As you may know, we were in Kenya to attend Afrikoin, a conference on mobile money, and to continue our exploration of innovation ecosystems. How are countries and cities pivoting towards entrepreneurship? What are the fundamentals and best local practices used as 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 has invested in 9 startups in Africa. He told us how Kenya has become what it is today.
For Mbwana, there is “the conditions, the atmosphere” of the ecosystem, and “the sparks, what makes it move in one direction or another”.
Innovation in Kenya: Primed and ready
- 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 a large influence in Africa and countries like Tanzania are still socialist-leaning. Kenya, on the other hand, is a former British colony and thus leans on “the other side”.
- It’s an English-speaking country since it was previously British (Even South Africa’s native language is not English) The tech world speaks primarily in English.
- The economy is diversified and is not resource-based, unlike Nigeria, another country touted as an innovation hub. Tourism, exports, manufacturing and services make Kenya’s economy a balanced one and allow innovation to stem from many industries. (In Nigeria, if you want to succeed, the oil & gas industry is by and large your best bet.)
The Sparks that ignited innovation in Kenya
- 2002-2005: the drop in the prices of phones made it accessible to more and more people
- 2005-2006: Kenya lays down its first undersea cable to connect to the internet. It 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 allows the first ISP to grow (Africa Online).
- 2007: MPesa is born! It will only become the mainstream mobile money payment system for Kenya in 2010. This innovation allows the unbanked to pay and receive 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 crowdsources crisis information through mobile.
- 2010: “The Ushahidi mafia”, in turn, facilitated the development of iHub, today’s main hub for innovators and startups in Nairobi, similar to how the Paypal mafia in the US gave birth to other key innovations (Youtube, Tesla Motors, LinkedIn, Yelp…). They now have a supercomputer and a Research Lab, all projects launched by people associated with 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 Kenya is not Silicon Valley. Rather than a global approach, startups here should serve their market first before even thinking about entering other African markets, each unique and different from the rest (a reflexion we had also with Samuel Gichuru from Nailab, a startup incubator).
With Ethiopia and Tanzania nearby, that’s already some 120 million people waiting to be served.