High Expectations, big disappointment. I think that is how the Kenyan tech scene should be described at the moment. Yesterday I tweeted about the rise of tech pundits demonizing the Start-ups in Kenya. Then on my way to the iHub ignored Agosta Liko of Pesapal who tweeted back that the tech pundits should be vetted. But then I met @TheMumbi the lovely lady who runs The Creativez Meetups, Ms.Njeri Ngaruiya the Investment Analyst from InReturn Capital and Bernard Odour of NikoHapa. We started to identify some of the problems facing the Start-ups scene in Kenya and why the start-ups are not doing well apart from winning the competitions and hackathons. I will come back to those problems later but first let talk about the “Reality check about Silicon Savannah” talk which took place today at iHub.
When you hear there is “some quality talk” in Nairobi, iHub starting at 6pm you brave the traffic to go and listen. After all we all are after those secrets that make some people very successful in business. But it is very disappointing when the opening statement from the speaker is that you are not meant to be here. Celullant and Craft Silicon were not at iHub because they were busy making money according to Andrea Bohnstedt. Wait a second, according to that reasoning nobody should have gone to iHub to listen to her! I guess the main reason such event are normally scheduled from 6pm, is because the organizers factor in the fact that people are working from 8am to 5pm after which they head home. Some at least instead of going home take time to go and listen to the business “experts” and may be learn one or two things to help them move forward in their own businesses. At the same time it should be noted that some people don’t go to such event to listen but to network.
The main point she was making is that the people who attend the tech talks are fuelling the hype about Nairobi tech while the reality is there is nothing to celebrate about. I get the point but I always wonder whether the tech pundits currently demonizing the start-ups realize that the hype about Nairobi was never created by the so called the entrepreneurs (start-ups) but by the same tech pundits? From where I am sitting writing this, I asked myself who the hell told the world that Nairobi tech is booming in the first place if not the same pundits who have the columns in newspapers and blogs around the world?
I think at this point the definition of technology and how to use it or deployed in the country is lost in translation. The technology in my world is enabler and those hard hitting pundits should realize that may be the other businesses in Kenya are doing well because the technology and the work of some of the start-ups they are calling rubbish at the moment. Look for example the m-Farm, what those ladies are doing is to help farmers get better prices for their products. In that case the outcome would not be out rightly visible within the m-Farm itself but through the farmers who have embraced the solution. There are many people doing great work out there helping companies solve their tech problems especially doing the enterprise solutions. I have seen great local payroll systems, I have seen great local banking systems, I have seen great local sacco systems, I have seen great local hotel management systems. At this point it is time to appreciate the fact that something changed over the last two years. And it is the emergence of how people perceive mobile phones and their primary functions. The birth of mobile apps changed the tech landscape and the narratives of what constitute tech. Developers moved from doing desktop applications, to creating mobile apps and then everyone has been forced to adapt to the new reality. To say the truth it has only been two years, two years for heaven’s sake and we already all shouting failures, failures failures. Are Kenyans developers and entrepreneurs that bad or is just starting to be fashionable to bash them?
The fact is when a kid is born; he/she has to go through different stages in life. Starts off by scrolling, then move to trying to stand, and then start walking like a man who has taken one too many. With time he/she gets it right and even end up being an Usain Bolt. Even learning to speak process usually takes time but with time they master everything. I guess there have been many trials and error in Kenya, and at this stage I can understand why. Personally I have been involved in many failed tech projects and I must say that I have learned a lot from them. And I want to see young people being told the Dos and Donts in the business process and not to “hell with Start-ups”. I agree with John Kieti of mLab East Africa:
” Perhaps argument should be “what else should grow in addition to the startup scene?” and not that of “to hell with startups” #SSrealityCheck“.
Ok, let’s go back to the beginning on how the Silicon Savannah reality check talk came up. Andrea wrote an article on the star titled Not all are cut for business:
‘There’s hype and then there’s business.’ Rachel found that ‘The event was well-attended, but the message was clear: Nairobi’s Silicon Savannah’ is in desperate need of a large dose not of money, but of modesty.’
I keep coming back to this subject: a lot of policy discussions, whether on government or on donor level, had focused, and continue to focus on, entrepreneurship. Of course this is necessary to develop an economy; there is no question about that. But I find that there is often very little thought as to whether entrepreneurship really is for everyone. In the past, vast aid programmes concentrated on fostering ‘income-generating projects’ at the so-called ‘grassroots’ level – are these necessarily enterprises or, as Tom Dichter once called them, survival activities?
And then there was the Vanity Capital and Vanity Companies by Jonathan Kalan
Cynics call it “vanity capital.” It’s fueling an industry of fluffy metrics where prize money, downloads, press hits, and sexy videos pass for milestones.
“Vanity companies” with little more than an idea and a collection of buzzwords are receiving tiny amounts of seed cash from the round-robin of pitch competitions, grants, app challenges and hack-a-thons that animates the hub circuit. Entrepreneurs behind these companies are falling for too many carrots, chasing free money with half-baked ideas developed to satisfy overeager funders.
For Jonathan I think he should talk to more people than ones he has talked to so far.
Great argument but I wish Andrea would sit down with thousand and thousand graduates in Nairobi looking for jobs and can’t find any and tell them the same. What I know is most people in Kenya end up trying business or the entrepreneurship, be it in technology or otherwise because there are no credible job offers coming their way. And without jobs, I don’t see why encouraging young people to be entrepreneurs should be looked at with some doubts. At this point I bet 8 out of 10 people at iHub will take a job if you offer them instead of sitting there many hours trying to make it the hard way.
I think instead of telling people that you know what you are no cut out to be entrepreneurs, the best thing would be to look at what they are doing wrong and tell them how to improve it. Unfortunately, what I hear from the talking heads is not analysis of what has gone wrong but blame game.
Here some of the problems facing Kenyan start-ups scene:
1. High expectations and being compared with Silicon Valley too early.
I think by all means and standard it is too early to pass judgement on Nairobi tech environment. As I have mentioned, it has only been two years. And what I mean by that is places like iHub which have provided enabling environment have been existed for roughly only two years. The same can be said about the stable and fast internet. Even up to now the digital divide between the urban and rural folks is still huge. The access is a big issue and there is huge wasted bandwidth in Kenya as the ISPs struggle to get ways to reach majority and at the same time still make profit. So what did you expect to happen in two years really? A company in the same size as Twitter? I don’t think so. I know people talk of developing for international market which is great when it is coming from the mouth. But the reality even the most successful companies start by solving the local problems before they can take their solution abroad. Now the start-ups in Kenya have to content with the fact that the local market still has less than 1 million people with stable internet. With that in mind I think it would take some time before the app business In Kenya takes off. And before you start swinging at me about the numbers, remember the people are comparing the local scene that is Kenya with US. That is why we are even calling it Silicon Savannah to make it feel like Silicon Valley.
2. Low Working capital
The talking heads here are claiming that there is so much and easy money in Nairobi but personally I asked myself where are these people from. Tell me one start-up in Kenya which have received over $1 million dollar in investment…..mmmh none why is that so if there is so much and easy money. I read about the Start-ups in US and other places and there is one significant aspect about the fund raising which is not replicated here. They talk of millions dollars in investment while here we talk about 25K dollars given for winning hackathons and competitions . Start-up which has raised 1 above million dollars to roll out their products cannot be compared to a start given 25K to do the same. The so called investors in Kenya still don’t believe in the market and are here to test the waters . In the process they are only giving very little amount which by all means cannot take the Start-ups that far. I can remember during Pivot East completion in June, the guys at CrowdPesa said they were looking for 1 million dollars in investment and everyone went like aaaaaghh in the hall. By the way let’s go back to much talked about Mpesa, the hidden fact is there was huge funding from Bill Gates in the early stages. And sure enough it succeeded. If you give the same funding to some these mVitus, I bet they will be successful as well.
3. Founders forced to do side hustle to make the end meet.
My friend Idd Salim like using the phrase “code with full stomach.” So you have a guy who has a brilliant idea and he/she has turned it to a business. From outside everyone can see that the future is bright. Unfortunately, the business is still not at the stage where it can pay the bills. To survive the guy has to go out there get some odd jobs. In the process the business is neglected and stalled. From there you get a founder who is not hundred percent committed to the business. If you are investor you will not look at the guy or the business twice and the same time the tech pundits will already be out in full force shouting failure.
4. Failure is not an option here
While I understand the important of failing and starting over and I would like to meet people who have gone through the process. In Kenya anybody who is considered a failure is shunned. All the tech talks are done by people who are considered to be successful. Nobody would invite someone who started a business and failed to explain how that happened and what went wrong. I remember Wallace Kantai refused to invite Kenyan women on tech on his show Aganda Kenya when they were discussing tech in Kenya. When I asked him, his words were to the effect that some of the so called Kenyan women are his friends but to be honest he can’t see what they have done. Back to my beloved iHub and all the talks are done by people considered to be successful. One of these days I would like to see people who have failed or considered to be have failed being invited to give people the side of their story. Honestly the so called successful people have talked too much and so far they have not helped anybody, time to give failures chance to talk.
5. No local Investors.
I asked a number of people who are known as the Kenyan tech veterans, if by any chance they get a million dollars, where they will invest their money in…none of them point towards tech and you can guess where their money will go…Real Estate. Even you who is reading this, I bet you will give me the same answer especially if you are a Kenyan….I stand to be corrected on the comments section. Leave your thoughts there