Category Archives: Business

Unequal Distribution and Perception of Emerging Markets

35 percent of the world is onlineThere’s quite a good read up on the Tech Coctail site titled, “What (US) VC’s Are Missing in a Rising World of Smartphones“. It’s a little about smartphones, though the underlying discussion points are really about how blind the investors in the West are to the Middle East, Africa, and Asia due to their preconditioning on Silicon Valley being the only place that big tech things happen. Meanwhile, massive deals are ongoing in the Middle East and Asia that are under the radar.

But Western VC’s are slow, and US VCs in particular are slow to catch on to this trend. In part, this is because US investors are accustomed to seeing the best US deals, and they are used to dealing with our ecosystem, our rule of law, the network effect of talent that is Silicon Valley, and other places here that are attracting dollars accordingly.

After spending 3 months raising investment for the BRCK company in the US, EU and Africa I can confirm that there is a great deal of investor unease in putting money into something in Africa from the US. Silicon Valley types tend to pay lip service to this idea, but don’t actually invest their money that easily.

I just wrote a post on the BRCK blog about what Juliana brought up at TED last year about “unequal distribution”, this time shown on a world map of the internet of things. This idea of unequal distribution of information and how it played into the industrial revolution, the scientific revolution and now the digital revolution that we’re sitting in today.

Thingful.net - mapping the internet of things

Thingful.net – mapping the internet of things

Unequal distribution is not static, it’s a constant dynamic where no one region of the world will lead indefinitely. ITU stats already point out that 65% of the people who get onto the internet today come from emerging markets. Meanwhile, only 24% of the people in emerging markets are online. That means that whether the West realizes it or not, the internet focus has already shifted, the ripples of this are only now being felt.

If you think that Google’s, Yahoo’s, Cisco’s, Intel’s (and many other’s) partnership in the Alliance for Affordable Internet and Facebook’s Internet.org strategies around global internet connectivity are just CSR activities, then you’re sorely mistaken. These companies (literally) see the numbers and the know that they need to stake a claim in the regions where the future of the internet already are.

Where Facebook's users are coming from 2012 vs 2014

Where Facebook’s users are coming from 2012 vs 2014

An Inspiring Article with Great Advice for Entrepreneurs

“When you take risks, odds are you’re going to fail. Successful people don’t like to fail. So the challenge with innovating as you scale is that you have to get people in the mindset that failure is part of the process — it’s part of this iterative process of grinding.”

This is from an article about David Friedberg, who just sold The Climate Corporation (aka Weatherbill) for $1 Billion.

Read it: http://firstround.com/article/Theres-a-00006-Chance-of-Building-a-Billion-Dollar-Company-How-This-Man-Did-It#ixzz2hPGdWRCn

Launching Gearbox, A Kenyan Makerspace

Gearbox: Kenya's Makerspace for tinkerers and makers of things

Gearbox: Kenya’s Makerspace for tinkerers and makers of things

We’ve been talking (and talking, and talking) about a rapid prototyping space here in Nairobi for ages. Without the resources to do it, the community got things started on their own with the iHub Robotics Group, who does all kinds of cool meetings; from training newbies like me and my daughters on Arduino and Raspberry Pi, to events where they showcase locally made solar tracking systems and help to run kids hacker camps.

This week we’re announcing Gearbox – our makerspace in Nairobi.

What is a Makerspace?

A makerspace (or hackerspace) is where a community of people who like to make physical products, who enjoy tinkering, and who design everything from electronics gadgets to plastic toys meet and work. To us, it’s a place where the worlds of high-tech software geeks meet jua kali artisans. This is why our space covers to flavors; what we call “Gearbox: Light” (electronics and plastics) and “Gearbox: Heavy” (wood and metal). Keep in mind, this isn’t a manufacturing facility for many items, instead it’s a place where you rapidly prototype out your idea to see if it will work – once you figure it out, then you have to find another facility for real production.

This is a place that is very community oriented, where there are advanced users and experienced fabricators around who are part of the community as well. It’s not enough just to be a member, but you also must give back by helping the newbies and running a few trainings to get people up to speed on the equipment.

Gearbox: Heavy
This is where we have heavy duty equipment, the metal working and wood working equipment and tools that allow you to build and prototype large things. Our friends at Re:Char built a “shop in a box” – basically a container with a bunch of amazing equipment. They’ve donated that to the iHub, and we’re finding a home for it now, so that everyone in our community can start building big things.

re:char factory is 20' container

Examples of the equipment:

  • CNC table w/ backup supplies
  • Diesel Generator
  • Welding equipment
  • Band saw, full + handheld
  • Compressor, full + portable
  • Power supply scrubber
  • Oxyacetylene torches
  • Saws, table + chop
  • Soldering iron
  • Drill press, hand drill, corded + cordless
  • Grinders
  • Forge

Gearbox: Light
When we were building out the BRCK, we found that we needed a polished space where we had access to some of the tools and equipment needed for higher-level electronics, while at the same time a place where we could mill out, or 3d print, early versions of the case. We soon found out that there were others creating robots, drones, TV devices and point of sale systems that also needed a place to do rapid testing of their ideas, but who didn’t have the tools themselves.

Solar Kits at Maker Faire Africa in Kenya

Our plan is to have this part of the electronics and plastics part of Gearbox on the 2nd floor of the iHub building. Where you’ll be able to come in and use a 3D printer, laser cutter, smaller CNC machines and soldering equipment. Again, the idea that there are experts around who you can talk to about the right materials, or a more efficient process for building your gadget, is here.

What we need

  • Makers – you want to build something, here’s your chance. Jump on the website and register for a membership, come in and build stuff.
  • Experts – if you’re beyond novice, have built products, please get in touch. We need you to help train and build up the next generation of makers.
  • Interns – a number of you have already been in touch, but we’re looking for 2-4 paid interns who will help manage the space and build the community.

On capital
It costs some money to get started with Gearbox, and a lot of groups are stepping up to help, and we could use some more. The partners for Gearbox are Sanergy, Ushahidi, BRCK, Knowable and Mobius Motors, and we’re looking for more. Academic partners are MIT thus far, and we’d like to get a few more signed up here too. If your company needs access to this kind of equipment from time-to-time, get in touch.

Right now we could use about $50,000 for some equipment purchases, as it’s expensive to buy and ship some items to Kenya. If you can help on that, please get in touch.

Long-term we have other plans for keeping Gearbox sustainable in 3 ways:

  1. Membership: There will be monthly membership fees, the rates are still being determined, but it will be affordable.
  2. Gearshop: There will be a store, where you can buy the small components and resources you need, as well as a place where we sell on consignment, things made by the community.
  3. Partners: Corporate partners who want to be a part of this community can do take part showcasing their products and doing events.

I’ve said for a long time that I think we in Africa have an advantage in making things. It’s a culture that’s never been lost, and we’re used to improvising, adapting and overcoming challenges that come our way. This is our first foray into that meeting of the worlds between high-tech and low-tech making, and I’ve not been this excited about something for a long time.

Join us!

Savannah Fund Accelerator: Call for 2nd Round

The Savannah Fund has been in operation about 8 months now, and has done 5 investments. One at $200k+, one at $75k and three at the accelerator level of $25k each.

We’re accepting applications through the end of this week, and we’re looking for 5 quality startups to begin the accelerator program in August. Fill out this form to apply.

What is the Savannah Accelerator Fund?

Last month we put together a short video to better explain the Savannah Fund, and why it’s important for tech entrepreneurs in the region.

In short, it’s not just the $25k, which is useful but not the reason why you should be applying, it’s all of the other connections, training and access to people that bring the real value.

Mbwana has written a post on some of the lessons learned along the way, well worth reading:

“Some of the sessions included Max Ventilla who sold his startup Aardvark to Google, Carey Eaton of Africa One Media (best known for Cheki), Eran Feinstein of 3G Direct Pay a leading credit card and payment processor in East Africa, and investors including Khosla Impact. We also focused heavily on digital marketing by bringing technical experts such as Agnes Sokol who continues to advise some of the startups. In the next accelerator we will add additional resources including collaborating with iHub Research and UX Design Lab.”

Here’s Ahonya, one of the Savannah Fund accelerator companies describes how startups can benefit from accelerator programmes.

Mobile and Internet Numbers for East Africa (2013 edition)

iHub Research continues to put out great research for clients. They also take time to put together the numbers for everyone else as far as what’s going on in our part of Africa.

Mobile & Internet Stats for East Africa

The most recent stats for East Africa’s mobile and internet usage have been put into an new infographic.

Mobile and Internet use in East Africa, an infographic by iHub Research

Mobile and Internet use in East Africa, an infographic by iHub Research

Here is a dump of the data used for this infographic:

Kenya Mobile Statistics
(Population: 44,037,656 July 2013 estimate)
30,429,351 mobile subscribers
16,236,583 (41%) Internet users
3.6 billion outgoing & incoming SMS
251,567 fixed lines
78% teledensity

Tanzania Mobile Statistics
(Population: 48,261,942 July 2013 estimate)
27,395,650 mobile subscribers
5,308,814(11%) Internet users
4.3 billion outgoing & incoming SMS
176,367 fixed lines
61% teledensity
7,662,504,921 voice traffic

Uganda Mobile Statistics
(Population: 34,758,809 July 2013 estimate)
18,300,000 mobile subscribers
4,800,000 (3.2%) Internet users
520 million outgoing & incoming SMS
464,849 fixed lines
52% teledensity
215,110,452 voice traffic

Rwanda Mobile Statistics
(Population: 12,012,589 July 2013 estimate)
6,039,615 mobile subscribers
903,964 Internet users
26 million outgoing & incoming SMS
42,323 fixed lines
57% teledensity
1,470,290,068 voice traffic

Burundi Mobile Statistics
(Population: 10,888,321 July 2013 estimate)
2,995,000 mobile subscribers
157,800 Internet users
80,039 fixed lines
2% teledensity
157,800 voice traffic

Sources:
http://www.telegeography.com/products/commsupdate/articles/2013/03/19/u-com-burundi-adds-mobile-banking-to-drive-customer-growth/
http://www.independent.co.ug/business/business-news/7748-airtel-warid-merger-shakes-market
http://www.independent.co.ug/news/news-analysis/7332-telecoms-gear-for-turf-wars-in-2013
http://www.independent.co.ug/business/business-news/7748-airtel-warid-merger-shakes-market
http://www.reuters.com/article/2011/07/22/ozabs-econet-burundi-subscribers-idAFJOE76L0EY20110722
http://www.cio.co.ke/news/top-stories/Africell-buys-Tigo-to-expand-in-Sierra-Leone
http://dlca.logcluster.org/BDI/logistics-services/index.html
CIA World Factbook

2011/2012 Stats and Infographic

Here’s the 2011/2012 numbers for all of the countries in East Africa, plus some bonus numbers around mobile money at that time.

2011 and 2012 East Africa mobile and internet statistics infographic by iHub Research

2011 and 2012 East Africa mobile and internet statistics infographic by iHub Research

See the old ones from 2011 in Uganda, Kenya and Tanzania. You can also see the some 2012 numbers on the iHub that they put together as well.

Designing a Kenya Shilling Symbol

I make no bones about my admiration for the team at Ark Africa, who I think are possibly the best design house in East Africa. They tend to take on projects of their own, just to think through the problems and come up with something that’s truly useful. Other examples of this are when the building of the new Thika road was going on and there were no signs, they created the signage for it. They’ve also taken the Kenya coat of arms and re-touched them as a screen-friendly version for smaller devices and very small prints.

ARK | Kenya Shilling Symbol

ARK | Kenya Shilling Symbol

In possibly my favorite Ark project to date, they’ve decided to design a Kenya Shilling symbol. We have this problem where we don’t have a simple symbol (such as $, £, €, ¥, etc) to use, nor do we have a clear way of writing it. We use “Kes” or “Ksh” both interchangeably.

This is one idea that I hope gets traction with the right people. The government, if it had thought to do this, would have paid a company a lot of money to get to this same point. I hope they take the gift given to them here.

Report: Accelerating Entrepreneurship in Africa

A couple months back Omidyar Network released a report (with an exhaustively long title, like all reports tend to have), “Accelerating Entrepreneurship in Africa: Understanding Africa’s Challenges to Creating Opportunity-driven Entrepreneurship.“. If you’re interested in this space at all, in even a minor way, it’s well worth a read.

Get the full 2.5Mb download of the report here: (ON Africa Report).

The gaps they see are familiar to many. We all know that part of the problem is the education system isn’t setup for problem solving, it’s about rote learning.

“Students are not afforded clear paths for cultivating competencies related to practical thinking and creative problem-solving—skills needed to successfully build and manage a business.”

African entrepreneurs aren’t helped by government policies and regulations, in fact they’re better served by doing it informally first, as seen in the responses on this to the question:

African entrepreneurs prefer starting off informally

African entrepreneurs prefer starting off informally

Another great quote about the cultural pressure not to do a startup:

“Parents and guardians pressure their wards into studying more professional courses rather than entrepreneurial or creative ones, sometimes even tagging them as ‘crazy’ when students make the decision to work in start-up companies or develop their own businesses.”

There’s also a gap in where companies find seed funding:
Africa-entrepreneurs-funding

The survey focused on four areas of the entrepreneurial environment:

  • Entrepreneurship assets: Financing, skills and talent, and infrastructure
  • Business support: Government programs and incubation.
  • Policy accelerators: Legislation and administrative burdens.
  • Motivations and mindset: Legitimacy, attitudes, and culture.

There are a lot of recommendations for each of these four areas that the report covers, enough for anyone running a tech hub, incubator, university and especially the government to think through.

The Problem with Hardware in Africa

Recently I wrote about the making of the BRCK here in Nairobi, and I alluded to some of the issues around doing hardware in Africa.

“Making things is hard. It’s harder in Africa. I can’t overnight an order of processors, boards or 3d printing filament here. There aren’t an over abundance of local fabrication facilities or tools, and the milling machine you find might be in disrepair and take you two days to calibrate. We’ve got our work cut out to create the right spaces for prototyping and small-scale fabrication on the continent.”

I just had another experience that underscores the difficulties.

FedEx called me with the news that a package we were waiting for had arrived. The true value of the components was listed on the package at $230. These were new plastic cases for the BRCK, as well as a couple modem and router components. The Kenya Revenue Authority decided that it actually should be valued at $300, and then charged 100% duty. To clear the package, we have to pay $300 (26,000 Ksh).

Kenya Revenue Authority

Before I go any further, I’ll state that I think it’s imperative that you build hardware like the BRCK, or Kahenya‘s new Able Wireless device, where it will be used. You need to build it close to the ground, where the working conditions, and the real pain of the problem is part of the product team’s life. For both Kahenya and the BRCK team, that means here in Kenya.

It’s hard to get the components that you need. Kahenya and I did backflips trying to getting 5 Raspberry Pi’s and cases ordered and delivered to Kenya. Similarly, we have issues with anything we need for the BRCK. The ripple effects on your business for this delay in time can be a big issue, it carries a lot of friction. If you want an Arduino kit or simpler components that you can’t purchase in Kenya, then your two options are; a) someone is coming from that country and can bring them in for you in their luggage, or b) you’re willing to pay a lot of money for FedEx or DHL to ship it in, then pay even more on duty.

This is the very earliest prototype of the BRCK. It's made up of components that aren't all found easily in Kenya.

This is the very earliest prototype of the BRCK. It’s made up of components that aren’t all found easily in Kenya.

So, not only is it hard to get the parts you need, the government has set up its regulation in a way that discourages local prototyping and even local manufacturing. The revenue authorities would rather make quick money off of a component import than more money later off of a manufacturing industry. I’d rather set up an assembly factory here in Kenya than one in another country, but that isn’t possible if component import isn’t changed.

ICT Ministers of Africa should note that in this rapidly changing world of tech, that the regulatory system needs to keep pace. If it doesn’t, it can produce a tech ecosystem that strangles innovation at the expense of short-term tax and duty.

If Kenya wants to pretend it can get to Vision 2030 without some changes in regulation for local companies, there will be some surprises coming.

Arrogance or Laziness

Last year for Pivot East, we flew in one of the top trainers in presentation design in the world from Duarte Design to spend two days with the 25 companies who would go on stage. The first day was a general training for all hands. The second day was one-on-one sessions. Only half decided they needed to do the personal session.

IBM decided to open up its new research arm in Kenya, these are well paying internships for university students to understudy with some of the world’s top researchers. 100+ students applied, 20 were shortlisted for interviews. 11 showed up for their interview.

These types of responses by members of the tech community point towards either arrogance or laziness.

Why?

The GSMA Opens an Africa Office in Nairobi

The GSMA is the global association for the world’s mobile operators. Back in 2010 when the iHub first opened, we had some of their staff who were in Kenya working out of the iHub and using the space for different meetings. They loved the vibe and makeup of the Kenyan tech community and wanted to figure out how they could connect and be a part of this same energetic space, while at the same time fulfilling their obligation to Africa’s mobile operators.

gsma-nairobi-office2

gsma-nairobi-office1

The main office for the GSMA is in London, and their times in Nairobi coincided with their internal strategy discussions on opening up offices in each continent. Today they are opening up their Africa office, which is on the first floor of the iHub building (Bishop Magua Centre), on Ngong Road.

This is great news for all parties, as it brings the large mobiel operators into closer connection with the startups and tech innovators found in the building already, and it allows the tech companies to better connect to the association that bridges the big mobile players. I’m excited about what will come from the interactions that this new space will bring.

My experiences with the GSMA team, both in Kenya and London, have left me with nothing but a great amount of respect for what they’re doing globally. I also love them for their mobile statistics and reports, which is why I’ll leave some exerpts from their press release here:

Why the office in Nairobi?

“The rapid increase of mobile connections has attracted GSMA to the region. Mobile connections in Sub-Saharan Africa increased by 20 per cent to 500 million in 2013 and are expected to increase by an additional 50 per cent by 2018. The GSMA’s permanent presence in Kenya will enable the organisation to work closely with its members to put the conditions in place that will facilitate the expansion of mobile, bringing important connectivity and services to all in the region.”

From their Anne Bouverot, Director General, GSMA:

“The rapid pace of mobile adoption has delivered an explosion of innovation and huge economic benefits in the region, directly contributing US$ 32 billion to the Sub-Saharan African economy, or 4.4 per cent of GDP. With necessary spectrum allocations and transparent regulation, the mobile industry could also fuel the creation of 14.9 million new jobs in the region between 2015 and 2020.”

On the internet and data:

“In Zimbabwe and Nigeria, mobile accounts for over half of all web traffic at 58.1 per cent and 57.9 per cent respectively, compared to a 10 per cent global average. 3G penetration levels are forecast to reach a quarter of the population in Sub-Saharan Africa by 2017 (from six per cent in 2012) as the use of mobile-specific services develops.”

You can read the full press release here.

Community Connectedness as a Competitive Advantage

In the last couple weeks I’ve had the opportunity to be in Nigeria (Maker Faire Africa), followed by South Africa (AfricaCom). Along with Kenya, these countries represent the biggest technology countries on the continent. They are the regional tech hub cities at this point in Africa.

In both places I was struck by how different each country is, and the challenges and opportunities that arise due to the tech community’s connectedness, regulatory stance and local entrepreneurship culture.

The Kenyan tech community in the iHub

Some Theories

South Africa has so much infrastructure, you’re immediately struck by how money isn’t an issue there. The lesson I took away from the DEMO Africa conference is that South Africans are far, far ahead of the rest of the continent in enterprise apps and services. They tend to see themselves as “not African”, and try to identify with Americans or Europeans. This comes out in their tech products, they have a more global focus and tend to fill the gaps that are needed by the many multinational corporates that call South Africa their home in Africa.

Nigeria has so many people, it overwhelms in it’s pure mass. It’s a bit cramped, louder, and more energetic than almost any other country in Africa. Nigerians have a long history in entertainment, with their Nollywood films and music spreading across the continent. It wouldn’t be surprising to find a killer entertainment consumer app coming from Nigeria, that can be exported regionally and internationally.

Kenyan tech companies tend to focus on localized consumer needs, and we have a competitive advantage in anything to do with mobile money. Even in the secondary and tertiary uses, I’m always struck by how much more advanced the Kenyan startups are with local eCommerce products and marketplaces than their other African counterparts.

Kenya is smaller than Nigeria and has less infrastructure than South Africa. Why then are there so many more startups per capita, more innovative products coming from Kenya right now?

A History of Community

Kenya’s technology scene is vibrant and there’s a certain connectedness amongst the community that isn’t found in the other two countries, yet.

Having a Ghana programmer talk

I was in Ghana in 2009 for the first Maker Faire Africa. I went around visiting a lot of tech companies and individuals I had gotten to know via blogging over the years. What struck me at the time was that there wasn’t even a tech mailing list that connected the community. We’d had the Skunkworks mailing list in Kenya since 2006. My assumption had been that every country with any type of critical mass in tech had a forum of some sort for connecting tech people to each other.

20+ members in the Ghana tech community came together at Maker Faire Africa and decided to start Ghana tech mailing list. I’m still subscribed to it, and it’s a great resource for both myself and those using it. With that list, and the founding of MEST in 2008 (their tech entrepreneur training center) that Ghana’s tech scene started to get connected and move forward strongly together a couple years ago.

Points of view

Fast forward to Nigeria a couple weeks ago. As far as I can tell, there are some tech-related forums, though not a mailing list. These have been valuable in connecting people, but it seems that the ccHub, founded last year, is the start of a real connectedness between members of the tech community. I got the feeling that all the energy and entrepreneurialism that makes up the Nigerian culture of business now has a tech heart and that we’ll see an acceleration of growth in the coming years that has been missing until now.

For many years, the tech bloggers of South Africa organized and centralized conversations around tech with events like 27Dinner, BarCamps and more. They have long-standing tech hubs, such as Bandwidth Barn, they have a network of angel investors and greater access to VC funding. There wasn’t a centralized mailing list or forum back in the day (before 2008) that I know of. A few years ago we saw the rise of Silicon Cape, an initiative to bring attention to Cape Town’s startup culture.

At AfricaCom an interesting discussion ensued around South Africa’s tech community and questions on why it wasn’t getting as much attention or traction as Kenya. Two points were brought up that I think are incredibly important.

First, while Silicon Cape is focused on branding (and doing a good job of it), what is really needed is someone to bring the new tech hubs, startups, angel investors, media, academia, corporations, and even the government together. There’s a lot of activity, each in it’s own silo. It’s a hard job being the trusted bridge between these different parts of what can be a very opinionated and political community. I’d suggest that Silicon Cape’s mission should be to do just this.

Second, In Kenya and Nigeria the founders of startups tend to look a lot like a cross section of the country’s population. The tech community in South Africa doesn’t look a lot like the racial makeup of the country. to put it bluntly, I rarely see a black South African tech entrepreneur. Not being from there, I’m not sure why this is, so it’s just an observation. It’s hard to build a product for a community that you’re not from, nor understand, so I can’t help but think that the South African tech scene would benefit greatly by having more people building companies to solve problems from all parts of that country’s stratified makeup.

A Connected Community

Sitting at 38,000 feet writing this piece, I keep thinking how there seems to be a link between the connectedness of a tech community in a country and it’s vibrancy as an industry. Though I realize there are other variables, this explanation helps me explain why Kenya is further ahead in some areas than other countries.

As I look to Kenya more deeply I’m struck by how important the egoless actions of individuals like Riyaz Bachani and Josiah Mugambi (Skunkworks), Dr. Bitange Ndemo (Government), Joe Mucheru (Google), and others have been in setting us on a trajectory that we all benefit from as the whole becomes greater than the sum of it’s parts.

This theory of a connected tech community doesn’t mean that the everyone always agrees or walks in lock-step with each other. There’s a healthiness in internal critique and desire to find solutions beyond the status quo of the moment. However, I do think it does provide a foundational element for cities and countries trying to grow a more meaningful and vibrant tech community.

The connectedness can come in two ways, digital and analog, and will have a different flavor in each country that mirrors it’s own culture. It helps to have a centralized digital space to throw out questions, opinions and find answers on efficiently. Equally, I think we’re seeing that analog, physical meeting spaces that are represented by the growing number of tech hubs around the continent are another way to accelerate the connectedness needed to grow.

Africa’s tech hubs are the new centralized meeting spaces, the watering holes, for connectivity and connectedness. However, it’s not enough to have a space, without local champions who are willing to make it their mission to grow, connect and bridge the tech ecosystem (gov’t, corporates, startups, academia, investors), then they won’t work.

We Need More, Not Less

I was recently approached by a Kenyan journalist who was bemoaning the fact there was so much activity in the local tech scene, but that so many weren’t making a lot of money on their startups yet.

It was an interesting moment for me, as I looked at last year’s iHub Research study showing 48 new companies out in the past 2 years (I’ll need an update for 2012 numbers). I look at the numbers of say 30-40 new tech startups in Kenya each year and I think, that’s not enough. We know only 10-20% will make it. Personally, I’m not happy with 3-6 companies each year getting through, we need more. I’ll be a lot happier when we see 100+ new startups, working out of all the new incubators and getting the investment and users/clients they need to grow.

In short, we need more, not fewer startups in Kenya.

It might be uncomfortable for some of us, as we’ve seen the increasing amount of activity and we’re not used to it. However, a growth in this space is exactly what we need if we are to fulfill our own potential for being Africa’s tech innovation hotbed.

It’s also a bit hard to see so many companies fail. This is normal though, it’s what we should expect. As long as the entrepreneurs are learning from what went wrong, then it can serve as a good lesson that makes them more investible in the future. It’ll help us get used to a much more rapid ideation >> creation >> failure/success model.

Here’s the full infographic from the iHub, updated for 2012 (click for full size):

Quick Hits Around African Tech: July 2012

Africa’s Mobile Stats and Facts 2012

Few organizations do as good of a job as Praekelt in creating well-designed applications that are used by millions of people in the continent. A couple times a year, they take that same level of quality and create new videos and resources to better showcase Africa’s tech statistics. Here’s their newest video.

Game Creators: an Interview of Maliyo Games in Nigeria

Good interview of Maliyo Games founder and the opportunity in Africa’s gaming space.

Why do you think the African audience is looking for African games instead of Farmville or Mafia Wars?

“It’s not so much what they are looking for, more what is being pushed to them. Our games ‘Okada Ride’, ‘Mosquito Smasher’ and ‘Adanma’ have far more local relevance than Mafia Wars. Nigerian music and Nollywood movies have a strong appeal to the local and diasporan consumers. We are riding this trend and thus far we are seeing traction.”

Check out Maliyo’s website to get their games.

Opera’s “State of the Mobile Web” for Africa 2012

Opera puts together a great resource of user-based statistics [PDF link]. It’s a country-by-country breakdown of mobile penetration, user growth, top domains and top handsets used. Here are a few of the interesting tidbits:

  • Across Africa, data growth seems to outpace page-view growth. This fact suggests that Africans are browsing larger pages and most likely, using richer, more advanced websites.
  • Facebook is the top domain in every country except for these six, where Google leads: Egypt, Guinea, Djibouti, Comoros, Central African Republic, and Algeria.

Mobile Reporting Field Guide

UC Berkeley has created a mobile reporting field guide, useful for people doing data collection and research as well as activist types.

Upcoming Tech Events in 2012

PyCon South Africa – Cape Town, Oct 4-5
DEMO Africa – Nairobi, Oct 24-26
Tech4Africa – Joburg, Oct 31-Nov 1
AfricaCom – Cape Town, Nov 13-15
Mobile Web Africa – Joburg, Nov 28-29

(If you know of other tech events coming up before the end of the year that you think belong here, put it in the comments and I’ll add it later.)

Some Self-Serving Links:

Google Plays Dirty in Kenya

There is a damning post out by Stefan Magdalinski on some unsavory business practices being done by Google Kenya against Mocality. Mocality designed a fantastic crowdsourcing tool to create their mobile web-based business listings directory back in 2010. There is undeniable proof that Google’s team here has been systematically calling businesses in the Mocality business directory in an effort to poach them to their own “Getting Your Business Online” program for Kenya.

The long and short: Mocality claims Google Kenya is using its database to sell a competing product.

For some context, the Google team in Kenya has always been above board. They are genuinely good people, so seeing this happen is incredibly surprising. I’ve been trying to get in touch with them since yesterday when I first was made aware of this situation, but have had no response to any of my queries.

The problem here is that the sting put on by Mocality is so complete. They have all the forensics and even voice recordings to show what Google is doing. I want to believe that Google has an answer for this that makes sense.

UPDATE: Google has owned up to this, saying:

“We were mortified to learn that a team of people working on a Google project improperly used Mocality’s data and misrepresented our relationship with Mocality to encourage customers to create new websites. We’ve already unreservedly apologised to Mocality. We’re still investigating exactly how this happened, and as soon as we have all the facts, we’ll be taking the appropriate action with the people involved.”

Africa: Turning the World Upside Down

Whitespace in business is defined as a place, “…where rules are vague, authority is fuzzy, budgets are nonexistent, and strategy is unclear…” It’s the space between the organizational chart, where the real innovation happens. It’s also a great definition for what we see in Africa, and it’s the reason why it’s one of the most exciting places to be a technology entrepreneur today.

I just finished with a talk at PopTech on Saturday where I talked about “The Idea of Africa” and how Western abstractions of the continent are often mired in the past. It’s not just safaris and athletes, poverty and corruption – it’s more nuanced than that.

Today I’m in London for Nokia World 2011 and am speaking on a panel about “The next billion” and how it might/might not turn the world upside down. In my comments tomorrow, I’ll probably be echoing many of the same thoughts that came out over the weekend at PopTech.

Here are a few of the points that we might get into tomorrow:

Horizontal vs Vertical scaling

I talk a lot about this with my friend Ken Banks, where we look to scale our own products (Ushahidi and FrontlineSMS) in a less traditional format. As entrepreneurs you’re driven to scale, but our definition of scale in the West tends to be monolithic. Creating verticals that are incredibly efficient, but which decreases resilience.

In places like Africa, we have this idea of horizontal scaling, where the product or service is grown in smaller units, but spread over multiple populations and communities. Where a smaller size has its own benefits.

In this time of corporate and government cuts, where seemingly oversized companies are propped up in order to not fail, there are some lessons here for the West. We shouldn’t be surprised that the solutions to the West’s problems will increasingly come from places like Africa.

Instead of thinking of Africa as a place that needs to be more like the West, we’re now looking at Africa and realizing the West need to be more like Africa.

Reverse distribution

Will we increasingly see a new set of innovative ideas, products and services coming from places like Africa and spreading to the rest of the world? Why is Africa such a fertile ground for a different type of innovation, a more practical one – or is it?

Disruptive ideas happen at the edge.

Africa is on the edge. While the world talks at great length about the shifting of power from the West (US/Europe) to the East (India/China), Africa is overlooked. That works in our favor (sometimes).

A couple of the ideas and products that have started in Africa and been exported beyond the continent include; Mpesa, Ushahidi and Mxit.


Mpesa – the idea came from Vodafone, but product met it’s success in Kenya. Over $8 billion has been transferred through it’s peer-to-peer payment system. Vodafone has failed to make the brand go global, but the model itself is being dissected and mimicked the world over.


Ushahidi – we started small, from Kenya again, and driven by our Crowdmap platform now have over 20,000 deployments of our software around the world. It’s in 132 countries, and the biggest uses of it are in places like Japan, Russia, Mexico and the US.


Mxit – the famous mobile chat software from South Africa has 3x the number of Facebook users in that country, and has over 25 million users globally.

Like we see at Maker Faire Africa, these innovative solutions are based on needs locally, many of them due to budgetary constraints. Some of them due to cultural idiosyncrasies. Often times, people from the West can’t imagine, nor create, the solutions needed in emerging markets, they don’t have the context and the “mobile first” paradigm isn’t understood.

A good example of this is Okoa Jihazi, a way to get a small loan of credit for your mobile phone minutes when you’re out of cash to buy them, from the operator. They’ve built some safeguards in to protect against abuse, such as you have to have had the SIM for 6 months in order to get the service. It works though, because the company selling it (and many of the mobile operators do across Africa) understands the nuanced life of Africa.

We hold on to technology longer, experiment on it, abuse it even. SMS and USSD are great examples of this, while much of the Western world is jumping on the next big technology bandwagon, there are really crazy things coming out in emerging markets, like USSD internet, payment systems, ticketing and more.

Throughout the world, the basic foundation of any technology success is based on finding a problem, a need, and solving it. This is what we’re doing in Africa. We have different use cases and cultures, which means that there will be many solutions. Some will only be valuable for local needs and won’t scale beyond the country or region. Others will go global. Both solutions are “right”, it’s not a failure to have a product that profitably serves 100,000 people instead of 100 million.

Turning the world upside down has as much to do with accepting this idea of localized success as an acceptable answer as it does with explosive global growth and massive vertical scale.

The Two Big Trends

Trend #1: Adoption by Africans as consumers is increasing.
Trend #2: Technology costs are decreasing

Let’s get back to my talk for tomorrow at Nokia… 87% of sub-$100 phones sold by Nokia are sold in emerging markets. 34% of Africa’s population (313 million) are now considered middle class. The fastest growing economy in the world is Ghana, 5 of the top 10 are African countries (including Liberia, Ethiopia, Angola and Mozambique). Across the continent, the average GDP growth is expected to be at 5+% going forward.

At the same time, we’re seeing bandwidth increase, and bandwidth costs decrease. Mobile operators are the continents major ISPs, and they’re getting creative on their data plans. Handset costs are going down. Smart(er) phones are available for less than ever before. We even have one of the lease expensive Android phones in the world at $80 in Kenya, the IDEOS by Huawei.

Is it all bright and rosy? Not at all. You’re on the edge, you have to create new markets, not just new businesses. But in that challenge lies opportunity, for it’s from these hard, rough and disruptive spaces that great wealth is grown. If you’re an African entrepreneur, why would you want to be anywhere else?