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I was recently approached by a Kenyan journalist who was bemoaning the fact there was so much activity in the local tech scene, but that so many weren’t making a lot of money on their startups yet.
It was an interesting moment for me, as I looked at last year’s iHub Research study showing 48 new companies out in the past 2 years (I’ll need an update for 2012 numbers). I look at the numbers of say 30-40 new tech startups in Kenya each year and I think, that’s not enough. We know only 10-20% will make it. Personally, I’m not happy with 3-6 companies each year getting through, we need more. I’ll be a lot happier when we see 100+ new startups, working out of all the new incubators and getting the investment and users/clients they need to grow.
In short, we need more, not fewer startups in Kenya.
It might be uncomfortable for some of us, as we’ve seen the increasing amount of activity and we’re not used to it. However, a growth in this space is exactly what we need if we are to fulfill our own potential for being Africa’s tech innovation hotbed.
It’s also a bit hard to see so many companies fail. This is normal though, it’s what we should expect. As long as the entrepreneurs are learning from what went wrong, then it can serve as a good lesson that makes them more investible in the future. It’ll help us get used to a much more rapid ideation >> creation >> failure/success model.
Here’s the full infographic from the iHub, updated for 2012 (click for full size):
“I disapprove of what you say, but I will defend to the death your right to say it.” – Voltaire
Robert Alai is blogging scum. Make no mistake. The quality of a person is not found in what they say, but in what they do, and Alai has proven time and time again that he is a bad actor.
If you know Robert Alai’s history in the tech scene in Kenya, then you know why he has been banned from the iHub. There’s a reason why the Skunkworks community ejected him multiple times over many years. There’s a reason why Nokia banned him. There’s a reason why Google blacklisted him. He consistently libels individuals for personal gain, to draw traffic and monetize his sites. For him it’s about attention, any way that he can get it.
Yesterday, the newswire said that Robert Alai was wanted. Today’s news is that he has been arrested for tweeting about the Kenyan government’s official spokesman Alfred Mutua. (fuller backstory here)
A lot of Kenyan’s on Twitter are laughing at Alai’s current predicament, after all, it is fun to see someone of his particular uncouth makeup get their comeuppance. The problem is in how and why this is being done. While you laugh today at Alai, tomorrow they will come for you.
However…
This isn’t about Alai, he just happens to be playing the role of a jester, distracting us from the much greater story that is online and media censorship in Kenya. There were many of us who warned against the real danger in 2008 and 2009, this Kenyan Information and Communications Act that allowed for censorship based on fuzzy details and definitions, and how it could all be done at the behest of one man, with little oversight. While everyone wants to laugh and point fingers at Robert Alai, they won’t be laughing when this censorship gets applied to him.
This all stems from the Kenya Informations and Communications Act (PDF Version), which was amended after the post-election violence in 2009 in an effort to curb hate speech. It is a controversial amendment of the Kenya Communications Act, 1998 because it gives the state power to raid media houses and control the distribution of content.
Of course, the media houses only cared because of the fear of it applying to them. However, they’re already mostly muzzled due to in-house nepotism, links with political parties, and more importantly don’t want to upset the hand that feeds them: the millions that they get from corporations, the government and political parties who advertise with them.
It is for this very reason that bloggers are so important, why Twitter and Facebook matter. It’s through these channels that people can speak truth to power.
“SMS, blogs and websites were an essential source of information, opinions and images. Innovative ways of capturing news and events as they unfolded – for instance, by using mobile phone cameras and uploading images onto the internet – increased access to information during those critical months. The downside of this increased access to information, however, was the use of the same media to spread messages of ethnic hatred, intimidation and calls to violence.”
There in lies the issue, that the medium used for so much innovation, democratization of information, and empowering of ordinary people can also be used for misinformation.
Let’s look at the details
I am not a legal expert, so I am quite interested in hearing from someone who understands and knows the real definitions of the terms here.
“We summoned him on Thursday and we hope to see him probably and latest Tuesday (today). He has violated sections 26, 29 and 30 of the Act and we feel he should come and tell us more,†said Kamwende.
So, let’s take a look at this.
Section 26
Deleted, it doesn’t even exist in the law…
Section 29
29. A person who by means of a licensed telecommunication
system—
(a) sends a message or other matter that is grossly offensive or of an indecent, obscene or menacing character; or
(b) sends a message that he knows to be false for the purpose of causing annoyance, inconvenience or needless anxiety to another person commits an offence and shall be liable on conviction to a fine not exceeding fifty thousand shillings, or to imprisonment for a term not exceeding three months, or to both.
Section 30
30. A person engaged in the running of a licensed telecommunication system who, otherwise than in the course of his duty, intentionally modifies or interferes with the contents of a message sent by means of that system, commits an offence and shall be liable on conviction to a fine not exceeding three hundred thousand shillings, or to imprisonment for a term not exceeding three years, or to both.
Now, Section 26 doesn’t exist and Section 30 seems a stretch, because as far as I know Robert Alai doesn’t run, own or license any telcoms system. Instead, let’s focus on Section 29, which seems to be more relevant.
Alai is likely being held for Section 29(b). He’s well known for libel and defamation, and someone is finally penalizing him to the full extent of the law. People need to be held to account for what they say, freedom of speech comes with responsibility. This fine line is where and why the law actually matters. It’s about what the law is, who defines it and how it is followed through on.
The real issue 4 years ago, and why this act was opposed by many, is that the act contained controversial provisions that sought to allow security agencies to seize property without due process, arrest and indefinitely detain suspects.
What the question should be for all of us with Robert Alai, is whether that is being tested on him. Was/is there due process? Who decides which media company gets raided? Who gets to say which blogger gets arrested, or which person on Twitter said the wrong thing?
99% of Kenya’s 6.5m internet users access it via mobile, of which Safaricom owns 77% marketshare.
In Kenya, when you buy a 1.5Gb internet bundle from Safaricom you pay 1000ksh (~$12). You’ve paid for the data, and there is no additional cost to Safaricom if you were to use that data today or a year from now. The whole concept of data bundle expiry is ridiculous, as noted by Safaricom CEO Bob Collymore when he visited the iHub:
“When you go into a petrol station and fill up your car, does the owner of the petrol station tell you to bring it back on Wednesday to take back what’s left in the vehicle? Of course not. So I ask, why the hell are we doing that?”
Bob goes on to say that he isn’t going to be an apologist for this practice, that there is a problem with leaving the data there ad infinitum. That 60 days is probably too short and that Safaricom does need to change how they handle this.
Until recently they just held your data hostage. If your data expired, you could recharge with just a few shillings of data, this would re-trigger your “old” data that was past the expiration, and have that available to you again.
Today, it is “data gone, money stolen” after expiration. They cut you off if you haven’t used all of your internet bundle in the nominal 7-90 days, no matter how much is remaining.
I brought this up with Bob Collymore, and his chief executives when they visited the iHub earlier this year (see video), at which point he admitted that it was indeed a dubious practice that would be changed to something much more open to users. You’ll see what Bob says at the 1:17 mark in the video below.
Here Bob is on video speaking to this point (I’ve saved the link to go to the right point in the video):
The other day I caught a Tweet from Sunny Bindra about some surprising changes:
Safaricom is actually very responsive on Twitter, probably the best big company on social media in the Kenya. They followed up with Sunny with this:
So, Safaricom didn’t broadcast this significant change in the way data bundles are handled broadly. Apparently, “publicized on our website” means quietly posting a PDF somewhere in the morass that is their website to notify the data using public of the changes.
If you follow the links to the PDF, you’ll find the following:
What is the Validity period?
This is the time frame that you have to use the bundles, when this period elapses it means that any remaining bundles will have expired and will not be available for use.
(Note: there is conflicting information on how long bundles will last, you can only find out by topping up a bundle. I did this for 1.5Gb and found that it’ll last 80 days, not the 30 that they say in the PDF. I don’t know if it’s more/less time for other bundle amounts.)
It’s in Safaricom’s best interest for you to keep buying more data, over and over, even if you haven’t used it. It costs them nothing to let you use it over a longer period of time, or to keep recharging it.
In Conclusion
I’m disappointed with Safaricom, especially after Bob Collymore came to the iHub and said he was going to fix this, not break it further.
This is an outright fleecing that the Safaricom team should be questioned on. In a country where they are the monopoly player on the primary source for people to access the internet, this makes them appear like a bad actor.
Basically, we’ve gone from a bad system that was promised to be made better, but which had a corrective option, to a worse system that has no option.
Other Safaricom Data Miscellany
While I’m at it, let’s go ahead and talk about a few other ways that the data service that Safaricom raises the bar for bonehead usability: buying data bundles themselves.
Case 1: You used to be able to send airtime to a SIM card on your Safaricom modem. Then, using the inbuilt Safaricom Broadband app, send an SMS to 450 with the amount of the bundle that you wanted to buy, now 450 only seems to work for checking your balance.
With the new service updated in the aforementioned PDF you can now only use the USSD code to update it.
Solution now? Take the SIM card out of your modem, load it in your phone and do the USSD code. Once confirmation is received, switch that SIM card back to the modem.
Yes, that’s correct. Instead of being using the software that comes native with your modem, you now have to use a phone to update your bundles. Why would you change your system to not work with everything that people use? I’m quite curious actually. I can’t understand this decision from a either the business or the product side at all.
Case 2:
Safaricom wanted to make it easier for people with modems, iPads, Android tablets and smartphones to be able to update their bundle (good idea). They created http://portal.safaricom.com/bundles for this purpose. Let’s say you’re out of data, you have no credit on your phone. How do you get to this page?
Solution?
There are none. You’re stuck because this page isn’t zero-rated. This is mind-boggling in it’s oversight. I have no data, therefore I cannot go to your page to load more data. Seriously… who is the genius that thought this up? Or, probably more accurately, what form of bureaucracy is in place that allows this mediocrity to persist?
Further, if you’re Safaricom who controls 77% of the consumer internet access in Kenya, why wouldn’t you zero-rate your whole Safaricom.com domain and make it free for anyone to surf, even if they don’t have a single shilling on their phone?
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.
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.
“The ground is barely scratched”, quipped Rebecca Wanjiku, a local tech infrastructure entrepreneur and iHub advisory board member, on stage today at Pivot East. And she’s right, there are a wealth of opportunities in the region. When asked “Why are there so many apps being built in Kenya?”, Kenya’s Permanent Secretary for Info and Comms Bitange Ndemo said, “Because we have so many problems to solve.”
While the iHub might be about innovation, Pivot East is about finding the tech startups with high-growth potential in the region and putting them on stage in front of investors, media and businesses. It’s about finding “what’s next” in East Africa’s vibrant mobile tech scene. Chances are, the best of these startups are providing highly innovative and disruptive solutions.
The startup scene in East Africa has moved wildly beyond where it was even two years ago when the iHub started. Those trying to raise funds for a new company have all of the resources they need at their disposal, including spaces to work with fast bandwidth, mentors and investors that cover the funding spectrum. If the last couple years was about building the ecosystem, this year is about the startups proving themselves and building products.
Day one of Pivot East is over, and we’ve had a lot more fun than we should be allowed to have. How to find out more and follow for day two tomorrow:
It’s interesting to see how this Pivot East is different than last year’s Pivot 25 (by the way, we changed it to Pivot East so that our friends in South and West Africa could use the brand to do their own events). It seems like the bar has risen, that the pitches are better delivered, that the ideas are a little more sound and business plans are more thought through.
This makes sense, as there has been an influx in pitching and hacking competitions over the last year and people have seen the bar from last year and want to do better themselves. On top of that, the startups in East Africa have had a lot more face-time with investors, who provide pressure to think more deeply about the important questions related to running a business, not just building a cool product.
My friend Michael Duarte, of Duarte Design – the team behind some of the most impressive presentation designs in the world, spent 3 days with the Pivot East finalists last week helping them to hone their decks and tell a story that would resonate with the audience. It’s worked wonders in the way the decks look, as well as the confidence that the startups have when they pitch.
This year we’ve put the investors into the same area as the judges, allowing both to ask questions and grill the startups. This has turned out surprisingly well, allowing the people with the most interest to ask pointed and meaningful questions.
We’ve had some fantastic pitches thus far, but it’s only day one, so we’ll have 10 more hit the big stage tomorrow. Exciting times!
Fireside Chats
Intermixed between the pitches are “fireside chats”, our fancy term for panels of real movers in different parts of the industry. We try to keep them lively by bringing a good moderator in, and this year TV personality Eric Latiff from KTN has proved to be an outstanding one, making sure we’ve got some lively commentary and tough questions being asked.
One of my favorite panels was when we had Bob Collymore, CEO of Kenya’s Safaricom on the same stage with Hakim Moi, the CEO of Zain South Sudan. It was a real treat to hear the difference in the way an incumbent mobile operator speaks about their market versus a new one in Africa’s newest country. There’s a lot of opportunity in both countries, but they come from completely different edges of the spectrum.
A particularly interesting challenge was voiced by Bob Collymore on the difficulties of large mobile operator’s on the innovation front. He’s interested in having a “Director of Innovation” in the organization, someone that comes from the outside and on the edge, who can work directly with him to ensure that not only Safaricom, but the rest of the people and organizations within their sphere are thinking broadly about disruption and creating ways for new, small and innovative companies to better interact with each other.
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 MultiFlex® 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.
May 6, 2012 / HASH / Comments Off on Quick Hits Around African Tech (May 2012)
This last month has kept me too off-kilter to get a good blog post up. However, there have been some very interesting happenings around the continent, here are the ones that caught my attention:
Pivot East
East Africa’s mobile startup pitching competition is just a month away. We announced the top 50 a few weeks ago, and now the 25 Finalists are named as well. Don’t miss this event, June 5 & 6th at the Ole Sereni hotel in Nairobi.
Google Releases “Insights Africa”
This truly deserves a blog post of its own… Google spent a lot of money and time gathering information from over 13,000 people across 6 African countries (Ghana, Kenya, Nigeria, Senegal, South Africa and Uganda) to determine why, and how, people use the internet. This data is all openly available, with an outstanding visualization tool to see what the information really means, and compare it, at InsightsAfrica.com. My chart below is just one example, showing how people access the internet across these 6 countries:
Donors prioritized “industrial policy†in Asia, but “social sectors†in Africa. Why?
Kariobangi writes a compelling blog post on the difference between the aid that was prioritized for Asia versus that for Africa.
TeleRivet: An Android SMS gateway
Similar what Ushahidi offers at SMSsync, TeleRivet is a tool that allows you to use your Android phone as an SMS gateway. It’s more robust, offers an API, and makes it easy for people to get started on SMS and USSD apps. Mbwana Alliy writes up a blog post on why this is important, and the business prospects involved in utilizing this type of service.
WEF: The Global Information Technology Report 2012
The World Economic Forum’s annual report on IT has some good information on emerging markets. You can read it online here. Here’s the video:
ForgetMeNot and the rise of Africa’s Smart(er) Phones
“First, a mobile phone subscriber sends an SMS to a given short code. The message is received in the mobile company’s message centre, which then forwards to ForgetMeNot Africa’s internet servers. The servers process, route and deliver the message to the subscriber, who can then respond.”
Kenya study, impact of venture capital on small and medium sized enterprise
“The minimum profit before use of venture capital was Ksh 34, 866. Upon use of venture capital, the minimum profit increased to Ksh 600, 000. This shows an increase in minimum profit of 94%. The maximum profit respondents reported before use of venture capital was Ksh 38, 567,951 which increased to Ksh 62, 864,152 an increase of 63%. The average profit also increased by 69% (from Ksh 7,204,653 to Ksh 12, 202,775)”
Mpesa, a 5 Year Infographic
Just how big has Mpesa become? Take a look [PDF version].
Jason Njoku, Funding and Nigerian Movies Online
In Nigeria, Jason Njoku is at it again, raising $8m from Tiger Global Management, a US-based PE and hedge fund. Here’s an interview with him on Forbes. Iroko Partners is the world’s largest digital distributor of Nigerian movies and African music. The firm is YouTube’s biggest partner in Africa, boasting over 152 million views in 2011.
Across Africa there is a vibrant culture of people creating things. Hardware products. It’s rarely glamorous as our inventors and micro-entrepreneurs innovate on products due to necessity – there simply aren’t enough jobs and they need to feed their families.
Regardless of the reasons why they do it, what this has created is a culture of innovation.
When you have a problem in Africa, there isn’t another option, you either improvise, adapt and overcome, or you die. You don’t give up, you figure out a way to make things work.
This environment has bred a generation of problem solvers: people confront immense challenges and keep at it until a solution is found. It might not always be the most beautiful solution (usually the finishing isn’t up to par), but it works and that’s what matters.
Concurrently, we’re a net importer of fabricated products from around the world. We might make some of our own software now, but we do little to nothing with hardware. How can we be the masters of our own future if we don’t do any meaningful levels of fabrication?
A while back I wrote about the need of “hardware hacking garages” in Africa, a place where the innovation and inventions that deal with things you can actually put your hands on happens. I think this is our next frontier to explore: fabrication and manufacturing.
Moving from FabLab to Fab Factory
The one place that we do do some type of fabrication, at least where we explore and invent, is the network of FabLab’s across the continent. They are very much university focused (and constrained), but they have had a great amount of innovation coming out of them as well. In Kenya, Kamau Gachigi runs the one in Nairobi, and it has been a model of both invention and innovative revenue streams to keep itself going and to bring in funds to the engineers working through it.
The FabLab is small though. What would happen if you put it on steroids and made it 10x larger? What if we were talking about a Fab Factory instead?
A Factory A space that has all the machines needed to fabricate prototypes and manufacture pieces in at least small quantities. It would need machine tools, laser cutters, 3d printers, wood working tools and more. A place that you could rent time on the machines, rent a workshop, and get training on the machines you don’t know how to operate. Something that looks a lot like the TechShop in San Francisco, but tweaked to work in Africa.
A Warehouse
Take the Factory model, and layer on a warehouse. There are some items that we will not make on our own, namely computer chips. Having a warehouse would allow group buying to happen, where economies of scale could be reached for supplies to be brought into the country, as well as serving as a central facility for distribution of these items to the community.
A Nodal Network
Having a central “factory” and “warehouse” provides many benefits, but it’s not enough. As we know from 3 years of running Maker Faire Africa events, many of the most interesting inventions come from rural areas, mainly due to the fact that they have strong commercial upside. In this case it makes sense to take the original FabLab model and export that to the major cities around the country, making these types of capabilities much more accessible to a wider user base.
A Tech Store
Beyond building and inventing, there’s a gap where the people creating things can take them to market. Providing a space for these people to sell their products (and services), provides a bigger target for buyers, both consumer and b2b buyers to find new items. It also provides a much needed stream of income for the small-scale inventors, with the potential to put them on the map for efforts to commercialize and scale their work.
Ideas and Examples
A couple examples of things that could be built locally, while at the same time keeping the money in-country and increasing technical capabilities in the market:
In Kenya, the local energy company is moving to pre-paid meters for home electricity. These are simple boxes, imminently hackable, and all made in China. Why? These could be fabricated right here in Kenya, and made better, cheaper.
The Kenya Wildlife Service needs UAVs for tracking poachers and remote viewing of the parks. They’re currently spending large amounts of money on imported ones. We can build those here too, to the standards needed, and for a lot less.
Emeka Okafor, my organizing colleague for Maker Faire Africa, has been on this fabrication thing for years. He has even more examples of small scale manufacturing on his blog at Timbuktu Chronicles.
I imagine a place like that would get immediate use in certain markets; namely Kenya, Ghana, Cameroon and Nigeria, though others might line up quickly as well. It certainly makes sense for the governments in these countries to invest in this future, or at the very least to incentivize this type of ownership of our own technological future.
What I’m wondering is what other models are there like this?
If building the iHub, m:lab and Ushahidi have taught me anything, it’s that getting something going is the most important thing you can do. Do something, even if small. Get traction. Get started.
The answer isn’t to wait on the government, even though we all see the argument for them being involved here. I imagine the next step is to raise some money, find a space and get a few fabrication machines in place. It will grow from there. Standby for this in Nairobi soon. It has to happen, and it will happen.
This will take money. Anyone interested in getting involved?
(On a sidenote, I’m finally getting to visit the TechShop as I’m in San Francisco this week. Very excited about this!)
“Nearly every start-up working in payments is simply creating a new front end for your credit card. That’s not a small thing; we need new ways to use our credit cards. But we shouldn’t forget the true winners in this new marketplace—whatever innovations we see in payments over the next few years, there’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.
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!
If you know Robert Alai’s history in the tech scene in Kenya, then you know why he has been banned from the iHub. There’s a reason why the Skunkworks community ejected him multiple times over many years. There’s a reason why Nokia banned him. There’s a reason why Google blacklisted him. He consistently 
