Africa is increasingly becoming a region of catalysts for entrepreneurial excellence. This has made the region to be known as a continent that is brimming with untapped potential and brilliant minds.

And currently, the region is dedicated to empowering the next generation of African innovators and change-makers. And it can be seen in many innovative works that are emerging in the continent.

Currently, startups have been recognized to be transforming African Economic ecosystems. This has been recognised by the AU’s Stratup Policy framework and Model Law, supported by Google and African Practiced, where they recognised that for the sector to grow, there should be a continent-wide initiative designed to harmonise regulations and the drive growth in Africa’s tech and innovation ecosystem.

And also focus on the challenges they are facing. One such area is how to promote inclusivity and provide a roadmap for the member states to create policies that empower the next generation of innovators.

But despite the many opportunities that startups has been able to offer for young innovators, latest research by tech experts reveals that 90 percent of ventures normally fail within the first five years.

And with 10 percent failing in their year and 70 percent within three years of inception, this means that only 10 startups succeed eventually. Can this scenario change? And how can we ensure that more startups succeed beyond the three-year mark period?

But despite these challenges, experts reports reveal a landmark transformation in the region. For example, across East Africa, there are founders genuinely doing important work.

One such area is in building clean energy solutions in Kenbera, Kenya. The other area is in Kampala-Uganda where the youths are running employment programmes.

And in Morogoro, Tanzania, they have seen an expansion of healthcare access. But despite the success stories, many startups are still struggling to raise money and market access. And this can be linked to the fact that it cannot easily show an investor or donor that the problem they are trying to solve is real and what it is worth.

Despite the various challenges, there is already a growing body of practice among the East African Social enterprises that successfully attract capital and operate with greater clarity. And what many of them share in common is a three-part framework, and the key insight is that these tools are not independent, they are sequential and each one feeds the next.

From experts’ analysis, this means that all startups in Africa should adopt the Theory of Change, for them to survive the ecosystem. And this is foundational logic of the organisation that has been written down and testable. It asks the following questions: what problem are we solving, what are we doing about it and why do we believe our actions will lead to the change we want?

This theory of Change which has been evaluated can help all startups to measure their impact continuously, and once they have the day, this can be translated into the raw material for Social Return on Investment (SROI).

And it translates it into financial language, assigning monetary value to social results. For example, when a founder is able to tell an investor that, “Every $1 you put in generates $4 of social value,”  impact stop being a moral argument and becomes a business case.

Therefore, SROI give impact investors the return on Investment framing and innovators are also trained to evaluate. For most Kenyan founders, SROI is not a tool they have rejected; it is one they have simply never encounter.

By embedding SROI literacy at the formation stage, rather than expecting founders to discover it years into operations, could meaningfully increase the number of Kenyan startups and social enterprises entering the investment conversation ready. Finally, the Theory of Change feeds into Monitoring abd Evaluation (M&E), which in turn feeds into SROI.

The use of the three tools is not merely a reporting exercise. It is how an organisation systematically builds credibility, improves internally and communicates its value to the world. And the enterprises that will define the next decade of East Africa’s social economy are not necessarily those with the most ambitious missions.

They are the ones who can consistently and clearly show that their mission is becoming a reality.

Article written by Victoria Gichuki and Dr. William Murithi, PhD, a Senior Faculty Member at Strathmore University and was first published here.