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Creating an effective entrepreneurship institute in Uganda is no mean feat as Jun Shiomitsu and Joshua Pi’Rwot – both highly trained business and finance professionals, found out.
The fragilities of many entrepreneurs resulting in the high mortality rate of micro, small and medium enterprises in the country, was a valuable lesson and experience that shaped and strengthened the formation of the AVODA Institute of Entrepreneurship.
Global Entrepreneurship Monitor 2019/2020 ranked Uganda as one of the most entrepreneurial countries in the world with 30 percent of Ugandans starting businesses annually. In the United States of America and Japan, that figure stands at 7 per cent and 11 per cent respectively.
However, the majority of these enterprises do not survive beyond their first year birthday and by the end of the third year the existing ones are either struggling or non-existent, confirming the hard lessons the two founders experienced, informing the need to establish the institute to arm the arm entrepreneurs against frailties resulting into the death of their enterprises.
Who is Jun Shiomitsu?
For the first half of Shiomitsu’s life, he was in investment banking, initially at Citibank in Tokyo, Japan, as the assistant vice president for the treasury department. He then moved to the Deutsche Bank Group in the UK, Germany, and Switzerland. Here, he co-founded their global financial institute that worked on the most cutting-edge forecasts for the global economy.
It was during his MBA at the University of Cambridge that he met an American missionary who asked him to teach financial ‘stuff’ in Uganda for a week. With his banker hat on, in 2000, Shiomitsu flew to Uganda, destined for the Africa Bible University in Lubowa.
In one week, from morning till night, they covered all the main topics of an MBA such as strategy, marketing, operations, finance, accounting, and pitching.
“On pitch night, we invited people and every attendant got some monopoly money, which they ‘invested’ into their favourite start-up. It was then I realised that many of the business ideas seemed almost investable,” he says.
An eye for business
Within a week, he was bitten by the Uganda ‘bug’.
He smelled business opportunities in Uganda, particularly for start-ups. Five years later, he launched the African Business Institute (ABI) under the African Bible University of Uganda. One of his students, Pi’Rwot, started working with him between 2018 and 2020, teaching marketing while also running his own business.
“I partly worked for ABI while also running a business with my business partner, who is my wife now,” Pi’Rwot says.
Pi’Rwot had suffered the Kony insurgency to live in Internally Displaced Camps (IDPs).
“I have experienced poverty and all the consequences of war. So the question that often popped in my mind was what I can do to improve people’s status and businesses,” he says.
That pushed Pi’Rwot, now Uganda Country Director for AVODA Group, to study for a postgraduate diploma in business, a master’s degree, and an executive MBA to better execute his passion. Since 2016, he has started several businesses with successes and failures.
Birthing AVODA in Uganda
After running ABI successfully for four years, they realised that serious Ugandan entrepreneurs did not need another MBA programme but a practical fast-track to income generation.
That embodies a SMART (specific, measurable, achievable, relevant, time-bound) vision, a lean but 100 per cent relevant curriculum, a global network of investors and mentors, and most importantly, direct access to local and global markets.
“That led to the birth of a relentlessly entrepreneurship-focused sister organisation- AVODA Group in 2020,” Pi’Rwot says.
The group consisted of the AVODA Institute of Entrepreneurship (Kampala, Uganda) and Ideologie International (Tokyo, Japan), and was funded largely by AVODA Fund in the USA. The US side helps with upholding the institute with cash, while the Japanese arm supports the institute by offering strategic advisory services to governments, ministries and financial institutions in Uganda, Asia, and the US. In addition, both the US and Japanese entities provide investment and market access to AVODA’s graduates.
Understanding the business spectrum
Over the years, many business ideas have come their way (e.g. vending machines) and Shiomitsu initially wondered why nobody had run with those ideas.
I&M Bank Offers Loan Repayment Holiday to Customers This Festive Season“But I have come to understand the unique nature of the Ugandan business landscape,” says Shiomitsu, which he groups into four.
- Credit: Many entrepreneurs in Uganda do not have bank accounts or credit cards, making it difficult to measure their financial transaction history, and their credit-worthiness for loans over $10,000.
- Consistency: It has been hard to find entrepreneurs who can provide consistent quality and supply of their offerings. Without these, a start-up will never be able to grow.
- Execution: While ideas, planners, thinkers and cheap labour are in plenty, the missing link is good executors in Uganda.
- Grant-preneurship: “After studying over 400 start-ups in Uganda, I found out that most cannot survive without grants. This creates a very harmful mindset, where entrepreneurs spend more than they make, and ask investors for far more cash than they immediately need,” Shiomitsu notes.
AVODA Solutions
To deal with that, AVODA developed the AVODA Interest and Credit Scoring System (AVICS). While the start-up owners may not have credit cards, their tuition payment history starts their tracking journey.
“We do not offer free courses because paying that tuition helps in creating a credit portfolio. We also track daily class punctuality to prove that you can consistently deliver on your promises over an extended period. These metrics, together with other FICO-like data, provide each student with a credit score by graduation time,” Pi’Rwot says.
The ideation week is another great asset where the students visit successful start-ups in Uganda to see how the founders planned and executed their dreams. Last year, they visited eight companies, where seven coincidentally started without capital or loans.
The AVODA entrepreneurship programme
The entrepreneurship course is a 50-50 programme, where students get top-notch MBA lectures as well as in-market practical activities focused on enabling entrepreneurs to make sales.
“It is focused on execution skills and investment readiness by making sales and establishing a credit score,” Pi’Rwot says.
Adding, “Having a small number means we can have a personal relationship with them, allowing for personal mentorship over the next few years. That also includes following their incomes, expenses, growth and opportunities.”
So far, they have reached over 200 entrepreneurs while graduating 16 start-ups with at least four funded through the institute’s investment vehicles in the US and Japan.
Christian focused programme
Shiomitsu says AVODA is designed for the Christian-majority population of Uganda. Its goal is to empower Christian entrepreneurs to profitably occupy different spheres in the marketplace.
Apart from his banking background, he is also a trained pastor (theologian). His four-year training in Japan provided him with a solid background in theology, Biblical studies, and Christian doctrine. On the other hand, Pi’Rwot is a trained pastor who chose to economically empower the church. “If my faith can find expression, let it be in the creation of economic vitality,” he says.
Shiomitsu says networks have been everything.
“The global investors who are hand-holding our students’ businesses are people I have known for a long time. He says they are people-driven while at the same time committed to our programme, which we believe is a place where entrepreneurs find their calling.”
Regrets
The biggest mark of a good leader is how he gradually makes himself obsolete so the next leader can grow.
“In the beginning, one might think they are the only ones who can do things. That exhausted me and I was not giving my team room to grow. It was only after January 2022 that I appreciated the need to step back. Today, Pi’Rwot is the Country Director of the Ugandan organisation and he makes all the decisions. I wish I had done it faster,” he says.
He also wishes the institute had become more data-driven from the start to avoid burnout due to long working hours.
Future Outlook
Shiomitsu believes AVODA will be the leading Christian boutique accelerator in the region offering targeted assistance to Christian start-ups. Over the next 20 years, the aspiration is to train at least 2,000 Christian entrepreneurs and invest in about 500 Christian start-ups.