Across Africa, a familiar pattern keeps repeating itself: startups launch with excitement, funding, and ambition—yet many collapse before reaching scale. A major reason is that a significant number of these startups build edge solutions: impressive tech products that are conceptually strong, but misaligned with the actual behavior and needs of businesses on the ground.
This raises a deeper question: If technology adoption is still relatively low across the continent, how do millions of African businesses continue to operate successfully? And even more importantly, is the slow pace of digital adoption contributing to Africa’s lower GDP performance compared to major global economies?
To understand this, we must start with the basics: access and usage.
The Reality Behind Internet Penetration and Digital Usage
Take Kenya as an example. Kenya has an estimated 35% internet penetration, translating to roughly 22 million people with internet access. Meanwhile, about 27 million people are above 18 years old. That means nearly 5 million adults lack internet access or do not own devices capable of connecting.
This “offline” population represents a massive opportunity for startups building digitization tools, financial inclusion solutions, or services targeting underbanked communities.
But the real question is: What are the 22 million connected people actually using the internet for?
The assumption that connectivity automatically translates into business technology usage is false. Many users focus on:
- Mobile money
- Social platforms
- News and entertainment
- Communication tools
Only a small percentage rely on digital platforms for business operations. Still, mobile money—an essential service—has pushed digital usage deeper even in regions with low formal internet penetration. This signals something important: African businesses adopt technology when it solves a direct, unavoidable, daily problem.
How Many Businesses Actually Need Tech?
Kenya has approximately 7.5 million MSMEs and SMEs, but fewer than 1.5 million are formal. The majority are informal, spread across vibrant but unpredictable markets. Most operate in urban centers, while rural businesses adopt technology at a much slower pace.
For a startup—say, in logistics—this distinction is critical.
Urban-focused operations reduce fuel costs, increase customer density, and simplify scaling. Additionally:
- Formal businesses already have structures and systems in place, making it easier for a logistics solution to plug in.
- Informal businesses, however, require you to build the structure before offering the service—meaning higher acquisition and operational costs.
Think of B2B operations as a socket and plug: both sides must be ready for the connection. Without the right socket, the plug is useless.
Why African Startups Really Fail
Contrary to popular belief, many African startups don’t fail because of funding shortages. They fail because:
They build services people want but not services businesses need.
There’s a major difference.
A “want” is optional and often dependent on trends, convenience, or hype.
A “need” is tied to daily business continuity. It’s non-negotiable.
A logistics startup succeeds when it solves a core operational pain point.
A payment startup grows when it solves a direct cash flow bottleneck.
A retail solution scales when it solves a real efficiency problem.
But many startups build elegant tech solutions without fully understanding the operational realities of African businesses. Technology should not be the product; it should be the enabler.
The Mindset Shift: Solve Problems, Not Trends
The African market rewards startups that solve deeply rooted, high-friction problems.
It punishes those who introduce technology for technology’s sake.
The winners will be the companies that:
- Understand the informal sector’s behavior
- Build for markets with limited infrastructure
- Focus on essential operations, not luxury features
- Prioritize adoption over complexity
- Solve needs, not wants
In other words: Don’t build niche technology. Build technology that solves niche problems.
This is how African businesses truly grow, how digital penetration rises, and how startups survive long enough to scale.
