As you may know, we were in Kenya both to attend Afrikoin, a conference on mobile money, and to continue our exploration of innovation ecosystems. How do countries, cities, are turning to entrepreneurship? What are the fundamentals and best local practices when they try to build and nurture communities of innovations?
After Afrikoin, we had a quick but fruitful discussion with Mbwana Alliy. Mbwana runs the Savannah Fund from Nairobi, which invested in 9 startups in Africa. He told us how Kenya became what it is today.
For Mbwana, there is “the conditions, the atmosphere” of the ecosystem, and “the sparks, what makes it move in a direction or another”.
A few key traits of Kenya can explain its readiness for innovation:
- It’s the biggest economy in East Africa, and as such, it’s also a transportation and aviation hub for East Africa. Talents are flowing in, from and through Nairobi.
- It’s a capitalistic country. Not so long ago, the USSR had also a large influence in Africa, and countries like Tanzania are still socialist-leaning. Kenya, as a former British colony, leans on “the other side”.
- It’s an English-speaking country, as it was previously British. Even in South Africa, the native language is not English, and the tech world definitely is made in English
- The economy is diversified, and is not resource-based as it is the case in Nigeria (which everybody thinks it’s another key market for innovation). Tourism, exports, manufacture, services make it balanced, and allow innovation to stem from many industries. In Nigeria, if you want to success, it can be mostly, if not only, within the oil & gas industry.
Then, there’s the sparks, these key moments that make planet Kenya be an innovative country.
- 2002-2005: the drop in the prices of phones made it accessible to more and more people
- 2005-2006: Kenya lands down a first undersea cable to connect to the internet, and is now at the heart of the East Africa coast in terms of connectedness. The 3G network is also being built at the same time and allow the first ISP to grow (Africa Online).
- 2007: MPesa is born! Not until 2010 it becomes the mainstream mobile money payment system for Kenya. This innovation allows the unbanked to pay and get money, and new services are built around this platform (as you can see with the latest startups working on bridging Bitcoins to MPesa for remittances)
- 2008: The election crisis saw the development of Ushahidi, a project which crowsdources crisis information through mobile.
- 2010: “The Ushahidi mafia”, in turn, made possible the development of iHub, today’s main spot for innovators and startups in Nairobi. A bit like the Paypal mafia in the US gave birth to other key innovation (Youtube, Tesla Motors, LinkedIn, Yelp…). They now have a supercomputer and a Research Lab, all projects launched by people who gravitates around Erik Hersman, the founder of Ushahidi.
- 2013: A new “Vision 2030” is approved by the government, with a new place proposed for Konza City, an innovation cluster, out of Nairobi. Price tag: $14.5bn.
On top of this historical approach, Mbwana insists that we’re not in the Silicon Valley. Rather than a global approach, startups here should serve their market first, even before thinking of entering other African markets, all unique and different (a reflexion we had also with Samuel Gichuru from Nailab, an incubator located 2 sets of stairs from the Savannah Fund).
With Ethiopia and Tanzania around, that’s already some 120 million people to serve.