Startimes

Be aware, the Kenyan Tech Doomsday Predictors are Here

Written by
kachwanya@yahoo.com'
  • 3 years ago
  • Posted: October 18, 2012 at 11:19 pm

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

Kachwanya
kachwanya@yahoo.com'
Blogger at Kachwanya.com and covers Mobile Phones ( Smart and Dumb), Mobile Apps, Social Media, Mobile Money, and Digital Savannah. Seeking the best ways of incorporating strengths of old media to new media.
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Comments

30 comments
kahiga
kahiga

the main problem is that there are no (mass) market for the largely elitist tech products/services in Kenya given that big corporates and the government have been monopolised and the elites in Kenya are tech illiterate.... still waiting to see whether the Macharia's gamble of hiring politically correct Muchemi at Seven Seas is paying off..would like to see Seven Seas succeed to offer a bargaining power for techies when pitching to monsters like Safaricom...man solutions like Lipa na Mpesa ought to have created a young techie billionnaire!

luchirio
luchirio

Its a microwave generation.. we hype we expect results and just as soon we get disappointed we start blaming and pointing fingers. In my honest opinion... the reason why nothing revolutionary has appeared so far is that.. 1. We have 'too much money' chasing the same people/ideas. in economics you only get an inflation.. 2. When there is too much hype then its just marketing.. an entrant VC trying to get recognition.. and or raise more money from the 'bigger boys' i.e the Omdiyars, Bill&Mellinda etc 3. We need to eat... So people have turned these events into careers In conclusion. I still think it has been a worthwhile ride..and it should continue..That way nobody, especially in Nairobi, should ever complain of never getting a good shot at 'it'.. Those who make it, have tried it several times.. Even the V.C's that have backed the successful stories have a list of failed ventures... the ventures themselves havent always struck it the first time... well maybe just Zuck There are hidden ideas, somewhere in some garage or home office that will make it.. there are hyped ideas that will also make it.. bottom line.. nothing, nobody should be left behind

David Kobia
David Kobia

Thanks Kachwanya. Sometimes an emerging tech community needs a swift kick in the rear in the form of an article like this to keep trucking on. The idealists and dreamers are great for keeping the fire burning. The doomsday predictors are great for keeping the dreamers tethered to the ground. Ultimately talk does not detract from the fact that there are some very clearly defined challenges. Investment for one, and the fact that some out of the box thinking is needed to solve local problems -- not the 'me too' kind that seem cool but are not really useful.

kev
kev

I personally think inspiration comes from deed. I haven't heard any talks, recorded or otherwise, from some of the entrepreneurs I admire e.g. Elon Musk of tesla motors(since tesla is still considered a startup) but with every model of tesla that is released you just can't help but be inspired by the sheer amount of time and energy this guy has put into make that little light of his shine....At times, we just need such role models.....who will inspire the rest of us by just happily doing stuff and making money while they are at it rather than shoving theories down our throats.....we had enough of that in campus. I would like to attend a talk and listen to how people are making it in business from a person who is not "well known", even if its from a potato farmer who is running a profitable business because that will help us learn some realities about doing business in Kenya. I hope to attend talks where someone just gives us their story as an entrepreneur and let us pick out what's relevant for us from the story instead of telling us what to do. We are trying to copy the Western model...build, seek venture funding, grow/scale.....but we all know that's not how it works here, getting capital is much harder hence funding from savings and bank loans is more common...some ideas/startups flame out after a few months/years because of not appreciating this reality.

AngryKenyan
AngryKenyan

I'll tell you what the MAIN problem is. The main problem is that we've let some idlers who've accomplished nothing, bamboozle us with some slick talk and then we say they are tech experts. Let me give you a list of the idlers I have identified: - Idd Salim(who is even commenting on this article): what company has he ever built? Look at his website; it says he is the 'Chief coder' at xema.mobi and Angry Kenyans. Check up on those two 'companies.' You will find nothing! Yet you will find Kenyan techies saying 'Idd Salim ndio mnoma!' - Mbugua Njihia: also an 'expert' with no noteworthy company to his name. But he wears glasses and spits out hard words, so people have anointed him as a tech high priest. - Andrea Bohnstedt: What the hell was that woman telling us about building companies? What has she built? Ati Ratio Magazine? That is a flop, and she has nothing else to her name that would make her worthy of an 'expert' title. She should follow her own advice and get back in the kitchen. - Mbwana Alliy: this guy has been an employee all his life, but he tried to build some website called 'Yellow Masai.' The fool actually managed to raise close to 10 million shillings to start YellowMasai, but it was still an unmitigated flop. Yet he is the one who is being called to tell us how to build a company. - Sam Gichuru: another fella with a string of flops to his name(Dukawala, Inpostme, Latentalk amongst many others) yet he is also a 'sage expert.' - Kahenya: that guy managed some flop of a company called VIRN instruments, and another flop called Simple.co.ke, yet the media gives him all the airtime. Kachwanya, it starts with you media guys, if you can give these pretenders a COMPLETE BLACKOUT, then that's when the tech industry will begin to clean up its act. We will not have silly doomsday predictions from people who want to project their failures on others.

El Komo
El Komo

And who said there's anything wrong with failing? Keep failing and keep rising...but make sure you keep at it!

Brian Puckett
Brian Puckett

Nice post, Kach! and some great observations in the comments As someone watching and trying to participant in Kenya tech scene from afar, I believe this change is inevitable and may actually be good. The determining factor to me appears to be money. Now that some outside investors have arrived the metric of success changes. Further, I think this may be symptom of the honeymoon being over as the unbelievably hype around Nairobi tech scene is simply not sustainable. Good entrepreneurs need to keep their heads down and focus on their vision and plow through all the naysayers. Some of the criticism is valid and entrepreneurs should accept for what it is and learn from it and move on with building their business.

Ricky Ricardo
Ricky Ricardo

Kenyans and their excuses! No one is perfect so take the criticism and move on.

MMK
MMK

1. You are right, the tech scene in Kenya is still young. We'll be very far in the near future. 2. Kenyans are haters, plain and simple. 3. Fear of failure, which comes from our education system and parents 4. Funding? Tough luck, but improving.

Karimi
Karimi

Having been there for the talk,i think that you over simplified what was said. IMO i think there were a great load of good pointers for people starting out. Note that while there maybe conferences, hackathons, pitching et al what counts at the end of the day is commercialization of the idea. Secondly, it was a call to diversify tech projects such that there is more than M-apps but rather explore the world of business solutions.

Anon
Anon

HORRIBLE grammar!!!! lol

Patrick
Patrick

I couldn't agree with you more. Just one note though, there was a talk about failures at the iHub. The humble @Afrowave and the nice-ish @roomthinker were willing to chip in some of their experiences.http://www.ihub.co.ke/blog/201... I've always been searching for the fabled tech veterans in Kenya. Just to gain that piece of wisdom that would make me wiser. If you have ever read The Wizard of Oz, I realised after reaching the Emerald City that the Wizard(s) I was looking for were in some cases underwhelming and in most cases what they said should be taken with a pinch of salt. When you're a trail blazer, some (most?) of those things just don't apply. Somehow I felt like the Straw Man thinking(?!) that he had no brain. http://www.imdb.com/character/... Here is a quote from Joel Spolsky, that I've come to live by. http://www.joelonsoftware.com/... Most college students, fortunately, are brash enough never to bother asking their elders for advice, which, in the field of computer science, is a good thing, because their elders are apt to say goofy, antediluvian things like "the demand for keypunch operators will exceed 100,000,000 by the year 2010" and "lisp careers are really very hot right now." Bottom line is nobody has a clue where this is going, only the risk takers will ever get to see first hand how the tech scene in Kenya unfolds. Oh and another note. You mentioned how young the tech scene in Kenya is you'd be surprised at how young the techies are... not just the veterans with 13+ years experience. The average age of the iHub member according to this infographic is 24.http://www.ihub.co.ke/blog/201... Assuming that there are outliers amongst that crowd, I wouldn't be shocked to find a large group below this average. Youthful inexperience can be an asset sometimes, no? PS: Please attend events! You might just meet me and I might just like you enough to work with you. Who knows what we can achieve with serendipity.

Sam Gichuru
Sam Gichuru

I have to say, that is the highest compliment anyone has accorded me recently, - :) my tenacity is very obvious in your insults above. Asante.

Kirembu
Kirembu

I'm going to sound unpatriotic but I'm not going to say anything about the Kenyans you have mentioned here. Like someone just put it, time will tell. But for Mbwana Alliy that's just uncalled for. The guy literately risks his life for this. http://www.iddsalim.com/blog/2012/09/18/the-rise-of-the-al-sha-ihub-thugs-at-maguapadmore/ I could call him crazy, because this could fail like the venture both you and him have pointed out. People like him probably give people like me, among others, who are just starting out with none of those spectacular failures to speak of - some slight hope. Like it has been pointed, out there have not been spectacular exits like Mxit and Fundamo. But there are spectacular people who have tried something and failed spectacularly. Have they called it quits, not yet.

Mbwana Alliy
Mbwana Alliy

First of all you can read my bio and work at http://www.mbwana.com/bio.html if you do your homework and research (I am a google search away) you will see that I have in fact spent 5-6 years in corporate life (tech in US and UK) and 4 years and counting in the startup and investing space (US and East Africa). Thats not all my life last I counted. And yes, I have failed at yellowmasai but technically the site is still up and surviving so on that measurement it is still going, but I have written it off because I am no longer involved and don't believe team is on right track (I am happy to talk more about this failure so that others can learn). I have been involved with about 16 companies as part of i/o ventures who have some pretty amazing people who have built some sites called YouTube, Bittorrent, Paypal, Myspace, Yelp (some of them are even failures!) and brought them to East Africa which and helped convince them and half of Silicon valley to take a look at the region and invest and gave birth to Savannah Fund. We will add 30 companies in the next 5 years of which I promise you most of them will be failures (and no sorry, they won't all be Kenyan either...) You are all good but there are other people on this earth too with some good ideas and great teams for broader Africa, but we hope a few will breakout and we have invested our HQ in Nairobi given the potential. That's what my job is- to try and find the next (perhaps first?) tech startup success story, I will say no to 1000s of entrepreneurs and say yes to 30. Of those 30, maybe 2-3 will make the "success" bar. Yes, read that again- that's how venture work and that's why they call it "risk capital". There are other investors 2 doing the same thing, some will take a different approach and succeed, we might even (shock horror), fail! What is failure/success for Tech startups? The first metric for startups is can they survive and generate revenue (yellow masai is actually in this camp after 2-3 years- as I mentioned lets just call it a failure and I am happy to talk about it openly and why it failed and lessons to take away, I walked away and had disagreements on direction- this happens all the time at many levels in companies), 2nd can they be profitable and scale across multiple markets and secure follow on funding from our partners. If companies only win $5-25k and last 1 year and pack up then they are failures. This i quite hard for many startups in Africa and even then success is not guaranteed. 3rd can they be acquired or reach IPO. Just to note they are not many that have reached this level infact- only Mxit and Fundamo can call themselves exits and Mxit is currently in trouble it seems- http://memeburn.com/2012/10/alan-knott-craig-steps-down-as-ceo-of-mxit/ What have you done to help Africa tech? By the way, speaking of Failure, my partner Paul Bragiel, Russ Simmons (Yelp/Paypal) investor in Savannah Fund, was just involved in FailCon Singapore. Silicon Savannah needs a healthy dose of Failcon- do you want it?,- http://singapore.thefailcon.com/speakers.html Again- what have you done to help Silicon Savannah?

Dr IddSalim Komesha
Dr IddSalim Komesha

Short answer: Lol! Nice comments. Now, come back and comment after 6 months. Long Answer: True. "Idd Salim ndiye mnoma".. or as you put it in your kindergarten Swahili "Idd Salim ndio mnoma". Lol! Wasted fees. Buda yako angelewa tu ama alipe poko. There would be no difference in your IQ. Allow me to lecture you about something called "amassing knowledge and expertise". It takes 10, 000 hours for a person of purpose (or 50,000 for an idiot like you) to be an expert in something. If we wanted, we would have created our Kenyan FB, Twitter or 4SQ. But we choose to 'wait' and get better. We are at the infancy level. But people are already masturbating using our names. Imagine that. Na hata hatujaanza. Scary, huh? Since you are all about lists and people, how about you provide us with ONE thing that you have done in life, that people about the IQ of 12 can talk about. What gives you the mandate to judge people, whilst you don't even have the balls to use your own name here. AngryKenyan? How about dry-vagina? I have forgotten more Computer stuff than you will ever know in 17 lifetimes. But that does not seem to bother a naysayer like you. All I can say is, come here in March 2013 and repeat the exact same words. Until then, go back to your arm-chair.

Lordbanks
Lordbanks

I couldn't have said it better Brian. And in an unrelated aside, you've gotta love East African tech pundits. It's in this kind of ideological skirmish that the true strength of this ecosystem becomes obvious, the abundance of fearless criticism, intelligent conversation and deep insight into the issues they are faced with. We're envious in Lagos.

Kachwanya
Kachwanya

The young part is where people not getting. They watch mature markets and rush to give judgement on Kenyan scene. Even the most successful people fail in one way or another, I wonder why people so afraid of failing. Entrepreneurship means taking risks and where the word risks is involve, the balance is between success and fail

Kachwanya
Kachwanya

The point here is not just about what was said yesterday at the talk. It is what I have seen or observed. Believe me , it is becoming a trend or even fashionable among the tech pundits to bash the start-ups at every chance they get. The talks yesterday was awesome but I don't agree with attitude I have seen from some of these so called experts...Are they here to encourage or destroy those trying make it out there?

Kachwanya
Kachwanya

Thanks....Unfortunately, English is my third language

Apple IIE
Apple IIE

A true absence of level 5 leadership here...very inappropriate I must say...

obeserver
obeserver

i think the problem here ni kujipigia debe. if you keep shouting how good you are at least you should at the very least have something to ur name that speaks for itself.. i think its time you got off ur high horse and actually do something worthwhile with ur 'expertise'.

Gichuki
Gichuki

" If we wanted, we would have..... " ... The Failure of Africa is in the Postponing of Excellence and the Limbo of Perpetual Preparation for Tomorrows hoped for Greatness ... Do it Today and silence them.

mic
mic

Let me digress. i think if you are a model of young techies coming up in Kenya, Nairobi or broader Africa, whether self appointed or hyped, your derogatory response is appalling. Try emulate Mbwana Ali. A witty descent response to affirm your stance. No point in abuses and shame the tech community.

mic
mic

reality check perhaps? Entrepreneurs have to be concrete hard. Business scene is tough and no space for wimps. Try pitching to an investor.

therealabunuwasi
therealabunuwasi

Very insightful piece of analysis by @a136ca42d772f2ac6e6e40b188d5498c:disqus and @Mbwana:disqus and i cant resist to add my thoughts....i am an indie developer in kenya with an idea or two. So what ails us?its simple actually..a bright idea does not equal success and money in the bank.Its just that.a bright idea. I laugh at all those hackathron winners and what have you because other than a headline on daily nation and a mention here and there they will never be millionaires..never..remember the story of worldspace and African virtual university? bright ideas from guys who worked for nasa (AVU) but what happened?They all died.can we first understand why before tujadai ati sillicon savannah!!@twitter-35195020:disqus the best coders are not the richest..the richest steal other peoples ideas and bam!!do your research (bill gates,stevejobs,zuck...the list is endless) pls dont insult people...it just shows how shallow you are.Ati M-cow??what a joke!!dont get me started...how many daily cows do u have in kenya?how many are kept by literate farmers?mko chini kama sole ya kiatu changu.....

Ngoma
Ngoma

You need to deal with your female hate issues..quite obvious from your language you need a mental doc.

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