Sunday, 24 February 2013

6 Challenges Facing the ‘booming’ tech scene in Kenya

Kenyan tech scene is always labeled as booming, growing, a model example for Africa, the silicon savannah and such things. Well what I never get to see is what new stuff is rocking the booming sector in terms of innovation (not some cool and fancy apps). We’ve had hackathons, business launch pads and various other initiatives however the entrants and the winners never seem to change. Same familiar names always pop up. Then we have amazing stuff happening at Bishop Magua, ground breaking Konza City and when all this is mentioned you can’t leave DR. Bitange Ndemo of out of it course. Same stories, different writers and it’s not bad after all; when Google chairman toured Nairobi he ‘saw the potential’. We all want to have a Silicon Valley kinda thing in Kenya; can Konza be that model city in Africa? Will it give rise to some million dollar companies in the near future? Is it okay to think along those lines now? How soon can this work? The ground breaking was done but that isn’t all we need to see! The city concept is brilliant but is it what the developers need to start working on some serious stuff? NO! Let’s to flip the coin and look at what could be lacking or some of the challenges the tech scene is facing currently.

Problem #1: Lack Business Models
This is simple, most of these apps, websites are not businesses or companies that are investable, and they are great ideas though lack a revenue model to monetize in the foreseeable future. How do you make money? What are your revenue streams or sources? You’ve got to know how you will make the money otherwise you aren’t in business. Participating in hackathons is good, if you win there’s good PR coverage for you, prize money and gift hampers but that’s not why you exist as a company that’s if you are an entity yet!!! Press coverage doesn't pay bills, infact it brings in some more.
And don’t include donation and grants into some of the revenue model! Don’t create something UNDP might fund….don’t work targeting donor funding! If you have that idea set in place don’t go into it just for the money, it takes time to flow in and when it does it may dry up at a given time! Money is a side effect of solving a problem that enough people are facing and will always come if you’re passionately doing the right thing at the right time in the right industry.

Problem #2: The Consumer- Lack of Customer Focus
Do these ‘innovations’ have a clear consumer focus in mind or a clear understanding of ‘who will pay for it’? Are we doing something cool to win prizes and earn respect from our peers? It’s one thing to get data that shows the growing market in a certain industry, identify a niche, go ahead and work on something to fill it and finally make money while doing it! It’s also okay to draw your inspiration from an idea that worked in America and create a local version of it, it’s also nice to have statistics from World Bank to back up your idea but remember we are in Africa and Kenya! Different economies, different consumer habits and lotsa things!
Remember the customer pays everyone from the founders, so you better have something people can spend money on or one that helps other business serve their customers better!
Smart guys tend to think everyone in the world is as smart as they are; well it’s not the case. We are very innovative, doing really cool stuff that our friends like but no one else understands how to use or operate or even bothers to let alone pay for it. People want to use simple, easy to understand gadgets and appliances. There’s nothing so innovative about Equity bank but the focused on the bottom of the pyramid where majority of Kenyans were and banked them. 

As at now we might want to keep it simple and basic- not cool and amazing!

Problem #3: The Capital, Equity, VC’s, Friends and BOA’s.
Shark Tank is now airing on NTV; am sure you’ve seen people pitching in their ideas; some walking away with the cash and now living the ‘American Dream’….do we have the African or the Kenyan dream? Maybe! Since we are in Nairobi, the VC story is very different here; we’ve had cases such as the most recent one involving Pesatalk.
Still on this, the startup founders need advisors and some star employees who will ask for equity. By all means, good employees deserve shares as they are getting paid less to work for you than would if they worked for a multinational. And keep in mind that if people in your advisory board are big brands, they probably won’t have much time to help you. It’s cool to have Eric Hersman, Bitange Ndemo etc but these guys probably won’t have much time for you. Am sure you don’t want to learn your advisor isn’t in town via a tweet? You need someone accessible enough yet experienced and passionate about your business as you are! Just check around you will get one. May not be known but if he’s done it probably you need his help!
The truth is there’s a lot of money chasing good businesses in Nairobi; I believe money will always chase a brilliant idea fronted by a skilled and passionate team with a solid and functional business model that shows realistic revenue streams. Do we have that yet? Tell me!

Problem #4: Innovators don’t want partners
     There are loads of smart people out there doing cool stuff, with amazing business ideas but they will never grow. These people are local Twitter heroes with some following and good press coverage but one thing that they lack is that strategic partner to catapult their businesses to national or global market. Guys want full control of their ventures! These partners could be distributors, well known people with the influence and connections an entrepreneur needs to grow or could even be a financial partner but they’ll all need some equity for their time and money. Since we all feel smart; the developer keeps his code, the marketer walks around with his strategy, the finance guy keep his money & investment management knowledge and God watches it all as we try to beg him for a breakthrough independently! So everyone is disappointed and goes back to an 8 to 5 job where we can dutifully utilize our great skills for a monthly cheque! Not bad!

Problem #5: Is it just happening at Bishop Magua?
Of course there are a ton of benefits of working from the epicenter of Kenya’s tech scene, you’ll find more tech investors, mentors, training programs, events and networking sessions than anywhere else. The VC’s also tend to invest in people they know and believe in so should everyone get a desk there? However does that mean if you don’t ply your trade on Ngong road you’re doomed to fail? We can’t all fit there but the guys at Bishop Magua are definitely doing amazing stuff on their macs while sipping pete’s coffee.
We need to focus on universities and research; Strathmore is doing some amazing stuff with m-lab and others should follow suit in having these incubation centres.
But is this sport isn’t just about Computer Science, BBIT and Bachelor of informatics students or graduates. No! I believe we need to create an ecosystem that encourages partnership and collaboration mostly at the university level where guys spend four whole years just chilling and partying seriously before being given the power to read! Can a PR, journalism student can work on idea with a CS student? Yes but the government can’t make it happen, we just need to share information, knowledge and pool our skills into something. The other thing is innovation and this tech buzzword isn’t just about apps, websites….I would classify something innovative as something economically viable, with a social impact and one that is scalable and with great disruptive potential.
Initiatives such as open data are doing a great job with getting innovators information they badly need however the government and private sector too need to make public their research, to at least share it with people. 

Problem #6: Are We Ready For that Big Break?
Definitely the tech scene in Kenya is growing but is the talented Kenyans ready to take the big break or the big leap? Most of the guys I know have a main job that somehow they don’t want to let go and they pursue the side jobs in the evenings and weekends. Guys simply don’t want to take that big leap, simply because they don’t want to full venture out to business. I have also seen a few who rush back into employment after two dry months in the hustle! Whatever it is, shuffling between the hackathons, a full time job and the side hustles isn’t bad after but you need to look at what and where you need or want to be in 10 years. I think we have talent, great ideas and amazing people that can make things happen but we never want to sit and work on it so we keep talking and meeting for coffee to discuss, meetings and preparing presentations but that’s not going to set it rolling till someone decides it’s time to do it!

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