Tag Archives: nigeria

Tech Links Around Africa, March 2013

[Last week I had a security problem with WordPress, which is fixed now, my apologies for any inconvenience]

Pivot East, our East African pitching competition, will be held in Uganda for the first time this year. Get your applications in, and plan your travel for June 25-26th in Kampala.

Bosun Tijani and the ccHub are part of what I think is a fantastic idea. Instead of building a “tech city”, they’re creating a “tech neighborhood” in Lagos, Nigeria with many partners.

Nigeria's I-HQ project

The three types of tech incubators in Africa. I disagree a bit here, but will save that for another post.

A long essay, comparing Kenya and Rwanda’s efforts to become the tech hub of East Africa.

Surprising no one, Uganda’s mobile money service eclipses traditional banking with 8.9m users (compared to 3.6m for banks).

Good article by The Next Web on how winning in African tech is a patience game.

Not specifically about Africa, but here’s a great graphic that maps out the alternative financial ecosystem, of which mobile money plays a significant role.

I love this Africa-inspired Foosball table design, which would be made better without all the NGO crap on it.
African-foosball

Personal Link Updates:

Community Connectedness as a Competitive Advantage

In the last couple weeks I’ve had the opportunity to be in Nigeria (Maker Faire Africa), followed by South Africa (AfricaCom). Along with Kenya, these countries represent the biggest technology countries on the continent. They are the regional tech hub cities at this point in Africa.

In both places I was struck by how different each country is, and the challenges and opportunities that arise due to the tech community’s connectedness, regulatory stance and local entrepreneurship culture.

The Kenyan tech community in the iHub

Some Theories

South Africa has so much infrastructure, you’re immediately struck by how money isn’t an issue there. The lesson I took away from the DEMO Africa conference is that South Africans are far, far ahead of the rest of the continent in enterprise apps and services. They tend to see themselves as “not African”, and try to identify with Americans or Europeans. This comes out in their tech products, they have a more global focus and tend to fill the gaps that are needed by the many multinational corporates that call South Africa their home in Africa.

Nigeria has so many people, it overwhelms in it’s pure mass. It’s a bit cramped, louder, and more energetic than almost any other country in Africa. Nigerians have a long history in entertainment, with their Nollywood films and music spreading across the continent. It wouldn’t be surprising to find a killer entertainment consumer app coming from Nigeria, that can be exported regionally and internationally.

Kenyan tech companies tend to focus on localized consumer needs, and we have a competitive advantage in anything to do with mobile money. Even in the secondary and tertiary uses, I’m always struck by how much more advanced the Kenyan startups are with local eCommerce products and marketplaces than their other African counterparts.

Kenya is smaller than Nigeria and has less infrastructure than South Africa. Why then are there so many more startups per capita, more innovative products coming from Kenya right now?

A History of Community

Kenya’s technology scene is vibrant and there’s a certain connectedness amongst the community that isn’t found in the other two countries, yet.

Having a Ghana programmer talk

I was in Ghana in 2009 for the first Maker Faire Africa. I went around visiting a lot of tech companies and individuals I had gotten to know via blogging over the years. What struck me at the time was that there wasn’t even a tech mailing list that connected the community. We’d had the Skunkworks mailing list in Kenya since 2006. My assumption had been that every country with any type of critical mass in tech had a forum of some sort for connecting tech people to each other.

20+ members in the Ghana tech community came together at Maker Faire Africa and decided to start Ghana tech mailing list. I’m still subscribed to it, and it’s a great resource for both myself and those using it. With that list, and the founding of MEST in 2008 (their tech entrepreneur training center) that Ghana’s tech scene started to get connected and move forward strongly together a couple years ago.

Points of view

Fast forward to Nigeria a couple weeks ago. As far as I can tell, there are some tech-related forums, though not a mailing list. These have been valuable in connecting people, but it seems that the ccHub, founded last year, is the start of a real connectedness between members of the tech community. I got the feeling that all the energy and entrepreneurialism that makes up the Nigerian culture of business now has a tech heart and that we’ll see an acceleration of growth in the coming years that has been missing until now.

For many years, the tech bloggers of South Africa organized and centralized conversations around tech with events like 27Dinner, BarCamps and more. They have long-standing tech hubs, such as Bandwidth Barn, they have a network of angel investors and greater access to VC funding. There wasn’t a centralized mailing list or forum back in the day (before 2008) that I know of. A few years ago we saw the rise of Silicon Cape, an initiative to bring attention to Cape Town’s startup culture.

At AfricaCom an interesting discussion ensued around South Africa’s tech community and questions on why it wasn’t getting as much attention or traction as Kenya. Two points were brought up that I think are incredibly important.

First, while Silicon Cape is focused on branding (and doing a good job of it), what is really needed is someone to bring the new tech hubs, startups, angel investors, media, academia, corporations, and even the government together. There’s a lot of activity, each in it’s own silo. It’s a hard job being the trusted bridge between these different parts of what can be a very opinionated and political community. I’d suggest that Silicon Cape’s mission should be to do just this.

Second, In Kenya and Nigeria the founders of startups tend to look a lot like a cross section of the country’s population. The tech community in South Africa doesn’t look a lot like the racial makeup of the country. to put it bluntly, I rarely see a black South African tech entrepreneur. Not being from there, I’m not sure why this is, so it’s just an observation. It’s hard to build a product for a community that you’re not from, nor understand, so I can’t help but think that the South African tech scene would benefit greatly by having more people building companies to solve problems from all parts of that country’s stratified makeup.

A Connected Community

Sitting at 38,000 feet writing this piece, I keep thinking how there seems to be a link between the connectedness of a tech community in a country and it’s vibrancy as an industry. Though I realize there are other variables, this explanation helps me explain why Kenya is further ahead in some areas than other countries.

As I look to Kenya more deeply I’m struck by how important the egoless actions of individuals like Riyaz Bachani and Josiah Mugambi (Skunkworks), Dr. Bitange Ndemo (Government), Joe Mucheru (Google), and others have been in setting us on a trajectory that we all benefit from as the whole becomes greater than the sum of it’s parts.

This theory of a connected tech community doesn’t mean that the everyone always agrees or walks in lock-step with each other. There’s a healthiness in internal critique and desire to find solutions beyond the status quo of the moment. However, I do think it does provide a foundational element for cities and countries trying to grow a more meaningful and vibrant tech community.

The connectedness can come in two ways, digital and analog, and will have a different flavor in each country that mirrors it’s own culture. It helps to have a centralized digital space to throw out questions, opinions and find answers on efficiently. Equally, I think we’re seeing that analog, physical meeting spaces that are represented by the growing number of tech hubs around the continent are another way to accelerate the connectedness needed to grow.

Africa’s tech hubs are the new centralized meeting spaces, the watering holes, for connectivity and connectedness. However, it’s not enough to have a space, without local champions who are willing to make it their mission to grow, connect and bridge the tech ecosystem (gov’t, corporates, startups, academia, investors), then they won’t work.

Style and Swagger With a Renegade Trike Hacker in Nigeria

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I’m a motorcycle guy, so anytime you put a motor on a chassis with something less than four wheels, then I’m interested. This week I’m at Maker Faire Africa in Lagos, Nigeria. This is the 4th installment, after Ghana 2009, Kenya 2010 and Egypt 2011.

The creation below is by a young man called “STA”, who’s got a lot of swagger and a double teardrop tattoo under his right eye. In many ways STA is a one-of-a-kind character, unlike anyone else I ran into in Lagos.

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Let’s put it this way, anyone who rides such an eye-catching bike without a license plate, and who has no worries of the cops hassling him because of it, is certainly cut from a different cloth. When stopped, STA simply points to the Nigerian flag flying on the front and explains that it’s all the license he needs. (I kid you not)

STA spent about 4 years in Holland where he was inspired by custom motorcycles and trikes (tricycles). When he came back to Nigeria he decided he could build his own here. STA International’s first bike is the long-forked trike.

Due to using his own funds, it’s a little underpowered with only a 250cc engine and a 10 liter tank. STA scrounged around and found the different parts, and put it all together himself. All total, he spent 300,000 Naira ($1,600) on it.

The bike has some very comfortable seating, a nice big sound system, 4 big silencers in the rear and drink holders for both driver and passengers. He can carry two passengers in the back, and there’s room under the seats for a little storage.

The bike is kickstarted, which I wasn’t expecting at first as I’m used to bikes this big having an electrical starter. Makes sense though, as this is a small engine bought off of a used engine reseller. The trike also has a reverse gear, which comes in handy when the bike is as long as this one is, for maneuvering out of difficult spaces.

STA and I hung out a bit over the last few days. He’s got a real passion for modding bikes, and his next big plans include an even bigger trike, though he hasn’t fully fleshed out the design yet. I showed him some of the cool, retro, modded designs on Bike Exif and we talked a while about what a custom bike for African cities might actually look like.

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Note: I’ve been blogging most of this on the Maker Faire Africa blog, so go there to find more posts on the stories from Lagos, Nigeria and the innovative and fun products made there.

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

BizCommunity has a good article on ForgetMeNot’s Message Optimizer service’s growth on the continent. This service delivers internet content to users who can only access that information via SMS. Here’s how it works:

“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

VC4Africa reviews a report on VC’s in Kenya. This isn’t just tech, but it is interesting and surfaces some great information. [PDF Download]

“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.

Quick Hits Across African Tech

What Africa’s Entrepreneurs Can Teach the World
Ghanaian friend and TED Fellow Bright Simons does a piece for Harvard Business Review on African entrepreneurs, excess diversification and hyper-entrepreneurship. A quote:

Then there’s the tendency toward what I initially saw as excess diversification. My think-tank colleagues and I were stunned to see how many concurrent businesses the typical entrepreneur owns and manages in Africa. One famous waste utility entrepreneur had about 66 different businesses. On the whole, the businesspeople we studied appeared to run an average of six businesses.

Twinpine: Nigerian Mobile Ad Network
Forbes does a piece on a startup that I hadn’t heard about yet from Nigeria, Twinpine, who is setting up a successful mobile advertising network.

Re-inventing Finance
There’s a good talk by Sean Park from Lift 2012 called, “Reinventing Finance: an Emerging (Digital) Reformation” where he talks about the changes in the money space, with examples of who to look out for.

Infographic: Mobile Web East Africa
Interesting numbers, quotes and data from the Mobile Web East Africa conference.

30 Brilliant Startups Across Africa
If you’re looking to find some startups from many different countries across the continent, Memeburn has an article, selecting 30 companies that are doing cool, new things in tech in Africa.

African Domains
I’ve been having fun following a Twitter handle @AfricaDomains recently, and the Africa Domains blog is worth a read as well.

Kenya: Big vs Small
Big international firms (think IBM, Dimension Data, etc.) are beating out smaller local firms to lucrative government contracts, which makes up a significant portion of the annual tech spend in the country. The Nation opened up this debate with this article, that then went on to have a real face-to-face debate by the end of the week.

InMobi Mobile Media Consumption Research Q4 2011 – Global Results

Mobile Apps in Africa (2011 Report)

I maintain that Russell Southwood and his Balancing Act newsletter and reports are some of the best material on pan-African technology and broadcast information that you can find anywhere. Their recent “Mobile apps for Africa: Strategies to make sense of free and paid apps” report is one of them, and here are some interesting tidbits from it.

The report is broken into three parts: device, developers and distribution.

Device

South Africa, Egypt, Nigeria, Morocco, Ghana, Kenya and Tanzania all are good markets for apps, due to their population, 3g pickup and smartphone penetration. It should be noted that the highest smartphone penetration is in South Africa at 10%, though the high-potential countries are expected to grow by 8-10% per year over the next 3-5 years.

“Interestingly, infotainment activities score high off-line (using the phone’s features) and online (mobile Internet).”

Balancing Act provides a very interesting visual of what the “Handset pyramid shift” looks like in Africa.

Africa's handset pyramid, and its shift

Developers

The development of smartphone applications in particular commercial apps will depend on the rate and level of smartphone adoption. Developers in countries like South Africa, Kenya or Egypt with encouraging smartphone penetration rates have more opportunities in terms of apps development and uptake by potential users.

The major international apps stores (Apple, Android, etc) have set a figure of 70% of the revenue generated by apps will be going to the developer. This is very good news for African developers because so far with SMS based content, the revenue sharing model is not in favour of developers since less than 30% of the revenue generated by the content is going to the author. It is African mobile operators that make the most out of them as they take a minimum of 50% of the revenue generated by SMS services. The major international apps stores also offer additional revenue to developers via advertising and in-apps purchases. These revenue streams are becoming more and more significant for developers.

Building into the next section on distribution is the issue that developers have with creating apps for the international app stores. It’s very difficult, and often impossible, to sell apps on them and for African customers to buy them.

Distribution

The major consequence of the “success story” of the apps store is that it
establishes a distribution model for mobile content that breaks away from the monopoly and exclusivity that mobile operators have enjoyed so far on the delivery of services to their mobile subscribers. Today the mobile apps distribution ecosystem can roughly be divided in 4 main groups:

  1. Operating system app stores
  2. Handset manufacturer’s app stores
  3. Mobile operators’ app stores
  4. Independent app stores

So far, most African mobile operators have been little affected because smartphone penetration rates are very low in most African countries and also because African smartphone users still have access issues to the full portfolio of international apps stores.

The report goes on to express Balancing Act’s thoughts on how mobile operators can get into and take advantage of mobile app stores, “While revenue potentials are promising what else do mobile operators have to consider if they want to roll out their own apps store?” The report establishes the following 8 recommendations:

  1. Be OS agnostic
  2. Know the devices on your network
  3. Use “white label” apps store
  4. Source international content from third party content providers
  5. Don’t forget about additional revenue streams
  6. Build a strong local flavour to your apps store
  7. Make apps affordable to your subscribers
  8. Use carrier billing

And there’s More

Unfortunately, I can’t put all of the good stuff in this blog post. There are a lot more interesting points in the report, and you can buy it here. Amongst some of the best are:

  • What smartphones do South Africans want?
  • Nigerians love their BlackBerry
  • Examples of mobile apps start-ups companies in Africa
  • Morocco: Mobile internet users and penetration rate
  • Mobile Internet subscribers and market share per operator
  • Advertising and in-apps purchases potential income for developers

Praekelt: SMS at Scale

Here’s a great video put together by the Praekelt Foundation on the state of mobiles in Africa in 2011.

I’ve gotten to know Gustav Praekelt over the last few years after we first met up at PopTech in 2008. He’s one of the most astute businessmen I know on the continent, and his ability to grow out his business into the giant it is in the messaging and communication space is proof of that. The Praekelt Foundation leverages the same infrastructure that he’s built out on the for-profit side of what he’s done, and is making a big impact, at scale. You can watch a video of him talking about his projects here.

Africa’s Android Invasion

Mobile phone manufacturers, operators and of course Google started a big push on Android into Africa this year. Samsung, HTC and Huawei are moving Android phones into the market. Some operators are seeing the signals and starting to subsidize Android handsets to get them to a price point that is palatable by a larger number of buyers. Google continues to push for local content, works with developers, does g-[country] events and puts on contests.

While the primary phones in Africa are still feature phones, Android has made a beachhead on the continent and will continue to roll forward. I believe we’ll look back at the landing of the IDEOS phone earlier this year in Kenya as an inflection point, where in 2 years we’ll define the times up until then as, “before Android”.

Developers as Leading Indicators

I see what the local programmers working on as a leading indicator of what everyone else will be using in the next 2-3 years. In the iHub, on the mobile side, we see a lot of programmers excited about, and working on, Android apps. It’s a balance between that and the SMS/USSD core infrastructure apps that Kenya is well known for.

Today, at the g-Kenya event, Google announced the three winners of their Android Developer Challenge for Sub-Saharan Africa. Each of the winners will receive $25,000.

There were 29 finalists came from the following 10 countries, which is a pretty decent spread. However, you can tell from the number of apps in each country where the real powerhouses are.

7 South Africa
6 Kenya
5 Nigeria
3 Ghana
2 Uganda
2 Malawi
1 Senegal
1 Togo
1 Tanzania
1 Republic of Guinea

The one pain point that developers have right now is that they feel pressure to support multiple operating systems. This is Primarily between Android and Symbian if the app is focused on Africa, if the app is global, then add in iOS and possibly Windows and Blackberry.

It will be interesting to see what happens with feature rich HTML5 and how it plays out into the mobile space. At this point, either we’ll see a lot of mobile web apps (working across PCs and all phones with real browsers) or we’ll see a lot of apps. Even if we do see the client-side Android apps, I’m guessing they’ll be more thin-clients than anything else. Only time will tell though.

The Future of Consumer Mobiles in Africa

The years ahead are hard to predict. However, in Africa I think we’ll see an increase in Android handsets and mobile web usage, and a continued decrease in the cost of low-end smartphones and data connectivity.

If I’m an operator, I see the writing on the wall in regards to SMS and USSD apps, and I’m trying to move my user base to data. This means more subsidized phones, and attractive data packages that are wide-spread across my region. I’m making deals with content providers and offering zero-rated (or reverse-billing) packages on data to large content houses in order to increase usage.

If I’m a manufacturer, I’m providing an array of Android handsets that allow my aspirational users to move up from a feature phone to a (we hope soon) $50 Android, then up to a tablet eventually. I’m doing whatever it takes to decrease costs on the low-end to get mindshare. If I don’t do Android (Nokia, RIM) then I’m doubling down on the mobile web and pushing for better browsers on my phones.

If I’m Google, I keep having dev events and competitions, but I also push for better localized payment options for developers in Africa. On top of that, I’m looking for an operator billing link for consumers with attractive percentages for app publishers, that way I attract them and everyone makes more money.

Of course, there’s more, but that’s where I’d start.

Twitter is Slowly Coming Back to Africa

Over 2.5 years ago Twitter shut down all operations in Africa. Back then, in August of 2008, it really didn’t matter too much as the penetration rates for the service in Africa, and most of the world, were negligible. A lot has changed since then as Twitter has become a defacto communications too, and in many ways a new communications protocol, all over the globe.

Now, they really hadn’t “shut down” as the service is accessible always via the internet. What they had shut down was text messaging – SMS, due to non-sustainable business relationships with the mobile operators in each country. Since then, the Twitter team has grown, and their ambitions beyond North America, the UK and India have increased as well.

In Africa, three countries have it working; Nigeria, Kenya and Madagascar (Note: there used to be a fourth, but Cameroon has banned mobile Twitter as they go towards elections). Just send a text message with the word “start” to the following shortcodes in each country go get started:

Nigeria: 40404 (Airtel); 20644 (Glo Mobile)
Kenya: 8988 (Safaricom); 40404 (Airtel)
Madagascar: 40404 (VIP)

The Twitter team is working on relationships for expanding SMS service throughout a lot of countries in Africa. How those deals are structured with the network operators and why they’re slow in coming online with the service isn’t yet known.

You can find out which countries do have Twitter’s mobile SMS service on this page. You can also keep up with Jessica Verilli (@Jess), in charge of Corporate Development & Strategic Initiatives at Twitter, and the one who has been the most visibly active on the continent.

Nigerian Mobile Payments & Banking Starts

Last week I got a visit from Peter Afam Emeleogu, an old contact from TED Africa in 2007. We’ve both been busy in the intervening years, exploring how technology can be used to overcome inefficiencies in the system. Peter’s journey started when he realized the market value of mobile credit as a currency. In Nigeria, mobile payment systems weren’t licensed by the Nigerian Central Bank until December 2010, 2 months ago. So, until this time, mobile payment and transaction entrepreneurs had to be highly creative in order to meet consumer demands – thus the use of mobile credits as cash.

In December, 16 companies were given a provisional license to do mobile payments and banking. 6 of them are bank linked, and 10 of them are independent. A truly hot climate for mobile banking is emerging in Nigeria, where all players were forced to start at the same time, no matter their size or reach. Notably, only one mobile operator was included, MTN.

“only 21% (22 million people) of the adult population in Nigeria has a bank account, while 74% of the adult population (approximately 64 million people), have never been banked… Nigeria has proven a huge market for the adoption of mobile telephony. With almost 80 million mobile phone users.”

Peter is one of the principals for one of the ten independent companies who got a license, Eartholeum Networks, and it’s home to their QikQik product for mobile banking. They’ve had over $1m in investment to date, and like all of their competitors are scaling up as quickly as possible. Who ever executes fastest (and maybe best), and gets critical mass in the market, will win.

Some of the services that QikQik supports:

  • Person to person Transfer of funds
  • Payment for goods and services
  • Mobile phone can serve as POS Terminal
  • Cash withdrawal from ATMs
  • Purchase of airline tickets, bus tickets
  • Purchase of Telco recharge tokens and other e-tokens (PIN)
  • Tax payments and confirmation for Governments
  • Payment of bills
  • Internet payment identity/authentication
  • Payment of insurance premiums
  • Link existing bank accounts
  • Inward remittance of foreign exchange

One lesson from Mpesa’s success in Kenya is that you need to quickly reach critical mass with consumers, and that’s only done with a big investment in the agent network, making it easy for people to use the system.

Eartholium’s main focus is to enable third-party outlets such as post offices, retailers, petrol Stations, quick service restaurants, neighbourhood shops and pharmacies as QikQik Agents to perform functions such as customer due diligence for account opening, basic cash deposit and withdrawal in addition to transactional or payment services in areas where banks and other financial institutions do not have sufficient incentive or capacity to establish formal branches.

The race is on, and I’m very interested to see who will win this most populous and lucrative market in Africa.

Tackling Africa’s Classified Listings Space

Just over a year ago I was frustrated. We had just moved back to Kenya and I was trying to outfit our house with a few necessities. Just finding sellers of the items we were looking for was a pain, as there were no options for classifieds services online that had much to offer.

Being a builder and a problem solver I wanted to better understand what was going on here. Why, in 2010 did I have to go to one of 7 large shopping centers across town, in Nairobi’s terrible traffic, in order to look at a notice board to find products? With this in mind, I sat down and penned a strategy paper that I thought could address the problem.

(Below is the overview, the full document is to long to post)

The Overview

No organization or entity in Kenya has come up with a good classifieds network. There is little, to no, traction in the online space and the offline arena is a fractured market where each group protects their fiefdom and doesn’t share their ad content. This is seen in the popularity and reach of the classifieds at major shopping centers like Sarit Centre, Yaya and Village Market, but also in the newspapers and mailing lists.

There is also no good option for digital classifieds, even though there have been multiple attempts, including Nation Media Group’s N-Soko, Craigslist Kenya and eBay’s Kijiji as well as many small operations by Kenyan developers.

This fractured landscape, as well as a missing digital nexus point for classifieds in Kenya, creates a large and open opportunity. Real money is ready to be made, as there are many frustrated buyers and sellers who need an outlet.

In order to succeed at making real money with classifieds listings in Kenya, one needs to have a strategy for both the analog and the digital sides. It’s not enough to make a great classifieds website – as N-Soko and Craigslist are showing us. Neither is it good enough to have just offline newspaper ads or shopping center message boards.

The document went on for another 5 pages outlining a solution that I thought married up what was needed: a way to mix Kenya’s analog community habits and the efficiencies of a digital solution.

Our Solution

A couple months later I was discussing this with David Kobia, my colleague at Ushahidi, talking about how there are wide open opportunities like this in Kenya where there is a clear void that no one is filling. It’s not hard, it just takes focus on a simple platform that’s both web and mobile enabled, along with a way to bring in the analog side.

Fast forward a couple of weeks and David built a little site for this purpose over the weekend, called Pigia.me. A place for us to experiment with, and we did. We spent some time gathering classifieds from the shopping centers and the newspaper. We did some Facebook ads. It worked, we quickly got up to over 3,500 listings and traffic was increasing. Total investment 3 days coding and $300 in ads.

But we didn’t have the time. Ushahidi keeps us way to busy, as does the iHub.

Enter Dealfish

About 3 months ago Dealfish, the big classifieds site owned by MIH in South Africa, launched in Kenya. Simultaneously it launched in Nigeria, Tanzania, Uganda and Ghana (English). And in Francophone Cameroon, Ivory Coast, Senegal, and the DRC. They scooped up well-known tech entrepreneur and blogger Moses Kemibaro from Dotsavvy to run East Africa’s operations, while Neil Schwartzman overseas all Sub-Saharan Africa for Dealfish and Stefan Magdalinski presides over Dealfish as well as Mocality and Kalahari for all but South Africa.

They’re now at approximately 12,000 listings (in Kenya), serving the major urban areas and have about 6000 “answers” per month (which is what they call it when a buyer tries to contact a seller). The top areas are auto, home and jobs – like most classified sites.

Until critical mass is reached, classifieds are something that you have to put a lot of energy towards on a constant and consistent basis. Thus Dealfish has chosen Kenya and Nigeria as their first focus-countries, where they have dedicated personnel.

MIH has deep pockets, and they’ve decided that there is a future in investing in digital arena in the Africa outside of South Africa. They came on strong with online ads by Google, Facebook, Inmobi, Admob and Buzzcity. Inmobi has given them the best return, with Google ads in second place. However, it’s the Dealfish team notes that the Inmobi traffic doesn’t have nearly the same intent to buy or sell as the Google traffic – it’s blind coming in.

Offline Dealfish used radio, in-store advertising, posters in malls and in club bathroom stalls. The form of advertising dictates the type of user, whether they use mobile phones or PC web. In the beginning mobile users were their predominant type, but now it’s split 50/50 between mobile and PC web users.

Dealfish is doing well, and will continue to do so, especially as they have enough financial backing to continue seeding the market. Their competition comes in the form of verticals that are specifically created for a niche market. In this case, autos with Cheki, jobs with Brighter Monday and homes with Property Kenya. And that’s just in Kenya, they’ll fight that same battle in the other markets as well.

Tackling Africa

The only other classifieds system that has made a dent in Africa is Kerawa, operated out of Cameroon. They have thousands of listings in quite a few countries. They’ve done this over the last 3 years, bootstrapped and growing organically.

However, there’s a danger in trying to go after everyone and everything. In the broad classified space there is only a single winner, no prizes for second place, except in niche areas. Whoever reaches critical mass first wins, and the rest can go home. It’s better to win in a couple countries than to lose in all.

Both Dealfish and Kerawa have to fight the very real issue of spam listings. Just letting anything to so as to get bigger numbers only decreases the value to the user. How customer service and clarity of use and value play out to the listing companies and people is where a lot of time and resources can be spent.

[Update: Google Trader launched in Ghana and Uganda to mixed success. As long as there was a lot of marketing put into the effort, they had a lot of listings, as soon as they stopped there was a big drop-off. It's yet to be determined if Google Trader is a failure or success, or if Google is still putting any more effort into it.]

Urban then Rural

Finally, you have to start in the urban areas due to users, devices and general “mass”. However, if you think that’s enough, then you haven’t learned the lessons taught by the mobile operators. That is, urban is your anchor, but rural is your long tail, your reach.

Any attempt to get enough critical mass to make serious money off of traffic or transactions has to reach beyond the cities. The towns and rural areas are untapped and ripe for the approach. Phase 2 of this approach should look a lot like what I wrote about back in 2009, on how village billboards should be leveraged alongside the mobile phone shops in smaller communities.

InMobi and Mobile Advertising in Africa

India is watching Africa closely, especially after the big $10.7bn move by Bharti Airtel to take over Zain’s Africa operations. Yesterday Ankit Rawal, head of advertising for inMobi in Africa, spoke at the iHub. He spent a good amount of time explaining why Africa was so important to their growth strategy, and used a good bit of data from an InMobi research project to show why.

Ad Impressions

From their July 2010 statistics, Africa has over 2.8 billion mobile ad impressions available, an 18.5% growth from just one month before (June 2010). That’s an amazing figure, and amazing growth, by anyone’s standards. Only 16% of that inventory is on smartphones.

InMobi’s largest African markets, in order, are: South Africa, Egypt, Kenya, Sudan, Libya, Nigeria. There is a big difference between these countries and some of the others that we saw stats for. For instance, Mozambique, Tanzania, Angola and Namibia have only about 20-40 million impressions/month. There is a wide gap between Africa’s tech leaders and the rest of the continent.

Manufacturers

Continent-wide, the most popular manufacturer is Nokia at 61.3%, followed by Samsung at 21.8%, with SonyEricsson a distant third at 6.3%. Those aren’t especially surprising figures, but if you dig down into the country details provided for South Africa, Kenya and Nigeria, they differ.

  • In South Africa, it’s 38% each for Nokia and Samsung
  • In Kenya, it’s 66% Nokia and 18% Samsung
  • In Nigeria, it’s 78% Nokia and 9% SonyEricsson

Operating Systems

Important information for mobile app developers and businesses is which operating system to focus on. Nokia OS and Symbian lead, followed by RIM. No Android, iPhone or Windows Mobile mentioned, though there is a suspiciously large (37%) chunk of the pie for “other”.

Handsets

The actual devices that people are using that show mobile advertising is interesting as well. It’s largely Nokia, holding 7 of the top 10 spots, with Samsung carrying the other 3. The top device, is the moderately priced Nokia N70 is a popular, though unpretty, “do it all” phone.

Other Information

Not available in the qualitative research document provided by InMobi, but part of Ankit’s talk yesterday, were some other demographic statistics.

Male acceptance of mobile advertising in Africa is the highest in the world, when asked, “How comfortable are you with mobile advertising?”. African women came in second behind Asia on that same question. Women in South Africa were the clear outlier compared to Nigeria and Kenya, with only 45% comfortable with mobile ads.

Africa’s under 25 population has the highest comfort level with mobile ads in the world. 75% from this age range are okay with mobile ads, as opposed to 67% in Europe, 73% in the US and Asia.

South Africans are more interested in ads when top global brands appear as ads. The primary benefit of mobile ads that all consumers are looking for is “new information”.

Final Thoughts

Africa, as a whole is well positioned to see a huge growth in mobile advertising. This comes from a combination of consumer acceptance of mobile ads being the highest in the world, healthy support via increased data plan competition among telcos, growth in 3g and smartphone adoption, and mobile screen mindshare amongst users.

Quick Hits in the African Tech Space

Indian firm Bharti buys up Zain Africa
The biggest news in the African tech space is Bharti’s $10.7 billion purchase of Zain’s African operations, which operates mobile networks in 17 countries in Africa. Apparently, some believe that Africa’s potential makes Zain deal value fair. (Zain’s African countries: Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda, Zambiaand Morocco.)

Google continues getting Africa on the map

Google Maps was launched in 30 Sub-Saharan African countries
. That’s an amazing asset for everyone to use, and it’s also an incredible testament to the number of users using their “My Maps” feature, as this is where this data comes from.

On the growth of tech hubs in Africa
Rebecca Wanjiku wrote an article on IDG about, “Tech labs move beyond corporations in sub-Saharan Africa“. She’s a member of the Nairobi iHub advisory group, and has more insight than most in this space.

South Africa’s Design Indaba
It’s happening right now in Cape Town (Feb 24 – 26, 2010). Great design, and great speakers, but I was really intrigued by their kids program.

Location based service launches in Nigeria
StarTrack is a new location based tracking service in Nigeria, Loy Okezie has a good overview of this new service from Starcomms.

Text2Fly: Flight Schedules by SMS in Nigeria

Timi Agama was frustrated with his experiences in trying to get information about flights in Nigeria. It just didn’t make sense that there was no electronic means to track flight schedules. About five years ago he set out on a path to create a mobile solution for the problem. Out of that came Text2Fly, a mobile service that let’s you search for flight schedules by sending an SMS.

Text2Fly Nigeria

“The simple task of finding the next available flight is an inefficient and labor intensive undertaking for the Nigerian business traveller. Nigerian airlines don’t operate call centers and the Internet is slow. So the business traveller must assign staff to search all airline web sites or even send them to the ticketing office through stifling traffic.”

How it Works

A user sends in a text message to +447786201082 with a simple command, like “From Lagos to Abuja on Monday at 8am”. In response, the system gathers the information about all of the flights in Nigeria that fit your requirements, and sends them back to you as an SMS message.

As Timi states, this is ” A Nigerian solution to a Nigerian problem”. Interestingly, it’s not only useful in Nigeria, and I could see this same application being used elsewhere, not just in Africa but in the developed world as well.

I’m curious as to why the service is only available via SMS. It seems that if you have the data, then it’s easy to make it web-accessible. The advantage there is that you also can start creating ways for people to purchase tickets and thereby have another revenue stream.

The Business Behind Text2Fly

Text2Fly QuoteIn terms of business model Text2Fly is paid for by premium SMS once it officially launches. It’s free right now though, so definitely worth testing out to see how much it helps in your daily life.

User numbers are still modest because the site and backend system was only flipped on 3 weeks ago. There has been very limited marketing to this point, but there is a plan to launch a real-world and digital campaign once the service is fully tested and stable.

When I asked Timi about how local Nigerians are taking to the product, he stated:

The reactions from people who have used the service has been far better than I could have imagined. One chap I spoke to on the phone enthused about how Text2Fly is not just for busy business people but for “everybody”. Another told me a story of how he showed it to some friends while they were having a drink and all 7 of them stored the Text2Fly number.

[Note: David Ajao has also done a review, worth reading as he's a fellow Nigerian.]

My Favorite African Tech Blog Reads of the Week

This last week has seen a higher than average number of great technology blog pieces by a number of people. Here are my favorites.

Bankelele writes about Professor Calestous Juma with a review of a talk that he gave on how Africa can use technological innovation to stimulate economic recovery, spur economic growth and spread prosperity.

Aptivate gave us their Top 10 Rules for Designing Low-Bandwidth Websites. This is a goldmine, every web designer in Africa should print this out and hang it above their monitor.

Jon Gosier gave us a Comparison between On- and Off-network GSM Rates in Nigeria. Proving that, “with the exception of Etisalat, it’s quite clear that it’s cheaper to own four cell phones than one [in Nigeria].” (I hope this data makes its way to African Signals)

Ethan writes about Mike Best and his team’s work in post-conflict Liberia around digital storytelling.

South Africa’s popular mobile social networking application, Mxit, is now at 14 million users. “MXit users currently send approximately 35,000 messages per second during peak times and visit the system more than 20 million times per day.” Wow!

Bill does a review of Ndiyo, the thin-client computing solution for Africa. Specifically, on how Ndiyo “provides an alternative to traditional Western notions of how technologies should be deployed, used and paid for in developing countries”.