NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

I had a very interesting talk last week with Marsha Wulff, the founder and president of Wulff Capital. She has a very interesting idea of opening African markets to business by a Product Commercialization Platform (PCP) model that would enable indigenous development in Africa.

Wulff has always had an interest in Africa. When she finally visited, she fell in love with the continent and its people. She started questioning why African innovations and products did not make it to US markets. She worked with the Centre for Innovation & Entrepreneurship (CIE at the University of Cape Town), and it was through the CIE that she met many African entrepreneurs and saw the challenges they face. After those meetings, she wondered what it would take to unlock the market.Since then, she has developed a model for sustainable enterprise development called “Collaborative Commercialization,” and a model for a system to back this development, called “Product Commercialization Platforms.” The PCP model provides SMEs access to a cross-functional team of experts in product commercialization. She has spoken about this at the World Summit on Sustainable Development in Johannesburg, South Africa, Wharton’s Global Business Summit in Philadelphia, McKinsey Alumni for Development in New York, The Investors? Circle Conference in San Francisco, the World Bank in DC, and several top business schools across the US. Wulff sees that SMEs are usually turned down by the big development funders such as IFC, OPIC, World Bank, but that they are also too large for microfinance.

Editor’s note: This concept–how to meet the needs of the “Missing Middle”? has been identified by NextBillion.net as a significant unmet need.

Once an SME expands its market and is receiving more sales revenues, then it will be robust enough for conventional venture capital firms and lending institutions to consider financing its growth–this sort of product commercialization assistance is exactly the point of PCPs. The selection criteria for VCs in Africa have historically been geographic, but with PCP team support, sector-based development is more viable.

The PCP model proposes a not-for-profit entity be established with grant funding, but it will soon become self-sustaining through shared revenue agreements. This profit-sharing will be negotiated between the SMEs and the PCP teams, in exchange for their technical assistance with intellectual property, market research, manufacturing, and sales agreements.

I found it very enlightening to hear Ms. Wulff talk about this project. Africa has talented, intelligent entrepreneurs who lack financing opportunities. When these indigenous entrepreneurs commercialize their products, they become eligible for investment funding? this is exactly what the PCP enables them to do. This project offers a dignifying alternative of getting people out of poverty, creating jobs, and empowering African markets.