Sendy: Digitizing Motorcycle Deliveries

Motorcycle couriers in Timau, Kenya

Motorcycle couriers in Timau, Kenya

This year at Pivot East I had my first look at Sendy, which does for motorcycle courier deliveries and customers in Nairobi, what Uber did for taxis and passengers in San Francisco. At its heart, Sendy is about bringing the vast and growing motorcycle courier and delivery network in Africa into the digital and networked world.

Motorcycles in downtown Monrovia, Liberia

Motorcycles in downtown Monrovia, Liberia

This is a big deal, because those of us who live in large African cities know just how inefficient driving a car around the traffic-plagued metropolises can be. With the bad roads, traffic and high cost of fuel, motorcycle deliveries are a natural path.

Indeed, in almost every city, from primary to tertiary throughout the continent, you’ll find thousands of motorcycle guys sitting by the side of the road, ready to courier a package or serve as a taxi. They ride inexpensive $800-$1200 Chinese and Indian motorcycle brands, are generally not trained very well, have little safety equipment and are some of the most reckless riders I know.

When Alloys Meshack, Sendy’s CEO, stepped onto stage for his 7-minute pitch, I was hooked. It sounded like the right team, a good business plan, and one that could scale well beyond Nairobi. I met with him again this month, and got into a lot more details around the business, and this encouraged my thoughts on both him and his team, as well as the broader scope of the business that they are building. It is truly impressive.

How it Works

Sendy delivery - Android app screenshot

Sendy delivery – Android app screenshot

I also signed up for the service, and then used it.

It’s as simple as this:

  1. Download the Android app, or sign-in to the web app at Sendy.co.ke
  2. Click the button that you have a delivery (or pickup) to be made.
  3. You can see the map for where the rider is – my wait was approx 5 minutes for the courier to arrive
  4. Give him the package and directions

There is a GPS transponder on the motorcycle, and you get an SMS update when the delivery rider gets withing 50m of the delivery zone. Once the package is delivered, there is another confirmation that the rider sends to Sendy, that comes to you as well. Payment is then made automatically by either credit card or Mpesa.

My delivery took about 25 minutes, from first Android app entry, to delivery about 5km away. At the end, you can rate your delivery rider, so that the best are known and get more business. I found my particular rider courteous and patient. He also told me that he makes about 5-6 deliveries a day with Sendy, and loves the service.

Challenges and Opportunities

The Sendy opportunity in eCommerce

The Sendy opportunity in eCommerce

With Africa’s growing need for logistics around eCommerce, Sendy presents a natural option for everyone from Jumia to your local supermarket. Motorcycles are already an accepted means of delivery for non-traditional business and large enterprises alike. The idea of capturing a large portion of this, without all the baggage of a normal courier company setup, is good for both Sendy and the everyday bodaboda/courier guy.

There are a couple hurdles to overcome to make this a simple process to onboard new customers, receive payment and then send payment to the courier riders. Unlike the US or EU, not everyone has a credit card, and the mobile payment options don’t allow for “pull” billing (instead, the customer has to “push” a payment to your service), which is clunky.

Sendy has corporate accounts (which is now used by both BRCK and Ushahidi), and for businesses, finding a good payment process isn’t a problem. However, there will need to be some creative thinking for individuals and small businesses in order to make Sendy as painless as it promises to be.

The service verifies the courier riders, keeping their records on file, and providing the necessary technology for both tracking of motorcycle and communications with the rider. This means that qualified riders are picked, lessening the chance of getting robbed, and the ability to rate a courier creates a system that builds trust over time.

The opportunities that Sendy represents are staggering. I encouraged Meshack to get Nairobi right quickly, then scale up and move beyond into other major cities in the region.

Sendy is raising a seed round of investment. If this opportunity is interesting to you, you should reach out to them.

5 Good Recent Reports on African Tech – 2014

I keep meaning to write blog posts on each of these reports on tech, most of them on Africa, but can’t seem to get it done. Instead, I’ll just post a link to each, a visual, and why I think it’s worth reading.

1. The Akamai “State of the Internet” Q3 2013 report

[Akamai Report – PDF Download]

Has good information on overall usage globally, and trends. In Africa, even though they have a node in Kenya, all we’re seeing is stats on South Africa, Egypt and Morocco. However, there is a really fascinating chart by Ericsson in it on wireless usage.

Mobile data vs voice growth globally - 2013

Mobile data vs voice growth globally – 2013

2. GSMA’s “Digital Entrepreneurship in Kenya” report 2014

[GSMA – Entrepreneurship in Kenya report 2014 – PDF Download]

The GSMA puts together some fantastic reports, due to the amount of data at their fingertips due to their association’s membership. Alongside the iHub Research team, they’ve done a deep dive into the tech entrepreneurship side of Kenya, and you can see the results here.

tech-in-kenya-stats-2013

3. Deloitte’s “Value of connectivity” report 2014

[Deloitte’s – Extending Internet Connectivity report 2014 – PDF Download]

The Deloitte folks do a study and argue that an increase in internet penetration could have a large impact on an emerging market country’s GDP.

“Deloitte estimates that the resulting economic activity could generate $2.2 trillion in additional GDP, a 72% increase in the GDP growth rate, and more than 140 million new jobs.”

Internet penetration worldwide - Deloitte Report 2013

4. infoDev’s “The Business Models of mLabs and mHubs” report 2014

[The Business Models of mLabs and mHubs 2014 – PDF Download]

I’ve had a front-row seat to infoDev’s work starting and supporting places like the m:lab in East Africa. After doing it for 3 years, here’s their indepth report on what’s working, not working, how much money has been spent and what the future might look like.

Comparison of Key Results across mLabs - 2014

5. McKinsey’s “The Internet’s transformative potential in Africa” report 2013

[MGI Lions go digital_Full report_Nov 2013 – PDF Download]

Mostly useful due to the interest large corporates and banks put in McKinsey, this report makes that the greatest impact of the internet in Africa is likely to be concentrated in six sectors: financial services, education, health, retail, agriculture, and government. What they’ve done particularly well is gather a large range of numbers from diverse and various sources to make better sense of what’s going on.

Penetration and usage vary widely across the continent

An Inspiring Article with Great Advice for Entrepreneurs

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

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

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

Report: Accelerating Entrepreneurship in Africa

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

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

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

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

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

African entrepreneurs prefer starting off informally

African entrepreneurs prefer starting off informally

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

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

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

The survey focused on four areas of the entrepreneurial environment:

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

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

Google Plays Dirty in Kenya

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

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

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

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

UPDATE: Google has owned up to this, saying:

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

The developer to tech entrepreneur gap

Being able to make something doesn’t mean you’re an entrepreneur, being able to make a business out of it does.  

I’ve met many great developers across Africa, some who would be considered “top of class” in any country in the world.  Unfortunately, some confuse starting a company for running a business.  It’s easy to get a legal entity, a company name and even a prototype out into the market.  It’s hard to earn money off of that idea, even enough to make it self-sustaining, much less profitable.

I can think of a couple reasons why this might be.

Sometimes I wonder if this problem comes from the current eduction system, where you’re trained to be great employees but not independent thinkers with an entrepreneurial bent.  That could be it, and it’s no surprise that the tech entrepreneurs who are making a living, building businesses of their own, weren’t the top students in their class.

I then look out at the many pitch competitions and challenges that are being presented to the young tech entrepreneur in Africa, and I realize something else.  The ability to communicate what you do and what value it brings to your market are missing.  There is an extremely small number of presentations that I’ve seen that would sway an investor or business executive to engage with your business and its products.

Again, maybe this is a matter of academic style and lack of business training in school.  It probably has a lot to do with the fact that developers are generally not businessmen, therefore they have a difficult time pitching their product, even if they have the desire and fancy themselves in that role. 

We need a couple things to happen.  

First, more companies formed by a combination of 1 businessman and 1 tech.  Start from there and see what happens when you each concentrate on what your strengths are – your competitive advantage.  As a programmer, put your ego to the side and realize that an experienced businessman with good business acumen will take you far.

Second, I hope the local high schools and universities will offer basic business classes that are made open to young people in the technical field.  Having a basic understanding of economics, marketing and incentives means a better chance that aspiring tech entrepreneurs will make it.  Equally, we need more business schools to have introductory classes in technology so that they know what the gaps are and can exploit them.  

Mocality: Mobile Business Listings for Africa

It’s not often that you hear of a tech startup from South Africa who chooses to build and deploy their product to Kenya first. In fact, I’ve never heard of such a thing. However, that is just what is happening with Mocality, a mobile and web-based business listings and directory application built for Africa.

Mocality’s job: create a digital platform that makes it easy for business owners to promote and expand their businesses in Africa.

“As a business owner, you get free SMS, a contact list, a free mobile website and a free mobile business card.”

Mocality represents this change in the paradigm that we’ve seen coming on for years in Africa. An application built agnostic to the client platform (mobile phone or PC), where data is fed into whatever you use in a meaningful way. Where the mobile usage is just as rich as the PC use.

In fact, they’ve studied usage of mobile phones on their system and have seen the usage of smartphones to be so negligible as to not matter. As CEO Stefan Magdalinski says, “This is the Mocality reality: RIM, Android, Apple are 2% of usage.”

About the Team

Successful startups generally have great leaders, Mocality has that. Stefan Magdalinski (@smagdali) is a seasoned web veteran and entrepreneur, co-founder of Moo.com and an early entrant into the programming space in England in the mid-90’s, and just recently relocating to South Africa for Mocality. They have plenty of funding, from MIH, a subsidiary of Naspers Group (who has been eying Kenya with recent forays such as Kalahari and Haiya).

I’ve met with Stefan in Kenya and South Africa, and I’ve also had the chance to meet some of the members of his team here in Nairobi. The impression that I’m left with is that this is a serious startup, with plenty of funding and a great vision and a strategy put in place to pull it off.

How it Works

Mocality is built for Kenyan businesses that don’t have enough money (or value to gain) to advertise in a print directory.

Again, a paradigm shift. They’re saying that they don’t care about the big end of the power law of distribution (the big companies), only the longtail (small, marginalized businesses). This is apparent in the images below of their typical user:

  • SMS, WAP & Web tools (now J2Me, iPhone)
  • Businesses can self list
  • Geo-coding All business locations
  • Map view of business
  • Business toolkit:
    1. Add customers & suppliers
    2. Send bulk messages (400 free SMS monthly) (but with anti-spam controls)
    3. Send mobile business card
    4. Add details (e.g. Menus, Special Offers)
  • Website, google optimised (white hat only)

Important to business owners in this segment is that the platform is free. Services will be added to the platform over time that business owners can pay for, but currently the only cost to them is data or SMS usage on their own mobile phone to access Mocality.

Scaling using the Crowd

Initially, the Mocality team walked all over Nairobi getting businesses to put their listings on the platform. They were successful, and in about 6 months of hard work were able to get approximately 11,000 businesses listed. That’s good, but barely puts a dent in the number of companies operating in this city.

The team then launched a crowdsourcing option, where they experimented with allowing anyone in Nairobi to add their own (and other’s) businesses to Mocality, and they got paid a bounty to do so. Within the last 6 weeks they have as many listings entered as the previous 6 months. If you live in Nairobi and want to become an agent, you need a WAP-enabled cameraphone and only need to visit http://www.mocality.com/money.

That’s impressive, but the impact is even more apparent when you look at the visualization:

If you have a business in Nairobi, you can get your listing onto it by visiting www.mocality.com email to info@mocality.co.ke or SMS callme to 2202 from within Kenya.

What would you say to Nokia Africa?

On Friday I’ll be addressing some of the top business decision makers for Nokia in Africa. My goal is to shake them up a little, make them think deeply and differently about the African market.

Nokia in Africa - little innovation since the nokia 1100 flashlight on a phone

Nokia hasn’t truly innovated in Africa since they put a flashlight in a Nokia 1100 in 2003.

I’ve been asked to discuss my views on how the handset and mobile services business situation is developing, what the opportunities are in those areas and suggestions on how Nokia could lead in this market.

Therein lies the problem: I’m only one person with one opinion, they need to hear from others with different experiences.

What would you say?

Add yours in the comments below. The best will be brought to the Nokia executives attention:

Here are a couple from Twitter.

  • Top-end or low-end handsets, what does Nokia stand for here? (via Niti Bhan)
  • Innovate on the user experience for low-end handsets. (via Rombo)
  • Is Nokia serious about social impact, or is that just face paint?
  • Africa is ripe for experimental phones and financing models, what is new coming out of Africa first?

Don’t just think cheap handsets. What else would you do within business models and solutions?

5 Examples of Student Ingenuity in Kenya

My good friend Josiah Mugambi in Nairobi was at the Kenya chapter of the Institute of Electrical and Electronic Engineers (IEEE) exhibition in Nairobi last weekend. This is where students showcase their innovation in engineering, ICT, mobile application and renewable energy. He did me a great favor by sharing some pictures and research that he did on some of the really interesting students he came across.

1. MPESA Online Shopping

By Denis Ndwiga Nyaga

Safaricom CEO Michael Joseph was especially interested in this one for obvious reasons. Denis called it ‘nakupesi‘, Naku for Nakumatt (the local mega-store). nakupesi is an online shopping mall, with payment based on MPESA. One would need to be registered on MPESA to be able to pay for items online via MPESA. One thing that is possibly lacking is delivery to one’s residence or office after purchase. This shouldn’t be too hard to incorporate though.

2. Green Tree Markets – a Business Intelligence tool for farmers

By Andrew Owuor

This looked quite interesting – A business intelligence tool that allows a farmer to choose where to sell his produce based on price, and location. Some of the obstacles that the developer Andrew Owuor mentioned include the need for real time market data from markets round the country, for the system to be of use. This isn’t a completely new idea, but it’ll be interesting to see what local twists are created for East Africa.

3 more…

3. Automatic headlight dimming for two approaching vehicles – By Jemimah Wachenje
Jemimah has developed a system that automatically dips two vehicles head lights when approaching each other at night. Josiah has ranted about headlights before, and I agree, it would be very useful and potential could reduce some accidents on those dark lightless roads around Kenya.

4. Energy harvesting using piezos to charge mobile phones – by Richard Assanga Otolo and Gilbert Barasa
Very interesting, yet practical.

5. Synchronous Solar Heliostat – by Samuel Njoroge
Sammy Njoroge’s demostration of a synchronous solar heliostat used to track the sun, and orient a solar panel accordingly thus improving the efficiency of solar panels. Automatic tracking of the sun to increase the efficiency of solar panels, Makes economic sense. Innovation runs in the family it seems.