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Category: Strategy (page 3 of 12)

The Need for Both Makerspaces and Incubators in Africa

Maker Faire Africa 2012 in Pictures from WhiteAfrican on Vimeo.

I’ve long been a proponent of getting more spaces set up for hardware prototyping and making of things in Africa. I wrote about it first in 2010 (Hardware hacking garages), then again in 2012 (Fab Factories: Hardware Manufacturing in Africa). I’m one of the founding organizers for Maker Faire Africa and the founder of AfriGadget. I’m not just writing about it either, as we have plans to open up a makerspace in Nairobi this year, which will compliment the FabLab that we already have at the University of Nairobi.

Well managed makerspaces are a missing component in the African technology ecosystem and we need more of them.

There’s a couple reason’s that we need more of them.

First is for youth and learning, like the urine powered generator story from the teenage girls in Lagos, that took the world’s bloggers by storm, is an example of this. Another is the young Kenyan who used a simple lighting mechanism to scare away lions. We need places where young people can get their hands into hardware earlier, not all schools are setup for this, and having places with good mentors and tools that they couldn’t buy on their own is important.

Second is about a culture we already have of making things in Africa, specifically that we need to acknowledge our already present maker culture and then try to move it in the direction where it melds some of the more recent high-tech advances with the already low-tech inventiveness found locally. Examples abound, take the bladeless wind turbine out of Tunisia, or the mobile phone security system for your car in Kenya. Simply put, the more we get merge the hardware and software, the more interesting our products will be and they’ll have more global relevance at the same time.

A False Dichotomy

I just read an article titled “Close the Incubators and Accelerators, Open FabLabs and MakerSpaces instead” by Mawuna Remarque Koutonin. While overall it’s a good piece, the title does it a disservice by assuming a false dichotomy – that one is better than the other. It’s not an either/or, it’s an “and”. We don’t need to get rid of accelerators and incubators for software development, we need to add more makerspaces for hardware development and experimentation on top of what we already have.

First a quick list of assumptions that aren’t properly addressed in the piece, so are confusing:

There is a conflation of the terms “incubators” and seed-funding “accelerators” they are two different spaces and ways of growing businesses.
Makerspaces are collaborative incubation and experimentation spaces with a hardware prototyping focus.
Startups can be software or hardware based (or both).
Incubation and acceleration is not tied to just only one type (software or hardware) of startup.
Not all companies or individuals benefit equally from incubation, some not at all.
It can be argued that hardware startups benefit more from incubation facilities due to the heavy cost of getting started.

Other things to consider regarding software, hardware and ultimately the entrepreneurs and companies that come from them:

They’re different. Software startups are different than hardware startups, very different. I know this due to being involved with a hardware product internally at Ushahidi, it’s not the same at all and the needs for the two are completely different.

Having a space doesn’t take the place of personal drive and ambition. Incubators are no substitute for hungry entrepreneurs getting their startup going. Hackerspaces are no substitute for inquisitive hardware minds to experiment. Both require people driven towards a goal already, the space doesn’t matter if the person isn’t ready.

Both can help accelerate entrepreneurs. Both incubators and makerspaces give driven people a chance to move further, faster. The basics of fast internet, space to work with like-minded people, access to tools, inroads to mentors and/or business contacts, and government or university connections are all things that both can (should?) provide.

The conflation of what these spaces are is understandable, as they seem to be morphing all the time. Two good pieces to consider:

“Hackerspaces as Accelerators”

“It makes good theoretical sense to use a hackerspace as part of an accelerator. Incubators and accelerators are constantly evolving from models that provide premises, training and funding, that may or may not be part of a larger organization, to models that provide nothing but a cooperative community sharing resources. Some take equity, some ask for rent. Some take cuts at both ends. Some have sliding payment scales and operate in tranches, others have fixed programs. There are a lot of variations and not all accelerators/incubators deliver value.”

“Evaluating the Effects of Accelerators? Not So Fast”

“A business incubator in the purest sense refers to an office park or building complex that charges businesses, typically new businesses that cannot afford their own offices, some rent in exchange for space within the incubator and some administrative services and infrastructural support.”

“Accelerators are organizations that provide cohorts of selected nascent ventures seed-investment, usually in exchange for equity, and limited-duration educational programming, including extensive mentorship and structured educational components. These programs typically culminate in â€œdemo daysâ€ where the ventures make pitches to an audience of qualified investors.”

Where should they be?

In short, not the universities in Africa. They’re mired in the 1970’s and have levels of bureaucracy that make it difficult for innovative products or companies to grow out of them. I’d like this to be different than it is too. When I look at what we’ve built at the iHub over the past couple years (the UX Lab, Research arm, supercomputer cluster), I can’t help but think that if Kenyan universities were doing their jobs, then we wouldn’t have to do a lot of these things.

The truth is, globally there are few universities that do a good job of incubation. There are few labs that do a good job of prototyping and taking products to market. There are few accelerators that do a good job of accelerating startups. It doesn’t mean you throw all intent of doing these activities away due to 90% being bad at what they do. That doesn’t mean all are bad. It just means we need to emulate the good ones better.

The best incubators and makerspaces I’ve seen, or have been a part of, are collaborative community environments. Caterina Mota provides an excellent talk describing why they work, and uses the stories of Safecast and Makerbot to underline her statement:

“Secrecy and exclusivity are not essential to commerce.” Catarina Mota

It’s important for us to have spaces that the community has built and runs, where the university, corporates and government can plug into, but not be in charge of.

Jonathan Kalan said it best in his recent article researching the tech hub boom across Africa:

“In a region with a near-total absence of true â€œ3rd spacesâ€- physical spaces like coffee shops, libraries, and internet cafes, Africaâ€™s â€œhub boomâ€ has emerged to fill the gap, fostering openness, access, collaboration, education and sharing in Kenya’s tech community, while offering nodes for international exchange, where people like Eric Schmidt can drop in to get a sense of whatâ€™s going on.

Crucially, they address the ecosystem’s essential need to grow startups beyond ideas. There is no shortage of entrepreneurs with great ideas on the continent, yet many lack the knowledge and skills to build and scale companies. Through workshops, accelerator programs, incubators and mentorship, these hubs are helping to building local capacity.”

In the end, that’s what we’re all driving for. We’re looking to build and grow the spaces and investment vehicles that allow Africa’s tech community to expand and grow, whether it looks like a makerspace, an incubator or a seed-funding accelerator. We don’t need less of anything, we need more and we need diversification in the types of spaces as they help grow companies in different fields.

Poaching, Carbon and Tech in Tsavo

January 19, 2013 / HASH / 7 Comments

I’m disconnected. Off-grid in the usually dusty and dry (though green currently) Tsavo region of Kenya with seven others from the Ushahidi team as we look into whether or not technology can be useful on the Rukinga Sanctuary.

We’re here to see if our technology, or the knowledge of what can be done with tech, is useful in carbon monitoring of deforestation, security operations with rangers and/or better engaging with the surrounding community?

David Kobia talks to Dr Mwangi Gichiru of Wildlife Works carbon project

The Wildlife Works team has an extensive for-profit program around carbon credits, carbon offsets, and small factories in an EPZ where brands like Puma get their “made in Kenya” stamp. It’s maybe the most impressive example of what could be termed a “social enterprise” that I’ve ever seen. Over 300 people have jobs due to their presence, and all in the community monetarily benefit from their activities.

The 75,000 acre sanctuary sits just south of Voi, off the Mombasa road. Rukinga was the first place in the world to be VCS (verified carbon standard) verified and REDD (Reduced Emissions from Deforestation and Degradation) certified by the UN, and has since grown to encompass the 13 other ranches and 1/2 million acres surrounding them. 60,000 people in the communities surrounding them are financial beneficiaries from the project.

Last year they sold sold 1.4 million tons of carbon credits for around $6-8 per ton. The revenue from that is split into three parts; 1/3 goes to the land owner(s), 1/3 goes to the managing company (Wildlife Works) and 1/3 goes to the community. Interestingly, unlike a lot of NGO work, the team doesn’t decide how the community should benefit. The community decides how to spend the money, through their own local committees, and it’s led to a huge amount of school bursaries (2,000 kids now in secondary and tertiary schools), water catchements and other public works.

It’s impressive.

So, what does Wildlife Works really do at Rukinga?

In short, they try to increase the amount of trees, protect the animals, while balancing that with the local community.

An elephant in Rukinga Sanctuary, Kenya

This is where the problems arise as there are encroachments for wood by charcoal burners and poachers killing the elephants. Due to the community benefiting from the ranches, there has been a decrease in the amount of charcoal burners and even the local poison-arrow elephant poachers and bushmeat hunters have reduced.

However, there’s a much bigger problem, that of commercial poachers (mostly of Somali descent) who come down from NE Kenya, with sophisticated weapons and who are experienced in tactical movement. They come in teams of 2-10, using their mobile phones for coordination, moving fast and anchoring off the Mombasa Highway. Often they have buried caches of guns and ivory on the ranch, so they don’t even carry those in or out with them, and they can blend in easily.

18 rhinos have been killed since the holidays in Kenya alone, and elephant tusks sell for around $300/kilo, so provides a massive incentive for income for anyone.

“Weâ€™ve been working in Kenya for the past 17 yearsâ€¦ We lost 10 elephants to ivory poachers in the first 15 years, and 45 in the last 18 months, and this is despite being a relatively well-funded organization with extraordinary relationships with the local community members who benefit from wildlife,â€ says Wildlife Works founder and CEO Mike Korchinsky.

The rangers have no weapons. They are highly skilled at finding and tracking the poachers, but need the Kenya Wildlife Service (KWS) to come if they’re going to catch someone. KWS is sometimes slow to respond, and they’re not willing to put their life on the line in order to catch or kill the poachers. When a poacher is caught, the laws are not stiff enough to disincentivize others.

Talking with the Wildlife Works security and operations team

The Tech

So, where can tech help? We don’t know yet, is the answer.

To frame the problem of biodiversity protection, if you get to the animal or tree after it’s dead, then it’s too late. What you really want is prevention. If you can’t get prevention, then you need swift and effective response.

Prevention
We’re wondering if there’s a way to get the community interacting through SMS to pass on information about illegal activities. Beyond informants, we’re thinking that there might be a useful way to connect the local community monitors and make reporting on human-wildlife conflicts more efficient.

Response
The teams of 100+ rangers are on foot a lot, carry a GPS and do have some mobile coverage. They create reports when they come in, and their goal is to be light, hardy and fast. All of them already carry cheap Nokia-type phones, so can send SMS and call, and we’re thinking that a very simple text messaging system as a hub might come in handy for coordination and archived messaging for later assessment (and possibly mapping).

Other Ideas

There is a lack of information on all types of location-based data, especially once you get off the main road. There’s an opportunity to do a community-level mapping exercise, tied to Open Street Map.
The process for getting GPS-related data from the rangers to HQ and then a map takes a couple weeks. Surely there is a way to make this more efficient.
Related to the rangers data is that they rarely see the output of the GPS data and forms that they fill out. Could we create a faster way to visualize it, and let them see their work?
It seems to me that if you were able to gather the phones and SIM cards off caught poachers, then you could start dumping their address books and pattern matching for similarities. We could also see if it is possible to streamline the process for legally getting call log data for those SIM cards from the mobile operators.

The camp we’re staying at is situated has a generator that provides backup power in the evenings for a few hours, where we get our daily recharge-dose for our gadgets. If you stand in just the right place you get one bar of connectivity on your phone and send out text messages.

It’s a shock to our digitally connected system when we find ourselves without a digital tether. It’s also a wonderful reminder of the constraints that real life problems have, where technology helps and/or hinders and why simple solutions tend to be the best.

While we’d love to just shove an Android phone in every rangers pocket, it’s probably not the answer. Instead, as my battery dies, I sit here thinking that we’ll revert to our simplest messaging solution (aka SMS) for any communications tools. It also reminds me that technology is at it’s best when it’s a small component that makes one thing work better, faster or more efficiently. If all we were to do was take one pain point out of the Wildlife Works people’s lives, then that would be enough.

(Sidenote: Limo rubs it in that his Blackberry gets messages and calls, and much to my shame he’s right, it’s better than any of the Android of iPhone devices for connection on the edge of network connectivity. Maybe there is still a place for RIMâ€¦)

A huge thanks to Taylor Martyn for coming with us and taking some great pictures (seen here)!

Growing AfriLabs: 14 Labs, a Director, Research and Support

July 19, 2012 / HASH / 1 Comment

AfriLabs is a network of the tech hubs and labs across Africa. The labs serve as an accessible platform for bringing together technologists, investors, tech companies and hackers in their city. Each lab shares a focus on entrepreneurs, Web and mobile-phone programmers and designers.

Bill has put together an excellent blog post on how we’re growing the AfriLabs network. We’ve moved from the original 5 to 14 labs and hubs across the continent.

iHub – Kenya
Hive Colab – Uganda
ActivSpaces – Cameroon
BantaLabs – Senegal
NaiLab – Kenya
MEST – Ghana
iceAddis – Ethiopia
Co-Creation Hub – Nigeria
iLab – Liberia
RLabs – South Africa
BongoHive – Zambia
Malagasy i-Hub – Madagascar
m:Lab East Africa – Kenya
Wennovation Hub – Nigeria

Applications are open, and we hope to induct more African tech hubs into the AfriLabs Association in the coming months. I hope to see Kinu (Tanzania), OutBox (Uganda) and Jumpstart (Zimbabwe) apply.

An AfriLabs Director

We’re looking for AfriLabs first director, someone who understands the tech hub models and is able to help build the network, connections to it from media and investors and be a general connector for everyone. It’s a challenging position that requires someone who is good at community building, and can speak well with international corporates, foundations and media.

The AfriLabs Director can come from any country in Africa, and the HQ for AfriLabs is wherever the AfriLabs Director resides.

Funding for this position has been provided by our partners at Hivos. We’re seeking further funding and partners as the AfriLabs network grows, so if your company or foundation is interested in working with (or promoting) technology spaces across Africa, do get in touch.

Research on Africa’s Tech Hubs

Since we started the AfriLabs network, tech communities in many countries in Africa have started their own spaces. These range in model and makeup, from incubation and training spaces like MEST Ghana to co-working environments such as ActivSpaces in Cameroon, and community spaces like the Co-Creation Hub in Nigeria. Governments have gotten involved with places like the Botswana Innovation Hub here in Gaberone, and some academic institutions are jumping in as well like we see with the Strathmore iLab in Nairobi.

The iHub Research team has started doing case studies on the labs, and have started a research paper on the Impact of ICT Hubs (PDF) (this first one on the iHub). They’ll need further funding in order to take this to some of the other tech hubs across Africa.

This is estimated to be a 3-year-long study on 15 selected ICT Hubs across Africa. The main objectives of the study are to:

Short-term objectives:

Investigate what factors make up the ICT Hubs model;
Understand the entrepreneurs/start-ups and the value of the ICT Hubs to their business ideas through a representative sample size representing the different membership tiers;
Assess the impact of the Hub to an individual member based on the different memberships categories;
Survey the factors that make the members to continue to use the space.

Long-term objective:

Compare the different Hubs/Labs and the unique factors in each that make it to work;
Study the Impact of the ICT Hubs on the economyâ€™s development that is adoption of new technologies and innovations of employment leading to improvement in the living standards.

Supporting Organizations

Initial funding to get AfriLabs off the ground was through Hivos, who also supported the iHub back in 2009 before anyone believed that a tech hub in Africa could really work. They continue to support the ecosystem through funding the AfriLabs Director position (mentioned above).

One of the organizations that has really stepped forward to help give seed funding to the new tech hubs is Indigo Trust. They recently convened a meeting in London where they flew in a number of the managers from these facilities to meet and talk about what would be needed. This was the same type of discussion that was had in Nairobi with another group of tech hub leaders at the Open Innovation Africa Summit.

Google, Omidyar Network and infoDev have also been strong supporters (monetarily as well as other resources), with multiple hubs and labs. We seem to have reached the point where there is enough critical mass in the number of tech spaces, and enough support for them from corporates and foundations.

AfriLabs serves as a great vector for all of this to come together, applying resources to help liase and coordinate the communications and events between the tech hubs, and at the same time providing that larger target for media, investors, corporate and funding partners to find the initiatives in each country.

Launching the Savannah Fund in East Africa

June 6, 2012 / HASH / 16 Comments

I’m happy to finally be able to publicly announce the Savannah Fund, an accelerator fund focused on finding and investing in East Africa’s highest potential pre-revenue startups. It’s a partnership between Mbwana Alliy, Paul Bragiel and myself – along with a great list of limited partners (LPs) who are investing in the fund.

The idea is to bring the Silicon Valley-style accelerator model to Africa, seeing what needs to be tweaked to make it work for our region. It’s a small fund at $10m, with most of the activity focused on classes of 5 startups at a time being brought on board and invested in. They’ll get $25,000 for 15% equity, and have 3-6 months to prove themselves. Those who fail either pivot or leave, those who gain traction have a chance at follow-on funding. A portion of the fund will be invested at the $100-200k range where we’ll look at follow-on funding for the startups in our program, and also at other high-growth tech companies in the region.

We’ll be looking throughout the region for these investments, from Rwanda and Tanzania to Uganda, South Sudan and Kenya. You can put in an application now, though the first cohort will not be accepted into the program until the end of the Summer (Aug/Sept timeframe).

At this stage we’ve raised half of the fund, which allows us to get moving. 35% of the fund has been raised from local investors, such as Karanja Macharia from Mobile Planet. We also have big US names on board, such as Yelp co-founder Russ Simmons, Tim Draper, Dave McClure, and Roger Dickey and Dali Kilani of Zynga.

Why I’m involved

The reason I’m involved with Savannah Fund is very simple, I’m focused on getting the foundation of our technology future in place. In East Africa, we don’t have enough mid-cap investment opportunities in tech, and the only way to change that is increase the size of the base of that success pyramid.

Some history. Over a year ago I met with Ben Matranga from the Soros Economic Development Fund who noted that there were a number of interesting small startups, but they were too small for them to invest in. If there was a smaller fund, someone focused on this space, they’d be interested in using them as a vector to stir up the bottom and help uncover more successful companies over the next 3-5 years. At Pivot 25 last year I met up with Mbwana and we started to discuss the fact that most startups here aren’t ready for VC fund and how we might be the right people to create the needed vehicle.

Fast forward to September 2011 and Paul, Mbwana and I decided to go ahead and do it. Hours and months of due diligence, pitching and phone calls later we finally are getting it off the ground.

My role is to help find the new companies and to connect them to the businesses in the area.
Mbwana’s role is to manage the fund and the startups in it.
Paul’s role is to connect the Savannah Fund startups to Silicon Valley businesses and investors.

As Mbwana says, “We’re a fund for entrepreneurs by entrepreneurs”. We’re here for the small guy and our goal is to find those risky tech startups with hungry, passionate founders that will do the hard work it takes to become a successful company.

Find us on Twitter at @SavannahFund

The iHub UX Lab and Supercomputer Cluster

May 23, 2012 / HASH / 17 Comments

When I look at the tech scene in Africa, there is a single question that consistently runs through my mind.

What foundational parts of the technology ecosystem do we own, and what are we reliant on others for?

What I’m talking about here are the items deeper down the stack, the core components that allow a country to own its own technological future. Here are some examples:

Do we build our own software, or are we importing it?
Can we prototype and build our own hardware, even if not at the scale of China?
Are we investing in our own startups, or is that being done by foreigners?
Do we have our own researchers, or are we okay with people parachuting in from abroad to do that for us?

It’s quite difficult for me to do much about any of this beyond Kenya, so I focus on what I can do here and hope that it works and the model can transfer elsewhere. The iHub, m:lab, iHub Research and Savannah Fund are examples of this, where our efforts are focused on local software, startups and funding.

The newest additions are the iHub’s UX Lab and a new high performance computer cluster, both filling a void not just in Kenya but in the continent as a whole. Both of which will come online this Summer. Beyond that, we’re looking at hardware, thinking about what it would look like to have our own hackerspace and TechShop, in a model suited for Kenya.

The iHub UX Lab and Supercomputer Cluster

We are fortunate to have excellent corporate partners at the iHub, one of which is Google, who provided some funding to get two initiatives off the ground.

Creating a UX Culture in Kenya
In the software space design is one of our weakest points. This isn’t just web or mobile design, this is product design and it’s rooted in a lack of understanding or desire to provide a better user experience. Core to providing better products is doing research on what users are looking for and how they are using technology in the first place.

Shikoh Gitau has worked closely with the iHub Research team for the past year, in fact the core ideas that presented the challenge for that space to come into existence was from a paper she wrote, where she showed how little of the technology research done in Africa was by African researchers. Shikoh works with the user experience teams at Google, and started talking to us about the UX Labs that they run around the world.

I had also had the chance to do a workshop with Andy Budd at Tech4Africa, and then chat again in the UK later on. First hand, I got to know Gabriel White through some work he did for Ushahidi. Both of them helped me get to a better understanding of the value of UX research in the product design process.

All of this led to us deciding that the iHub should create a UX Lab, a resource that would serve the region. A place where companies and startups learn about and begin thinking about user experience as they develop new products. We’ll do this through masterclass training on skills, partnering with the top UX experts in the world, and by providing the resources for this to happen.

Mark Kamau has joined the team to lead this initiative.

The iHub Cluster

At the end of 2011 I was approached by one of the iHub Green Members, Idd Salim, about an idea of building our own supercomputer. Why?

Outside of South Africa, there is little to no capacity for cloud computing on the continent. This means that few of the programmers in this region have the skill sets necessary to work and build out this infrastructure. We have a severely limited foundation on which to build future services in an increasingly cloud-based computing world.

Some of the use cases where we see the need for this:

Research and training opportunities for super computer enthusiasts and university students
Training people capable of being SREs (Service Reliability Engineers)
Power-Computing service for local content
A host for parallel and resource-hungry applications such as weather prediction, draught prediction and real-time information dispatch.

The initial funding for a small HPC deployment has been funded by Google Africa Inc. Intel have further added to the project a Intel MultiFlexÂ® Server for use as the “master” component of the HPC cluster.

Bob Aman works at Google here in Kenya, and has become a staple at the iHub where he runs his office hours twice per week. He, along with Idd Salim and Jimmy Gitonga are building the first 4 nodes of what we hope to be a 24 node cluster. The most I had done before this was build my own gaming rig, so I’ll be honest in saying that I’m the noob in this group, where most of the conversations are beyond me.

As with the UX Lab, the iHub Cluster will be for people to learn what goes on under the hood of HPC’s by building it, and to learn how to use the power in it to solve big data problems. It will also be made available to the animation and ad agencies in town for rendering services.

In Summary

The UX Lab and iHub Cluster will come online this summer. Both projects have the leadership in place to run them and the resources to build them out. They’ll both be located in the same building with the iHub, and both are being built with the greater Kenyan tech community in mind. Like all of the iHub initiatives, they only work when people from the community are a part of them.

If you would like to get involved in either, reach out to the respective leads: Mark Kamau for the UX Lab, and Jimmy Gitonga or Idd Salim for the Cluster.

Will The Real Payment Disruptor Please Stand Up

February 19, 2012 / HASH / 14 Comments

Farhad Manjoo makes a compelling argument for why the real winners of the payments revolution are the same players we already know, the credit card companies and the banks, in his, “Donâ€™t mess with credit: Why the future of payments is already in your pocket.”

“Nearly every start-up working in payments is simply creating a new front end for your credit card. Thatâ€™s not a small thing; we need new ways to use our credit cards. But we shouldnâ€™t forget the true winners in this new marketplaceâ€”whatever innovations we see in payments over the next few years, thereâ€™s a very good chance that most of the rewards will flow to Visa and MasterCard.”

This is true… if you live in the US or Europe.

It’s also why Mpesa is so important, as it represents a new form as well as a new source.

Mpesa destroys the paradigm of payments as we knew it

It’s a good thing that Mpesa happened in Africa. It offered a new way of thinking about money and payments, without the legacy baggage of banks and regulations meant for another century. The powerful banking interest were held at bay, not by great power, but by indifference – this is Africa afterall, who cares about this market?

With Mpesa, and without a bank account:

People can send and receive money.
People can store up to $1000 in the system, creating a pseudo-savings account.
There are no credit card companies involved.
There are no banks involved.

Mpesa is big now too, big enough to garner a lot of attention from the the credit card companies and banks. M-PESA has over 14 million users in Kenya, 9 million in Tanzania, and hundreds of thousands in Afghanistan and South Africa now too. It now processes more transactions domestically in Kenya than Western Union does globally, somewhere in the range of 25% of Kenya’s GDP is transacted on it.

The banks actively lobby against mobile-based payment and money systems now, globally, as it constitutes a massive competitive threat that they are unable to compete with due to a multitude of reasons, one of which is simple transaction costs. The credit card companies are watching closely too, and moving. Mastercard and Visa both are working on mobile offerings, seeking to link with mobile operators in order to bypass a would be competitor.

Mpesa isn’t perfect – we need a payment system that works across mobile operators and can be synced (easily) with any bank, if needed. While it could improve, it’s still worth pointing out the really big missed opportunity here is by Vodafone. Like I’ve said before, if Mpesa was rolled out at as an independent company led by Michael Joseph, it could battle the credit card companies of the world and unseat them in many markets.

What’s interesting to me is that in the arguments in the US and Europe on “the future of payments” the real innovation, with real numbers, isn’t being mentioned.

Update. some new blog posts on this topic:
Could we live without cash?
Payments, the more things change…

The iHub in 2012: Freelancers and Presentations

February 5, 2012 / HASH / 11 Comments

This weekend the iHub Advisory Board met with the managers (Tosh and Jessica) to discuss the future direction of the space and what our focus should be for the coming year. The meeting was facilitated by my friend Peter Durand of Alphachimp Studios, who is in town as a part of the PopTech Lab.

The iHub Advisory Boards is made up of 5 people who come from the Nairobi tech community, and represent the community when important, or difficult, decisions have to be made. They are:

Riyaz Bachani, Wananchi executive, now in charge of Wazi WiFi
Josiah Mugambi, Co-Founder of Skunkworks, works at Nokia Siemens
Rebeccah Wanjiku, Tech reporter and founder of Fireside Communications
Conrad Akunga, Blogger, co-founder of Mzalendo and highly respected software architect
Erik Hersman, Tech blogger and co-Founder of Ushahidi

Looking at 2012

Our overall focus has always been that we should look to serve the tech community first, and that everything else would come from that foundation. As we stepped back to look at what’s happened in the last (almost) 2 years, we tried to identify what worked and where there gaps were.

We first worked through the a “business model canvas”, putting our minds together to find out if we all saw the iHub in the same way, and if what we were doing was what we should be doing. As you can see in the diagram above, we tried to list out all of our partners and community members, then map how we add and receive value from each of them.

A key point of discussion was how do we add value to not just the 250 green members who can come in and use the space, but also the serve the needs of the other 6,000 white members in the “virtual” community. We’ll have more thoughts and announcements on this over weeks and months ahead.

Going Deeper by Improving Freelancer Skills

We delved deeper into this, separating the types of individuals between the startup types vs the freelance types. One of the biggest gaps we’ve found is that there are many freelancers, some of whom are working on a startup on the side, but need the funds from their freelance activities to pay the rent.

Our questions became:

How does the makeup of the iHub green membership reflect different levels of what’s needed for projects to be done? In other words, are we diverse enough?
How can we help get freelancers more projects?
How can we help them become better at delivering on their projects?

In order to do freelance work, you often times have to team up with others who offer the skills that you lack. We’ve noticed that we’re primarily developers at the iHub, with some designers sprinkled in, but don’t have enough project managers or quality assurance types. So, our first order of business is to make sure we’re letting the people with these other skill sets know that they’re welcome to be a part of the iHub community too.

A gap that our sector has in Kenya is that companies who want to get a software project done don’t necessarily want to go with just any freelancer. We’ve discussed for some time the way the iHub brand can be used as a vector to find freelancers, but we’ve shied away from doing anything more than connecting people through the job board or through referrals.

The iHub is now looking into doing the following (and for this, we need some community feedback and help).

Standardize a process for clients to interact with iHub freelancers, using the iHub brand as a vector for business needs to be solved by the technology community.
Creating a way for developers, designers, project managers and QA people to collaborate and form teams to work on client projects. To be on the “shortlist” of freelancers, each would have to pass a test to make sure they are at the appropriate level.
Bring in a very specific and targeted type of mentoring and business skill training to focus on the individuals in this program, so that we can get a better culture of on-time delivery, communications and quality of work.
Put in place a system, upon project completion, for clients to rate the team, or individuals, who do the work. This would be tied to iHub member’s profiles, and anyone who under-delivers would be dropped from the pool of freelancers.

If you think you have the skills necessary to be on the initial shortlist for paid project work, and are a member of the iHub, let me or Tosh know as we think through this process. We’re looking for 5-10 people to explore this new area with us. Specifically, we’re also looking for a leader with great project management experience.

What YOU Do

As we stated at the beginning, the iHub is about doers not talkers.

Our final takeaway was on communication by the green members on what they’re doing. To this end, we’ll be putting together a schedule for each of the 250 green members to do a 5-minute presentation, followed by a 5-min Q&A. There will always be a quorum of the iHub Advisory Board present, as they’re the ones who make the final decision on who gets and retains membership. It will also be in front of the other community members who would like to attend so that there is a better understanding in the community of what each of us do.

We’ll subscribe a very tight template, likely 15 slides that automatically progress, much like Pecha Kucha (or Ignite talks). You won’t be required to give up competitive details, this is more for you to give us an overview of what you’re working on, how the iHub is helping with that, and where the gaps are that you need assistance.

Look for more details on this in the near future, and be ready to sign-up for one of the slots. If you don’t do a presentation, you will lose your green membership.

Final Thoughts

The iHub has been operational for 1.5 years and we’re about to celebrate our 2 year anniversary in March. This cushion of almost 2 years has allowed us to do a lot of experimentation, and we’re still in the process of gathering feedback from the community to get a better understanding of how the iHub is doing and what we can do better.

As that information comes in, we’ll do what we always do, and that is double down on what works and throw out what doesn’t. It would help us greatly if you take part in this feedback process, run by Hilda Moraa out of the iHub Research arm.

Finally, a HUGE thank you to everyone who makes the iHub possible!

Kikuyu Grass and the Macro / Micro Problem

January 11, 2012 / HASH / 1 Comment

Kikuyu Grass comes from East Africa, and is heavily used in sporting fields and schools around the world due to it’s hardy nature and ability to repair from damage quickly. It’s also tough, aggressive and spreads like a weed due to how it sends out long shoots. If you know this grass, you aren’t surprised to see one “runner” of Kikuyu Grass dropping in and out of the ground over a 20-30 meter area.

I like the analogy of Kikuyu Grass to discuss an issue that I see as a major issue in certain industries in regards to how technology solutions get critical mass and go mainstream, or don’t.

The Macro and Micro Problem

I call this a “macro and micro problem”, where you have to solve a big overarching issue of scale at the same time as solving needs for individuals at a very hyper-local level. This is a particularly difficult problem for bootstrapped startups to manage, because they don’t have the money or access to infrastructure to scale wide, even though they might have an excellent micro-level solution that individuals want to use.

There are two industries in Africa that I see this problem at it’s greatest, though I’m sure there are more; agriculture and healthcare. In both agriculture and healthcare you need to serve the finite needs of a farmer or someone who is sick or injured, yet it’s difficult to provide that any one solution to millions of people. Academically, you can do it, it’s easy to come up with a solution sitting in a room somewhere with a whiteboard. It’s also feasible to roll out a pilot project and make it work well in one area.

What’s difficult is replicating that same working idea at scale. This only gets more difficult as you take in the hyper-local technology demands and cultural context across a country. In fact, there are few organizations who have figured out how to roll out new technology at a national level, the best being large corporations such as bottling and soap companies, and of course the mobile network operators.

Let’s look again at healthcare. There are some great solutions coming out of the tech community for problems surrounding patient information, clinic and doctor information, medicine supply chain management, drug reminders and more. Some are at pilot stages, but none have critical mass at a national level. They simply can’t build the infrastructure fast enough, can’t market widely enough and aren’t trusted by everyone, everywhere yet. Can they do any of these? Yes, but it takes funding and great execution.

Examples from the payments space

The payments industry is on that has been able to solve this from both a macro-to-micro level, and also from the micro-to-macro level.

Macro-to-micro
The too often talked about mobile money solution in Kenya, Mpesa, is actually a really good example here. The product innovation came from outside the company, but the execution on it came from inside, as did the strategy to focus on getting thousands of Mpesa agents going all over the country. This focus on hyper-local agents solved the micro problem, and the national infrastructure and brand of Safaricom allowed it to proliferate and gain trust.

Micro-to-macro
PayPal began as a solution for small businesses or individuals (and grew largely through use on eBay) to accept payment via credit card, which was expensive or hard to do back in the early 2000’s. They were small, serving individual needs, but were able to grow their brand and scale their infrastructure to what they are today due to large VC investments.

Outstanding Questions

The question is, are there ways to solve this problem in healthcare and agriculture?

In agriculture, how will the Esoko‘s and M-farms of the world do it? Can they do this on their own, will it have to be take in by a larger company to hit critical mass?

In healthcare, will MedAfrica be able to get enough data and downloads for mainstream use? Will mPedigree and Sproxil be able to scale their counterfeit drug solutions?

I think these types of startups can, though some will have to broker partnerships with larger organizations, like the government or the mobile operators to do so. Each of them will also have to work very hard in order to meet the demands of putting a new technology solution in play at a large scale.

Like Kikuyu Grass, which has many touch points to the ground as it’s runners spread across and takeover a whole field, startups trying to solve problems in a big industry vertical need to have many local touch points as well.

What’s on Tap for 2012

January 4, 2012 / HASH / 10 Comments

2011 was a good year – a great one even. Here’s why:

iHub reaches one year, clocks over 6,000 members and more than 100 events. Companies were founded, business got funded and many companies found CTOs and employees through the network. (What makes the iHub work?)
The m:lab (East Africa’s mobile lab) was founded, with a testing center, 7 companies incubating and 2 classes of mobile app development trained.
AfriLabs was founded and now has grown to see over 15 labs in Senegal, Uganda, Kenya, Nigeria, Ethiopia, Zambia, Cameroon, Ghana and South Africa.
The first Pivot pitching competition and conference was a massive hit. Look for regional versions in South and West Africa in the coming years.
Ushahidi has over 20,000 deployments in 132 countries, the community grows.
Kenya leads an open data revolution in Africa, and we also held the IGF which brought many big names into town.
African tech startups start to get some real attention globally.
Massive growth in bandwidth mixed with lower costs on smartphones, internet itself and mobile services as well as increases in internet and mobile users across the continent.

2012 looks to be even better

The past few years have been about building an infrastructure that improves the chances of the technology startups in Africa to succeed. Seeing this buildout in action in 2011 was exciting, but it should be recognized for what it really was: a setup for 2012 and beyond.

You see, all those labs and hubs around the continent, the startups and the media coverage? They’re all about getting attention and increasing the awareness of the pent up startup potential in Africa’s technology space. Media and funders both have a bigger target to hit when looking for entrepreneurs. We were setting the stage to broaden the base of our startup pyramid: finding the local innovators and entrepreneurs and getting more of them funded.

Where we stand now is an order of magnitude beyond what we had just a few short years ago. In 2006 if you stated that you want to be a web or mobile entrepreneur you weren’t taken seriously. Five years later and it’s a legitimate position to take. We now have some successes to point out (think mPedigree, Mxit, PesaPal, Sproxil and Ushahidi etc), which make it a lot easier for the new breed of startups to get started.

This is what we’re aiming for: a playing field that allows more entrepreneurs to startup, get some seed funding and fail fast if necessary. The ones who make it, the ones who get beyond the startup phase and become real companies with cashflow and employees, are why this is being done. This will make some people a lot of money, and it will make millions of others lives a lot better because they have better and more relevant products locally.

2012 is set. It’s the year where we grow the seed funding and early stage venture capital investments so that five years from now we have the ecosystem needed to support a much larger investment and startup community.

My prediction is this: In 2012, if you have a startup in one of the main tech cities in Africa and are unable to get funding, it is due to one of two things: Your idea isn’t viable or you don’t know how to pitch.

The funding is coming, and it’s up to you to create a business and make it succeed.

(To do this, I suggest you read 2 posts on the Afrinnovator blog: “15 Skills African Tech Talent Must Acquire in 2012” and Mbwana Alliy’s “12 Predictions for African Tech in 2012“.)

Thoughts on Africa’s Mobile Operators and Disruption

November 13, 2011 / HASH / Comments Off

Generally speaking, mobile network operators (MNOs) were highly disruptive in the 90’s, but have continued to decrease in this over the last decade. Operators are no longer the offensive, attacking force of yesteryear, instead they’re putting up barriers and defensive walls trying to protect what they have and hide.

Instead, the disruption comes from the open web. Whenever the operators put up a blocker to what users want, usually in the form of price or access to their infrastructure, the web finds a way of displacing them. Examples abound in location based services, text messaging, video and photos.

There’s a reason operator revenue is shifting away from voice and SMS towards data. The products that got the operators here are receding in relative value. The user wants what’s available in the open web, and that’s just not found, or being provided, by the operators.

So, what is an MNO to do?

Change. Disrupt someone else. Innovate.

One of the biggest disruptors, even in this decade of MNO mediocrity, has been Safaricom – the 800lbs gorilla in my own back yard. They’ve invested in new technology, products and business models like few others, and are reaping the rewards of those strategic moves.

Do I like having a monopoly player in my market? No.
Do I feel bad for the other MNOs (Orange, Airtel and Yu) who are crying now? No, they did this to themselves.

Let’s dig into their golden-child, Mpesa, the mobile peer-to-peer payment system that’s did $3.15 billion in transaction in just the last 6 months(!). How do you know they succeeded in innovating? Well, the easy answer is looking at their profitability and user tie-in that they get from Mpesa. Look more closely and you’ll notice the other signal, all of the bank lobbies in other countries have put up huge walls, blockading an aberration like Mpesa from having sway in their country.

[Sidebar: A warning to everyone who wants to see innovation in their country. Over regulation of telecommunications and banking strangles it. South Africa and Nigeria are cases in point.]

So, Mpesa sounds to everyone like a huge success story. It is, and it’s not. What we think of as an amazing disruptive product is really only halfway up the mountain. There are too many corks being popped while money lies sitting on the table. This stems from 2 main things, which seem to be an issue of Vodafone primarily, since they own the IP for Mpesa and own a 40% stake in Safaricom:

The lack of leadership by Vodafone to NOT open up an API that other businesses could build on and increase usage. They’ve stifled innovation on their own product.
Their lack of vision in the global payments space. Their shortsideness in not spinning out Mpesa as its own company to take on Visa and Mastercard directly. This was one of the few products and business models that could do that.

More MNO Innovation

So, Safaricom might be stifling its own product, but they’re still not short on disruptive features and products. They do fall prey to bureaucracy and political infighting, but they’re also one of the most aggressive MNOs globally, always trying new things. Three more examples:

Creativity in 3g data pricing and accessibility down market.
First-movers in 3g and exceptional data coverage countrywide.
Okoa Jihazi, their product that gives a loan of credit from the operator to users who are tight on cash.

Other examples of MNOs who are innovating in Africa are:

Airtel Madagascar working with Movirtu with their new Cloud Phone, a way for people to share a phone, but keep the SIM card in the cloud.

MTN, testing Mobile Phonebook by FeePerfect out of Cameroon, a product that puts a phone book into everyone’s phone.

Small + Big

Clearly, innovative products can come to market through MNOs. What’s the common denominator on these products though? Most of them came from small companies and were then incorporated into the MNO.

Ideas come from outside, they come from the edge. Scale comes from inside, from the massive infrastructure provided by the MNO. They have to work together to succeed.

I work with, and talk to, hundreds of entrepreneurs. They have ideas, prototypes and products that just might be what the users want. They lack the access to the infrastructure to roll it out.

As an MNO, you boost your chances of success in this increasingly chaotic space by not walling everything off, but by opening it up.

Where Africa and Technology Collide!

Category: Strategy (page 3 of 12)

A False Dichotomy

Where should they be?

So, what does Wildlife Works really do at Rukinga?

The Tech

An AfriLabs Director

Research on Africa’s Tech Hubs

Supporting Organizations

Why I’m involved

The iHub UX Lab and Supercomputer Cluster

The iHub Cluster

In Summary

Mpesa destroys the paradigm of payments as we knew it

Looking at 2012

Going Deeper by Improving Freelancer Skills

What YOU Do

Final Thoughts

The Macro and Micro Problem

Examples from the payments space

Outstanding Questions

2012 looks to be even better

So, what is an MNO to do?

More MNO Innovation

Small + Big