[kictanet] Interview on Silicon Savanah

Mon Dec 3 12:56:39 EAT 2012

Silicon Savannah: Time to grow up?
Business Focus<http://www.howwemadeitinafrica.com/category/articles/business-focus/>,
Feature Articles<http://www.howwemadeitinafrica.com/category/articles/feature-articles/>,
ICT <http://www.howwemadeitinafrica.com/category/sectors/ict/>,
Kenya<http://www.howwemadeitinafrica.com/category/countries/kenya/>|
BY Jonathan
Kalan <http://www.howwemadeitinafrica.com/author/jonathan-kalan/> |
November 6, 2012 at 14:50
 ------------------------------
inSharThere*Interesting article in response to a debate that raged online
on whether the current tech sector is over-hyped. I called in the writer
for a discussion on the same and this is the resultant  interview.

http://www.howwemadeitinafrica.com/silicon-savannah-time-to-grow-up/21932/?fullpost=1

It’s raining in the Silicon Savannah, and unlike Nairobi’s unbearable
traffic problem, no app has emerged promising to stop it.*

Paul Kukubo, CEO of Kenya's ICT Board, says the current debate about the
state of Silicon Savannah is "not discouraging people, it’s making them
think again".

Inside the colourful and buzzing tech corridors of Africa’s first
technology boom town, whispered conversations between investors are
becoming amplified. Criticism, candid commentary and a dose of reality are
dropping in from bloggers and pundits, challenging Kenya’s image as a place
where African technology magic happens, where successful startups, apps,
and entrepreneurs flow like water.

Over the past two years, media and the startups they cover have shared the
responsibility of painting a glorified picture of Nairobi’s startup scene.
They have built a collective hype that’s attracted investors, entrepreneurs
and even journalists.

Yet for those who have arrived and stayed, what they have found is neither
a vast oasis of untapped innovation, nor a dry and dusty savannah filled
with empty promises. The reality lies somewhere in between – essentially a
very young ecosystem with great potential, but one that also needs to
mature and grow up.

As the choir gets louder, one thing is becoming apparent – a little rain on
Kenya’s technology parade might actually be a good thing. It’s time for
companies to sink or swim, for the good seeds to grow and the bad to be
washed away.

Software and app startups are a dime a dozen here. Yet few are finding
funding, and even fewer are actually making money. Entrepreneurialism has
become a profession itself, and many young entrepreneurs are lacking the
experience, training, and business acumen to make companies grow. This is
something investors notice quite quickly.

“High expectations, big disappointment,” is how Kenyan blogger Kachwanya
described Kenya’s current tech landscape, in a blog post that received 27
heated comments.

Andrea Bohnstedt, an investment risk analyst and columnist wrote in a local
Kenyan paper “there’s hype and then there’s business. Nairobi’s ‘Silicon
Savannah’ is in desperate need of a large dose not of money, but of
modesty”.

In a recent piece for *Impact IQ, *I myself wrote of “vanity capital and
vanity companies”, referring to the fact that entrepreneurs with half-baked
ideas and a collection of buzzwords are “falling for too many carrots,
chasing free money to satisfy overeager funders”.

Last month, even iHub, Kenya’s most established and successful innovation
hub, held a full-house event titled ‘Silicon Savannah – Reality Check’, to
have “a brutally honest discussion around what’s really going on in Silicon
Savannah”.

To get to the bottom – or really the top – of Kenya’s ICT scene, I recently
sat down with Paul Kukubo, the chief executive officer of Kenya’s ICT
Board, to get his take on this Silicon Savannah debate.

*What is your take on the argument that there’s “too much hype” surrounding
Kenya’s technology scene? Is a bubble about to burst?*

We need good debates. The guys who bring up these issues are important to
solving the sector issues, and it’s a healthy debate. It’s not discouraging
people, it’s making them think again.

If anything, it’s not hyped enough. Kenya’s app-fuelled startup scene is a
very small sector, with a few people who are active on Twitter following
each other.

It’s important to understand that Kenya’s 20% growth in
ICT<http://www.howwemadeitinafrica.com/category/sectors/ict/>is coming
from a multiplicity of businesses and tiers, not just from the
small startups.

At the top of the ladder are the multinational corporations, like IBM and
Oracle. Then there is the partner ecosystem – the companies that feed off
this multinational tier as partners and distribution channels. Then, there
are companies that do a bit of everything, creating software products,
either by utilising open source systems or developing code from scratch.
These are traditional software writers, systems that run schools or
financial systems.

Finally, you have the apps companies, a new generation of companies that
have an innovation agenda. You get attention with the most sexy app, or the
one that does the most sensible thing. Their role is to break the rules,
articulate needs at the community level, innovate, and customisation for
the market.

Top tiers, like Oracle, IBM, Microsoft, are the large money generators, but
the app model is what’s being developing around the world, and you cannot
rank these things. Just like you need Oracle, you need Angry Birds.

That’s why we love this scenario, and don’t want to mess it up. It’s nice
when you have a culture where young people take the initiative to create.
That has its own momentum. It’s creating a culture of creating, which is
what all governments around the world spend so much time teaching the young
people to do.

*You see many foreign investors coming through your office. What are their
concerns with the Kenyan market?*

Some of them say they came in too early, some say they wish they came in
earlier.

Their biggest concerns are not about the ideas. They think the ideas are
exactly the same. What they say is that the culture of doing business among
these technology entrepreneurs has to be strengthened, in terms of things
like reporting back.

Venture capital money is not like donor money. It’s very strictly
commercial. VCs are finding there are sometimes discipline issues,
inability to comply with requirements, and a culture around their
obligation towards repayment.

I’m on record as saying I fear that we can create a donor dependency. You
don’t want donor money to crowd out the private sector. But, I think it
straightens itself out. The market is the best judge.

It’s a learning curve, and you need to go through that curve. People don’t
understand technology enough to invest in technology companies. I think
that that’s changing. If anything, that’s changing faster here than it’s
changing anywhere else.

*What is the media’s role in this?*

Writers are like small companies. They also need to write. So, we now need
a new angle – this ecosystem needs a new angle. You read about the *Silicon
Alley Insider, *the role that magazine played in building Silicon Valley,
it was exactly the same. We need a good technology writing clique to
decipher the stories actually surrounding this debate.

What we also need is better reporting so the failures can be highlighted.
When it comes to failures, there are many. You don’t know them because many
don’t exist in the structured labs and hubs. They are working in their
bedrooms, in the schools, in rural areas.

*In 5-10 years, where do you see Kenya’s tech scene? What does it need to
get there?*

Some companies will grow and become big, some companies will become mid
tier, some will become acquired, and many will fail. That’s just the way it
has to be.

We need this many startups because the ratio of failure to success by
definition must be high. There are companies littered all over the Silicon
Valley roads. Many of these companies are going nowhere, others will become
millionaires.

We need people to actually start to solve problems by understanding
problems well. We have needs in
agriculture<http://www.howwemadeitinafrica.com/category/sectors/agriculture-sectors-2/>,
health care, retail<http://www.howwemadeitinafrica.com/category/sectors/retail-sectors/>,
mining<http://www.howwemadeitinafrica.com/category/sectors/mining-minerals/>,
public sector – everywhere.

Most importantly, we need a new kind of entrepreneur. Someone who’s young,
has worked for a larger tech company for a few years, who understands
business process. We don’t have many of these yet, but they are emerging.

*(interview edited for length and clarity)*

Paul Kukubo
Chief Executive Officer, Kenya ICT Board
PO Box 27150 - 00100
Nairobi, Kenya

12th Floor, Teleposta Towers Koinange Street

Tel +254 20 2089061, +254 20 2211960
Fax: +254 20 2211962
website: www.ict.go.ke
local content project: www.tandaa.co.ke, www.facebook.com/tandaakenya
twitter:@tandaaKENYA
BPO Project: www. doitinkenya.co.ke
Digital Villages Project: www.pasha.co.ke

personal contacts
_______________

Cell: + 254 717 180001

skype: kukubopaul
googletalk: pkukubo
personal blog: www.paulkukubo.co.ke
personal twitter: @pkukubo

____________________
Vision: Kenya becomes a top ten global ICT hub

Mission: To champion and actively enable Kenya to adopt and exploit ICT,
through promotion of partnerships, investments and infrastructure growth
for socio economic enrichment
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