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iHub By Rachel Gichinga / October 23, 2012

Silicon Savannah: Hype or Reality? A recap of last week’s event

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Last week’s “Silicon Savannah: Reality Check” discussion generated a substantive amount of debate. A recap of the major talking points, by Andrea Bohnstedt (paraphrased from her Saturday article in the Star)

Not every app is a business, and not every iHubber with a laptop is an entrepreneur. The iHub guys often struck me as very technology-focused.

Technology in itself isn’t a business yet. If you want to be a start-up, then you need to think about it in a bigger context. Your app, website or other idea may be great, but if you don’t understand marketing, if you don’t understand how to build a company around it (or how to find people who can do this), then you probably won’t get very far.

I don’t want the iHub (or similar bodies) to discourage anyone from pursuing a business idea, but to be more realistic about what it takes.

And I also argued that the iHub, as an organisation set up to support and nurture the IT community, could do a better job in broadening its efforts.

Most ideas aren’t at even at the VC stage, so building an angel investor network could be useful. If you are setting up a company in Kenya, then surely having access to people to know how to run a business in Kenya would be helpful

And finally, don’t underestimate the value of access to traineeships, internship, and employment. I know it sounds dull, and it’s often very difficult to find, but employment can be huge learning experience, not just with regard to technical skills.

Conrad, who I had expected to be wild of hair and fiery of eye, turned out to be a far more mellow looking sort, but that was merely appearances: Silicon Savannah, he said, was just a stereotype, like African drums.

He ran a couple of well-known IT brand names past us and asked if anyone knew where they came from. We didn’t, and it turns out they were all from Eastern Europe.

Did it matter? No, not one tiny bit. Users used them because they work. So forget the Savannah bit and benchmark yourself against global quality. Don’t, he said, develop something and then go looking for a problem that this might solve.

And he’s not a big fan of all those conferences, pitch events, hackathons, bootcamps etc: ‘What have they bloody produced?’

Start-up, he says, is a dirty word – it’s a company to which the following doesn’t apply: Cost management, marketing, strategic planning, talent acquisition and retention and so on.

And not all paths to success are mobile, mobile, mobile: there are enormous opportunities in providing products and services to business. A lot of this is ‘boring. Hard work. When people hear about this, they vanish.’

Mbwana also wasn’t so hot on the competitions/hackathon/pitch circuit: In Silicon Valley, he argued, these happened in universities to get youngsters started – if you actually have a start-up, you’re usually too busy chasing real investors (oh, and getting work done).

There is effectively a market for competitions in Kenya now, he finds, but most competition judges don’t really go through the company metrics carefully enough.

However, when he asks people looking for venture capital about figures, they often, disappointingly, have nothing to show.

In her contribution, Njeri Rionge focused on ‘corporatising’ your idea – more emphasis on taking your idea beyond yourself and your laptop.

And she actually showed the iHub what they could get out of pursuing connections to the local business community more systematically: she offered five internship positions.

But a final ‘voice of reason’ contribution from Mbwana: failure is normal. There are lots of failures in Silicon Valley – and you do learn from them.

And it’s worth bearing in mind that this tech sector in Kenya is still very young, so trial, error, failure, and revision are natural while it matures.

On the other hand, tech blogger and iHub community member Kachwanya had this to say in response:

The main point she was making is that the people who attend the tech talks are fuelling the hype about Nairobi tech while the reality is there is nothing to celebrate about. I get the point but I always wonder whether the tech pundits currently demonizing the start-ups realize that the hype about Nairobi was never created by the so called the entrepreneurs (start-ups) but by the same tech pundits?

At this point it is time to appreciate the fact that something has changed over the last two years. And it is the emergence of how people perceive mobile phones and their primary functions. The birth of mobile apps changed the tech landscape and the narratives of what constitutes tech. Developers moved from doing desktop applications, to creating mobile apps and then everyone has been forced to adapt to the new reality. It has only been two years, two years for heaven’s sake and we are already all shouting failures, failures, failures. Are Kenyans developers and entrepreneurs that bad or is it just starting to be fashionable to bash them?

I guess there have been many trials and error in Kenya, and at this stage I can understand why. Personally I have been involved in many failed tech projects and I must say that I have learned a lot from them. And I want to see young people being told the Dos and Donts in the business process and not to “hell with Start-ups”. I agree with John Kieti of mLab East Africa, who tweeted the following:

‘Perhaps the argument should be “what else should grow in addition to the startup scene?” and not that of “to hell with startups” #SSrealityCheck’

I keep coming back to this subject: a lot of policy discussions, whether on government or on donor level, had focused and continue to focus on entrepreneurship. Of course this is necessary to develop an economy; there is no question about that. But I find that there is often very little thought as to whether entrepreneurship really is for everyone. In the past, vast aid programmes concentrated on fostering ‘income-generating projects’ at the so-called ‘grassroots’ level – are these necessarily enterprises or, as Tom Dichter once called them, survival activities?

I wish Andrea would sit down with the thousands of graduates in Nairobi looking for jobs who can’t find any. What I know is most people in Kenya end up trying business or entrepreneurship, be it in technology or otherwise, because there are no credible job offers coming their way. And without jobs, I don’t see why encouraging young people to be entrepreneurs should be looked at with some doubts. At this point I bet 8 out of 10 people at iHub will take a job if you offer them instead of sitting there many hours trying to make it the hard way.

I think instead of telling people that they are not cut out to be entrepreneurs, the best thing would be to look at what they are doing wrong and tell them how to improve it.

Here are some of the problems facing the Kenyan start-up scene:

1. High expectations and being compared with Silicon Valley too early.
2. Low working capital
3. Founders forced to do ‘side hustles’ to make ends meet
4. Failure is not an option here
5. No local investors.

You can read Kachwanya’s full post here.

What are your thoughts on this debate? Post your comments to let us know how we as the iHub can help you grow. 

Author : Rachel Gichinga


2 Comments
  • Isaac Rutenberg at 08:33:15AM Wednesday, October 31, 2012

    Something that is completely missing from this discussion is Intellectual Property (IP). Silicon Valley became what it is because they knew how to use IP rights to build business and attract investment. In fact, Silicon Valley has more IP lawyers than anywhere else in the US. Kenya is starting to take IP more seriously, although much of that is on the enforcement side – i.e., reduction of counterfeiting. While this is important, it is equally or more important for people to start acquiring more IP, particularly on an international scale. International IP is the best way to attract investment (VC, angel investors, licensees, etc.) from the really big sources of money (i.e., western companies and investment firms). A very small number of Kenyans acquire international IP or make any attempt to export home-grown technologies. Only when this changes will Kenya be in a position to replicate Silicon Valley’s success. Unfortunately, IP is not always a popular topic, particularly in the tech space. Only when this changes will Kenya be able to start acquiring IP on an international scale. If you want to learn more visit our website at http://www.cipit.org or come and visit CIPIT at Strathmore.

    Reply
  • Billy Branks Kaye at 09:32:18AM Wednesday, October 31, 2012

    Fake it until you make it.
    The Silicon Savannah hype has brought a lot of investors , foreign businesses, international media attention and donors. Startups here are now in the eyes of the whole world , they will not all fail. Some will fail but those that fail will not stay down they will get up and try again.And sure it is very early to compare silicon valley with silcon savannah.

    Reply

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