new venture. She spoke about the opportunities her innovative project will give upcoming entrepreneurs and how it can support start-ups. The project "Blue Moon" was launched a few months ago with much promise.
Fortune: In your own words, how would you describe Blue Moon?
Eleni: Blue Moon is Ethiopia’s first youth agribusiness incubator. Youth, for us, is ages 15 to 29, and agribusiness really covers the range of the entire value chain from input, delivery, production, post production, to IT, and financial technology. It could be livestock, it could be in fishery, it could be in forestry, it could be dairy, or honey. We have a very broad idea of agribusiness.
Our goal is to find innovative, scalable and potentially transformational businesses that we can incubate. Meaning that for four months we would really coach the businesses to go from a great idea to an invest-able business.
How did you get the idea for Blue Moon?
It was really around the idea that we have a lot of youth programs that different NGOs are doing and there’s talk about youth employment and entrepreneurship training and entrepreneurship development centres that are training thousands of people, youth and otherwise. But what I saw was a gap.
The gap is that these are creating micro enterprises, which are usually low risk ventures. Somebody says, “I’ll buy a cow. I will milk it. I’ll sell the dairy and that’s my micro enterprise.” They will hire two or three people. It is not a scalable business. It does not have much innovation content. And usually the program will be linked to microfinance, which is also low risk capital. Microfinance is, “Ok, you buy a cow. I’ll give you the money. In six months you’ll return the loan.”
But for a high-risk, completely innovative idea where do you get high risk capital? Where do you get the kind of support you need to take a high-risk idea, an innovative idea, and a scalable idea and make it reality?
I thought that could be my contribution in Ethiopia: to create a stage or a platform for high-risk innovative ideas to be matched with high risk capital and really see where that goes.
Why does the program focus on agribusiness?
First of all, and nobody needs to be convinced of this, agriculture is the mainstay of our economy. However, our definition of agribusiness includes things that other people think of as industry or some people might think of as IT. So agriculture has linkages or overlaps with many sectors: industry, processing technology, and finance.
The other thing is that agriculture and agricultural related business is 44pc of the GDP. Agriculture itself hires 81pc of the labour force. It’s the big animal in the room.
When we talk to the investors and the private equity funds currently operating in Ethiopia. Some of the venture capital firms that are starting operations in Ethiopia will tell us that 80pc of the proposals they are financing are in agriculture. This is the nature of our economy.
What is the biggest challenge Ethiopian entrepreneurs face today?
I have been traveling to different parts of Africa and looked at starting businesses and unfortunately even though our economy is growing very fast I feel that we need to improve the business climate. Particularly for new companies, for young entrepreneurs and for start-ups who are doing things like what we are talking about, high-risk ventures.
It’s still very difficult to start a business, and to close a business. The tax policy is not very encouraging. Also the administration of tax is also very difficult. Even our company will spend one or two days per month just making the payment itself or doing the paperwork. We see now in other countries that people are paying tax on mobile phones. Here, you’re spending days paying your taxes.
Not to mention that there are many issues with how to find service providers. How do you find reliable service providers? Where do you find a reliable lawyer? Where do you find somebody to do your marketing for your brand?
It is word of mouth. We do not have a better business registry. We do not have a directory that has evaluations. I am proposing a new business idea right there. Somebody should do a rating system for small business providers.
What is the biggest advantage Ethiopian entrepreneurs have today?
I think Ethiopia is a fast-growing country and when you look at it from the outside and from anywhere around Africa, there is a lot of admiration for a government that is delivering on the promises on infrastructure, on a very solid investment in education and health. A relatively stable government where things more or less work.
I hear this comment from people in Ghana, Nigeria, Kenya and really all over Africa that there is a lot of admiration and respect for the way that the country has evolved over the last two decades. In terms of the growth of infrastructure, the construction boom, all these things are very positive.
Now what we are trying to do is say, this is great and now we need also to open up space for entrepreneurs so they can leverage all the good things that have happened and now think about a knowledge economy.
We are building a lot of infrastructure, the industrial base is starting. Now how do we build knowledge content? How do we think of innovative business? How do we get business that build on the base that is there?
The challenge is not so much that there are so many problems and it’s not workable. It’s how to carve out a knowledge economy.
What is something you wish every young entrepreneur knew?
I would wish that in our Ethiopian society, we empowered young people to think they can change the world.
I have been giving an example of how one of my colleagues who went to Bahir Dar University was the top student. She was studying engineering and got a scholarship to do her master’s in Finland. When she got to Finland, she met with her advisor and he said, “So what classes are you going to take?” She said, “I don’t know. What are you going to tell me to take? I’ve never chosen my classes myself.”
I think, in a way, our society is very top-down and hierarchical. There are processes, whether it is choosing a university, choosing your degree, choosing your courses, or choosing your career. With many things, decisions are made from somewhere else.
I think what we need to do is to develop a culture of empowerment that as a young person I can aim to change the world. I can dream big. I do not have to stay in this area where I was told. I do not have to take direction. I do not have to wait to graduate to feel I can start a business. I should have a sense of empowerment.
The second thing is that we need a culture of mentorship. A sense that we should all be giving back. If each of us in our various sectors, it does not have to be business per se it can be anything you are doing, coaching and guiding a young person is something I value because I cannot be the only person that is successful. I have to create 10 more people like me, who are more successful than me. If we do that and think of that as a societal value, then I think we can go very far.
What’s next with Eleni Gebre-Medhin?
Hopefully, what we are doing here takes off and I have every commitment to that and every belief that will happen. So, when that happens I think the world will start to pay attention to this thing that we are doing.
What I would like to see is how we could scale it up and link it into the big venture funds that are out there. We would like to start a venture capital fund putting money into early stage ventures.
These are the things that I would like to see growing in this phase of my life. But every phase brings its own interest and passions.
With a reformist administration in charge of the executive, there has b...
The new electricity tariffs that became effective on December 1, 2018,...
Who it is that midwifed the rapprochement between E...
Desert Locusts have been costly to combat, because efforts are made aft...
A recent photo between Prime Minister Abiy Ahmed (PhD) and George Soros...
The future is bleak. Millennials and younger generations who will inher...
There is heated debate on the propriety, decency and morality of breast...