Microsoft BizSpark program for Startups

IMG_8411As part of the iHub Corporate partnership with Microsoft 4Afrika, the iHub became a BizSpark Network Partner. Thus, the iHub Startup community is invited to join the program and benefit from it to boost their businesses. The BizSpark program was launched in 2008 around the world to support startups by providing software, support, and visibility. Today the BizSpark network […]
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Time is Ripe for Kenyan Android Developers

Kenya Android iHubGuest Blog by Erick Wasambo, Kenya Android Developer Group Lead A lot has been said about Kenya being a tech-destination, especially on mobile. One of them being TEDxVienna talk by Alexander Oswald where he concludes by saying that if the rest of  the world is not careful, they will be coming to Kenya in future […]
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IBM Research – Africa @ Nairobi Research Buzz

Ibm (2)Thursday 5th December 2013 at *iHub Bishop Magua Center 4th Floor from 5:30pm -7:30pm,  IBM Research Scientists will be speaking at this year’s last edition of Nairobi Research Buzz to give a behind the scenes view of what’s it’s like to work at a global research facility that is located in Nairobi. But what is […]
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The sustainability of Africa’s start-up culture – 6 Incubators and accelerators and what they tell us

Source: Smart Monkey TV

There are now many ICT incubators and accelerator units across the continent and the
beginning of what seems like a burgeoning start-up culture. As reported in an
earlier issue, an Angel network has been set up and there are both local and
international funds for those whose business has some trading record. There is also
now a network of impact investors who are interested in social as well as financial
returns. In this issue, I look at six ICT incubator and start-up funds I’ve
interviewed and try to draw out some of things that are happening and the challenges
ahead.

88 Mph, Nairobi and Cape Town: The first of these organisations is the accelerator
88Mph that has offices in both Nairobi and Cape Town. It seeks to find start-ups
that need initial modest funding to get to the investment starting line. They select
their start-ups and work with them to help shape the business and make introductions
to potential funders. In the video clip interview below, Nikolai Barnwell, 88 Mph
describes the work of the organisation:

Two start-ups that have come out of the 88 Mph process give some idea of one strand
of their interest. A year ago South African Simbarashe Mabashe, Wabona.com was a man
with good idea and only a few thousand users. Now he has raised his initial finance
and attracted nearly half a million users. See video clip interview with him on the
link below:

Martin Neilson co-founded the Kenyan mobile music platform Mdundo and is one of a

handful of local African music platforms that is beginning to get traction. See
video clip interview with him on the link below:

Jokko Labs, Senegal: The growth of ICT incubators is not restricted just to
Anglophone Africa. In Senegal, long-time ICT player Karim Sy set up Jokko Labs and
is now franchising the operation into different countries. This expansion includes
France and a promised move into Anglophone Africa. He’s also not just interested in
ICT projects but finding some way of harnessing the energy of the nascent Maker
movement in Africa. See video clip interview below:

“We”nnovation Hub, Lagos: There are two ICT incubators (Wennovation Hub and
Co-Creation Hub) in Lagos seeking to harness the intense interest in start-ups among
young Nigerians. Most parents would prefer their children became lawyers or worked
in a large company but these brave pioneering souls are seeking to create new
businesses in one of Africa’s largest and toughest markets. Co-Creation Hub has a
focus like many incubators on social start-ups that will address the many problems
in the country using technology in one way or another. However, a more prominent
start-up like Paga developed and found funding outside of the incubation process. To
see a video clip interview with Wole Odetayo who describes a Wi-Fi content player
being developed by the hub and how his mother uses What’s App:

[http://www.youtube.com/watch?v=tOl0NErAPsk]

Kinu, Dar es Salaam: Kinu is another incubator space that makes much of the idea of
co-creation, the bringing together of different talents and ideas to give birth to
new start-ups. For a number of historical and cultural reasons, Tanzania has a less
developed start-up culture than its neighbor (and favorite grudge match partner)
Kenya. Nevertheless things are changing and new businesses are being born but again
the most significant examples came from outside of the incubator hub. However, to be
fair, it’s early days so I’m watching with interest. For an interview with founder
John Paul Barretto, see link below:

[http://www.youtube.com/watch?v=mlG1W3H9Vd8]

kLab, Kigali: Most ICT developments in Rwanda come from the top down and tackle the
big gaps like infrastructure so it put a smile on my face to see an ICT incubator
that is well used by young Rwandans. It focuses on both commercial and social
start-ups and seeks to give advice and a helping hand to those that want it.

A typical social start up is Esther Kunda’s OSCA Connect, an advice and market app
for farmers. This is now such a deep seam for projects and companies that it’s
surprising that more progress is not being made. However, it’s early days for this
one…See video clip interview with Esther Kunda on the link below:

[http://www.youtube.com/watch?v=Er7hSi2YKKc]

A more developed start-up in the same genre is Susan Oguya’s MFarm which is working
with a significant number of farmers, both giving advice and setting up deals for
produce from smallholders. MFarm is a tenant of Nairobi’s widely known iHub. See
video clip interview with Susan Oguya on the link below:

iHub founder Erik Hersman has long maintained that access to finance, particularly
at the lower end of the scale, is a key barrier for successful start-ups to
negotiate so it’s good to see the Savannah Fund which he co-founded announce its
accelerator class to work out of the m:lab offices. The four startups come from four
countries and were selected after a month long competitive process, including 80
applications.

“Whilst we received less applications this batch than the last (180), the quality
was higher. Twenty-two per cent of the applicants reported to have generated revenue
compared to 15 per cent from the last application pool. Seventy-two per cent of
startups had a prototype versus 62 per cent in the previous class,” said a Savannah
Fund statement.

The startups include Cardplanet Solutions (Kenya), a payment solution where mobile
money meets cards initially targeting students and schools, Inforex (Uganda), a
network of foreign exchange providers within Africa allowing them to check and trade
currencies amongst each other, Zatiti (Kenya), a website/mobile web builder and
e-commerce platform for small merchants in East Africa, and Zished (Ghana &
Nigeria), a gifting and loyalty e-commerce platform targeting both local, diaspora
Africans and corporate entities starting in Ghana.

JoziHub, Johannesburg: Last but not least, JoziHub came out of the energy and
determination of Gustav Praekelt. Situated in a rather funky urban revelopment
project at 44 Stanley Avenue, Milpark, it has a mixture of social and commercial
projects. One of those, Cyclogy, is developing electric bicycles for use in the city
and will be the subject of a video clip interview to be uploaded next month. To hear
JoziHub’s Community Manager talk, click on the link below:

[http://www.youtube.com/watch?v=9iYBQ6VPgZQ]

So what does all this activity tell us? On the upside, start-ups have become an
accepted part of national development in many African countries. Governments like
the emblematic quality that young people striving to succeed has in worlds that are
often dominated by politicians who still have their e-mails printed for them. Indeed
in Kenya the Government has started to mobilise loans for this activity and this has
sparked a small campaign for similar funding in Nigeria.

But at the sharp end of the pencil things remain challenging. Techies are not
necessarily good entrepreneurs. I recently read an article that argued that only
coders make good entrepreneurs because in short, they understood what was possible.
However, whether the entrepreneurs are techies or not, they certainly need to gather
a more significant group of skills around them.

For example, there are now many online film and video platforms but there are few
entrepreneurs behind them who have understood how the rights market operates and why
that might be important to them.

It is a much-repeated phrase that Africa is a mobile market and that start-ups
therefore need to focus on this fact. However, few people – and most of the hopeful
entrepreneurs – do not necessarily have a grasp of what this means. I have over the
last 12 months made presentations at some of these incubators and the one slide that
always gets people thinking and talking is the handset pyramid.

It shows a market fragmented between smart phones, feature phones and basic phones
and the many different operating systems that make them function. Put brutally, it’s
difficult to extremely hard to make an SMS service on a basic phone turn into a
business without donor funding. The revenue split with operators is still simply too
punishing. Feature phones offer opportunities through platforms like biNu and
Every1Mobile but don’t seem to get much focus. And sadly many developers are focused
on the smart phone market where numbers using services are still relatively modest.

The incubator hubs do not always seem to tackle the strategic issues like readying
their young hopefuls for the tough life that awaits them. And this is what makes the
accelerator programmes more interesting as they seem to acknowledge that you need to
take the best and help them get better. A successful start-up culture is one in
which the majority of young hopefuls fail and maybe even move on.

The incubator hubs do not really have a business model themselves. They are largely
donor or charity funded and with anything that’s funded in this way, fashions change
and the money moves on. In developed countries, incubators are often funded by local
or regional governments but the idea of African national or local government putting
things like this on their budget seems fanciful.

Most African cities are cash tills of patronage that pay for bloated (sometimes
non-existent) workforces and do not seem to exert much magic on their surroundings.
The better informed conjure the name and successes of Governor Fashola in Lagos but
he remains one of a handful with vision and drive. In Europe, innovation hubs are
often used as part of urban regeneration which is what makes 44 Stanley Avenue and
JoziHub interesting: they contribute something to regenerating a run-down area of
Johannesburg. Why isn’t this happening elsewhere in Africa?

Having one or two incubator hubs should not be the sum of a start-up culture in a
country: it may be a start but it’s not the end. There need to be independent and
successful entrepreneurs who can act as role models and sometimes as mentors. And
there needs to be funding…Donor funding needs to be used to set up things and then
move on. If it’s a public service, African Governments need to fund it out of their
own budgets because that way, someone gets to take responsibility…I’m still not
completely convinced of the case made for impact investment but I’m willing to wait
and see what it produces…Most importantly, Africa needs start-ups that are a
commercial success that pull in more money (both local and international) on the
back of success.

If you would like to receive more e-letters of this kind, please subscribe by
following the link below:

[http://www.smartmonkeytv.com/channel/users/register]

Yours sincerely

Russell Southwood

Smart Monkey TV

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The future delivered today: Lesson learnt from Transform Africa Summit 2013 in Rwanda

Summit*iHub_Research Outreach Coordinator, James Ndiga,traveled to Kigali last week to attend the Transform Africa Summit on behalf of *iHub. The Summit was organized under the theme, “The Future Delivered Today,” as leaders, investors, and entrepreneurs from across the world devised ways for Africa to leverage broadband for the transformation of communities, governments and the private […]
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