Kenya's Silicon Savannah


A programmer walks slowly down the stairs, holding his laptop in both hands as if steering by it. He passes a mural of Super Mario Bros, circa 1988, and into the entrance of iHub proper – a large, airy space, full of earnest young women and men working on their laptops. A coffee machine hisses in one corner. A quiet game of table soccer is under way. Silicon Valley? Not quite. This is the heartland of the Silicon Savannah, and one of many startup incubators dotting dusty Ngong Road in Nairobi, Kenya.

Everyone is here nursing the same hope – to make the next breakthrough service for Kenya’s enormous and growing population of mobile phone users. More than two-thirds of Kenyans own mobile phones, the highest rate in East Africa. The mobile phone has become Africa’s leapfrog technology – communication, commerce, computing and increasingly, internet access, all rolled into one cheap device.

Kenya is at the forefront of the shift, led in part by the breakthrough M-Pesa system, a wildly popular method of transferring money by SMS from mobile to mobile. Owned by the Kenyan-UK telco Safaricom, the five-year-old service is the world’s most successful mobile money solution, with 17 million users out of Kenya’s 41 million people.

Fully one-fifth of the nation’s GDP now flows by text message annually, jumping from phone to phone, peer to peer. And that is without mentioning M-Pesa’s successful imitators. In mobile money, Kenya is the world’s leader, outstripping developed nations where the desktop computer is only now giving way to tablets and smartphones.

Success in the Silicon Savannah does not come through imitation. Africa’s challenges are well documented. Any digital solutions must be localised, according to Gregory Mwendwa, a program officer with the Dutch charity Hivos, which part-funds iHub.

“Africa’s success should be measured by what innovation is happening by its own processes,” he says. “If China stopped investing in roads in Africa, they would not be built. But M-Pesa would still be here.”

CNBC commentator Larry Madowo, a mentor at another Ngong Road incubator and investor 88mph, says imported solutions often fail spectacularly. “The technologies — and services — that thrive here are those that are distinctly local, respond to everyday problems and fully adapt to the Kenyan psyche,” he says.

And while he advises caution to separate hype from reality, Madowo believes Kenya is well ahead of most other African nations in tech. “When you’re living through a revolution, it’s not always apparent at first,” he says. “But if the current startups in incubation hubs along Ngong Road can scale effectively, monetize and avoid the pitfalls … the Silicon Savannah will be in full bloom,” he says.

The African tech boom is not unique to Kenya. In emerging economies around the continent, entrepreneurs are beginning to innovate in earnest. Elikia, the first African-designed smartphone, was released in the Republic of Congo in September. Founded in 2004, the Nigerian-Kenyan tech firm Cellulant began by selling music to mobile users. Now, it has moved into mobile banking in 12 fast-growing nations in West and East Africa.

In August this year, the Savannah Fund, a Silicon Valley venture capital fund aimed at East Africa, made its first investment of US $2 million in biNu, a fast-growing startup founded by Zimbabwean-Australian Gour Lentel which brings a smartphone experience to the lower end phones still the norm in Africa.

Kenya has earned the lion’s share of attention on the ICT front, trumping even the economic powerhouses of Nigeria and South Africa. Kenya’s education system is envied by other African nations, producing a qualified and literate workforce. The nation prides itself on its openness to outside investment and its relative stability.

And behind the scenes is another force: the strong political support of Dr Bitange Ndemo, the Permanent Secretary in the Ministry for ICT. “He’s the greatest technology evangelist of our times,” says Madowo. Hype? Not at all. It was Ndemo who fast-tracked the four new undersea fibre-optic cables, which made landfall in 2009. Plans are now well advanced for a fifth cable with much larger capacity.

The Kenyan Government has moved towards greater transparency with the Open Data Initiative, placing non-classified government data online. That, too, was one of Ndemo’s ideas, a radical departure from the decades-long rule of autocrat Daniel arap Moi which ended only in 2002. During Moi’s reign, civil servants were prohibited from disseminating any government data.

There is also an ambitious blueprint for a $7 billion tech city modelled on Silicon Valley and Mauritius’ Cyber City at Konza, 60km southeast of Nairobi. On his official Facebook page, Ndemo writes, “The big idea is that a poor country should take a small, empty part of its territory and say: We're going to build a new city here.” Will it work? “I would move there,” says Anthony Wang’ombe, a Nairobi networking consultant. “Every bank would want to be on Wall Street. It is the same. If you are a key player, you will want to be there.”

There are now no less than seven ICT incubators in Nairobi, the highest concentration in Africa. They offer everything from a space to meet fellow developers to a chance to present to angel investors and secure crucial early-stage funding. The enthusiasm is palpable. The problem now is that so many apps and mobile-based products are pouring out of the incubators that the focus is now shifting to quality over quantity.

Mark Kamau, the lead for the almost-completed iHub user experience lab says it is time for Kenya’s mobile market to come of age. “In the beginning, we had a lot of enthusiasm, with people churning out apps every other day. But we need to make sure that our products are designed to actually resonate with users,” he says. “You might have a beautiful app technically – but how will users use it? Will it add value to their lives?”

Sitting behind a Dell laptop papered in NASA stickers is Patrick Mithamo, a Python programmer and self-confessed geek, says iHub changed his life. “I never thought I would meet someone with similar interests,” he says, eyes flashing. “But I came here and I met people who knew what PHP was, how websites worked, people who knew how to program. iHub is aggregating people.”

He’s working on a mobile survey platform designed for microfinance providers. Mithamo spent long weeks in rural Kenya as a survey field worker, walking kilometres house to house in the scorching heat. Back in Nairobi, he realised that technology offered a much easier way. “Walking around kind of sucks,” he says. Why visit the beneficiaries of the microloans, when right there in the hands of most villagers was the most remarkable and the most portable communication device ever invented – the mobile phone. Soon the surveys will come and go by SMS. 

But why? What need for indigenous innovation when there are already millions of apps available? In part, the reason is the platform: millions of poor Kenyans own the cheapest possible mobile, a entry-level $20 model. Third-party mobile services in developed nations focus on smartphones through app stores. Here, it must be simpler. Many startups use the USSD protocol, a basic two-way form of communication with a telco’s servers. But it’s more than that. “Why would I want to find out the best jogging route in Nairobi?” asks Mithamo. “Who does that? People don’t jog. We are not a middle-class economy.”

Global companies are getting in on the act. Samsung has released a solar powered laptop and a new fridge with a built-in coldpack, designed to endure frequent power outages. In Kenya, 15 per cent of deaths amongst women of childbearing age are linked to pregnancy. To address that, Marcel Ogweno built Mimba Bora, an application designed to let women track their pregnancies and – if needed – find nearby medical help. And in agriculture, too, mobiles have arrived. Despite the growth in ICT and tourism, agriculture still accounts for almost a quarter of Kenya’s economy. But life for small farmers is hard. It was impossible to know whether they were getting a good price for their produce. That issue gave rise to M-Farm, a mobile app which began at iHub as an idea batted back and forth between three female techies.

“We realised that farmers [in Kenya]were always complaining because the middleman was taking what they should be getting,” says marketing lead Linda Kwamboka, an effusive 24 year old. “And others had no other markets to sell to. So we decided to help these farmers.” The app works through SMS – and by a network of agents on the ground.

Farmers can text in to discover the current market rate of produce in different towns around Kenya. Alternatively, they can find other smallholders and combine their crops for a better rate. And farmers can also find M-Farm approved sellers who offer a price guaranteed by M-Farm. The system is intended to increase accountability by providing a trusted link between buyers and sellers.  More than 7000 farmers now use the system.

Another localised solution is M-Shop, a mobile ticketing system for mobile phones of all kinds. The company, MTL, also hails from the iHub incubator, but has since migrated further along Ngong Road to the Greenhouse, a large and open office space. The story behind the system stemmed from a universal problem, says CEO Meshack Alloys. “A friend wanted to go for a date with his girlfriend, and he wanted to go out of Nairobi. But they missed the bus because when they got to the terminal, the tickets were gone.” Now Alloys’ mother, who still lives in a village, can buy a ticket to come and visit him in Nairobi without enduring an expensive and time-consuming 60km round trip just to make sure she can get a ticket. 

“We’re building on top of M-Pesa and the environment that created for us, where people already trust mobile transactions,” says Alloys. “Early on, people didn’t trust M-Pesa — would the money really get there? But now they do. And that is quite amazing to see. The strong growth in startups means we can plug another group’s solution in. You don’t have to build it all yourself.”

Perhaps 10 years ago, Alloys – a USAID merit scholar in engineering – would have left for California, part of Africa’s brain drain. But times have changed. “Our future is very bright,” he says. “We are growing steadily. Nairobi is at the centre. This is the best place to be.”

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