[kictanet] Kenya's Tech Startup scene leaves investors underwhelmed

Mon Jan 12 18:05:55 EAT 2015

According to Robert Yawe: https://t.co/pJfVm9ffxi

______________________
Mwendwa Kivuva, Nairobi, Kenya

"There are some men who lift the age they inhabit, till all men walk on
higher ground in that lifetime." - Maxwell Anderson

On 12 January 2015 at 16:21, Phares Kariuki via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> http://www.wanjiku.co.ke/2015/01/kenyas-tech-start-ups-and-fluff/
>
> Wanjiku's take
>
> On Sun, Jan 11, 2015 at 1:44 PM, S.M. Muraya via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>> @walu @makali
>>
>> Automation varies e.g. systems (infrastructure) automation vs Business
>> Process Automation.
>> Business Process automation is big in societies which favor
>> efficiency/hospitality over fraud.
>>
>>
>> http://www.computerweekly.com/news/2240237777/Forrester-IT-maintenance-saps-budget-as-tech-spending-increases
>>
>> For business automation, locals get along better with locals, and do much
>> better than expatriates.
>> Smart expatriate entrepreneurs/investors focus more on infrastructure
>> automation/management.
>> Business automation involves understanding how an organization or society
>> needs/wants to work.
>>
>> As the Reuters article noted (GSMA research), local investors (which must
>> include public officials) are not well informed.
>>
>> Regards
>>
>> Murigi / Stanley Muraya
>>
>> *"Better a patient person than a warrior, one with self-control than one
>> who takes a city." Prov 16:32*
>>
>> On Wed, Jan 7, 2015 at 8:38 PM, Walubengo J via kictanet <
>> kictanet at lists.kictanet.or.ke> wrote:
>>
>>> @David,
>>>
>>> sounds like a good topic.  Investment in the ICT arena.  I would imagine
>>> that high-capital investments are done and dusted i.e. setting up mobile
>>> networks, setting up media and broadcasting houses, laying fiber, etc.
>>>
>>> The remaining area of ICT investment is in the low-capital investment
>>> area a.k.a innovations. Software based Innovations along the spirit of FB,
>>> Twitter, MPESA, Google, etc.  Essentially Kenya lacks investors in this
>>> space.  Local banks only fund the traditional, tried and tested business
>>> models like opening up a bakery, building flats for sale/rent, land
>>> transactions, etc but have not time to invest in "ideas".
>>>
>>> So you would probably need to schedule 2 talks/sessions around.
>>>
>>> 1. Why and how to fund/investment  in ICT ideas/research (get  someone
>>> from Govt, Commission for Sci, Tech & Innovation (??) , get someone from
>>> Academia, (Dr. Ndemo?) , from Industry ((Joe/Veronica of Safcom
>>> Innovation Directorate))
>>>
>>> 2. Why Kenyan investors dont fund ideas/innovations (get one fellow from
>>> Industry(Joe/Veronica of Safcom Innovation Directorate), Govt (Victor,
>>> ICTA) , Investment banker/Venture Capitalist (e.g. ????)
>>>
>>> You can pay me 2Chickens for the advise...IEBC type Chicken not your
>>> local luhyia rooster :-)
>>>
>>> walu.
>>>
>>>   ------------------------------
>>>  *From:* David Makali via kictanet <kictanet at lists.kictanet.or.ke>
>>> *To:* jwalu at yahoo.com
>>> *Sent:* Wednesday, January 7, 2015 4:32 PM
>>> *Subject:* Re: [kictanet] Kenya's Tech Startup scene leaves investors
>>> underwhelmed
>>>
>>> Folks:
>>>  I would like to frame a discussion on citizen tv breakfast show around
>>> this issue: IT or ICT as an area of investment and econ growth and her
>>> competitiveness of our investment environment. What should the topic be and
>>> who are the 2 critical people that should form part of that panel. And why.
>>>
>>> Last year, I tried in vain to get my friend and member of this network,
>>> Catherine Adeya, then CEO of Konza city, to come on air for an exploration
>>> of the subject but...  Doesn't mirror much the robust discussions I see
>>> here (behind the curtains?).
>>>
>>> David
>>>
>>>
>>> This is official mail. If you doubt the content, call back on
>>> +254722517540.
>>>
>>>
>>>
>>> On Jan 6, 2015, at 9:38 AM, Ngigi Waithaka via kictanet <
>>> kictanet at lists.kictanet.or.ke> wrote:
>>>
>>> Listers,
>>>
>>> My 2 cents on this issue.
>>>
>>> Kenya Technology scene, is actually quite old; I know a few firms that
>>> were founded in the 90s, some even earlier, and that are still going
>>> strong. If anything, firms founded around the late 90s and early 200s have
>>> had a lot more success than in later years, IMO. If you doubt me, check
>>> firms like Virtual City, Craft Silicon, AT, SevenSeas, 3Mice, Cellulant,
>>> Verve, ReelForge, Turnkey Africa, Lantech, AfricaOnline, Wananchi etc
>>>
>>> Having being involved in this sector over the last 20 years, I think
>>> that the article is quite fair in that in recent times, there has been a
>>> lot of hulabaloo of a new IT Startup which in no time bites the dust,
>>> leaving investors obviously, licking their wounds.
>>>
>>> But this didn't just happen overnight.
>>>
>>> Sometime around 2007, there was a general drift towards mobile
>>> technology. There were very nice sound bites, that, if you built a mobile
>>> application, and got 1% of the world to buy it, you would be best pals with
>>> the likes of Facebook, Twitter, Google Founders who would probably be
>>> calling you up to borrow your yacht.
>>>
>>> This excitement was quickly followed by the "...build it they will come
>>> mantra...", and besides, a new city technology city, Konza!
>>>
>>> This had the quick effect of churning a lot of money into these startups
>>> to the point where what traditionally we would call "functions" in an
>>> application, was being touted as a full application. These were quickly
>>> showcased in the next mobile competition, and the winners of these parlayed
>>> across the media as the true technology champions of Kenya.
>>>
>>> And with the success of Mpesa (that Kenyan application that is not built
>>> in Kenya), Kenya had arrived in the technology scene. But this could not
>>> have been further from the truth!
>>>
>>> I have argued before, that if we are to build a local technology scene,
>>> it has to first cater for the current needs in the market. The Kenyan
>>> Technology scene is heavily dominated by procurement of enterprise
>>> applications & technologies. Put together, GoK, Safaricom, Airtel
>>> , KPLC, KenGen, KRA, KCB, Equity etc spend not less than Ksh 200B every
>>> year in IT purchases.
>>>
>>> If we ought to make a serious push for technology, then we need to first
>>> address the market where local firms are already buying into, instead of
>>> concentrating on developing functions wrapped as mobile applications for a
>>> market that at most cannot even hit Ksh 100M.
>>>
>>> This is what every one of those firms that I have listed before did and
>>> its no wonder 20 years later, they are still here.
>>>
>>> And this is the fundamental difference between the Kenya & Nigerian
>>> startup scene. There are countless Nigerian firms that are already in Kenya
>>> pushing their Nigerian built core Banking, Insurance, Manufacturing and
>>> Public Sector solutions. Solid firms that are making applications that the
>>> market is already paying for.
>>>
>>> So, lets not shoot the messenger. Lets reserve our vitriol and energy
>>> for the ICT policy makers and ask them to build a policy that leads to
>>> self-sustaining ICT growth.
>>>
>>> Regards
>>> Ngigi Waithaka
>>> A1.iO <http://a1.io/>
>>>
>>> On Tue, Jan 6, 2015 at 2:46 AM, Eric Osiakwan via kictanet <
>>> kictanet at lists.kictanet.or.ke> wrote:
>>>
>>> .....you are very far from wrong, actually too close to right.
>>>
>>> HNY.
>>>
>>> Eric here
>>>
>>> Sent from my iPhone
>>>
>>> On Jan 5, 2015, at 17:40, John Kieti via kictanet <
>>> kictanet at lists.kictanet.or.ke> wrote:
>>>
>>> Dear Ali, and other listers,
>>>
>>> Once in a while, we read articles in media, especially international
>>> media carrying very misleading headings on the Kenyan startup scene. The
>>> piece you share Ali is one such misleading story
>>>
>>> I would easily dismiss such an article, not only for it simply
>>> "re-tweeting" old unfounded stereotypes but for two other reasons as
>>> follows :-
>>>
>>> 1. The story is built solely on the investment philosophy of one
>>> investor - not that its a wrong investment philosophy but that its not the
>>> only investment philosophy relevant for a young ecosystem like ours. Even
>>> in other advanced ecosystems there's many competing investors with diverse
>>> investment strategies.
>>>
>>> 2. The story fails to capture sentiments of local founders seeking
>>> capital and the challenges they face - from a startups perspective.
>>> Considering that local startups have perceptions such as existence of
>>> "vulture capital" and  "racial capital preferences", it is fair to expect
>>> that closing even the simplest of deals, or even attracting the requisite
>>> pipeline is not for faint hearted or non-committed investors. The writer
>>> could have gone under the hood to explore these at the very least.
>>>
>>> At the very least I would ask myself this when faced with such an
>>> article; Can anyone really fairly compare our five year old ecosystem with
>>> mature (decades old) ecosystems such as Silicon Valley or Tel Aviv? What
>>> yardsticks would be fair across the board?
>>>
>>> That said, our startup ecosystem still experiences the usual challenges
>>> expected at these formative stages. For instance (a) There's still too many
>>> parallel entrepreneurs (for justified reasons) running startups
>>> sub-optimally (b) we continue to experience a gap in local angel funding
>>> (or traction proof funding) which cannot be replaced by foreign capital.
>>> (c) Players and commentators in the ecosystem continue to assess startup
>>> growth and performance with the same yardsticks applied to consultancies
>>> and lifestyle businesses (d) The local market has sustained this uncanny
>>> tendency to favor the presence of a non-local when a sales pitch party is
>>> granted - if at all such is granted to a startup. (e) In the legal,
>>> PR/marketing, accounting and other supporting professions, available skills
>>> sets and professional approach are for the most part inflexibly corporate
>>> minded  - neither customized nor conducive for working with startups. These
>>> to me are new issues below the surface that a writer should be exploring
>>> rather than repeating the usual rhetoric damning the fledgling ecosystem -
>>> which I find unfounded.
>>>
>>> I may be entirely wrong, but I could be right in my observations.
>>>
>>> Best regards
>>>
>>> On Sun, Jan 4, 2015 at 9:44 PM, Sean Moro
>>>
>>> On Sun, Jan 4, 2015 at 10:52 AM, Ali Hussein via kictanet <
>>> kictanet at lists.kictanet.or.ke> wrote:
>>>
>>> Listers
>>>
>>> A lot of discussions in this area over the last few years. Are the
>>> chickens coming home to roost?
>>>
>>> Have we focused too much on competitions, donor funded money and shared
>>> spaces and a lot less on commercially viable ideas/nurturing what is there
>>> towards commercial exploitation?
>>>
>>> My sense is that we now need to move to 3.0 to enable realize the
>>> potential of our startups.
>>>
>>> Read on:-
>>>
>>>
>>> http://www.businessdailyafrica.com/Corporate-News/Kenya-s-technology-push-leaves-investors-cold/-/539550/2574220/-/13qkohy/-/index.html
>>>
>>>
>>> http://www.gsmaentrepreneurshipkenya.com/GSMA_KENYA-AR2014-060214-WEB-SINGLE-PGS.pdf
>>>
>>>
>>> *Ali Hussein*
>>>
>>> +254 770 906375 / 0713 601113
>>>
>>> Twitter: @AliHKassim
>>> Skype: abu-jomo
>>> LinkedIn: http://ke.linkedin.com/in/alihkassim
>>> <http://ke.linkedin.com/in/alihkassim>
>>> Blog: www.alyhussein.com
>>>
>>> "I fear the day technology will surpass human interaction. The world
>>> will have a generation of idiots".  ~ Albert Einstein
>>>
>>> Sent from my iPad
>>>
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>>> --
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>>> '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
>>> The ordinary just won't do
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>>> for people and institutions interested and involved in ICT policy and
>>> regulation. The network aims to act as a catalyst for reform in the ICT
>>> sector in support of the national aim of ICT enabled growth and development.
>>>
>>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
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>>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>>> for people and institutions interested and involved in ICT policy and
>>> regulation. The network aims to act as a catalyst for reform in the ICT
>>> sector in support of the national aim of ICT enabled growth and development.
>>>
>>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>>> online that you follow in real life: respect people's times and bandwidth,
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>>>
>>>
>>>
>>> --
>>> *Regards,*
>>>
>>> *Wait**haka Ngigi*
>>> Chief Executive Officer | Alliance Technologies | MCK Nairobi Synod
>>> Building
>>> T + 254 (0) 20 2333 471 |Office Mobile: +254 786 28 28 28 | M + 254 737
>>> 811 000
>>> www.at.co.ke
>>>
>>>
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>>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>>> for people and institutions interested and involved in ICT policy and
>>> regulation. The network aims to act as a catalyst for reform in the ICT
>>> sector in support of the national aim of ICT enabled growth and development.
>>>
>>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>>> online that you follow in real life: respect people's times and bandwidth,
>>> share knowledge, don't flame or abuse or personalize, respect privacy, do
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>>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>>> for people and institutions interested and involved in ICT policy and
>>> regulation. The network aims to act as a catalyst for reform in the ICT
>>> sector in support of the national aim of ICT enabled growth and development.
>>>
>>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>>> online that you follow in real life: respect people's times and bandwidth,
>>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>>> not spam, do not market your wares or qualifications.
>>>
>>>
>>>
>>> _______________________________________________
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>>> Unsubscribe or change your options at
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>>>
>>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>>> for people and institutions interested and involved in ICT policy and
>>> regulation. The network aims to act as a catalyst for reform in the ICT
>>> sector in support of the national aim of ICT enabled growth and development.
>>>
>>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>>> online that you follow in real life: respect people's times and bandwidth,
>>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>>> not spam, do not market your wares or qualifications.
>>>
>>
>>
>> _______________________________________________
>> kictanet mailing list
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>> Unsubscribe or change your options at
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>>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>> not spam, do not market your wares or qualifications.
>>
>
>
>
> --
> Warm Regards,
>
> Phares Kariuki
>
> *E*: pkariuki at gmail.com | *Twitter*: kaboro | *B*: http://www.angani.co
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> Angani Limited
>
>
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> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>
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