What It Takes to Build High-Impact Ventures
A Q&A with Lyndsay Holley Handler, Founder of Factor[e] Venture Studio. She shares learnings from her entrepreneurial journey and why she is investing in the next generation of talented leaders in Africa.
Hailing from Lake Placid, New York, Lyndsay Holley Handler has been passionate about entrepreneurship from a young age. That passion took her to East Africa, where she has brought her mission of building life-changing products and services for the mass market to fruition in remarkable ways. She spent a decade growing Fenix, an innovative solar business that she scaled to reach over 5 million people in six countries across Africa before it was acquired by ENGIE, one of the largest independent power and energy companies in the world.
Today, Lyndsay’s new venture is Factor[e] Venture Studio. Factor[e] aims to co-build new businesses from scratch, investing up to $1M to rapidly test business ideas in energy, agriculture, water, and mobility, with the goal of spinning out five impactful businesses a year. Factor[e] is actively searching for African and female founder candidates with whom it can co-build and scale ventures.
As an employer partner of The ROOM’s talent community, Lyndsay shared some of the learnings from her entrepreneurial journey and why she is investing in the next generation of talented leaders in Africa. Having hired 8 people (and counting) from The ROOM, she highlights the benefits of accessing high-calibre talent from The ROOM to grow her venture.
Tell us a bit about your background. What inspires you to do the work that you’re doing today?
The initial inspiration to do the work that I do today, which is supporting entrepreneurs and building great entrepreneurial teams to solve problems in Africa, is my great grandfather. He was an inventor, tinkerer, and entrepreneur, who built the Holley Motor Company. He never graduated from high school and he didn’t have any fancy degrees or a lot of capital, but he was passionate about bringing life-changing products and services to the mass market. And so he spent years designing motorcycles and cars that were affordable to all.
Growing up, I always heard the story about how my grandfather spent his life thinking about how to make great things for the masses, and I was really inspired. When I graduated from college, I thought about how to use my passion for entrepreneurship to have an impact on people who didn’t have access to some of the basic services and the great products that have made our lives so great.
As an American entrepreneur based in Africa, what has your experience been and how does it connect to your long-term mission?
Since 2003, I’ve spent 19 years working and living in Africa—primarily in rural Africa, at the last mile. I spent six years supporting entrepreneurs with seed capital, training, and savings programmes. These entrepreneurs were building micro, small and medium businesses, with capital of anywhere from $200 to $50 000. We deployed this capital and provided these programmes to entrepreneurs in the most rural parts of East Africa. I worked in rural Tanzania, Turkana in northern Kenya, Kakamega in western Kenya, and Gulu in Uganda.
I had the opportunity, in those first six years, to really learn about what it takes to build a business in rural East Africa; how hard it can be, but also how much opportunity there is.
I had the opportunity, in those first six years, to really learn about what it takes to build a business in these markets; how hard it can be, but also how much opportunity there is. We invested in over 10 000 micro and small entrepreneurs during this time, and got to learn about different business models, and different industries—from agriculture to retail and services. Most importantly, I learned about how much economic and entrepreneurial activity there is in Africa with the mass market, and how much opportunity there is to bring superior solutions to some of the problems that we face out here.
Through this experience of living and working in these communities, I got to learn, up close and personal, and in a deep way, what those customer needs were. That has really inspired me in terms of identifying problems that can be solved, how to find the right solutions, and how to build great companies that last and create value. I think it all starts with really knowing the customer and the market that you’re working in.
Tell us about Fenix, your first experience with co-building a venture, and how this has informed the way you see venture building?
In 2009, I was working in rural Kenya, and I was living off-grid on a small farm outside of Kakamega. I was investing in several entrepreneurs, supporting them. Within a couple of weeks, one of my neighbours lost their house in a kerosene fire and lost their 1-year-old daughter in this fire.
At first, I thought, “Wow! I can’t believe we’re using kerosene 100 years after we stopped using it in other parts of the world. There are cheaper, safer, cleaner solutions that we could bring.” And then I started to realise that a lot of the businesses we were investing in were not really reaching their full potential for productivity, profit, and value creation because they lacked access to clean energy as well. I saw that despite technological innovation and the lowering costs of energy products around the world, the benefits weren’t reaching rural Kenya. This struck me as a great opportunity to solve a problem, because people and businesses in the villages were spending a lot of money on energy.
We spent the next 10 years building a company called Fenix, which was meant to address this problem. During this time I went through the typical entrepreneurial journey of taking several years to find the product-market fit and taking a few more years to find what we call product-pricing-market fit, where we could build a product that people could afford. Then we spent a couple of years figuring out how to scale it from one country in Africa to many countries. We started with a couple of people selling our solar products in the early years, and built a team of over 1500 employees in six countries across Africa.
How and why did you decide to relinquish control over Fenix?
As an entrepreneur, what I learned during this process is that there is a lot of value in having taken a company all the way from idea to exit. It helps the ecosystem you’re working in attract more commercial capital.
We took our solutions to each of the six markets; we reached over 5 million people, had 10 000 sales agents, and generated significant revenue for ourselves and our partners. As a result, we were approached by a number of different companies to invest in our growth or acquire our company. We weren’t looking to sell — it was the last thing on our minds — but we decided to take Fenix through an acquisition with a French company called ENGIE, which is one of the largest independent power and energy companies in the world. They were very excited to invest over $200 million to scale Fenix and help it reach more customers. As an entrepreneur, what I learned during this process is that there is a lot of value in having taken a company all the way from idea to exit. It helps the ecosystem you’re working in attract more commercial capital.
The leadership team I was working with took Fenix through this acquisition into ENGIE; we integrated it into ENGIE and today ENGIE Energy Access is continuing to serve customers in nine countries across Africa. The employees that went to ENGIE still have great jobs with great benefits, even through the pandemic. We saw that the company helped validate some of the industry players and helped get more entrepreneurs excited about starting companies. Some of my old employees who left Fenix also started companies with the money and learnings they earned from the exit.
How did the idea for Factor[e] Venture Studio come about? How does the studio identify and support entrepreneurs?
Before Factor[e] Venture Studio, I spent some time thinking about what I wanted to do next. In that period, I mentored entrepreneurs and did some angel investing in companies. I got to work with about a dozen different early-stage companies, mostly in the energy and agricultural sectors, that were looking to bring new products but also new business models to some of the core problems on the ground in rural Africa.
As I was working with this portfolio of entrepreneurs, one of the things that I consistently found was that CEOs were incredibly lonely and felt unsupported. CEOs in the early stages didn’t always have the capital to hire a strong team to support them through the really hard times in the early days that would enable growth. I also found that there wasn’t a lot of meaningful capital for diverse entrepreneurs and CEOs. I found, especially for women and African co-founders, it was much harder for them to raise meaningful amounts of equity and debt in the market. We’re seeing the numbers improve slightly. I think 10 years ago, about 3% of equity went to female entrepreneurs, and now it’s about 7% of venture capital that goes to female-led companies in Africa. Still, 7% is way too low.
Our vision at the studio is to bring together co-founders who are excited to solve problems in energy and agriculture. They will have the opportunity to gain a deep understanding of the problems based on our own internal research team’s work. With our teams, they will then co-create venture concepts to bring their proposed solutions to the market. They will have support throughout the venture-building journey, including up to $1 million in capital to make sure that they have meaningful capital that will allow them to compete with other foreign-funded companies.
At some point around the Series A and the seed run, we hope to spin them out and help them go out into the market and continue to provide, over the life of the company, lighter touch products and services that they want. We hope to get feedback from co-founders along the way about what shared services they want in the early stage and what support they need when they spin out. Ultimately, we want to provide long-lasting support to co-founders building ventures in these spaces.
How can potential co-founders plug into the studio that you’re building? What do they need to know in terms of what you’re looking for?
Great leaders, who I often call entrepreneurial leaders, are some of the best co-founders out there, but they’re often too humble to think of themselves in this way.
First and foremost, any potential co-founder is somebody who is a serial entrepreneur that wants to start another company with more support and more capital. Reach out and just tell us about yourself, the problems you’re trying to solve, your own personal mission, and what kind of support you want, and we can see if there’s a good fit.
I also want to encourage people out there who might not think of themselves as a co-founder today, to consider a co-founder role. One of the things that I’ve learned on my own journey is that a lot of great business leaders don’t see themselves as entrepreneurs and co-founders. In my experience growing Fenix, we had over six different CEOs open markets across Africa. Most of them would not have called themselves an entrepreneur or CEO beforehand, but they were incredibly focused on the problem, incredibly customer-centric, and very good at building teams – hiring, developing, managing and leading people toward a shared goal. I think great leaders, who I often call entrepreneurial leaders, are some of the best co-founders out there, but they’re often too humble to think of themselves in this way.
As a member and employer partner of The ROOM, can you share how this partnership has impacted the growth of your venture?
Factor[e] has hired 8 people from The ROOM Talent community who work with us across multiple levels as Research Fellows, Associates and Consultants/Leads. The people we’ve hired are very mission-driven, diverse, and community-conscious, which is important to our mission and culture. Overall, we’ve found each of them to be valuable additions to the Factor[e] team. The Research Fellows, for instance, have been instrumental in supporting the Ideation and Research team that conducts customer market research, a significant part of product development in an organisation that values building products for the end user.
Professionals from The ROOM stand out from others as creative and futuristic critical thinkers. They are driven self-starters who are passionate about their own growth and the growth of the organisations that they join, and we appreciate that.
We were intentional about hiring through The ROOM because it brings together like-minded individuals whose values are aligned with those of our organisations — individuals keen on building towards impact and are determined to do so through strong partnerships with other professionals. Besides that, we could tell that professionals from The ROOM stand out from others as creative and futuristic critical thinkers. They are driven self-starters who are passionate about their own growth and the growth of the organisations that they join, and we appreciate that.
I would recommend The ROOM to individuals who value excellence and are thoughtful in all that they do. We hope to connect with more members and talent from The ROOM who are interested in the venture studio model.
The ROOM is proud to be connecting companies across the globe with the in-demand talent of the future. For more information about how to access world-class talent to grow your business, visit www.theroom.com.