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From 2012- 2014 and 2018 – 2019, Dr. Tessa Pijnaker, a PhD researcher from the lecturer at Utrecht University, spent a total of 12 months researching Ghana’s rising start-ups.
During her stay, she observed the inner workings of different local hubs, most promising that entrepreneurship would lead to individual and collective prosperity on the continent.
In articles published in the academic journal “Africa” and academic blog “African Arguments“, Dr. Pijnaker argues that the Silicon Valley promise of serial digital entrepreneurship – the idea that repeated business failure will eventually result in a profitable digital start-up – lured young adult digital entrepreneurs into gradual socio-economic decline.
During her stay, she observed that Ghanaian young adults who did not course correct after 2 to 3 years of unsuccessfully building a start-up, and did not seek waged employment instead, could face serious consequences.
Those who kept trying digital entrepreneurship were eventually ignored and shut off from care by family members.
They were also shut off from opportunities in the waged job market, trapped in the precarious pursuit of digital start-up “dreams”.
Chasing The Silicon Valley Dream
In Ghana, most hubs and incubators follow a similar vibe often seen in Silicon Valley, the area in California that birthed some of the world’s popular tech startups like Uber and Facebook.
Silicon Valley celebrates and normalizes failure and hardship as an inevitable part of the start-up journey, with slogans like ‘fail fast, fail often’.
It claims that failure provides individuals with valuable lessons that will eventually lead to them building a successful start-up, generating millions in profits, and fame.
Quitting is not encouraged, but committing to the start-up grind is, and little to no attention is paid to the negative long-term effects that (repeated) failure can have on entrepreneurs and their families.
As Dr. Pijnaker continued her research after returning to Accra’s tech hubs and incubators in 2018–19, she heard concerning stories from entrepreneurs about the realities of entrepreneurship in the country.
No Return on Investment
The popular data point is that new startups tend to fail 90% of the time. Different reasons vary from product market fit, lack of funds to scale, and structural marginalization of female and non-white founders by venture capitalists.
Dr. Pijnaker recalls a conversation she had with an entrepreneur in 2014 about his startup journey.
He explained that, in principle, his siblings did not believe in entrepreneurship. They did not think that in Ghana, succeeding after multiple failures was a way to obtain middle-class status, but rather believing in “one opportunity”.
“In Ghana, people think you only get one opportunity: you go to primary school, secondary school, university, do national service, … get a good job and you work your way up, buy a car, buy a house and then you marry.
When you become an entrepreneur, your family can be worried that you throw that one chance away.“
Ironically, his siblings supported his entrepreneurship ventures for several years, despite all of them failing.
This ultimately led to an intervention by his family to give up on his startup dreams.
But he resisted.
He eventually moved out of the family’s home in Sekondi-Takoradi to Accra to work on a digital start-up for a friend.
The goal was to use funds from the startup to provide for himself and develop his own new startup.
When Dr. Pijnaker revisited the entrepreneur in 2018, he detailed the financial hardship and his reluctance to seek help from family and friends.
Last year I had a really difficult time. I could not get consultancy work [short-term assignments] or any other source of income, so I had to touch my savings.
Eventually, I struggled to get food. I felt I could not ask my friends or family for help any more. It was very difficult and lonely.
The entrepreneur’s journey back to “normal” waged work life after his entrepreneurship ventures proved difficult.
He stated that recruiters and firms he applied to did not understand the progress of his entrepreneurship and his responsibilities in his startups.
Dr. Pijnaker stated that other men in her study who became entrepreneurs as university graduates and spent more than three to five years in their entrepreneurship career, similarly struggled to leave the digital start-up industry.
Some entrepreneurs also ended up developing start-up stress-induced chronic illnesses or came to feel so removed from their family, friends, and start-up dreams, yet trapped in entrepreneurship that they developed problems with suicidal ideation or took their own life.
Missed Life Opportunities
Like most Ghanaians, young entrepreneurs are expected to enter into middle-class Christian marriage and to produce children.
Dr. Pijnaker recalls the story of a female entrepreneur who had raised almost $100,000 for her startup. The venture shut down two years later.
In her early thirties, she struggled to find corporate work, had not settled down for marriage or children, and had broken up with her significant other.
“My older brothers have already married; my sibling just after me will likely be getting married soon. I am afraid of being skipped,” she stated.
Male entrepreneurs faced the same issue with their long-term partners.
Some male entrepreneurs with start-ups they (repeatedly) could not scale, stated that their significant others (most in their early thirties) had been “too demanding”: they had expressed a desire for marriage and children, while the entrepreneur had not felt ready yet to pay for the bride price, engagement and wedding.
As a consequence, while their start-ups had fallen apart, their romantic relationship had fallen apart too.
Some entrepreneurs also ended up developing start-up stress-induced chronic illnesses or came to feel so removed from their family, friends, and start-up dreams, yet trapped in entrepreneurship that they developed problems with suicidal ideation or took their own life.
Many male entrepreneurs who coped with (repeated) start-up failure eventually opted to date women much younger than themselves, usually recent university graduates. They perceived these women as not wanting to get married yet and thus more compatible with their lack of funds.
Long-term ripple effects of start-up failure
Can entrepreneurs ultimately recover from their failures?
According to Dr. Pijnaker, who was at a conference where an academic asked this question, the answer is Yes and No.
Most entrepreneurs who experienced periods of (repeated) start-up failure and strained relationships with family members eventually managed to generate income through waged work at a corporation or start-up, and managed to repair their relationships with family.
However, some effects of start-up failure rippled through these entrepreneurs and their kin’s lives for much longer.
For some, there was the inability to ‘catch up’ in the form of not being able to save for middle-class markers of adult family life, such a buying a home or a car.
As they approached their late thirties, these entrepreneurs often had no children, and remained unmarried.
Some entrepreneurs also ended up developing start-up stress-induced chronic illnesses or felt so removed from their family, friends, and start-up dreams, they eventually committed suicide.
Most entrepreneurs worry that openly speaking about the true impact of start-up failure on them and their kin will lead to disapproval from the start-up community.
The Startup “Bubble”
For Ghanaian entrepreneurs, speaking about the full impact of start-up failure can be incredibly hard.
By framing failure as lessons for the entrepreneurs to overcome, Ghana’s start-up community can maintain the idea that success will eventually come their way.
Most entrepreneurs worry that openly speaking about the true impact of start-up failure on them and their kin will lead to disapproval from the start-up community.
They worry it might be perceived as discouraging prospects from signing up for entrepreneur training programmes, or lead to the ‘start-up bubble’ bursting.
The “burst” could be in the form of drying up of funds and capital for entrepreneur training programmes for Ghanaian start-ups from foreign businesses and governments.
They also fear that openly speaking about their failures might bring more shame to themselves and their kin or feed into racial stereotypes about Ghana and Africa as ‘lacking’.
All in all, local entrepreneurs who adhere to these narratives are reluctant to unite and put the structural problems that affect their entrepreneurial work and health on the agenda.
One small step towards alleviating the mental health crises among young African entrepreneurs would be the fostering of more supportive practices and narratives about entrepreneurial responsibility and well-being.
