Solving Local Problems or Going Big?


(Eric Halsey) #1

“Most of the developers in Uganda and solving Ugandan problems, not realizing there’s something bigger.”
-Teddy Rouge, Founder of Raintree Farms, Co-founder of Remit.ug and Hive Colab

Ugandan entrepreneur Teddy Ruge has faced some central questions in building his three main businesses. Among them is whether he should narrow down, focus on solving local problems and delivering his product in a smaller but impactful market, or whether he should go big and aim at delivering something to a wider customer base.

##The Advantages of Going Local

We’ve heard many African entrepreneurs talk about the importance of understanding your customers and building trust among them. This is one advantage of going local. In a smaller market, it’s easier to get to know your customers and build trust. For Teddy, this applied to both Raintree Farms and Remit.ug.

With both businesses, Teddy needed to build trust with local farmers in the case of Raintree, and with the diaspora and local Ugandans receiving money in the case of Remit.ug. Focusing on Uganda helped him establish both of these businesses. There’s a possibility of expansion, but that would never have been possible if the businesses had failed to build trust amongst their initial customer base.

##The Advantages of Going Big

“Where are you deploying it, what’s you addressable market, when can you get it out, are you thinking about 37 million in Uganda or 150 million in East Africa?”
-Teddy Rouge, Founder of Raintree Farms, Co-founder of Remit.ug and Hive Colab

Just because Teddy initially focused on local markets for his three businesses doesn’t mean he thinks that’s always the right choice. Instead, he focuses on the importance of asking the right questions.

“Are you thinking about the regulatory hurdles required for expansion, when can you handle them? Then before that, how are you going to grow and sell to a funder who wants to know about scaling. He’s looking for 100 million for scaling and sees that you can’t because the market is too small.”
-Teddy Rouge, Founder of Raintree Farms, Co-founder of Remit.ug and Hive Colab

The questions Teddy asks above point to the other side of going local: you can limit yourself. The difference here is between your market and your addressable market. Remit.ug, for example, started by establishing itself in Uganda. However, its addressable market includes millions in the African diaspora (as well as others potentially).

So for Teddy, it made sense to start local and establish himself while keeping an eye on the potential for scaling and going big in the future.