Hurdles of High-Tech Entrepreneurs in Africa

Morris Mbetsa is a 19 year old Kenyan with a lot of good ideas. If that was all, he wouldn’t be that special, however, he actually builds prototypes of his ideas and they end up being quite extraordinary. The first time we covered his “Block and Track” SMS-based vehicle security system on AfriGadget. This time he’s come up with a web application – the “Wakenya” system for tracking Kenyan citizens virtually via mobile and web.

The frustrations of tech entrepreneurship in Africa

Morris and I got together shortly after his first system was created. He shared a couple other ideas beyond that first invention with me.

He had received a lot of attention due to the Kenyan TV coverage, but it hadn’t turned into any real money for him. No one within Kenya was interested, either as a business partner or funder. There were a couple international groups that were trying to angle in on him, but when I spoke to him he didn’t know or trust them. What he had was all the makings of a sad story of inventiveness leading to… nothing.

This is our story in Africa isn’t it? How so?

  • We’re continually fighting to get our own money people interested in what we’re doing. We lack seed capital and no one locally cares.
  • We need business mentors that we can trust, ones that we’re not always worried about being fleeced by overnight. Ones that aren’t just looking out for how they can either steal the idea, the IP or the equity.
  • Lacking any local funding or business partners, we hope that an international funder will notice us.
  • If we’re able to get international attention, the next trick is trying to figure out if any of these people are real, honest or legitimate.

It’s frustrating. Why won’t anyone locally come in and fund an idea? Not just an idea, as in the case of Morris Mbetsa and others like Steve Mutinda, but real prototypes. These are working models. (I could go off on a tangent talking about all of the great software developers in Africa who talk a lot about good ideas but never build them – but that’s another post). No, these kinds of guys actually build the prototype first, then try to find someone to fund it. Basically, they’re doing it the right way.

Does the government have a role?

It should, but only in so much as they create a system which limits the hurdles that entrepreneurs need to overcome to create a business, get funding and bring their ideas to market (not just for tech, but for everything). Private investment should be the lion’s share of this type of growth for the country, but in Morris’ case, he’s created a system for Government, so there should be some government funding for just this type of activity.

In fact, Kenya went so far as to create the ICT Board a couple years ago for this express reason:

“To rapidly and innovatively transform Kenya through promotion of ICT for socio-economic enrichment of our society.”

Here we have a young Kenyan with (many) good ideas and prototypes. He needs some structural support though, and we hope he gets it before the vultures descend. I know Paul Kukubo, Al Kags and a couple others within this group – they’re good people and have big ideas themselves. I know that they’re trying to come up with big structural ways for Kenyans to access ICT services and for Kenya to become an global ICT hub.

My question is this: How will that ever be the case if guys like Morris Mbetsa don’t have the requisite government structures in place to allow them to succeed?

3 groups and food for thought

We have a foundational investment-in-innovation problem in many parts of sub-Saharan Africa. If Kenya is one of the top 5 African hubs for technology, then we know that the rest of the countries are in similar or worse conditions than this. What is it going to take for us to truly setup an ecosystem of entrepreneurship and the structures that support innovation, especially in the tech sphere?

1. Outside investment as catalyst
I’m starting to wonder if it will take a concerted effort by investors in the international space who can inject large amounts of capital into business ideas that have potential. Why international, isn’t local good enough? Normally it would be, but international investment comes with some benefits that local investment doesn’t. As anyone who lives in places like Nairobi knows, almost any money you take locally comes with two problems. First, it’s usually a small amount given for an excessive demand on equity. Second, it comes with political ramifications that tend to compromise the receiver of the funds.

Is what we really need a shakeup? A wake-up call for the local investor to realize that they will miss out on the big ideas and products if they don’t create a local system that allows real innovation to flourish, grow and enrich the inventors.

2. Government mechanisms for entrepreneurs
Outside investment as a catalyst for change in this space is one possible idea, but it’s not enough. As mentioned earlier we also need someone within our highly-bureaucratic government system to create a channel for entrepreneurs and investors to act. This could be accelerated business entity creation, and it would likely include lowering certain licensing terms and restrictions. My guess is it would also mean a structure for low-interest business loans as well.

3. A united technology community
Lastly, we need the technology community itself to band together. This is coming into being in a few countries, places where we have techies networking and creating relationships with business people and government. We’re starting to see when an investor comes into town, people okay with sharing the names of other entrepreneurs that have good ideas, and not trying to just tie that investor down with their own stuff.

While there will always be competition, lets put aside the tendency to pull someone else down when they’ve achieved some modicum of success. Instead, trumpet the small wins and help each other get ahead. Goodwill pays off so much better in the long run.

Finally

You can see this is something that I’ve been thinking about a great deal, and it bothers me to no end. For, if we don’t fix this we’ll continue to have the best and brightest head to other parts of the world – there is no industry where this is easier to do than the digital one. With them goes all the intellectual capital, inspiration and revenue that would further enrich our own continent.

I’m determined to play my part in seeing change happen. I want to see real technology powerhouses grow within Africa – ultimately with African investors and with solutions that will take the world by storm.

[Interesting update on Morris]

Paper: Mobile Phone Access and Usage in Africa

For the past few days I’ve been in Qatar doing a joint demonstration of Ushahidi with Ken Banks of FrontlineSMS at the ICTD conference. One of the interesting projects that I ran across was ResearchICTAfrica.net, who have been doing a study on mobile phone access and usage in Africa. They did over 22,000 surveys in 17 countries to compile this report.

ResearchICTAfrica.net

Some takeaways:

  • Lower levels of ICT access and usage in Africa can be attributed to weak telecommunications infrastructure, generally low economic activity, irregular electricity and a lack of human resources.
  • Income and education vastly enhances mobile adoption (over gender, age or social networks).
  • Mobile expenditure is inelastic, meaning higher income individuals spend a smaller proportion of their income.

Charts

There are a number of interesting charts within the paper. One of which shows the elasticity of usage depending upon income (top 25% of the population vs bottom 75%).

Mobile phone usage elasticity in Africa

Personally, I was fascinated to see a study on the average expected cost of a mobile handset.

Expected mobile handset costs in Africa

I’ve got a PDF version of the report here. Like this conference, it’s mired in academic language, but it’s an incredibly informative and useful report if you can get past that:

ResearchICTAfrica Report – ICTD 2009 [PDF]

(sidenote: the academics here at this conference could use a course in communications, it’s often difficult to decipher what they’re actually trying to say…).

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.

Mobile Broadband Internet in Africa

The Africa Report’s quarterly magazine has come out, this time with a report on mobile phones, internet penetration, BPO zones and mobile banking. If you’re not subscribed to this quarterly magazine yet, you should – it’s available in almost every country. Personally speaking, it’s one of only three magazines I subscribe to (the others are MAKE and Technology Review).

“The division between the ICT ‘haves’ and ‘have-nots’ now runs through the heart of the continent, geographically and generationally. While young urban Kenyans and Nigerians feel at home messaging one another on social-networking sites, the elders in the rural landlocked hinterlands have yet to send an email, and many have never made a phone call. Tunisia and Morocco compete furiously with one another in the business process outsourcing (BPO) market for francophone call centres, but most businesses in the Sahel have never heard of doing their accounts on Excel spreadsheets.

Mobile Broadband Internet in Africa

While it’s good to talk about mobile phone penetration, I was a lot more interested in seeing the discussion going on around mobile broadband internet and how that is the next big move in Africa for the operators. Passing data, not just voice, is the battleground of the future in Africa – and all the carriers are fighting to position themselves to win.

I saw this happening in my most recent trip to Kenya where the local ISPs are very much aware of their dongle-toting SIM card competition (see image below) found in Safaricom and Celtel. As voice services begin to erode for mobile carriers in Africa, they have to find new ways to compete. Of course, this means more and increasingly cheaper options for consumers around the continent.

Safaricom's Internet Broadband Dongle (with SIM Card)

With new carriers still entering into the fray, older ones having to change their business strategies, and ISPs who are also getting better international bandwidth connections the real battle for the internet in Africa is just beginning. It’s very much of a “wild west” atmosphere with huge stakes at both the country and regional levels.

[download the extract of this article here, a 772Kb PDF)

Google Kenya and the Google Global Cache

Google is well known for snatching up top-level talent, this holds true in Kenya as well. ICT groundbreaker Joe Mucheru heads up the Kenya office, and he’s surrounded by a team of smart young technologists. I had the chance to meet Isis Nyong’o (Strategic Parter Development Manager) while getting ready for Barcamp Nairobi, and then Chris Kiagiri (Tech Lead) and Mark de Blois (Geographic Supervisor) last week before I left.

Google Kenya is Different

I found out a couple of interesting points that make the Google Kenya office even more interesting than before. It turns out that there are 3 offices in Africa; Kenya, South Africa and Egypt. However, the office in Kenya is neither a sales office nor an engineering office, which makes it unique globally. In fact, it is the only “deployment office” worldwide. This means that the Kenya office can be used as a launch point for new ideas and is the central focal point for Google’s Africa strategy.

It came down to a choice between Senegal and Kenya – one French-speaking and one English-speaking, and both with a fairly well developed technology sector. Senegal had a direct transatlantic cable, but Kenya had the right people available. At Google it seems, finding the right personnel usually trumps about everything else.

Speaking of which, they’re still looking for the right people, not only in Senegal, but also in Nigeria, Ghana, Rwanda, Tanzania and Uganda. Unfortunately, Google HR seems to be geographically challenged, as jobs in Egypt are somehow not in Africa…

Dealing with a Slow Internet in Africa

The Google Global Cache (GGC) was announced in May at the African Network Operators Group (AFNOG) conference in Morocco. In lieu of data centers in Africa, Google has created a strategy that is housed at major exchange points to serve Africa at the edge of Google’s network. Internal tests suggested at least 20% performance increase in high latency links, like East Africa.


[The top cycle (1,2,3 & 4) is how things normally work. The bottom cycle (5,6 &7) is where the changes are.]

It works like this. Once anyone within that exchange point’s sphere visits a webpage, the information is cached and it becomes much faster for anyone else visiting that website to access it. Pre-fetching of data also that improves performance over time, even for dynamic content.

This is an interesting strategy. It’s a win for ISP’s (less international traffic means lower costs), a win for end users (pages load faster), and a win for Google (faster, better usage).

The pilot in Africa was turned on in Kenya just 2 weeks ago. There are 17 international exchange points (IXP) in 15 African nations, so with a positive pilot in Kenya, this could soon be seen continent-wide.

Keep your ears open, there are hints of even more interesting stuff coming out of the Google Kenya office.

FrontlineSMS (v2) is Reborn & Ready for Use

One of the guys that I’ve been fortunate enough to get to know over the years is Ken Banks. He’s a tireless believer, and more importantly practitioner, in the field of mobile phone as change agent in the world. His FrontlineSMS mobile phone software has been making waves from Chile to Nigeria, and it’s use is only accelerating.

Since its initial release in 2005, FrontlineSMS has been adopted by NGOs in over forty countries for a wide range of activities including blood donor recruitment, assisting human rights workers, promoting government accountability, keeping medical students informed about education options, providing security alerts to field workers, election monitoring, the capture and exchange of vegetable (and coffee) price information, the distribution of weather forecasts, the co-ordination of healthcare workers, the organising of political demonstrations, the carrying out of surveys and the reporting and monitoring of disease outbreaks.

As of today (9am GMT), the new and improved version of FrontlineSMS will be unveiled. The software will continue to be made available for free to non-profits, available in Windows, Mac and Linux formats in six languages; Chinese, English, French, Portuguese, Spanish and Swahili.

Knowing Ken personally has a few perks, like the chance to see the new version early and know the amount of work he’s been putting into making this come into being. On top of that, Ushahidi will be utilizing FrontlineSMS as an extension to the new version of the tool we’re creating – and I know that InSTEDD plans to do the same. You know you’ve created something remarkable when you’re starting to make an impact on the NGO and the technology sides of the world.

Keeping up with Ken is difficult, as he’s a road warrior constantly speaking at conferences or in the field with his software. My suggestion is that you join the his Social Mobile Facebook group, catch him on Twitter, or read along on the Kiwanja.net blog.

Ken, congrats on this, I know it’s been a long time coming. Next drink is on me! :)

Kenya’s ICT Board on eCommerce

I was quite excited at the opportunity, provided by Al Kags of Kenya’s ICT Board, to be a part of their meeting on eCommerce. This has always been a hot topic for me, as I strongly believe that the ability to transact business (through web or mobile) is one of the “killer apps” for Africa.

My take is that Africa needs a mobile payment system, akin to PayPal, that is both carrier and bank agnostic.

We’ll see if my definition of what it takes for eCommerce to work is the same as theirs.

NOTES from the meeting after the jump (long)

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