Loise and the African Dream
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Data acquisitionFatou-MengePairwise comparisonComputer animationLecture/Conference
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Fatou-MengePairwise comparisonUniqueness quantificationDemosceneBitLecture/ConferenceMeeting/Interview
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Representation (politics)Expert systemLattice (order)WhiteboardSet (mathematics)VotingLecture/Conference
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FacebookHome pageFacebookBookmark (World Wide Web)Noise (electronics)Lecture/Conference
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InternetworkingRecursionComputer animation
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FamilyDemosceneSoftware developerPairwise comparisonPerspective (visual)Noise (electronics)Multiplication signLecture/ConferenceComputer animation
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Plane (geometry)Right angleInternetworkingLattice (order)Lecture/Conference
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Computer hardwareControl flowComputer hardwareIntegrated development environmentFood energyKeyboard shortcutProduct (business)Router (computing)Lecture/ConferenceMeeting/Interview
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Digital rights managementData managementMobile appNoise (electronics)Ultraviolet photoelectron spectroscopyHome pageXML
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Transcript: English(auto-generated)
00:20
Hi everyone. I'm here today to talk about Kenya and actually to talk about, well, to do a new comparison or to just stop doing comparisons.
00:31
Because people love to do this comparison about Kenya being the new Berlin, the new Tel Aviv, the new London. But I would rather focus on what is the unique thing in Kenya that is going on right now with the tech scene.
00:46
And I would first like to start with the elephant in the room. And the elephant in the room, I guess, is me. Because it might be a bit strange that I'm the one, the German lady talking about Kenya,
01:01
while there are so many great representatives of Kenya here at the Republica. So why is that? The reason is that I went to Kenya end of last year. And I had the chance to talk to a lot of experts and collect all their voices and their opinions. And another thing is that I realized right now all the Kenyans or all the guys from Africa who are here at the Republica,
01:24
they are actually at the global gathering meeting where they have a board meeting with AfriLab. So unfortunately there is not even any one of them who can complain of what I'm saying, who can disagree. As I said, I went to Kenya end of last year to do a research trip for the Vodafone Institute.
01:44
The Vodafone Institute is a think tank for the global Vodafone group. And their mission is to analyze the potential of mobile technologies and how you can actually use digital and mobile technology to tackle societal problems.
02:01
And the core topic at the moment is youth empowerment. And when you do some research about youth empowerment, something that you come across definitely is entrepreneurship and tech entrepreneurship. And then when you investigate about tech entrepreneurship, something that you can't get away from at the moment is Kenya.
02:22
So I wanted to go there and understand what is going on at the moment in the Kenya tech scene. And there's one person that I met who was really inspiring, and that is Lois. And so now you already know why I have this strange title of my talk. So this is Lois. And Lois, she's 21 years old.
02:43
She's from Molunakuru, which is northwest of Nairobi. And her favorite home pages are Facebook and W3 Schools. Does any one of you know W3 Schools? Ah. So I had no idea. It's a programming page where you can teach yourself how to hack, how to develop, how to program.
03:06
And Lois is so much into that because she's an Akira chick. And Akira chick is a formation of women in Kenya who want to boost and who want to bring more women into tech because they say there are just too few women.
03:21
And besides all the good stuff that they do, they have something which I found so cool because they have this training program for young women, young girls from the poorer regions around Nairobi from the slums. And they pick those girls and bring them into a class for hacking, developing, coding. And they actually go there every day a week.
03:40
And afterwards, they get a certificate, and they are actually able to come up with their own app. So back to Lois. When Lois was asked what she wants to become when she's done with this course, she said she wants to be an entrepreneur, and she wants to be the best developer in the world. And I found this very striking because if you ask people here in Europe at the moment what they want to become,
04:04
I think most of them say, well, we want to have a formal job. But what you see in Africa right now, or what you have seen there for quite a long time, is that people are very entrepreneurial, and they are not fearing to start a business. So this is a chart of the Global Entrepreneurship Monitor.
04:22
And they ask young people to which extent they believe that the fear of failure would prevent them from starting a business. And there you see that the European Union, more than 46% actually said that they are too scared to start a business. While in sub-Saharan Africa, you have 25% who said that.
04:43
And of course, this is also because a lot of people are forced into business. It's because there are no formal jobs, so they have to start a business. But what is changing right now is that with the digitalization and with mobile technology, it's a lot easier for people to come up with a good product which can be distributed easily.
05:02
And I said earlier that I think Kenya is a very unique case. Or even Africa, the tech scene is very unique compared to the Western world. And what is very special in Kenya is the story and how this tech scene actually arises. And something that you can't take out of this story is definitely M-Pesa.
05:25
Who of you knows M-Pesa? Okay, great. Well, I'll just explain it very quickly. So M-Pesa implemented in 2007. And it allows you to send money to someone, either your friends, your family,
05:40
but also to buy a project and just send the money via your mobile phone. So you don't need any cash anymore. Today, one third of the population in Kenya has M-Pesa. And it has really changed the life of a lot of people, especially in the rural areas. Because before they had to travel long distances to bring the money back home,
06:01
but now they could just send it via the mobile phone. But what is even more fascinating, or for me, which was crazy to go to Nairobi and see that, is that you just have M-Pesa everywhere. Like wherever you go, I got off the plane, you see M-Pesa. And you want to buy a drink, you see M-Pesa.
06:20
And you go to a rural area and you see M-Pesa. So M-Pesa is kind of the shpety in Africa, in Kenya, except that you have it everywhere and not just in the capital. And what was even more important about that, or why M-Pesa is such a fascinating case, because it actually convinced the people themselves
06:43
that there can be a great innovation coming from this country. So in the mindset of Kenyans, they are very proud of this innovation. And also, when you look at the media reactions, so this is just some quotes that I found on Kenya related to M-Pesa. And they said, Kenya has beaten the world, Kenya the pioneer,
07:03
Kenya the world leader, and even the world's unlikely leader. So all of the sudden, people started to believe that there could be an innovation coming out of this country. And I think this was really crucial for the further immersion of this ecosystem. What then happened was, of course, in 2008, Ushahidi,
07:24
I guess people here, they all know Ushahidi, which is now used worldwide, was founded. And then in 2009, there was the first undersea cable brought to Kenya, which brought faster internet and which made internet far more accessible.
07:41
And then in 2010, of course, the iHub, I hope some of you remember Eric Hirschman speak from last year, who is actually the founder of the iHub. And this iHub really became the center of innovation in Kenya. So the whole ecosystem was somehow boosted by founding this place.
08:03
So if you go to Kenya, you can go to the iHub, and you just see everyone you need to see to understand the tech scene. And this is an article from last year, November. And I guess, I don't know how many Germans are here, but I guess most of you know their Spiegel.
08:21
And I think what's important to note is that now, people are getting interested in the tech scene that is happening there. They are interested in the current developments. And as soon as something is in the Spiegel, I would say this is definitely mainstream. So people are getting crazy about this great story.
08:43
But at the same time, on the one hand, I think this is important, and it helps people like Lois, the girl who wants to become an entrepreneur, to get better support, to get better funding, to have the government to do better legislation to support her.
09:01
But at the same time, well, I think we should also ask ourselves, why are there always these comparisons with Silicon Savannah, and you always have this Maasai with a mobile phone? I mean, you don't go to the iHub and see a Maasai with a mobile phone. I can swear that. And there's also, I think it is important to start questioning,
09:25
why do we always need to compare it to those other places? Because from my perspective or what I've seen there, I think it's very unique as such, and it doesn't need to be a copy of Silicon Valley. It can just be Nairobi or whichever other tech hub in Africa
09:43
rises right now, and it doesn't need to be like Silicon Valley. Because what is also different to maybe Silicon Valley and Berlin and Tel Aviv, if you look at those places, people come up with very commercial apps. They come up with entertainment apps, gaming, and so on.
10:03
But if you look at innovation, which is coming right now from Africa, and those are some examples from Kenya as well, it's M-Corpo, for example, where you can get energy on demand. So you have the solar panel, and you have an M-Pelsa generator in your house,
10:21
and you can just get energy on demand. You have M-Farm, which sends information to farmers, and you have Inisa that brings education on your basic phone. So what you see here is that all those innovations, what they have in common is that they really solve a problem and that they really address a need.
10:42
And I don't want to romanticize that, because I'm very aware of the fact that there are more problems, and necessity is the mother of invention somehow, so that people probably therefore have to come up with new solutions, while here maybe other things are better in place. But I think it is very notable, because they come up with new ways of solving problems.
11:03
And some of those problems are also existent here, but somehow we can't come up with new ways, because infrastructure is so much in place. So this is why I think it's interesting to look at Africa and to look at how they are solving problems and what we can learn from them.
11:20
And there are even academics who put that in formal concepts like reverse innovation, frugal innovation, all these terms, which now understand that we somehow can learn from Africa, of course. And that this is possible has been proven two months ago, because now Vodafone actually launched M-Persa in Romania,
11:42
and it will be launched in other countries in Europe as well. So this is the proof that this is working. But then the other thing, I now talked again about M-Persa, and what I now want to do is stop talking about M-Persa, because talking to the guys in Kenya,
12:00
you realize that somehow everybody is getting a bit annoyed by this whole M-Persa story, because it's sort of hunting them, because everybody now says, oh wow, there was this great invention, where is the next? But to understand the specific ecosystem over there, you have to understand that M-Persa was a very special case and a very unique case,
12:21
because M-Persa was implemented by a very big player in the market. So Safaricom back then had a market share of 85%, which is incredible. It was the biggest company in Kenya, and it enjoyed huge trust among the population. And only a company like this was in the position
12:41
to take this risk that they took back then and to do this huge investment, because implementing M-Persa was really expensive. So that's the first thing we have to realize, that it might not be possible for a small startup in Kenya, sitting at the iHub, to come up with the new M-Persa,
13:02
but they don't have to. But we just need to understand that right now it's a very, very small ecosystem. It's very fragile. So I talked a lot about the iHub, and honestly, the iHub is here on the fourth floor, and you have all the other big incubators that you read about in this Spiekler article, for example.
13:22
All the great things they talk about in Kenya, well, most of them are in this building. All the innovation I just mentioned, like M-Kopa and Neza, M-Farm, they all sit in this building. So this is not a bad thing. It's actually really practical, because you can just go there to the cafeteria and meet them all. But I think one thing that we have to understand
13:42
is that it's very, very small. There are already other places around, but we have to be patient, and we can't expect that this can be the next Silicon Valley in the next year or two years. But instead, we should go beyond the bus,
14:01
and we should rather support this ecosystem. We should support people like Lois, who want to become entrepreneurs, who have great potential. And to do that, I think it is crucial to understand the uniqueness of this ecosystem and to also understand the requirements that those entrepreneurs have.
14:22
So because it's always really difficult to come up with a startup, entrepreneurship is hard wherever you go, no matter if you're in Berlin, in New York, or in Silicon Valley. But I think it's even harder if you go to Kenya. So this is what one of the guys told me,
14:40
who I talked to, John, who's actually the manager of one of the accelerators, he said, well, it's just a struggling place. So people have a lot of issues to really establish a startup. And you have this typical needs of an entrepreneur, which is always funding skills, mentoring support,
15:02
network, and collaboration. And I think all the entrepreneurs that you'll ask, they will say, well, those are the key issues or the main problems. And then definitely, whoever you ask, what's your main problem, especially, for example, in Berlin, they would always say, well, it's funding. We don't have enough money.
15:20
We need more money. What was really interesting for me to learn in Kenya, the difference is that they need a very different sort of funding. I'm not saying that not at one point in time they need a huge amount to really do marketing stuff to scale up. But right now what they need is actually small amounts
15:42
and micro seed funding. So here we see the percentage. This is a study by the GSMA. Here we see the percentage of people have money in Kenya and venture capital in Silicon Valley. And I know I said I don't want to compare it. But just to show you this figure,
16:02
most of the people in Kenya have to actually fund themselves. So 60.3% of the Kenyans start their business by using their own money or 20.3% by using their family's money. And this next chart shows you what they actually need
16:22
because they need money at a very, very early stage. So this chart, the black boxes shows you how much or where capital is going to. So in seed and growth stage, there is most capital. But then you have this 40% of demand
16:42
actually in the ideation phase. But there is no one giving them money in this phase. And what they told me is that they don't even need $10,000, $20,000, $30,000. What they need is sometimes just $500. What they need is $1,000. Or what they need is a proper smartphone or a proper computer.
17:03
So this is actually what they need to start a business because otherwise what they are really dependent on is having several site businesses and having several jobs. So I think this is important to note that there is a huge difference in funding those startups
17:21
than funding a startup in Berlin. Another thing is the long-term orientation because what you see right now is that there are a lot of companies going to Kenya and doing competitions and arranging all these competitions. And competitions are great to the extent
17:40
that they provide funding at an early stage. And I just said that they need that. But at the same time, they kind of animate people to just go to competitions So what you now see is that some people there are just serial competition participants. So they just go from one competition to another
18:01
because it's an easier way to get money but it doesn't really support you in coming up with a good business model, in coming up with sustainable solutions. But they actually support you rather in having a good pitch deck or doing a good presentation. And so something that should change there
18:23
or which would be really helpful is that instead of getting a huge price amount or money for the price, you should better give them like a monthly salary or hardware or a room where they could work. And regarding this room where they could work, this is one of the accelerators which is not in the IHOP building,
18:43
not in the Bishop Magua Center. It's 88 MPH. And places like this are extremely helpful for any entrepreneur. They are extremely helpful for an entrepreneur here in Berlin, so people like to go to the better house because this helps them to get a network
19:00
and that helps them to meet the right people. But in Africa it's even more important because what it does provide people with is with fast internet infrastructure. It provides them with a place where they could just have a drink and meet someone without being worried about
19:21
okay, who's going to pay for the bill? And so I think we just need to understand that places like this are actually even more important over there and need to be established further. And then the other really interesting thing is hardware. So Eric Hirschman last year,
19:42
he presented the brick at the Republika. I don't know who remembers that. Anyone? Yeah. So the brick is like a router which they constructed in Kenya and they said okay, the problem is right now we get all this hardware from the Western world
20:02
which is produced for needs in New York or in San Francisco but this doesn't really refer to our demand and doesn't refer to our need. Instead what we need is a router that really fits with our environment. So of course for example with energy shortcuts which is one of the main problems.
20:22
But then they had all these problems of coming up with a technical solution because it was so difficult to produce hardware in Kenya. And this is first of all because it's really expensive to import the material so you pay a double of taxes on the price that you just pay for the product
20:44
which is also a problem is that most of the people don't really have the skills. And obviously there is so much untapped potential when it comes to hardware so they could come up with great solutions but they need a good surrounding to do so.
21:03
Last, no not last, another thing is business skills. So here you see entrepreneurs were asked what are their educational backgrounds. And you see that 46% of them they have a background in IT and only 11% have a background in business management.
21:26
And I don't want to leave the impression that business management is the only skill that you need to really boost a startup in Kenya because I think it takes much more to really navigate in that market because it is a difficult market.
21:41
But still business skills like marketing, like all this other stuff that you need are really crucial to support those startups because right now a lot of them come up with good apps
22:00
because they are now able to do those apps and to build those apps. Just like Lois told me she's going to this W3 school's homepage and teaches herself how to code. But at the same time she then usually can't find the right people to support her really come up with a good business idea.
22:23
So right now there are a lot of experts in Nairobi who are involved in those teams and they come from schools in the US for example or in Europe and they bring their skills and those startups usually are very successful but I think on the long run of course this shouldn't be the option.
22:41
It's a good nice thing to have that you have these multicultural teams and I think that's nice but it shouldn't be like it's a must that you have someone like this on your team to have a successful venture. Another thing is that where there's a real lack is in terms of supporting the talent
23:03
and here I take an example out of America because I think this is interesting for any sort of startup environment. What they do is that they take people who just come out of high school they put them into a startup for two years
23:21
and then of course they hope that afterwards they'll come up with the startup themselves. And programs like this for people in Kenya or in these fragile ecosystems would be really helpful to provide them with the relevant knowledge that they need. But it's not only programs like this it's also just internships
23:41
so that it's easier for them to do an internship abroad. I just talked to the guys who are here now for the global gathering and it's still so hard for them to get a visa. So things like this have to be made easier because they bring a lot of great skills and what they do can be really inspiring also for a startup here in Berlin of course.
24:02
So this is why I'm saying it also needs more exchange programs. So this is an exchange program between Germany, Tunisia and Egypt where people actually come together and work on their startups together and things like this could be also implemented for African countries.
24:22
And then of course the future of virtual collaboration because what I realized I talked to guys and I said well our biggest problem is that we can't find designers and I bet there is a place in the world where there are a lot of designers but they have like in something else.
24:40
So more sort of collaboration exchange would be really helpful here to support those teams but also to support other teams here. So I want to stress that I don't think it's all about support in helping the Kenyan tax scene but this is also definitely added value for our ecosystem.
25:02
And then of course conferences like this one like Republica where they bring a lot of people together where there is a lot of exchange but for all this kind of stuff people need traveling funds because there are nice conferences around Africa as well but it's just really expensive for them to travel.
25:23
So here it would be really NGOs, development organizations who should support this by giving travel funds. And yes, coming back to Lois. So she's actually looking for an internship so if any one of you has a startup or something
25:42
and wants to get in touch with her and wants to learn from her and wants to involve her in your business please feel free to contact me. And I'm really excited to see what is going on in the next years and what will happen to Lois and with what kind of ideas she'll come up.
26:00
And this was just a brief overview of or some impressions of what I've seen in Kenya but there is a report and you can download it here and there's also some further reading and there is more detailed information and also more detailed recommendations on the Kenyan tax scene.
26:24
Great, thanks.