BRCK Raises $.1.2 Million and Why Kenyan Engineers Need To Do More

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When you talk about Kenyan tech, all you think about is Mobile apps, the hubs and the already failed Konza city. Within the hubs, techies and developers work on mobile apps, and Konza city was meant to give the developers a better working environment. The common denominator in all that are the mobile apps. In not so many words, Kenyan tech is about mobile apps. Well, considering how broad the technology sector is, doing apps only make our tech look as tiny as it comes when you look at the bigger picture. Why is this so? The problem is there is no incentives for the Kenyan engineers do create stuffs. Our Engineers dream of working for Multinationals, where most of them end up as the regional sales people. A Kenyan Engineer working for Intel, Microsoft or Google for example, basically works as sales man or woman. You can say that some of them rise to the management levels, a point which they become useless in terms of engineering skills.

For that our manufacturing sector is basically dead or limping at best. Once in a while you would hear people mention manufacturing sector, especially during the Budget reading. At that point you would think it is the sector to absorb our engineers. It is where you would expect our engineers to horn their skills and come up with some new exciting things. That is not happening because there is no real manufacturing going on. By that I mean the sector is predominantly agro-processing with manufacture of food, tobacco, beverages and textile accounting for over 34.0 per cent of total sectoral value add according to Kenya Institute of Public Policy. Because it is all about basic manufacturing the overall performance of the sector is affected by erratic weather patterns. So why is it that most engineers never follow up in the footsteps of Kenyan mobile developers and try to create stuffs? The problem is not the engineers themselves but the missing ambition on the aspiring and existing entrepreneurs. There is also the cost factor which involved on the hardware manufacturing.

May be the cost factor can be solved by local funding and the use of old money. If you look at the mobile apps, one would argue that the old money in Kenya still don’t see the value in them. The old money and the old men behind it are used to tangible products. Things like land and real estate make a lot of sense to them than the supply chain processing system like My Order by Weza Tele. Reasonably one would expect that hardware start-ups can be able to draw the local funding but that is still not happening.

One argument that I have heard in many places is that Africa is leapfrogging the Industrial revolution to Information age. This would make sense if the information age depend entirely on information and not on any industrial stuffs like equipment, gadgets and even better transport and communication infrastructure. The biggest problem with this argument is the obvious fact that Africans are basically consumers and not makers. So yes we use mobile phones, but we don’t make any. Yes, we use Social Media but we entirely rely on Facebook, Twitter, Google Plus. Yes we send emails but we completely depend on Google, Yahoo, Microsoft. Yes we use cloud system and store our information somewhere in the sky but we don’t have any reliable Data Center. Yes we use modems and routers to connect to the internet but we don’t make any (At least now we are starting on this one)

All the above is the reason why I am very excited about the biggest tech news to come out of Africa this week. The launch of BRCK and the news that it has raised $.1.2 million to connect the last mile to the internet. Coming back to the money part later, but first let look at what BRCK is. BRCK is a rugged, cloud managed, full-featured modem/router with built in fail-overs and programmable GPIO expansion. May be ,the better definition would be the one according to Christina Tamer on iHub blog, BRCK is a rugged, self-powered, mobile WiFi device which connects people and things to the internet in areas of the world with poor infrastructure.

Erik

Erik Hersman ( @whiteafrican )

In terms of Physical dimensions BRCK measures 132mm by 72mm by 45 mm. It weighs 510g…a little bit bulky if you ask me but I am confident that Erik Hersman ( ) and his team will improve it with time.

Other notable features are:

  • 8 hour battery life in Full Power Mode
  • 4Gb of onboard storage (Factory Upgradable to 32GB)
  • Three connection points …..Ethernet LAN/WAN Port , SIM Card Slot, USB Host Port,
  • RP-SMA External Antenna Connection for 3G/4G antenna
BRCK

Connection ports

Capable of using 3G data enabled Sim Card in over 140 countries. If you don’t have Sim card then you still can use BRCK vMNO for global connectivity without SIM card. The fact is the last mile connectivity and digital divide are still the greatest challenges facing Africa and most third world countries.

BRCK will retails at $.199 (slightly above Ksh.17, 000). One would be tempted to ask how that price will help in solving the last mile connections. Those who can afford that, probably already have other option to connect to the internet. I know, I had the same type of questions until Erik explained to me the main thinking behind it. The things is the existing options might not help much when you are forced to work from some of the remote areas in Africa. For example a field worker in places like North Eastern Kenya, some parts of Congo or Somewhere in South Sudan, would definitely be interested to get BRCK even though in normal circumstance they would use Vodafone/Safaricom Modem. The pricing also put into consideration the initial cost factor. Building a Hardware device is not easy, and the amount of capital required for mass production is huge, which makes the whole process even harder to pull off.

Connection Priority

You can Choose the Connection Priority

As already mentioned the extent of the capital needed to do run a hardware start-up, could be one of the reasons why Kenyan start-ups only venture into mobile apps development. The question is, are there ways to turn this around? I think there are but only with more strategic thinking and seriousness from the part of the Government. First, the need for friendly tax regime for parts needed to build hardware devices and equipment. Secondly, the Government need to think beyond politics and be more ambitious. What I mean here is we have several funds which are being wasted due to poor thinking and political considerations. Take for example Ksh.6 Billion Uwezo Fund. The youth are told to form groups of between 9 to 15 people in order to access the loans of between Ksh.50, 000 to Ksh.500, 000. For politicians, who in most cases only look at short term period for quick gains in order to win the next election, this make sense. But for smart people who want to develop the country, there is much better way to do it. To start with, telling nine people to start a business is not making sense. Anybody who runs some business with at least a partner knows how hard it is to get one good partner. Now telling people to get nine is simply misguided.

Let do some quick calculations here.

Scenario 1- Uwezo Fund as it is now

If for example you get the youth to form maximum number of groups expected to apply for Uwezo Fund. The amount is Ksh.6 Billion. We know that 3% will cater for the administration work. That leaves us with Ksh.5, 820,000,000. If each group applies for Ksh.500, 000, we will end up with 11,640 groups. Assuming that each group has 9 young people, then you end up with 104,760 people gaining from the fund. The chances that these people will be able to manage these businesses from that capital to some successful conclusion is a story for another day. Actually there is high chance that 99% will fail in the first 6 months. If you think that failure rate is joke then go ask ICT Board how many companies succeeded under the Pasha Centers Fund and Tandaa Grants

Scenario 2-Restructured Uwezo Fund under Visionary Leadership

So I mentioned up there that BRCK raised $1.2 to enable them build BRCK devices. That is roughly Ksh.105, 239,986.63, according today’s exchange rates. So if we put down this amount raised by BRCK as the base line for funding under Uwezo Fund then you get a complete different scenario. Under this option, the Fund managers would have to identify highly promising existing start-ups and give them proper funding in the tune of what BRCK has raised. In this case you will only have 55 Companies to fund. Now that amount of money would definitely enable the funded companies to build the required capacities or go into proper manufacturing same as the BRCK guys have done.

I believe that kind of funding will enable 55 companies to grow to mid-size companies in the next 5 years or so. In most parts of the world mid-size companies are companies that employ between 2500 to 10,000 people. In Kenya I will go with lower limit of 2500. If each of the 55 companies employ 2500 people, then you end up with 137500 People. In this case you would have 137500 people in permanent employment excluding the Founders. Such companies will also bring revenues to the Government by paying substantial amount of taxes. Those taxes will enable the Government by extension to employ more people or to provide better services.

If the fund is meant to address the unemployment in Kenya, then I think the second option is much better. Compare 137,500 people who would gain under the second option with 104,760 people under the first one. The second option would also address the issues we have with the manufacturing sector. I know there is that push that business is the key but we have to realize that not everyone is an entrepreneur. Most people thrive well under employment and are not ready to take the risks which usually characterized the world of entrepreneurship.

Ok..ok… Yes BRCK, who funded them? Invested Development, an early stage impact investor, led the way in giving BRCK the much needed capital. Others were Omvestments, Urban.us, Cheryl Heller and Gary Scheft of CommonWise LLC, Synergy Growth.

By the day of the launch, BRCK had over 3000 people expressing interest to buy BRCK devices . According to Erik Hersman 800 units are hitting the market on July 17. Interested, head here and get you BRCK in good time

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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