Kenya is Leading Africa On DEMO Africa Applications but are Start-ups Good Enough?
Yet again Kenya is leading other Africa countries in terms of the number of start-ups which have applied to participate in DEMO Africa Conference. DEMO Africa is a Pan-African launch pad for emerging technologies and trends and will be held in Nairobi in October. . 300 technology start-ups from 24 African countries have applied to launch at DEMO Africa Conference.
Kenya, Nigeria and South Africa produced most of the applications with Kenya submitting 73 applications, Nigeria presented 50 and South Africa forwarded 33 applications. These are said to be the technology hotspots in Africa. Ghana and Egypt each forwarded 19 applications.
Hype? Noo Kenya (Silicon Savannah) is no hype. I know we had the argument about Nairobi being hyped as oppose to doing some kick-ass stuff but sometime numbers do not lie. Kenya usually submit more apps for competitions and win majority of them as well. At one time I asked if the apps are not good enough and the reason why no much are heard about the winning apps after the competition. That post provoked a lot of follow up questions. In reality the the problem is not with the quality of the apps or start-ups but with the environment and the attitude of the developers and the founders.
When I talk about environment I am thinking about the Funding and other factors. Kenya is still a young market, especially to do with getting the funding for start-ups. First the role of hubs like Nailab and iHub has to be lauded. In the environment where funding is a problem, the hubs have come up to help the early stages of start-ups development in the country.But then the number of hubs have increased to the extent that some people have started to question whether they now competing with Start-ups for the Funds available within the industry instead of being the main facilitators. In Kenya alone we now have 19 hubs and 90 around Africa. Sticking with the Kenya, now most investors and companies run to fund or partner with hubs. Which is ok, as that enable them to continue running but I wonder how different it would be if the 19 hubs were businesses funded or doing some serious partnership. I know that is controversial statement and some people might take it the wrong way but the reality is most funds end up on the hand of hubs and not start-ups. Yes, I have said that they are doing a great job but with time people will not necessarily need the hubs a such. The reason why hubs are important at the moment is because most people can not afford to stable internet in their homes. The other important aspect of hubs that can not be replaced is the mentor-ship some of them provide and the networking opportunities.
So we have seen that funding is scarce and that brings us to the attitude of the Developers and Founders . The problem I see with many start-ups in Kenya is that they focus too on looking for funding instead of looking to do business. The existence of any business should be to make money and make profit and tech start-ups are not exceptions. During an event at iHub recently I gave an example of two extreme ends in Kenyan market.. For those who have gone to the local market Gikomba, do understand the attitude of the traders there. They have to sell each day at all cost. They shout themselves almost to death trying to sell. In most cases they are one man or one woman teams but they make profit or money at the end of the day. On the other extreme end, look at the most profitable company in East and Central Africa, Safaricom. Safaricom spend fortunes trying to sell every single day. They do go extra miles to get people to buy their stuff. Somehow I don’t see the same mentality with our local start-ups. People are not hanging themselves out there to sell at all cost.
I feel every star-up in Kenya should ask themselves the following questions:
1. Who are your target clients and market
2. How are we planning to reach those clients or gaining entry to the market…..(look for ways to do it)
3. After reaching them how will you convince them to buy your product or service… Think for a second, if you were on the other side of the scale..meaning your are the client will you buy your own product, if yes, then use the same reason to market it(when putting yourself on the other side be honest and brutal), if no, then go back to the drawing board
4. Are you planning for mass adoption or a niche market.. in both cases, what are your pricing model
5. Finally, before you look for funding or investors, the question will be, can your start-up survive without the funding or the investors especially at the beginning. This is important because nobody gives you the money for free. At one point you must find a way to pay it back, either through the equity option or repayment of loan or losing the full control. And for that it should be good to know that you idea, will survive with funding or without.
Oooh Sorry Hare, back to DEMO Africa …Speaking after the official closing of the three-moth application period, Harry Hare, the Executive Producer of DEMO Africa noted that 2013 had seen 100 more companies register than in 2012 when 150 start-ups applied for the top 40 positions to launch at the DEMO Africa stage.
“We are excited that this phase of the DEMO Africa initiative has been successful, now the hard work of adjudication and selecting the most innovative technology start-ups in the continent starts,” said Hare.
At each DEMO event, hand-selected class of new products is introduced to the world for the very first time to global press and prolific bloggers, investors, corporate acquirers, strategic partners and buyers.
“We have seen excellent applications this year around and the competition for the 40 positions will be tight,” said Ben White, the Founder and Director at VC4Africa the platform partners for DEMO Africa.
“The judges have their work cut out,” he continued.
The adjudication process has begun, and the announcement of the final 40 start-ups to launch at DEMO will be announced on August 27th.
“We now embark on the selection process, but first we need to clean up all the applications and make sure the judges receive only those that are eligible, and plan to have the final 40 before the end of this month,” Mr. Hare said.