Securing startup grants can be a major milestone for young African companies. However, the journey from proposal to project execution rarely goes exactly as planned. Unforeseen challenges during grant-funded initiatives can derail timelines, impact deliverables, and even jeopardize funding. Successfully navigating these roadblocks requires proactive planning, adaptive management, transparency with funders, and unwavering commitment to impact.
Several unforeseen external challenges frequently throw African startups into a loop. These challenges include:
1. Market Volatility
Unpredictable shifts in currency exchange rates and inflation can wreak havoc on budgets. For example, a fintech startup in Nigeria saw operating costs balloon 60% over two years due to Naira inflation and rising AWS costs due to dollar rate swings. Constant fluctuations impact the costs of needed items, forcing financial plans to be rewritten.
2. Political Shake-Ups
Political events, such as a change in government, political instability, or conflicts, can significantly impact startups in Africa. These events may lead to license or support withdrawal, supply chain disruption, limited market access, and an uncertain business environment. A startup with endorsement from the People’s Democratic Party (PDP)-led government may lose support if an All Progressives Congress (APC) -led government takes over.
3. Cyber Insecurity
Cyberattacks can lead to data breaches, leaks of sensitive information, financial losses, and operational disruptions. It is a serious challenge for startups. For example, hackers reportedly stole N2.9 billion from Flutterwave in 2023 (though Flutterwave denies the hack). This can force them to divert otherwise planned resources or spend above-budgeted resources toward protecting data and systems.
4. Regulatory Changes
Regulatory change in Africa is rife and the sudden changes affect project execution. Imagine a new regulation being enacted a month before launching a telemedicine solution, the startup may burn another 6 months redesigning its telemedicine solution to meet new data privacy legislation enacted. Startups may face challenges in complying with new regulations after planning based on previous regulations, requiring adaptability and potentially affecting project timelines.
In addition to external variables, unpredicted internal challenges can slow startup success:
1. Team Troubles
Internal challenges such as changes in team dynamics, whether due to death, health, conflicts among team members, or leadership changes. These changes can affect overall team efficiency, thereby delaying project progress. Imagine one of the C-level executives quitting mid-way into a project. Filling the vacuum can significantly affect the project execution.
2. Technology Glitches
Despite the best preventative measures, software, apps, hardware, and systems can still crash, fail, or have intermittent functionality issues. These issues may lead to delays, errors, or even system failures. This is very particular to projects involving the use of an app, a website, or a device. Think about what you face when your conventional bank app fails, that is how the project suffers too.
3. Lack of In-House Expertise
Launching innovative products and services often requires niche skill sets. Gaps in technical know-how can bottleneck progress unless outside experts are brought in. If the team lacks the necessary skills or knowledge for certain aspects of the project, it may lead to inefficiencies and suboptimal outcomes.
4. Resource Constraints
Limited resources, whether financial, human, or technological, can hinder project progress. Startups may face challenges in acquiring the necessary resources to meet project requirements. This might be an issue for a project with co-financing. The inability of the implementing organization to provide their part of the agreement can lead to such a challenge.
Proactivity is the first line of defense against the unpredictable nature of project execution in Africa. To prevent these challenges, startups must adopt a proactive stance such as
1. Conduct Robust Due Diligence and Risk Assessments:
Due to the diverse and sometimes unpredictable nature of the African business environment, startups may face a range of external challenges. Conducting robust due diligence involves thoroughly researching and understanding the market, regulatory landscape, and potential geopolitical factors that could impact the project. By identifying risks early on, startups can develop strategies to mitigate or navigate these challenges. This is a step to find out possible challenges.
2. Establish Contingency Plans and Crisis Management Protocols:
African startups may face internal and external crises that could jeopardize project success. Contingency plans involve preparing for the unexpected by outlining alternative courses of action in the event of a crisis. Crisis management protocols ensure that teams know how to respond promptly and effectively to mitigate the impact of unforeseen challenges. This is admitting there are challenges and preparing for them.
3. Build Flexible Timelines and Budgets:
The African business environment is characterized by factors such as bureaucratic delays, infrastructure challenges, and most especially, market uncertainties. Building flexible timelines allows startups to account for potential delays and unexpected obstacles. Similarly, allocating additional budget resources and ensuring staff capacity flexibility can help mitigate the impact of unforeseen challenges and ensure that the project remains on track despite unexpected setbacks. This is an adjustment to accommodate realities.
After unforeseen challenges strike, the ability to adapt is the hallmark of successful startups. To address project challenges after their occurrence, the following can be considered.
1. Hire a Project Manager
Hiring a skilled project manager can enable quick adjustments in project plans in response to unforeseen challenges. The manager deploys their adaptability, collaboration, and iterative development skills to help the team respond swiftly to the changed circumstances.
2. Update Gantt Charts
Gantt charts are visual project timelines. Updating them post-challenge helps remodel schedules and deliverables to align with current constraints. It also provides a clear overview of the adjusted project trajectory.
3. Transparent Communication and Inclusive Decision-Making
When a challenge occurs, it may throw the team off balance. Transparent communication fosters open dialogue about challenges without sharing blame. Inclusive decision-making ensures that key project stakeholders are involved in addressing issues and promoting a collaborative approach to finding solutions.
4. Continuous Monitoring and Evaluation
Continuous monitoring and evaluation involve ongoing assessment of project progress. It ensures that the project stays on course after an unexpected challenge. This ensures that further challenges are prepared for while managing the existing one.
1. Provide Comprehensive and Honest Reports
Inform funders early when disruptions emerge, not after the fact. Waiting weeks or months can erode confidence. Startups should provide funders with comprehensive and honest reports, detailing both successes and challenges. This open dialogue fosters trust and enables funders to better understand the nuances of project execution.
2. Highlight the Impact on Timelines and Deliverables
When challenges arise, explain the root factors driving interruptions, especially external ones beyond startup control. Quantify resulting impacts on budget, schedule, and products. Honest communication about setbacks allows funders to recalibrate expectations and demonstrates the startup's commitment to transparency.
3. Provide Potential Solutions and Mitigation Strategies
Beyond highlighting challenges, startups should present potential solutions and mitigation strategies. Detail proposed solutions and recovery tactics to reassure funders that challenges are being competently addressed. This proactive approach reassures funders that the startup is actively working to overcome obstacles, reinforcing the collaborative nature of the partnership.
The project execution path is filled with unexpected twists and turns. However, with deliberate planning, adaptability, and transparent communication, external hurdles and internal growing pains can be overcome to achieve startup success. By embracing the information shared in this blog post, African startups can transform challenges into stepping stones toward success.
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