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Where Africa and Technology Collide!

Category: Internet

Affordability and the Future of the Internet

The first few decades of the internet has been about getting the signal everywhere. The current decade is about making the internet affordable to everyone. The internet will be free, and the future belongs to those with the courage to create and fund the business models that support creating an onramp for that last blue ocean of internet users.

It takes someone in Africa four days of work to earn 1Gb of internet. In the US and Europe, it takes just two hours to do the same. (note: see bottom for the math on this)

Connectivity can be generally broken down into two buckets:

  1. Accessibility – which is generally about having the signal for the internet and the devices to connect to it.
  2. Affordability – the ability to pay for the internet.

There’s a good piece in Wired about the slow down in connectivity around the world. We’ve made great progress in the initial half of the world connecting to the internet, but the remaining half is coming along a lot slower, and at a decreasing speed each year.

“The data shows that growth in global internet access dropped from 19% in 2007 to less than 6% last year” The Guardian

Why?

For the last two decades we’ve been focused on some pretty big population numbers as well as more wealthy demographics; connecting cities (in both first-world and frontier markets) and the relatively prosperous populations of the world wherever they may be. Currently, on the accessibility front we’ve been forced to work in harder areas with less population density, where the numbers for a cell phone tower are slower to show their ROI, and where frankly it’s not worth using our older technology and our older business models to unlock the internet to that population.

So we come to an interesting time in history, where there is a lot of discussion about, “connecting the last 3 billion”, but not a great deal of courage in doing so.

Sidebar: since I’ve been sitting on an airplane for many hours, I watched the movie 1970 movie Patton, which is likely why I’m thinking so much of courage. In it he quotes Frederick the Great (possibly wrongly attributed) as saying:

“L’audace, l’audace. Toujours l’audace.”
“Audacity, audacity. Always audacity.”

And it is about courage. Most people look at the problem of the internet and think about current tech, or even future tech. They try to do something a little bit cheaper, maybe the go all out and and try something truly mind-blowing, such as balloons, satellites or drones. And, they each do play a small part. But, that’s it, small. We’re at a point where even these seemingly world-changing technologies are relatively small since there is a bigger picture that eclipses tech accessibility.

The big picture is that the internet will be free. Everywhere. Eventually.

Which means connecting the next 3 billion is a business model problem, not a technology problem.

If the is true, then let’s keep investing in these marginal accessibility changes. We need them, we truly do. Every time we get a new Viacom satellite, a Safaricom cell tower, a Google Loon balloon, or a new terrestrial cable dug across Africa or Asia, we get a needed marginal improvement. We push the costs down and the accessibility equation goes a tiny bit higher.

But back to courage. In our plans to connect the world to the internet, it doesn’t take a great deal of bravery to invest in a little bit more infrastructure. For these types of initiatives we’ve had our formulas for a decade or more, and we know they work. A few accountants and legal to check the boxes and a couple million more USD gets spent. We know how to charge for it, and that business model has seen but iterative change in two decades. We’ll always need cables and satellites, but in the world where the internet is free for everyone, it’s the business model that needs the most work.

So, how do we solve this business model for free internet? After all, the internet isn’t free, someone always pays.

It doesn’t come from charging a consumer who has limited disposable income. Just like the internet is moving to free in most public spaces in the US and Europe, I believe it will be the same in most of the rest of the world. The answer comes in looking for indirect revenue streams, and there are multiple paths to this.

This is where the big companies have let us down. Not due to their lack of investment, but to their lack of creativity. Whether it’s with satellite companies who provide low cost subscriber models, helping a moderate percentage more of the population get online regularly, or the Google Loons that side with telecom oligopolies, or the ISPs and mobile phone companies that are too deeply entrenched in their legacy business models to make any meaningful change.

Large organizations have a lot of resources. But… these same large organizations don’t think creatively enough about the solution.

Too many resources tends towards lazy problem solving. After all, if you’re a heavyweight going up against a featherweight, your only strategy need be bludgeon your competitor to defeat. In our world, a lot of money starts feeling like a hammer that you can start bludgeoning with – which tends towards solutions like the original “Free Basics” from Facebook, which looked a lot like an organization trying to do the right thing and then realizing that they couldn’t afford to give everyone the whole internet for free, so instead tried to make a good bit of it free – and ended up with a useful walled garden that set a lot of people on edge.

Compounding this is that the people making decisions around the initiatives at these larger organizations are not the entrepreneurs who built the company, they’re middle managers who like to reduce their risk profile inside the organization so that they can maintain their nice salaries and perks.

But, we can make the whole internet free, and we don’t have to buy it. What we need is a bit more creativity in coming up with new business models that represent the future of connectivity, not the past.

So, if big organizations aren’t the answer, and old infrastructure models are just iterative change, then what is the answer?

It’s a combination. Matching up the resources (and capitalist business models) of these large organizations to get these new users onto their platforms, and the creative solutions that come from smaller, hungrier companies give us a wonderful blend. When these two come together, interesting and explosive change can happen.

I’ve seen all of this first hand. Both the marginal change of the aforementioned global organization efforts alone (or worse, paired with some other large organization), as well as the magic of what happens when one of them works with a smaller company that has a real ground game and understands the problem from a different level.

I’m convinced that we’re solving this right now at BRCK, and that’s due in no small part to the infrastructure team we’ve had the chance to work with at Facebook. We’re not the only ones either, I’m seeing some other companies working on some pretty neat solutions too that gives me optimism for actually solving this problem. The only thing we need is more of the large companies to embrace some of these changes and work together with the companies on the ground in Africa, Asia and Latin America.

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Kenya: Who Got Funded in 2014?

Which tech companies were funded in Kenya in 2014? I thought I’d compile a list of the ones I know of.

Send me any that I might have missed.

Early stage capital

Angani – Public cloud computing provider
BRCK – Rugged, wireless WiFi device
CardPlanet – Mobile money payment system aimed at business and NGOs
iProcure – Software for optimizing rural supply chains
OkHi – Physical addressing system for logistics solutions
Sendy – Motorcycle delivery service
Tumakaro – Diaspora driven education funding
Umati Capital – Factoring for farmer cooperatives, traders and processors
GoFinance – Working capital finance to distributors of FMCGs
BuyMore – Electronic student discount card
TotoHealth – SMS technology for children’s health
BitPesa – Bitcoin for African remittances
Sokonect – Mobile agriculture tool to eliminate brokers
BookNow – Buy bus tickets online in East Africa
Mdundo – African music on your phone
Futaa – Source for football news in Kenya
Movas – Global provider of B2B/B2C m-Commerce solutions
Hivisasa – A free, county-level online newspaper
Yum – Online ordering and food delivery service in Kenya
Akengo – Learning management system
EcoZoom – Hardware. Clean burning, portable wood and charcoal powered cookstoves
Jooist – A gaming network for mobile phones
Globa.li – A platform to connect hotels and distributors for bookings

Growth capital

MKopa – solar power financing using mobile money
BuyRentKenya – Real estate classifieds
Wave – US-to-Kenya remittance provider
Eneza Education – Mobile tutor and teacher’s assistant
Sanergy – hardware tech, building solutions for urban toilets and composting
Bridge International – Education in low-income environments, uses tech to send teaching content
Soko – Handmade jewelry and accessories shopping from East Africa
EatOut – Find and book seats in East African restaurants

Exited/Acquired

M-Ledger (by Safaricom) – Monitor your Mpesa transactions
Wezatele – Mobility solutions in commerce, supply chain, distribution and mobile payment integration

A special thanks to John Kieti, Rebecca Wanjiku, Nikolai Barnwell, and Ben Lyon for refreshing my memory!

Great roads and a bit of engine trouble (day 1)

(Cross posted from the BRCK blog)

I’m writing this blog post using my Mac, connected to a BRCK which is connected to a satellite internet connection using an Inmarsat iSavi device, somewhere about 100km from Arusha towards Dodoma. Inmarsat gave us this test device, a small unit, made for global travelers, so we could test out what worked and give them feedback on their tools. It also helps us figure out what connecting to the internet looks like when you’re beyond the edge of the mobile phone signal in Africa.

Here’s Reg, using his phone to do the same at our campground this evening:

Reg using the BRCK and iSavi in Tanzania

Reg using the BRCK and iSavi in Tanzania

The Journey

We left at 5:30am from Nairobi to beat the traffic out of the city. With the beautiful new roads, we were at the Namanga border by 8am and cleared by 10am. Before you go on one of these trips, make it easy for yourself and get the following:

  • Carnet de Passage for each vehicle (get this via AA)
  • COMESA insurance (get via your insurance company, or buy at the border)
  • International driver’s license (get via AA)
  • Yellow fever card
  • Passport

By noon we were in Arusha, and took a chance to see the cafe that Pete Owiti (of Pete’s Coffee in Nairobi) set up with some Tanzanians, called Africafe. If you ever find yourself in Arusha, this is the first place you should go. Great food, good coffee, right in the middle of everything.

Knowing we were only going about 100km more today, we set off around 1pm. We got to a roundabout, and I knew which direction the main road was, so even though Philip mentioned we should go right, I went left to the main road. 45 minutes later we realized my mistake when Philip checked his GPS and realized we were further away than we were supposed to be.

Lesson learned: always listen to your cofounders (especially the one with the GPS).

With many sighs, we turned around and went back to Arusha, where Reg had been smart enough to stay with the Land Rover when he realized we went the wrong way. We quickly split off in the correct direction, aiming to get to the camping spot by 4pm latest.

As we were sitting in traffic in Arusha, Joel says, “Erik, your bike is smoking.” I replied that it was likely just the car I was parked next to. Nope. Sure enough, I was leaking oil… For those of you who don’t ride motorcycles, this is the last thing you want to hear when on the front end of a 4,400km trip. I ride a 2007 Suzuki DR650 – they have some of the most bullet-proof engines, and are perfect for Africa’s roads.

Working on the DR650 in Arusha

Working on the DR650 in Arusha

Fortune smiled upon us, and we were pointed towards Arusha Art Limited, which turned out to be an amazing garage (the best I’ve ever seen in Africa). Their director, Hemal Sachdev helped us out by helping to troubleshoot what could be wrong, and even fabricating a high-pressure oil hose, with compression fittings on the spot. There was oil everywhere, so we washed it off and kept going.

Lesson learned: there are a lot of people willing to help you in your journey, especially if you ask nicely.

5 km down the road, I was still smoking… Thanks to Hemal’s help, we knew what the problem wasn’t. It was now that we chanced to notice that the problem seemed to be coming from the timing chain setting hole. We realized this could be filled by a normal M5 screw, so got trucking to the campground where we could let the engine cool down and screw it in.

Now, I sit here in Wild Palms Camp, some place we saw on the side of the road near the Tarangiri game reserve. For 10,000 Tanzania Shillings ($6) each, you get a patch of ground to put a tent, there is a banda with table/chairs, and there are even some showers and toilets. Not real camping, but definitely nice after a day on the bike!

A BRCK Journey

We’re about to ship our first orders of BRCKs next week, on July 17th.

Tomorrow (Wed, July 9th) we have a launch event happening at Sarit Centre for our Nairobi friends and media, starting at 9am, where we take over our partner Sandstorm‘s store for the day. We’ll be there all day, so come on buy if you can make it. You’ll be able to use the devices and ask questions from anyone on the BRCK team.

A BRCK Journey - how it was made

The BRCK is a rugged, self-powered, mobile WiFi device which connects people and things to the internet in areas of the world with poor infrastructure, all managed via a cloud-based interface.

It is designed and engineered right here in Nairobi, with components from Asia, and final assembly done in the USA. Specs here.

the Journey

Most people heard about the BRCK a year ago when we ran our Kickstarter campaign that raised $172k. What a lot of people don’t know is that the journey started long before that, 1.5 years earlier in fact.

Back in November of 2011 I was in South Africa for AfricaCom, and it was in a discussion with my good friend Henk Kleynhans (the founder and then-CEO of SkyRove) that we started talking about routers. Knowing nothing about routers, I asked him why he didn’t build his own, to which I think the answer was something like, “that’s hard” and it wasn’t their core business anyway.

Later on that evening I was flying back to Kenya and I started pondering what it would be like if we built a router made for our own environment – something that would give us good solid connectivity in Africa. I started sketching out the first ideas around what would be in the BRCK, what it would need, etc. When I landed in Nairobi, I started talking to the Ushahidi team about this, and whether anyone wanted to try prototyping this with me in their free time.

My initial notes on the BRCK in the airplane, thinking through what it should be, basic features, and products I liked.

My initial notes on the BRCK in the airplane, thinking through what it should be, basic features, and products I liked.

Initial BRCK idea, drawn in my notebook in November 2011.  You can tell I hadn't a clue as to where things should go yet.

Initial BRCK sketch, drawn in my notebook in November 2011. You can tell I hadn’t a clue as to where things should go yet, it was just barebones features and simplicity was key.

With the problems we have around power and reliable internet connectivity in Nairobi, we all had an itch to do something, and so we did.

The 1.5 years between that point and the Kickstarter was filled with Jonathan Shuler doing a number of early prototypes, Brandon Rosage hammering out an early brand and design, and Brian Muita getting into the guts of the software. Sometime in there was a walk with Ken Banks in a field in Cambridgeshire, discussing what this future product could be as a company. Then there was the entry of Philip Walton, volunteering his time to do the first truly functional designs that married the components and some customized firmware, throwing it all into an Otterbox case, held together by Sugru and tape, to make sure it worked (seem image below). Then Reg Orton came along in late 2012 and started volunteering his time and knowledge around case and PCB design, and started to professionalize our hardware production. All of this culminated in a working prototype.

An Early BRCK Prototype from mid- 2012

An Early BRCK Prototype from mid- 2012

We ran the Kickstarter in June last year to test the market, to see if there were others who thought this BRCK device was cool, useful and something that they would purchase. It worked out well, and we found out that there were a number of business types who wanted something just like this.

Then the real work began.

From Prototype to Production

It’s fairly easy today to prototype a cool new device, we did that for 1.5 years with many iterations even before we did our Kickstarter in June last year. When you go to production though, that’s a whole different beast, and we ended up spending a year from our Kickstarter until today going through more levels of prototypes before we finalized on our production-level hardware back in February. Keep in mind, that’s with people on the team, like our CTO Reg Orton, who have been in this hardware space for 12+ years.

There’s also the software integration issue that had a lot of unknowns which we couldn’t tell in advance. It’s not just hardware we’re building but an integrated software and hardware package that consists of hardware + firmware + cloud. Fortunately we’ve got some pretty amazing problem solvers who don’t seem to sleep on our team, between the heroics of our COO Philip Walton and cloud lead Emmanuel Kala, we were able to find workarounds and put together a robust BRCK management package.

What I’m getting at is this – software is hard to get done well. Hardware is harder. Software plus hardware is amazingly complex, and it’s easy to underestimate the level of difficulty in what seems like a simple device.

It’s been a battle, one with multiple fronts and many setbacks along the way. We’ve had our modem supplier go end-of-life on one of our core components, and subsequently had to find a new supplier and redesign our board and case. We’ve found crazy bugs in OpenWRT that took us weeks to figure out a way to work around. We’ve mixed in some fairly harsh testing of the BRCK in some of Kenya’s hardest environments, and we’ve seen it perform and change the way a business can do their work. We’ve also seen our earliest users loading up education materials on it for schools that aren’t fully on the grid.

Rachel running on a BRCK in Uganda, by Johnny Long

Rachel running on a BRCK in Uganda, by Johnny Long (more on their Education page).

We’re finally there, after many, many months.

Some Thanks

It’s with great gratitude to my BRCK partners and team that I say thanks for pushing through. I’m also extremely grateful to Ushahidi, especially David and Juliana, and the Board, for helping push the BRCK through, even in those early days of 2012 when it seemed so crazy. None of this could have been done without a few brave souls willing to risk some money on us, to our seed round of investors who came together and put in $1.2m, which meant we could hire more people and build an amazing team.

Finally, our biggest debt of gratitude goes to our early backers, those of you who over a year ago put some money into this little black box. You will have your BRCKs soon, and we hope that they live up to your expectations. After all this time, I can say I’m probably more excited about getting them into your hands than you are in getting them! 🙂

One in Three

One in three people around the world are connected to the internet. This is not enough.

In a world of 7 billion people, 4.2 billion still can’t access the internet. 3.8 billion of whom live in emerging markets, specifically Africa, the Middle East and Asia.

Market research in this space is fascinating, because as we look at penetration rates we see that even though the lion’s share of internet is being driven by the developed world, that that in fact only one in three internet users comes from those countries. 65% of internet users are from the developing world today, 35% from the developed.

Individuals using the Internet, by level of development - 2013

Individuals using the Internet, by level of development – 2013

The takeaway here is that most everyone’s assumptions about the internet are wrong. The fastest growth is already in the emerging markets, and that growth is only accelerating. If you’re going to pick a place to put your money, it’s not in the US or Europe, it’s in Africa, the Middle East and Asia.

My new job is to truly understand these numbers. As I talk to investors about investing in BRCK, our new router/modem/smart battery device made for this part of the world, I’m expected to know about the market. So I know things like this: if only 24% in the developing world are connected to the internet, then BRCK targeting 1% of these 3.8 billion unconnected people means a potential market size of $7.7 billion.

Only 24% in the developing world are connected to the internet.  BRCK targeting 1% of the 3.8 billion unconnected means a market size of $7.7B

Only 24% in the developing world are connected to the internet. BRCK targeting 1% of the 3.8 billion unconnected means a market size of $7.7B

Of the 1.8 billion people connected to the internet in the developing world, An astounding 65% of them use Wireless Data.

Of the 1.8 billion people connected to the internet in the developing world, An astounding 65% of them use Wireless Data.

That’s a big number, and it’s why I’m so excited about the future.

[Stats source: ITU]

Infrastructure plays

In an earlier blog post I talked about the “rail lines of connectivity“, talking about the pioneering engineers of yesteryear who built the railroads, and who’s rails we still ride on for communication today. Where Physically connecting people and things was the great challenge of their time, digitally connecting people and information is the great challenge of ours.

There are other big infrastructure plays right now, specifically in communications, and heavily internet-focused. If the 90’s and 2000’s were characterized by the rise of mobile infrastructure, the 2010’s are equally characterized by the internet.

It started with the undersea cables in the late 2000’s, and is now about terrestrial cable and growth in technologies that cost less but spread over greater regions. The race is on to connect the world – at least to build the road and rails for the internet, if not the driveways into people’s homes and offices.

For the former, Google’s just-launched “Project Link” in Uganda underscores an intent to increase speeds and decrease costs by providing Google fiber on the continent. There’s also no lack of investment available for companies digging trenches for terrestrial cable across the African continent, this is private equity fund territory, and it’s booming.

Intra-Africa Internet cable map - Donna Namujju & Steve Song

Intra-Africa Internet cable map – Donna Namujju & Steve Song

Both Google and Microsoft are experimenting with the widely available TV White Spaces spectrum, which can spread wider and costs less other solutions over broad areas of dispersed populations. Then there is Project Loon, a true moonshot idea by Google to cover wide areas of the developing world with internet balloons floating at 20km.

I’m often asked why the BRCK is so important for internet growth in Africa and other parts of the world with poor infrastructure. This is why: so many focus on building the backbone, and so few focus on the last-mile, the end user.

The large international tech companies are putting a lot of effort into cracking open the developing world market as it’s where the growth for the next ten years comes from. We all need this, and I’m a big fan of what both Google and Microsoft (as well as the private equity investors) are doing.

We also need tools that work here, devices that are created to work in areas where there might be connectivity, but no power. Where the roads are still dirt and dust and rain affect all of you your electronics. The BRCK was designed for this world, it’s designed in Kenya (where we live) and it’s this last-mile problem that we are committed to solving.

We’re taking investment right now, closing a convertible debt round in mid-December. If you want to take part of this seismic shift in the internet, you can join us at https://angel.co/brck.

BRCK - final mile connectivity for the rest of the world

BRCK – final mile connectivity for the rest of the world

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