White African

• The Israeli vs Silicon Valley Models for African Startups

  Posted: March 28, 2010, 11:35 am by HASH

  Everyone wants to compare any up-and-coming tech city in the world to, “The Next Silicon Valley”. That idea is dead on arrival, yet we’re seeing many a reference to it in the media for places like Nairobi and Cape Town.

  Paul Graham’s essay states this best (please, read the whole piece):

  “What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.”

  A model for African startups

  Yesterday I spoke at Mindspeak, a monthly meeting in Nairobi where people in the business and tech fields talk about what got them to where they are. During the Q&A session after I spoke there was the recurrent question and comparison between what we’re trying to do with the iHub and how we see the increased critical mass in the Nairobi tech space, and if that was going to make us the next Silicon Valley.

  That’s the wrong model for us. Instead, we should look closer at the Israeli model.

  “Very often, local high-tech startups can’t find the funding here,” Mr. Glaser said. “They get funding elsewhere and ultimately move their locations from here to be closer to their investors.”

  Israel already has a culture of innovation and entrepreneurship, which leads to a strong startup culture. Due to geographical and political constraints, startups that create high-tech products and services are forced to look at their growth strategy early on. When a company starts gaining traction, they spin out their executive and parts of their operations to places like Silicon Valley, New York, Cambridge, etc, while maintaining parts of their operations in Israel.

  We’ve seen the same with a South African tech firm. Yola (old name: Synthasite) moved first their executive team, then part of their operations, to San Francisco. Shortly thereafter, they raised an amazing $20m.

  Of course, the Israeli Model, requires more than just up and moving half of your startup to Silicon Valley. That’s a simplified formula. However, it does serve as an indicator for what we should be looking at here. Instead of trying to grow the same ecosystem that took decades to develop in California, we should look at what works for us.

  Key ingredients needed:

  • A network of investors, mentors and connectors in the bigger tech hubs of the world that help incoming African tech companies and help them take the next step. Most of these should be well-placed African diaspora.
  • A policy and legal framework in African countries that allow them to build and succeed/fail quickly so that they can take that next step globally.
  • Seed capital and incubation options for early stage prototypes and business testing in-country.
  • Teach entrepreneurship and leadership within the education system, especially at the university level.

  You’ll note that none of these items can be done by just one entity, it takes a concerted effort by multiple parties, including investors, academia and government in order for both a high-tech startup culture to come into being and for success beyond a countries borders to take place.

  Certain cities in Africa have the ability to pull this off, including Nairobi, Johannesburg, Cairo, Accra and Lagos. Others have a chance too, but these 5 have the critical mass that makes it more possible, though none of them are there yet.

• Quick hits around African tech

  Posted: March 25, 2010, 9:46 am by HASH

  Google’s Code Jam Africa is underway, and top African programming talent are working to solve some tough algorithmic challenges.

  Idd Salim gives us, “10 Kenyans Under 32 will be USD Millionaires before October 2010” or, his thoughts on how to make big money in the web and mobile space.
  (related, how to make money with Safaricom)

  Foreign Policy writes a scare piece on how a high-speed wired Africa dooms the world to powerful botnets…
  (related blog post)

  AllAfrica covers Sophia Bekele’s .Africa project, trying to get a TLD set up for Africa (a la www.whiteafrican.africa).

  Inside Facebook points out the slow and steady growth of Facebook users across Africa.

  Finally, in the not-tech-but-interesting category we see the blurring of the US military and development/aid programs and how this new “smart power” is going to mean more US military industrial complex members invading Africa.

• More Than Just Call Centers: BPO in Kenya

  Posted: March 24, 2010, 10:08 pm by HASH

  There has been a lot of talk, especially in East Africa, about business process outsourcing (BPO) as a big way to elevate the technology field. The logic is that while many of these jobs might not be super high-tech (ie, programmers), they’re at least in the tech field thereby allowing people to get comfortable with computers and bringing outside investment into the country.

  Kenya has a great number of qualified students leaving university each year that. Enrollment in 2008/09 (public, private, part-time) was 122,847, and my friend Bankelele estimates annual graduation at about 30,000.

  Kenya’s BPO strategy is best summarized and detailed by Gathara (read more):

  “The general thrust of the report is that coming late to the party, Kenya has no chance of becoming a Tier 1 provider; it lacks the scale to become a global player like India or the Philippines. So the suggestion is that she leverages her relatively small pool of cheap, accent-neutral English-speaking graduates, her strong ties to the US and UK (which together account for nearly 60% of the outsourcing market), improving infrastructure and an already thriving business environment, to create a niche for herself in basic sales and customer-care services and attract large international BPO companies.”

  (also, read the Kenya ICT Board’s position on BPO)

  It’s a sound business area to put resources into, especially if you’re a government entity focused on growing jobs and investing in seeing the technology sector grow. However, I’ve been troubled by the idea that it’s focused mainly on the KenCall-type outfits – basic call centers. It seems that there’s more opportunity here than this. Let’s not sell East Africa short as a low-cost, low-value BPO region, but look more closely at a strategy for attracting higher margin clients for services by highly qualified BPO firms locally.

  Shifting the BPO Paradigm

  Beyond cloning what India or the Philippines has done, can we rethink the outsourcing paradigm?

  Nairobi, due to location, climate and a number of other reasons ends up being the hub of a lot of major corporations (Google, Microsoft, IBM, Nokia, etc), large non-profit organizations (UNEP, CARE, World Vision, Hivos, etc) and a host of medium-sized companies. These represent businesses with large amounts of revenue which is mostly injected from overseas. Why are their business processes being run out of expensive central offices in regions like the US and Europe?

  Earlier this week I discussed this with Wiebe Boer of the Rockefeller Foundation in Kenya, who has given the Kenya ICT Board $500k to drive their BPO strategy. He worked on the original McKinsey team to architect the six pillars of economic growth underpinning Vision 2030, of which BOP was one (and the only one being acted upon currently).

  He had some good ideas, stretching the understanding of the traditional BPO definition of East Africa, and leveraging bigger organizations to shift their non-core competency work to Kenya. Instead of just outsourcing customer service, think procurement, basic HR functionality, IT, monitoring and evaluation, and accounting.

  Last week the NetHope meeting came to Nairobi, their list of member organizations is impressive as far a “big NGOs” go. They represent a lot of money and a lot of potential for business for BPOs here in Kenya. Their supporters are the likes of Cisco, Intel, Microsoft, CDW and Accenture. Together, both supporters and members represent a vast pool of organizations ripe for this expanded type of BPO.

  Business opportunities for seasoned entrepreneurs abound. An example would be to build a strong firm that could focus on a couple of the non-traditional outsourcing needs (think M&E and HR). Many corporations and organizations (internationally and locally) need this and don’t have the in-house capabilities to do it right. Groups like the Rockefeller Foundation are poised to pressure the groups that they support financially into using BPO companies in Kenya, so if real viable firm was available, cash flow would be less of a risk than in other enterprises.

• Geeking out on a Motorcycle Trip

  Posted: March 13, 2010, 10:52 pm by HASH

  Today I had a lot of fun, one of my old schoolmates (Markus) from here in Kenya asked me if I wanted to get out of Nairobi and hit the trails on our motorcycles. Of course, the answer was yes. We headed out towards Naivasha early this morning and then took a side road off towards the escarpment.

  The roads are dirt and with the recent rains they’re really quite rugged and beyond most normal vehicles. Markus is an experienced trail rider on a KTM 450 (kitted out), I’ve ridden a lot of trails, but years ago and not nearly as experienced as Markus – and I’m riding an offroad/onroad Suzuki DR 650 (stock).

  We ended up having to run through, and beside, a lot of 5-10 acre farms that sit at the base of the escarpment in order to find a road up to the top of the escarpment. A lot of this was on cow paths and required some fine-tuned leveraging of our bikes through gates and streams. The road to the top of the escarpment, when found was a fun ride, minus the part where I wiped out on a simple turn (the one below)…

  Bruises (and bruised ego) aside, we kept going up into small-farm, where quite a few more people live, and which is almost entirely denuded of trees that were there just 15 years ago.

  After talking to some of the local community, we were advised to head down a certain road, with assurances that it would lead us to the bottom of the escarpment. It did, eventually, but not until we had backtracked, sidetracked, followed animal trails (in buffalo country), and then realized that the washed out gully we were in was supposed to be the road.

  3.5 hours of wrestling a mammoth 650cc bike through this terrain left me exhausted. This type of bike is not made for that level of technical riding down boulder strewn gully’s and game trails. However, it was also hugely rewarding when we finally found our way to the bottom of the escarpment and much easier riding.

  Mapping the Malewa Motorcycle Trip

  I also brought my Android Nexus One along for the ride, hoping that the battery life would allow me to use it for tracking our trip. The Nexus One has a GPS, and there’s an Android app called My Tracks, that tracks your trip, allows you to add waypoints, then easily shares it to Google’s MyMaps.

  Here is the result:

  
  View Malewa Motorcycle Trip in a larger map

  It doesn’t look very exciting like that, but it does give you the exact data for having your own challenging ride if you’re in Kenya.

• Crowdfunding and Seed Funding in African Tech

  Posted: March 9, 2010, 8:27 pm by HASH

  I’ve written a couple of times about the lack of seed funding in Africa, and how to find the entrepreneurs to fund if you did have seed capital. We’re starting to see a few angel investors like Sean Murphy of Chembe Ventures making their way around the continent, but they are not nearly enough to fulfill the capacity of ideas and individuals who need startup capital.

  Crowdfunding

  Just this week the CrowdFunding South Africa site was launched (look for them at SXSW this week in Austin), working off the theory that, “South Africa cannot compete in the global online sector if it isn’t funding start-ups at the beginning stage.” Their plan is to do this by getting:

  “1000 people get together investing R1,000+ each by pooling the money into the Crowdfund.”

  Seed funding is risky, and the idea of Crowdfund is to distribute that risk over a number of people thereby reducing it for everyone. Their goal is to invest 50,000-100,000 Rand in 10-20 “excellent ideas”, and also provide legal advice and contracts, designers, specialized developers, bandwidth, hosting, office space and running costs, mentorship and time saved.

  This idea is similar to what Ben White at VC4Africa is thinking about, basically a “Kiva on steroids” as Bill Zimmerman puts it. A way for you to invest in people and projects with larger sums of money and greater risk and returns than on the microfinance investing sites.

  Finding the Real Tech Entrepreneurs

  Both the Crowdfund and VC4Africa initiatives are excellent steps in the right direction, as they both provide platforms that allow less-knowledgeable investors (of tech in Africa), and deeply involved African tech investors alike, to get involved without too much risk at one time. There remains one issue to be solved though, and that is finding the entrepreneurs to invest in.

  Any VC worth their salt will tell you that they invest in the people behind good ideas, not just the product/service that the entrepreneur is trying to create. So, how do you find these individuals? It’s generally through your network, people you trust, that serve as a filter to guide you towards the promising ones. That’s the same in Africa as it is anywhere else, yet here in Africa, there are fewer of these trusted intermediaries who act as filters (especially for international capital), than there are in the US or Europe.

  In a meeting this last week of the people behind Limbe Labs (Cameroon), Appfrica Labs (Uganda), the iHub and the iLAB (Kenya) we discussed how these spaces could act as that type of a filter for investors and funds. Each of us sees more young tech entrepreneurs every day, and sees these individuals consistently, than most any other single person could by themselves.

  Could these labs, which are now showing up all over Africa, be a way for entrepreneurs to make themselves known, show their stuff, then be introduced to the funds and investors with a greater level of confidence than normal?

• Tandaa Kenya Meeting: Local Digital Content

  Posted: March 8, 2010, 12:48 pm by HASH

  “If Africans are to get online en masse, they need a reason to go there. Their lives, their stories”

  - Dennis Gikunda of Google Kenya, requoting Alim Walji who was at Google.org and is now at the World Bank.

  The Kenya ICT Board is throwing the Tandaa event today in Nairobi at the iHub, sponsored by Google Kenya. It’s all about getting more local Kenyan content online, and it’s a good mixture of speakers so far, with Dennis Gikunda starting off, giving us examples of successful local content plays.

  A “remember when” session just started, talking about how slow the internet used to be just a couple short years ago. Jimmy Gitonga scolds us for not doing more with what we have, figuring out business models and ways to make money off of our fast connections. He also reminds us that 2 million Kenyans access Facebook on their phones today. Moses Kemibaro steps up to give the real numbers showing the costs of internet, and the speeds, that has happened over the last year.

  Joshua Wanyama, of Pamoja Media and Africa Knows, is up to talk about “The internet at 500Mb” – how to help Kenyan companies make money online. He’s giving us a short summary of his background, about how he started a web development company from the ground up in the US, then how he’s brought that same mindset back to Kenya.

  “If I were to go online and try to find all the dentists nearby me in Nairobi, I couldn’t find it since it has not been digitized yet.” – Joshua Wanyama

  Josh goes on to say that we don’t have enough success stories, though he does reference Ushahidi and Safaricom’s Mpesa. We need more of them, as it will help get more young, smart entrepreneurs operating in the internet space. Most of the internet traffic from Africa goes to websites like Facebook, YouTube and Yahoo, all outside of Africa. What are we doing to get our own content up and make it more of a viable business alternative for our own society?

  Eddie Malitt of Sega Silicon Valley is here to talk about turning Sega village, a remote village of over 10,000 inhabitants located in Ugenya district – 25 km from the Kenya- Uganda border, into a “Silicon Valley” – an African ICT hub. One of the interesting findings that Eddie shared with us is that the children are leading the training of their parents and other adults. It doesn’t sound like their operations are self-sustainable, but that good things happen due to them being there.

  [More of the Tandaa event will be going on today, but I'll be unable to keep up with it due to other meetings. Follow it on Twitter at #Tandaa or @TandaaKENYA. I'm sure that Moses and Mbugua will also have something up later today.]

• ICANN Comes to Nairobi

  Posted: March 7, 2010, 9:29 am by HASH

  ICANN is the body that governs the assignment of domain names and IP addresses worldwide. It’s supposedly a non-profit, but their salaries might indicate otherwise. They decide if there’s going to be a new top level domain (TLD), and are behind the present craziness of letting anyone just choose their own TLD. They split the world up into 5 zones, and each year they go to one of these zones for their annual meeting. This time it’s here in Nairobi.

  You can see the full schedule of this week’s events here.

  The meetings are to be held at the Kenya International Conference Centre (KICC), who as organizers of the space have already fumbled the ball. They’ve double booked KICC on Mon/Tue of this week with the 6 heads of state (and all their security) of IGAD; Djibouti, Ethiopia, Kenya, Somalia, Sudan and Uganda. ICANN is none to happy about this, as stated on their blog:

  “With that many national leaders and scores of security personnel arriving at our meeting venue at one time, we expect it to cause severe inconveniences and at times possibly major disruptions for our community members as they attempt to enter and move around the KICC.”

  Major items on the agenda:

  Here’s a video from Gray Chynoweth where he outlines the topics for this ICANN #37 event including security and remote access, new TLD’s, the .xxx gTLD, DNSSEC rollout, root scaling, WHOIS study and more.

  • New TLDs— a discussion of what the “EOI” (expressions of interest) process will look like for pre-registering new gTLDs. ICANN provides more information on this here.
  • IDN ccTLDs – a status update on which countries that have applied using the “fast track” and where they are.
  • The .xxx extension- will it proceed and when.

• iHub Nairobi Launch and IgniteNairobi

  Posted: March 3, 2010, 11:43 am by HASH

  The new iHub in Nairobi isn’t completely built out yet (in fact, it’s still basically just concrete and few painted walls…), however that won’t stop us from having a party to celebrate the opening of the new innovation hub here! It starts at 5:30pm (Kenya time) at the iHub (map).

  [It's an invitation only event, just due to the size of the space and how many we can fit. Jessica is handling the invitations, so head on over to this form and fill it out if you haven't already. If there's room, she'll send you a confirmation email by early afternoon.]

  Things you should know:
  

  • There will be eight lightning-style 5-minute talks done by local techies as part of IgniteNairobi (see Global Ignite Week for more)
  • Keeping up to date with the event, we’ll be live streaming it via Ustream here.
  • The first 100 attendees – who are on the list as confirmed -will get one of the new iHub t-shirts designed by the guys at The Ark and printed by Bonk. (Yes, they are incredibly cool).
  • The floorplans and layout for the iHub are about done, but no buildout has started happening.
  • We’re having a cocktail tonight, so it’s drinks and bitings/hors d’oeuvres.

  We’re looking forward to everyone coming over and seeing the new space, thanks for being a part of it!

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes