Business

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.”

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?

When I was a kid of around 10 years old, I used to collect small motors and electrical components with my school friends in Nairobi. We’d find some batteries and create small rotating and whirling contraptions, dreaming of how we’d one day make a walking robot that we could sit in and control – no doubt inspired by the Star Wars AT-STs.

I’ve always enjoyed tinkering. It’s what drove my interest in telling the stories of Africa’s innovative hardware hackers in the jua kali sector, writing on AfriGadget. It’s why helping to organize and be a part of Maker Faire Africa has been so much fun for me (which I’m missing, as it’s taking place this weekend in Cairo, due to family reasons). It’s why I buy kids solar and hydraulic kits to build things with my daughters.

I’ve been buried in the software (web) side of technology for the past few years. In this space it seems like we’ve been happy with de-linking software and hardware, after all, pure internet software is easier to spread, export and get access to. I can’t shake the tinkering side though, knowing that the two sides are interlinked and that more of the bridging of the two is needed. We’re just waiting for the Moore’s Law treadmill to slow down enough for the two to sync up again.

Firefly Inspirations

Laura Walker Hudson shares a fascination with the Firefly TV series, which suffered a short-lived life spanning only half a season in 2002. It’s a space western, reminiscent of Star Wars, gritty with witty realistic characters. That’s not why I’m bringing this up though. Laura reminded me of what something that made the show more compelling, the fact that it was a merging of Western and Chinese cultures.

“…it is a future where the only two surviving superpowers, the United States and China, fused to form the central federal government, called the Alliance, resulting in the fusion of the two cultures…”

This reminded me of an article I read about the Shanzhai hacking, copying and innovating culture in China.

The contemporary shanzhai are rebellious, individualistic, underground, and self-empowered innovators. They are rebellious in the sense that the shanzhai are celebrated for their copycat products; they are the producers of the notorious knock-offs of the iPhone and so forth. They individualistic in the sense that they have a visceral dislike for the large companies; many of the shanzhai themselves used to be employees of large companies (both US and Asian) who departed because they were frustrated at the inefficiency of their former employers. They are underground in the sense that once a shanzhai “goes legit” and starts doing business through traditional retail channels, they are no longer considered to be in the fraternity of the shanzai. They are self-empowered in the sense that they are universally tiny operations, bootstrapped on minimal capital, and they run with the attitude of “if you can do it, then I can as well”.

This sounds like we’re seeing the beginnings of our sci-fi worlds becoming real. Mix this with what you see in other parts of the world with open hacking garages, like what my friend Dominic Muren (TED and PopTech Fellow) is doing with Humblefactory. We’re seeing hardware hacking spaces being set up, allowing small-time inventors to cook up new ideas on machines that they couldn’t afford by themselves. This is a trend that is growing.

Manufacturing our Future

Large technology companies drive both the diffusion of technology globally, and the costs of components. As the parts needed to make new tech “things” become commoditized, smaller manufacturers can get them at a low enough price point that they can also create their own inventions and sell them profitably. This is where the Shanzhai story becomes so compelling. We’re able to create more customized, and more innovative products, because they’re not created for a generalized mass market.

There was an article in the Wall Street Journal recently about small factories taking root in Africa. Most of them don’t have much, or anything, to do with technology creation. However, the story does point out the emergence of more manufacturing happening on the continent.

It makes me wonder what would happen if we had our own jua kali industry working on higher tech products, like their Shanzhai counterparts in China. What types of innovative technology (hardware and software) would come from Africa that differs for the local context?

I won’t go into a great amount of detail, on what I’ve written before around the idea of “Hardware Hacking Garages: hardware and accessories innovation” in Africa. I think we need it, as it could help kickstart this next phase of localized R&D, prototyping and ultimately small-scale manufacturing that we need on the continent.

If we can’t provide a technology manufacturing base of our own in Africa, I’m worried that we’ll forfeit our future in the space. We might not reach the scale of Asia, but we need to have the competency and the capacity to do some of it locally.

Another way of thinking about this is that the non-traditional businesses in Africa are well positioned to provide a distributed manufacturing base already. Think of it as horizontal scale instead of the vertical scaling you see in massive Asian factories. If there were a way to provide logistical, communications and market efficiencies to that loose and distributed network, then we might find that the foundation is already set.

Further Reads and Links

The Space Hackers are Coming! [small PDF]
The Hackaday blog
Fundibots – Ugandan-based robot building and training
The hardware hacker manifesto
Arduino

This should be a fun one. I was approached a month or so back about the Dragon’s Den coming to Kenya, and it looks like it’s actually going to happen (It’s much like Shark Tank if you’re in the US). If you think you have what it takes to pitch your idea in front of these guys, here’s your chance.

To make it easy, here’s the Dragon’s Den Application Form – Kenya (Word Doc).

“Dragons’ Den is a series of reality television programmes featuring entrepreneurs pitching their business ideas in order to secure investment finance from a panel of venture capitalists.”

Five experienced investors (the ‘Dragons’) are coming to Nairobi in the next few months to hear the pitches of some of Kenya’s brightest business men and women with the intention of investing in the very best. But these Dragons are not easy to please; they will be looking for entrepreneurs who are offering investable money-making opportunities, who can also explain why their proposal has what it takes to be a success and will make a difference to the local community.

The rules are simple: entrepreneurs ask for a reasonable cash investment in return for a negotiated equity in their business. However, they must get at least the amount they ask for or they will walk away with nothing.

The Dragons are prepared to listen to a pitch for any kind of business but they must be convinced that it requires investment and will make money. Ideas, businesses and products that have previously gained financial backing in the UK Den have demonstrated one or more of the following:

• Unique selling point
• Scalability
• Clear route to market
• Planned exit strategy

If you haven’t seen the programme, visit www.bbc.co.uk/dragonsden for more info, or search “Dragons Den Series 9” on YouTube to watch previous entrepreneurs pitching to the Dragons. Email DragonsDenNairobi@bbc.co.uk for an application form.

This isn’t the first time it’s been done in Africa. It ran in Nigeria in 2008. This Dragon’s Den is done by the BBC as a special edition for Comic Relief – a major charity based in the UK.

This week I’ll be speaking to a delegation of around 30 Associate Product Managers (APMs) who are exploring leadership positions within Google. Along with them is Marissa Mayer, VP of Location and Local Services. Like I did when I addressed Nokia’s Africa leadership last year, this is a chance for them to hear from more than just one person with one opinion.

I will bring them your answers to the questions below:

• What is Google doing well in Africa that they should continue?
• What should Google be doing better, differently or new in Africa?

A Few of My Thoughts

Google has done what few other tech companies have done on this continent. Having 54 countries to scale across isn’t easy, so anyone trying it gets a lot of credit.

• They’ve invested in people; both their own and the community in general.
• They realized early that there was a need for tech policy change, and put time, resources and energy into that.
• They have surfaced content, from maps to books to government data that wasn’t available before.
• They have localized search into multiple local languages, made their services more mobile phone friendly and experimented with services for farmers, health workers and traders.
• Their Google Global Cache has sped up the internet by upwards of 300% for some countries.

Here’s are my suggestions:

Double down on Android. Do this in two ways; first, keep driving the costs down, like what was done with the IDEOS handset. Second, help your partners (Huawei and the operators) push the spread of these beyond the few countries they’re in now (and at the same price as in Kenya).

Gmail ties everything together. Google has been the beneficiary of most other companies ignoring Africa. Facebook is the only challenger in the chat, mail and social spaces. Get started on zero-rating Gmail with the mobile operators, figure out how to make Google Voice work here, and extend Gmail SMS Chat beyond the 8 countries that it currently works in.

Figure out payments. It’s still difficult to get paid if you’re running ads or making Android apps, you’re not on an even playing field with your counterparts in other areas of the world. It is clear that Google Wallet is a strong personalized LBS play on consumers in the US. Take that same energy and figure out how to crack Africa, realize just how much money there is in a payment system that spans the continent.

Keep experimenting. Many don’t know of the apps and services you build and test out in various hyper-local areas. Some work, some fail. This curiosity and willingness to try something innovative and new is what makes the open web such a great space, and it is what helps us all overcome the walled gardens of the operators. Don’t stop.

Finally, though you have all the power and brand name needed to make things happen, remember that it’s the local devs and companies who need to own their space and especially their data. While flexing your muscle, especially with government types who own vasts amounts of data, do push for local ownership over taking it for yourself.

[Notes: hat tip on this post goes to Steve Song who started thinking through this years ago. Image credits from Memeburn.]

Pivot 25 was a blast! Over 100 teams from Kenya, Uganda, Tanzania and Rwanda applied to pitch their startup over a 2-day period. We named it “pivot” because we wanted to play off of the word, often used in the startup scene to denote a need for a startup to nimbly move in a different direction (plus it had a good sound). We did the event for 2 reasons:

1. To bring attention to “what’s next” coming from the vibrant mobile startup scene in East Africa.
2. To support the new m:lab, a mobile incubator that launched yesterday, where all profits from the event went to sustain.

This wasn’t your ordinary conference, it was a pitching competition mixed with lively fireside chats with the regions top business and government leaders in the tech space. Larry Madowo, a TV news personality in Nairobi, did one of the most amazing jobs I’ve seen with the fireside chats, keeping them lively and (best of all) disagreeing with each other. The event with 300+ attendees was smoothly MC’d by AlKags, keeping the pace fresh and upbeat.

Each category of finalists consisted of 5 companies, with an independent panel of judges (in other words, the organizers had no say in this). The finalist pitched for 7 minutes, followed by some very pointed and tough questions by the judges. Each judge scored the presenters on their pitch, business viability and model, an average of all these scores was tallied to find that session’s winner.

The Winners

Prizes of $5,000 were awarded to the winners of each of the 5 categories, and the overall winner was picked from these and will go to pitch at the DEMO conference in California:

• Mobile Payments/Commerce: mShop by MTL Systems (Kenya)
• Mobile Gaming, Entertainment and Utilities: Whive by Space Kenya
• Business and Enterprise: Uhasibu by PlusPeople
• Government, Agriculture and Education: SchoolSMS by Tusqee Systems
• Health: MedKenya by Shimba Technologies [Overall Winner]

A massive congratulations to all the winners, and we expect to hear great things from the MedKenya team of Mbugua Njihia and Steve Mutinda when they head to Silicon Valley in September to pitch on an even bigger stage.

Big Thanks!

The real reason this event worked was due to the team behind it. Countless hours spent getting sponsors, working with the finalists and designing the space. I want to thank the guys who really put the work in behind it, making it such a huge hit: Jay Bhalla (producer), Tosh, Joshua, Ryan and Jessica, the Sprint Interactive team, the Ark for the video, plus a good dozen volunteers from the iHub community.

I’d also be remiss if I didn’t thank the guys at Afrinnovator for live blogging the event, and for CapitalFM for live streaming it to the 3000+ people who tuned in from all over the world. Zuku provided us with 100Mbs for this to happen, though we will make sure we have more, and more robust, access points next time.

Finally, thanks to Nokia, Equity Bank, Samsung, Google, Tigo and Elma for sponsoring the event and helping us pay for what was a very costly exercise.

For those who want to know, the full revenue from the event was $145k, with a cost of $110k. Leaving $35,000 to put into the m:lab.

Stay tuned for where Pivot will be next year. Thanks everyone!

While in London at the RGS event I spoke about a different way that I’ve been trying to explain the startup and successful ecosystem needed in places like Africa. Specifically, in the major technology hubs for the continent, these are cities; Nairobi, Jo’burg, Accra, Lagos and Cairo. There seems to be enough funding available for SMEs. How do we get more of them?

It goes something like this.

We have a few good success stories in any one of these cities. There are a handful of great tech companies and organizations that have “made it”. This can be seen as a success in innovation or in business (or in both). Everyone wants to be at the tip of this, and these are the examples we hear of at international conferences and read about in the media.

In the middle we have everyone else, the guys who are still slugging away. They have some clients and revenue streams, but they’re not at the top (yet).

At the bottom, that’s what we deal with in places like the iHub and m:lab. These are those scrappy startups that might or might not have any right being in the place. They’re risky, probably don’t have a solid business model yet, and only a few of them will graduate into the SME space above them.

What to do?

To make the tip of the pyramid bigger, to have more success stories in the tech space, there is only one option: you have to make the base of the pyramid broader.

If your job is to see more innovative new tech companies come out of Africa, the recipe is quite simple:

• Invest seed funds into local tech entrepreneurs.

(that’s my only bullet point, it’s that simple)

I gave a keynote yesterday at the opening of the infoDev Global Forum in Helsinki, which has a specific focus on innovation. The m:lab funding comes from them, and they are exploring new ways to help entrepreneurs in the high-tech space, specifically mobiles, to make their businesses a reality.

Innovation: Knowledge and Resources

I’ve already stated that I think innovation is spread equally across the world. No one region has a monopoly on it. The kind of innovation that you see is dependent upon a number of things, but the foremost in my mind are knowledge and resources.

It’s what you’re educated about and in, it’s your skills, training and ability. When you mix that with the resources available around a creative and inventive person, then innovation happens. Let’s take a look at it.

Low-tech example
In Gikomba, a market place of jua kali workers in Nairobi, you find that their resources are made up of re-usable metal and they have deep training in non-traditional metal working methods and tools.

It comes as no surprise then, that the products they create look like this. Parafin lamps and other low-tech consumer products that sell cheaply and yet took a good deal of local ingenious thinking to craft (originally).

High-tech example
There is a group of women coders in the Nairobi area that call themselves the Akirachix. They often work out of the iHub, and their knowledge is about PHP, MySQL, USSD and SMS application building. The resources around them are mobile phones, and computers to work with.

It comes as no surprise that a couple of these gals (Jamila and Susan) develop mobile and web applications, targeted towards a demographic that they understand: farmers. M-Farm is a USSD and SMS app for farmer information, and organized buying by coops and suppliers.

What you see

What’s interesting here is that it’s often difficult for someone coming from one society and cultural background to appreciate the level of innovation coming from a completely different one. I used a couple examples of this in my discussion yesterday. How the low-tech innovation that we see at Maker Faire Africa is still innovation, and they have business value and provide efficiencies to the community that created them.

What’s difficult for people to do is see. It’s hard to look through another set of lenses and appreciate the inventiveness that got something so far. It’s a challenge to understand the needs of a culture that you don’t share and then create a product for it. This is why so many of the platforms and products designed in the West fail in Africa. It’s not that they’re not well designed, they’re just not designed by people who truly understand the needs of the customers in Africa.

It’s why rugged and efficient seed planting devices will be created in rural Ghana. It’s why Ushahidi and Mpesa had to come from a place like Kenya. It’s why South Africa’s Mxit has 35m users.

Finally, it’s why we should continue to invest in local inventors and entrepreneurs – instead of importing foreign solutions, let’s grow our own.

Vodafone recently concluded a policy paper on “Broadband in Emerging Markets”, also titled “Making Broadband Accessible for All“.

The position and reason for this paper is best summarized below.

“The success story of mobiles in the developing world is well known. Yet in the case of extending data services in emerging markets, there is a real danger of some serious policy mistakes. As in developed markets, broadband strategies in developing countries have tended to focus on investment in fibre. This is too simplistic. This focus on fibre may miss an opportunity for a transformational change built on the capabilities and in particular accessibility of mobile broadband. The early evidence suggests that mobile internet is spreading as quickly, in some developing countries, as mobile telephony did originally.”

Traditional definitions of broadband have a narrow focus on bandwidth and speed. This paper uses a wider definition, as broadband policy needs to consider the entire ‘eco-system’ of internet and data services from both a demand and supply-side perspective.

Content Sections

• Mobile Internet usage and demand in Kenya: The experience of early adopters (David Souter)
• The potential of mobile web content in East Africa (Erik Hersman)
• Spectrum policy and competition in mobile services (Thomas W. Hazlett)
• Rethinking mobile regulation for the data age (Martin Cave & Windfred Mfuh)
• Building next generation bradband networks in emerging markets (Luk van Hooft)

The Diffusion of the Mobile Web Across East Africa

Mobile web content is growing at an astounding rate. It rose 2.6-fold in 2010, nearly tripling for the third year in a row. Official Kenyan industry statistics show that mobile internet subscribers will grow by approximately 843% for the 12 months to September 2011.

What I like about papers like this is that I get to use words that normal people don’t use. I make a case for international content and platforms as “drivers of diffusion” of data across East Africa. That simply means that these platforms and content are helping to spread the use of data more deeply into the region, and allowing local players to get in at lower costs.

International web content is by far the most widely available and used in East Africa. This is in large part due to the ease of finding and disseminating this content, as well as its normalized licensing schemes and reliability. International platforms also carry a majority of the content that is currently being viewed on mobile phones. The following are the types of content that are most important to consumers in East Africa, according to our interviewees:

1. International entertainment news (sports, gossip, lifestyle)
2. Local news
3. Breaking news
4. Facebook (and to a lesser extent other social network tools such as Mig33, Mxit and Twitter)
5. Jobs
6. Dating (chat and relationships)
7. Religion
8. Local video/media

The reasons are that international platforms, such as Facebook, Yahoo!, BBC, CNN, Google and Wikipedia, have already been tailored to work on the most widely used data- enabled handsets. This contrasts with local content providers, many of whom have yet to tailor their websites for mobile access. In addition, local content less available at present, not as easy to license, and often cannot be reliably guaranteed as a long-term source.

Local Content

I interviewed a number of executives from Kenya, Uganda and Tanzania. There was a clear belief that while international content, increasingly localized for the market, is currently king, local content has the greatest growth potential because it is more highly valued by consumers.

While local content developers lack scale they have advantages that the global platforms do not. For one, they understand the local tastes and culture so customers value their content more. The consumer benefits of truly local content and platforms could be large.

The Government Role

There is still a lack of concrete government policies for government services or content to be made available or accessible via the mobile in any country in East Africa, even though this is the primary channel by which citizens could access services online. There is a solid case to be made for mGovernment, instead of just eGovernment.

To underline this, the most popular Kenyan Government website (Kenyan Revenue Authority) is shown as seen on a PC screen, a smartphone (HTC Desire) and a typical 2G internet enabled handset (Vodafone 350). The website is most clear and easily accessible via a PC interface (and consumer interaction primarily is through downloadable pdf files). There are no browsing problems when accessing through a PC-based browser. The KRA website is also accessible via the native Android browser in the HTC Desire Smartphone. The HTC Desire also allows downloading and viewing of pdf files. However, the native browser on the Vodafone 350 (a basic 2G EDGE handset) does not present the KRA website in a usable format. As can be seen, the website is badly rendered and quite impossible to navigate.

Possible government services to be made available via mobile web:

• Paying bills
• Service delivery questions and concerns
• Taxes – access, information and filing
• Health – access or appointments, information
• Public job search

An argument can be made that m-government services would have a greater impact if the focus were on supplying tools for small businesses to interact with government, rather than only making services available for citizens in general. By removing the barriers to entry for small businesses, the government would be providing a service that increased usage, decreased business costs and had a potential tax revenue increasing effect due to filing and paying on time.

Summary

East Africans are accessing the web primarily through their mobile phones. The new medium is enticing them online with the new services and content provided through a new medium. Broadband penetration rates are low enough in this region that we are not yet seeing the displacement of newspapers, radio and TV seen in other, more connected regions of the world. However, as with all network technologies, there is the potential for reaching a tipping point. This will depend on the provision of enough mobile web content that is valued by East African consumers.

The content driving East African users online is currently largely provided by international news and content sources, such as Yahoo! and the BBC, and also by global internet platforms, such as Facebook and Google’s Gmail. Even taking into account the decreasing data costs, falling data-enabled handset costs, and the increased availability of broadband, there would not be enough traction locally to get to the critical point if the content were not available.

These international content sources and global web platforms generate demand, and therefore allow the mobile network operators to decrease costs as more users come online. International content is thus providing a pathway for local content creators. While local content is in high demand and there is a rapidly increasing user base, the mobile web content space in East Africa is in its early stages, and there are no
clear leading content providers. At present the key trend is the provision of increasingly localized content by the leading global companies.

This paper has identified two important barriers to the further diffusion of mobile internet usage across East Africa: lack of m-government policies; and, more important, an absence of charging mechanisms which share the cost of mobile internet access between end-users and content providers. If governments embraced mobile-based provision of services and provided access free of usage charges to end-users (sharing the efficiency gains through payments to network operators), the potential impact on internet access could be dramatic. The challenge for governments and local developers of mobile web content is to utilize their local cultural understanding and ability to maneuver quickly to make their content more relevant and affordable to end-users.

(Note: This is summary of my section. Download the full 2Mb PDF report to read the section in its entirety, and to read the other 4 sections of the paper.)

A few months back Rudy de Waele got in touch with Ken Banks and myself about helping to curate a collaborative outlook on the mobile industry in Africa, called “Mobile Trends Africa 2020“.

Our task was to gather the mobile minds from across the continent and the world and ask them to vision out what they saw happening in the mobile space in Africa in the year 2020. Not an easy thing to do, tech in general, and mobile specifically, are such fast moving items that it’s hard to say where things will be even 3 years from now, much less 10.

The final 28 contributors include some of the people I most respect in this field. To name just a few:

• Stephane Boyera (World Wide Web Foundation)
• Will Mworia (Afrinnovator)
• Gerald Begumisa (Yo! Uganda)
• Steve Vosloo (Shuttleworth Foundation and mLab South Africa)
• Nigel Waller (Movirtu)
• Nicholas Heller (Google)
• Moses Kemibaro (Blogger and Dealfish East Africa)
• Gustav Praekelt (Praekelt)
• Bright Simons (mPedigree, Ghana)
• Nathan Eagle (TxtEagle)
• Wolfgang Fengler (World Bank)
• Anthony K. Ng’eno (WinAfrique)

In January I wrote about the way the Google Global Cache is affecting Uganda – how local web caching is completely changing the internet user experience for that country. We’ve known for a couple weeks that this was underway in Kenya too. Well, here are some numbers on that.

Here’s the aggregate month:

We’re seeing the overall traffic increase 300% from around 100Mbs to around 400Mbs. Those are some pretty impressive numbers, no matter how you look at them. Why is KIXP/TESPOK not making some noise about this significant achievement?

How does it look across the ISPs that are using it?

KDN hosts the cache:

Wananchi:

Internet Solutions:

Africa Online:

Umbono: Google’s South African Incubator

In Cape Town, Google has initiated a tech incubator that gives 6 months of free space, $25-50k startup funding and access to an extensive mentoring network. The secret sauce here is in the angel & mentor network, who will be providing 50% of all investment money, while Google provides the rest. Johanna Kollar leads this initiative, and tells me they’re looking for at least 5 companies to get behind in this first go at it, though if there are enough exceptional applicants, they might do more. If you’re a registered business in South Africa, then you can participate. (more on the Google Africa blog)

The BoBs

Deutsche Welle runs the “Best of Blogs” awards each year, showcasing excellent blogs from all over the world. If you haven’t yet, take a few minutes and vote for your favorites. There are quite a few from North Africa.

21st Century Challenges: Digital Technology in Africa

I’ll be a guest to the Royal Geographic Society in London on May 18th for a discussion on technology in Africa with Nicholas Negroponte, Herman Chinery-Hesse and moderated by Bog Geldof. Our main topic:

“Can digital technology such as laptops and mobile phones offer the countries of Africa realistic economic and educational opportunities?”

If you’re in London, you can get a ticket to the event and join us.

Ushahidi moves

There are over 10,000 deployments of the Ushahidi platform around the world, and as you might imagine, a lot has been happening at Ushahidi, including:

• The launch of Crowdmap Checkins at SXSW, a way to “roll your own Foursquare-type service”. It’s in it’s beta stage, but you can play with it now, as others have already using the Ushahidi Android or iOS apps.
• Some amazing people created a Japan deployment after the earthquake and tsunami there, we helped by getting our SwiftRiver Sweeper app to do real-time translation using Google’s APIs.


Japan earthquake Ushahidi data, heatmapped

• We’ve released some reports on past deployments and are part way through an evaluation by the Harvard Humanitarian Initiative.

One of our volunteer deployers, Anahi Ayala Iacucci, spent a great deal of time and created a 90+ page Ushahidi manual for anyone looking to deploy Ushahidi. Having worked on over 20 deployments of her own, she’s one of the best placed people in the world to do this.

Samsung Seeks to Grow in Africa

Samsung is opening a new Electronics Engineering Academy for youth in Boksburg, South Africa. As Afrinnovator states, they have about 20% of the market, which will only increase as they’ve been smart enough to get behind Android in their devices (currently with 22 models). We’ve felt this presence at the iHub in Nairobi as well, where Samsung has a great interest in reaching out to Android programmers.

Over 2.5 years ago Twitter shut down all operations in Africa. Back then, in August of 2008, it really didn’t matter too much as the penetration rates for the service in Africa, and most of the world, were negligible. A lot has changed since then as Twitter has become a defacto communications too, and in many ways a new communications protocol, all over the globe.

Now, they really hadn’t “shut down” as the service is accessible always via the internet. What they had shut down was text messaging – SMS, due to non-sustainable business relationships with the mobile operators in each country. Since then, the Twitter team has grown, and their ambitions beyond North America, the UK and India have increased as well.

In Africa, three countries have it working; Nigeria, Kenya and Madagascar (Note: there used to be a fourth, but Cameroon has banned mobile Twitter as they go towards elections). Just send a text message with the word “start” to the following shortcodes in each country go get started:

Nigeria: 40404 (Airtel); 20644 (Glo Mobile)
Kenya: 8988 (Safaricom); 40404 (Airtel)
Madagascar: 40404 (VIP)

The Twitter team is working on relationships for expanding SMS service throughout a lot of countries in Africa. How those deals are structured with the network operators and why they’re slow in coming online with the service isn’t yet known.

You can find out which countries do have Twitter’s mobile SMS service on this page. You can also keep up with Jessica Verilli (@Jess), in charge of Corporate Development & Strategic Initiatives at Twitter, and the one who has been the most visibly active on the continent.

Michael Joseph was the CEO of Safaricom, taking the mobile operator from 5 employees to dominating the Kenyan mobile operator market with over 80% market share in his 10 years at the helm.  Regardless of your personal feelings on the man, you have to admire the tenacious approach he took growing the business, and his willingness to invest in his company’s future, thereby decimating his (often inept) competition. 

Possibly MJ’s (how he’s known in local Kenyan parlance) greatest business move was also a measured risk, that is being the company to take a software created by parent Vodafone Group and push it into the market.  That software: Mpesa, the most successful mobile payments system in the world.  Safaricom has more transactions each day than Western Union does globally in a year.  Yes, it’s that impressive.

When Michael Joseph stepped down in October of last year, he had a blank slate.  Only he knows just how many opportunities were out there, but I’m guessing there were many.  He just announced his next move, and that is to join the World Bank and “spearhead expansion of mobile money transfers” in their member states.  

“The first fellow under the programme, Michael Joseph, will advise the Bank and governments on spreading the use of mobile phone banking, drawing on his knowledge and experience at the helm of Kenya’s largest telecommunications service provider,”

All of the business acumen and cache that MJ has built up is going to go towards being the World Bank’s ambassador for mobile money.  Meanwhile, he is maintaining a role at Vodafone as a director, where he serves as an advisor on the expansion of Mpesa to other African countries.  That’s to be expected, as he’s one of their greatest success stories to date.  Both of these, though good, seem like a waste of potential, and I’ll explain why.  

A missed opportunity

No one in the world holds as much knowledge on how to deploy a mobile money system, nor how to grow it and operate it as Michael Joseph.  However, all of his success was penned in by the fact that Safaricom only serves Kenya, he could never grow it outside of the country in a meaningful way.  Forays into Tanzania and South Africa have happened, but aren’t seeing nearly the success as in Kenya.

Vodafone knows they’re sitting on a goose that lays golden eggs, yet it’s only laid a single egg – their problem is that they’ve not figured out how to duplicate its success.  

Instead of trying to hold on to Mpesa, they should spin it out as its own entity, put Michael Joseph at its head and let it take on the world (not just Africa).  

There’s a few good reasons for this move:  

First, Vodafone is too big and slow to do this internally, it’s like all of the services and startups eaten up by other large companies that die due to not being within an ecosystem that has an entrepreneurial bent, but instead are sucked down by bureaucracy.  

Second, no one else could take this brand global and have the ability to stand toe-to-toe with other operator peers around the world like MJ could.  It needs that type of personality if it’s to do what’s next.

Third, there aren’t many opportunities that crop up that allows you to take on massively profitable and embedded incumbents and win.  In this case, that’s all of the other payment methods, including credit cards and internet payment platforms.  Mpesa could become the defacto mobile payment system for the world – displacing other methods.

To be honest, I thought this was the obvious play when Michael’s time at Safaricom came to an end – for all of the players: Vodafone and MJ himself.  I kept thinking that surely there was a reason for them not moving on it, that it might have something to do with timing.  Instead, it looks like the big IP owner, Vodafone, is unwilling to take Mpesa big – and it looks like the reason why is that they’re unwilling to let go of control (now ownership). 

That’s how it looks from where I sit, if you know more, add it below.

In the words of Steve Song, Village Telco is “an easy-to-use, scalable, standards-based, wireless, local, do-it-yourself, telephone company toolkit”. He’s just put out a new video making it very clear just how useful this system is.

The team over at Blinktower has done an exceptional job of creating a short, concise and eminently understandable video of what Village Telco is.

The Village

Often, we get caught up in our high tech wizardry and get overly excited about the newest Android app or the best new web app built in African Megalopolis #5. And by “we”, I mean “I”, since I too am a tech guy who is endlessly intrigued by the latest, newest and shiniest.

What we forget is the village. “Up country”. What happens when we get comments like this last week from the new CEO of Safaricom, Bob Collymore, threatening to do away with their rural network:

We’re OK with losing market share (faced with unrealistically low rates) and focusing on Nairobi and high-income communities. The people in remote districts are receiving calls (more than making them). If rates decline, why should I continue to do that?”

Some rural communities have never had connectivity of any kind, voice or data. Others have it now, but could lose it if their revenues don’t prove to be high enough for big operators. Who is going to fill that niche?

I think the answer lies in technology like Village Telco. It’s a business, not an aid program. Where an entrepreneur can get a link to the network started (or not), and then mesh out from there to the whole community. People pay for access, and profits can be made.

For the last few years, a dedicated team of enthusiasts have been building the initial hardware and software. Both of which are open source. It’s a low-cost way to get into the telco business. Here’s to hoping that more entrepreneurs take a serious look at rural connectivity.