Wednesday, April 28, 2010

East African Strides in Innovation & Venture Capital

This blog roll is to review some recent strides in innovation on the East side of the continent. Most of the activities being centered around Kenya and Kenyans. My Tanzanian, Rwandan, Ugandan and Burundi brethren need to pull their weight (Okay, I kid)


iHub – Nairobi’s Innovation Hub for the technology community – is here! It’s an open space (actually physical..and of course virtual too) for the technologists, investors, tech companies and hackers in the area. This space is a tech community facility with a focus on young entrepreneurs, web and mobile phone programmers and designers. It is part open community workspace (co-working), part investor and VC hub and part incubator.

The iHub will have a redundant 10Mbs connection, hardwired and WiFi, and it’s freely available to any tech person in Nairobi to use once they become members. Membership is free, our only requirement is that you are indeed involved in the tech space as a programmer, web designer or mobile application developer.

The new iHub’s location is going to be on the 4th floor of the new Bishop Magua Centre on Ngong Road (directly opposite the Uchumi Hyper). It’s said to be an amazing location, with quick access to public transportation, food and the rest of Nairobi. It launched in March 2010.

This is clearly designed to be a network support infrastructure..more ups to its facilitators.  This is a smart way of applying grants/aids. 


According to their website,

Ushahidi, which means "testimony" in Swahili, is a website that was initially developed to map reports of violence in Kenya after the post-election fallout at the beginning of 2008. Ushahidi's roots are in the collaboration of Kenyan citizen journalists during a time of crisis. The website was used to map incidents of violence and peace efforts throughout the country based on reports submitted via the web and mobile phone. This initial deployment of Ushahidi had 45,000 users in Kenya, and was the catalyst for us realizing there was a need for a platform based on it, which could be use by others around the world.
Since then we have grown from an ad hoc group of volunteers to a focused organization. The team is comprised of individuals with a wide span of experience ranging from human rights work to software development. We have also built a strong team of volunteer developers in primarily in Africa, but also Europe and the U.S.
Ushahidi has had an excellent press...especially on CNN. It is its application in a wide range of disasters in Haiti, Chile and Kenya that has brought it fame and Press. Am still not clear on what the sustainability of the project is beyond grant in aids. I mean commercially. 

Fanisi Ventures 

Fanisi Venture Capital Fund is a venture capital fund established in Luxembourg to work with competitive and sustainable East African businesses, whose ambitions are to grow and run their operations to global best practice standards. 
Ayisi Leads Fanisi

Founded in 2009 by the Norwegian Investment Fund for Developing Countries (Norfund) and Amana Capital Limited, the Fund focuses on a segment of the market that has to date been outside the ambit of most venture funds in the East African market. Fanisi makes equity investments of $0.5 million - $3 million per transaction in high growth businesses, including start ups and early stage companies, and is committed to working with East African entrepreneurs to build world class businesses with significant development impact on the economies in the region. 

The fund is rumored to have raised up to $100m from global investors including IFC ($7.5m) and plenty of others. The fund is led by Ayisi Makatiani  


Clearly, the new innovation paradigm drives the concepts emerging in East Africa..see diagram only worry is that disorganized chaos will not become an organized know what I mean? Microsoft Style. 

Monday, April 19, 2010

IE- Innovative Entrepreneurship as a Reverse Brain Drain Tool

Every year, millions of professionals abandon Africa in search of opportunities overseas. Today, it is estimated that while about 129,000 professionals left Africa between 1960 and 1989, about 20 000 now desert the continent every year since 1990. “Brain drain in Africa has financial, institutional, and societal costs”. African countries get little return from their investment in higher education, since too many graduates leave or fail to return home at the end of their studies.

This continuous outflow of skilled labor contributes to a widening gap in science and technology between Africa and other continents. Africa’s share of global scientific output has fallen from 0.5 in the mid-1980s to 0.3% in the mid-1990s. The more alarming fact is this; “there are more working African scientists and engineers in the USA than in the entire continent”. The flight of professionals from Africa endangers the economic and political systems in several African countries. As its middle class crumbles and its contributions to the tax system, employment, and civil society disappear, Africa risks becoming home to even greater mass poverty

The Conventional Solution

Solutions to the chronic brain drain problem in Africa fall into two categories: the conventional solutions and the non-traditional solution to brain drain.

The conventional solution imagines governments, policy makers and developmental institutions as key drivers of Africa’s destiny. In this model key steps that has been prescribed to stench the drain are building network pools between overseas based and homeland based professionals, ‘native expatriate’ relocation programs, creating programs to attract native expatriates home and make them stay, instituting short gap programs and visits that allow native expatriates contribute to their home economies.

The conventional model has its critical flaws. Indeed, since the execution of these programs often advocated by Breton Wood lenders and developmental partners, these programs have met with limited success. No data exists on how many Africans have returned home based on the implementation strategies developed under the conventional model. What we know from anecdotal evidence is that very few Africans have decided to stay or return since these programs began.

An Introduction to an Entrepreneurial Solution

The entrepreneurial solution (i.e. the non-traditional resolution model) gets to the bottom of the catalyst for brain drain in the first place. Most professionals move abroad for two primary reasons: In search of opportunities (and the professional fulfillment and appreciation that comes with it) and to relieve the economic pressures of practicing in a third world economy with low spending power and net income.

o       Innovative Entrepreneurship
§         What is Innovation? New vs. Old (Selling Phone Cards and Riding Okada  is not Innovation)
§         What is Entrepreneurship? Marketable vs. Dud. It must have a market. A number of great ideas are simply not scalable
§         Formula to IE: Ideas (i) * Energy (e) + Investment (I) = IE
·        Lesson: Vary i & e to get most boost to IE
§         Barriers to Innovation:
·        Capital Costs’ Tower of Babel (VC Fix)
·        Group Think
·        Risk Aversion
·        Comfort Zone
·        Naysayers
§         Barriers to Entrepreneurship (All VC Fixable)
·        Muddled Thought Process
·        Unrealistic Expectations & 
Unorganized market and process 

Next: Innovative Entrepreneurship is a Powerful Concept. High Impact IE is even a more powerful concept.

High Impact ? Metrics is Jobs created per venture. to read up on the concept

Friday, April 02, 2010

Carlos Slim...can Dangote make Africa proud!

Carlos slim...the 1st billionaire from a developing country to top the chart of "the big havers". To many, it seemed like an "Obama" dream...a long preached dream that unbelievably materialised. Of course Carlos Slim Hule (#1), is not the only one from a developing world that made the list. There's Aliko Dangote (#463) from my motherland...a guy i admire his "balls", don't get me wrong I'm not into men! lol. A guy who dominantly emerged in the Nigerian economy but took the economy by suprise. He started out with a countable product line but it now seems he won't stop at a thing to take over the about 20 Billion dollar economy.

I have a feeling he can conquer the Forbes List, but only if he sits up and stop spreading his resources over too many sectors in the Nigerian economy, not in this fast changing world. I've always believed he'll be the first Nigerian launch a global brand but I don't share this view anymore because of his recently acquired desire to go after already established and highly competitive sectors like the food sector (noodles). Going into this multibillion naira sector is not the problem but he's mode of entry; setting up a competition instead of mopping up competitions. His mode of entry should have been buying up the market movers in the sector not settling for Consumers' empathy

I really hope someday, he'll wake up to find out that focusing and expanding he's current cashcows into other lucratuve frontiers in Africa and beyond is the way forward. Even Sir Richard Brandson didn't just diversify the Virgin Group with UK and the US, most Virgin Brands are global. Aliko Dangote can get there only if there's focus and expansion within and outside Nigeria. A word is enough for the wise!