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Nine Things You should Know About 88mph

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Since  I wrote the post about 88mph, there has been a lively debate with some people criticizing my article and others agreeing with it .   Some termed the article poorly researched  and the reason given for that was mainly because I did not speak to 88mph managers before publishing the article.  The  88mph MD Mr. Kresten Buch was quick to call it falsehood (Check the comments section) but in the spirit of building the tech space in Kenya I  promised him that  I would pass by their offices and get the side of their story.

So I did keep my words and went there on  Friday. The MD himself was not around but I met the guy who run the space Mr. Nikolai. The first encounter with Nikolai was like entering a war zone and he went straight to asking if I have a lawyer bla bla blah. Well, I understood where he was coming from.  The blog caused a stir on Social Media and even Business Daily picked it as the blog of that week.  But at least Nikolai quickly understood that I was not there for a fight but to see where things stand and to write a follow up post. Yeah we had to start over twice.. Well, after that we had a great chat and went through the post line by line with Nikolai explaining every details.When I was through with Nikolai ,I talked to the guys of  Hivisasa, pesatalk and others(the Kenyan tech industry players outside the working space). Here are what I learned from Nikolai and others:

  1. Nikolai Agreed that Hivisasa was shut down temporarily but at the time of our talks, they were back to work.  What happened is that Hivisasa got investment from 88mph which was meant to last them up to a certain period but due to their expansive operations they ran out of the money earlier than expected. 88mph dug deep in their pockets, got them some more money to enable them to operate for a few more months after which they should either get another round of investment from somewhere else or make money to sustain themselves. The problem with Hivisasa is that they have many people on the payroll. They have like 250 regular writers who are paid per article and a total of 700 contributors.
  2. Out of 15 start-ups 88mph are working with, they have invested in 10 while started 5. 88mph own majority shares of the 5  start-ups they founded but they have given equity of up to 20% to a number of key employees. Pesatalk, Hivisasa and Mdundo are among the five started by 88mph. As for the remaining 10 start-ups, 88mph own between 15 to 20 percent shares in them. That include Ghafla, Tusqee Systems, Futaa and the rest.
  3. Tusqee Systems moved out of the co-working space as I had indicated on that article but Nikolai believed that they needed a bigger Office space.
  4. Nikolai agreed that there is one start-up their have increased they shareholding on by 5% after getting them another co-founder but that was within the original deal agreement. On top of that they further invested $.10,000 on the start-up. The other employments they have done is within the 5 start-ups 88mph founded. Their main point is to get the best human talents but  that put them in direct competition with the  industry heavy weights like Safaricom. The option they have is to advice the start-ups to pay the key employees within their means and give an equity option to top it up.
  5. As for the Entrepreneur in Residence Steve Gitau, Nikolai said things did not work out and they had to part ways.
  6. There was an intention of a court case by Mr. Joel Macharia, who used to run Pesatalk (still own some shares on the start-up) but that has not happened so far and I am told they are in the process of sorting out their differences.
  7. On my further investigation, I found out that people might be confusing the functions of Social Incubation Space like iHub and Nailab with private Equity Fund like 88mph. 88mph  is not an incubation center like Nailab but a venture capital which once invested in a company demand that the company make money for them.  Venture capital  according to Wikipedia  is a broad subcategory of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Venture investment is most often found in the application of new technology, new marketing concepts and new products that have yet to be proven. In all, that is what 88mph is trying to do.
  8. Everyone I have spoken to agreed with the point I made about the local capital, supporting the tech ecosystem. It interesting that around 70 percent of the 88mph fund now come from local investors according to Nikolai. I think that is awesome and will go  a long way to making the industry sustainable.  And for that sustainability to be complete we need more local people with money to start investing on the tech space. Actually we need the business men and women to take the challenge and stop looking at the tech space like a place meant only  for techies. A good example of non techie who made it big in the tech world is Ory Okolloh (@Kenyanpundit on Twitter). Of course, she is now one of the biggest tech voices in Africa but when she started, she was a lawyer blogging on the sideline. In other words all you good business people out there, you are all good for this and should come in running. Thank me later.
  9. So, is it  a burning house at 88mph? Yes but in a good way according to Nikolai, they demand success that some people might find hard  to cope up with.

 

What is your opinion on the topic?
Kennedy Kachwanya
Lead Blogger at Kachwanya.com
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Kennedy Kachwanya is a technology blogger interested in mobile phones both smart and dumb, mobile apps, mobile money, social media, startups ecosystem and digital Savannah. New media must not forget the strength of old tech.
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