To continue our exploration of Kenya as an innovation ecosystem on the fringes of Afrikoin, I met with Samuel Gichuru from the Nailab incubator. A fast-paced and energetic conversation proved helpful in pinpointing a key challenge entrepreneurs face: the management of cultural differences.
Kenya is the kingdom of mobile money (the MPesa system), but it is an isolated one. No other country is using mobile money at this level, be it richer countries (South Africa), more populous ones (Nigeria) or even countries geographically close to Kenya (Tanzania, Uganda). Even within a country, different sub-segments exist, each with their own cultural nuances, making scaling up for startups a true challenge.
Yet another part of Nairobi’s tech ecosystem
No 2 Markets are the Same: The importance of cultural awareness and experimentation
Innovation ecosystems, Samuel says, are not driven by the same factors everywhere:
- In Kenya and developing countries, necessity and poverty are the mothers of innovation
- In the US and the Silicon Valley, innovation is driven by aspiration, and it’s no coincidence Hollywood is very close. They “sexify everything”, including entrepreneurship (think of Justin Bieber or Ashton Kutcher to name a few).
If startups are to succeed, they must get to know the local contexts, which are multiple, obscure, intangible, and it takes time to get this vital understanding. In Africa, for instance, Nigeria is both a highly religious country where status is mostly reached through the oil & gas business. In Kenya, the population is more diverse, but also has its “niche” population which cannot be adressed in the same way. The internet has made us more globalised, but cultural distinctions remain strong and they create markets with different needs and considerations.
At the end of the day, we both wondered what was a good “model” for startups to follow to be both innovative and scalable. Unilever, for instance, has a model where contextualisation focuses primarily on altering the marketing strategy of the same product in different markets, using different brands, colors, marketing positioning and even pricing. Even in the world of social media, we are beginning to see fragmentation as messaging apps gain prominence alongside Facebook and Twitter. Will consumers behave differently on these platforms?
Startups need to learn to be culturally aware but even more than that, to go, try, fail, and try again. That is the only way to discover and potentially penetrate a new market. For MPesa, they should first focus on serving the market they are in and doing it well before exploring other markets.
Interestingly, BRICS startups from Brazil, Russia, China, India and South Africa also show how local knowledge, local ties to investors protect them, in a way, from too much predation from abroad.