Insights from ‘Digital Kenya’: An Entrepreneurial Revolution in the Making

Many people wonder what to make out of the entrepreneurial revolution in the tech space on the African continent. Questions such as: Are there really enough high quality start-ups that can make it to global scale? Is the local and regional market opportunity big enough for them to grow? Is the funding sufficient to produce a unicorn? Is the human capital up for this daunting task?

And the list of questions goes on and on and vividly portrays the skepticism against which convicts of entrepreneurship in Africa have to battle, both within their own markets and against those that prefer standing on the sidelines. The majority of responses to these questions can largely be grouped into two camps.

First, the optimists who see massive market opportunity seemingly everywhere and lure the pessimists and skeptics into visiting some of the major hubs and get a feel for the “African” tech vibe in order to get immersed into what is really going on. After all, how much do you really know when you judge from afar? Second, you find the conservative voices that hold the foot on the break paddle while everyone else wants to accelerate and jabs an “it depends” into any enthusiastic outburst that wants to celebrate and further fuel the tech hype on the continent.

To get a real feel for what is going on still remains a challenge. Well, don’t go any further, we have got you covered. Bitange Ndemo (Kenya’s former Permanent Secretary of the ICT Authority and now professor for entrepreneurship at the University of Nairobi) and I (Postdoctoral scholar at Stanford University) have brought together leading experts in the field that share their thoughts and analysis on one and only one tech community in Africa. Why only one you may ask? Well, we deliberately choose not to take a Pan-African approach but recognize the diversity across countries and sectors — meaning Ghana is not the same as South Africa and Nigeria not the same as Kenya — and thus make sure we get a firm grip on what is happening in Kenya’s ICT scene. What did we learn you may ask?

What follows is really just a short selection of insights that emerge from a book that covers a vast ground in 15 chapters and 14 interviews: Digital Kenya – An Entrepreneurial Revolution in the Making.

A new cultural current is gaining momentum

This may come as no surprise but it is well worth the mention. There is a lot of timely critic on whether the Africa Rising narrative materializes into substantial economic outcomes and whether it will be beneficial to a few privileged individuals rather than the many. While this critic is important to keep us on our toes, it is simply too early to tell. However, there is an important cultural undercurrent that is building momentum and we shouldn’t lose it out of sight. What is evident though is a new entrepreneurial culture that is being formed — one that is built on the foundation of “taking matters into your own hands if you want to see change.”

Recommended reading are our interviews with former iHUB manager Jimmy Gitonga (The Past, Present, and Future of ‘Digital Nyika’: How to Fix an Aircraft in Flight) and Kopo Kopo founder Ben Lyon (Creating the PayPal Mafia of East Africa). If you want to get deeper into it check out prominent investor Eric Osiakwan’s chapter (The KINGS of Africa’s Digital Economy) and Nendo founder Mark Kaigwa’s chapter on #KOT and Kenya’s social media transformation (From Cyber Café to Smartphone: Kenya’s Social Media Lens Zooms In on the Country and Out to the World).

Be prepared to take personal risks — What does that actually mean?

Part of the conventional wisdom around entrepreneurship tells you to be prepared to do things differently and break with conventions. As we know, everyone talks about taking risks and Twitter feeds are full of aspirational quotes, yet it remains largely unclear what that is actually supposed to mean. What risk are they all talking about?

Bitange Ndemo’s chapter (Inside a Policymaker’s Mind: An Entrepreneurial Approach to Policy Development and Implementation) clears that up for you. Albeit in the policy arena, Ndemo’s words carry an important message, that is, if you want to see things change then you have to be prepared to take personal risk in your doing and remain true to your beliefs. That means putting yourself and if necessary your reputation on the line and leveraging the resources you have got at hand to implement the change that you want to see.

Sounds easier then done? This is not a shallow message but he rather supports it with a whole host of examples, such as the personal liability and responsibility he took in convincing others to get Kenya connected to the global fibre grid, to get the buy in from the regulatory side in order to make Mpesa possible and his story also reveals a failure. While at it, check out our interview with Cellulant founder Ken Njoroge (How to Be a Rebel and Build a Business at the Same Time) and you will learn an important lesson — money is not the prime motivator but building and creation. Being a rebel and demonstrating persistence may well be an ingredient to do things differently and create a billion dollar Pan-African company. Time will tell!

Experiment, Improvise & Prototype

During my own research one of my informants told me this: “No one has figured tech in Africa out yet.” A young industry is still looking for the “ideal market fit” — so far there are no solutions out there. This calls for intensive learning, formulating the right problem and building a matching solution. Check out what okhi founder Timbo Drayson has to say in our interview with him (Finding the Right Problem to Solve) and be sure to give Bitpesa founder Elizabeth Rossiello’s words a close read (To Keep Disrupting, You Have toListen Closely to What the Client Wants).

Don’t just copy: Blend, Reimagine, Stay True to the Roots

It is seemingly an easy task to look outward to other markets and clone new market solutions but guess what adapting them to your market is far from straight forward. Be advised, you will run into a myriad of problems! Why not start the entrepreneurial journey differently? For a refreshing insight, check out the chapter from tunapanda founder Jay Larson and Duke University’s Michael Munger (Reimagine What You Already Know: Toward New Solutions to Longstanding Problems).

They advocate that existing market problems require entirely new solutions that blend approaches from different sectors. Read on to get the full story. Also be sure to look into Caribou Digital’s Marissa Drouillard’s work (Addressing Voids: How Digital Start-ups in Kenya Create Market Infrastructure). She brings in the perspective to think about platform ventures that seal essential market gaps and become indispensable as they do so.

Donors are a feature and not a bug

Interestingly there is a lot of contestation whether accepting donor money is a good thing in the long run for your company and what we are too make of NGOs and foreign donor in the tech space. Eleanor Marchant lays it out for you (Organizational Cultural Hybrids: Nonprofit and For-Profit Cultural Influences in the Kenyan Technology Sector) and opens up the debate by showing how the ideas and practices of donors have long made their way into business models.

We are at a point of no return it seems. Echoing her findings, anecdotes during my personal research have gone down a similar alley, meaning that donor money can provide a vital cash injection, yet you should be conscious that it can also bring you into dangerous waters — turning your venture into a NGO. The advice is: If at all grant money then use it in small doses and handle with great care.

New set of management skills direly needed

With a shift in how things are done profound new challenges arise – challenges that we shouldn’t push away but rather tackle head on. Klaus Weber and I have dedicated a chapter (The Art of Managing Worldviews in Kenya’s International Technology Sector) to the art of mastering the new managerial challenges that arise once a broader cultural shift is underway, new aspirations arise and achieving lofty goals is demanded of entrepreneurs who now have to also perform on a Pan-African and global scale. How do you stay true to the Kenyan context and scale to a global level at the same time? Can you blend the best of both worlds?

While we all agree on what technology entrepreneurs need to do in order to create the next big thing, the question that is much more unclear is how it all needs to happen. What’s important here is that there is no general rule of thumb answer here or best practice á la if it worked in Silicon Valley then it will also work in Kenya. The likelihood is high that it won’t fly. The answers as to how to be a successful entrepreneur will rather need to emerge as entrepreneurs in Kenya go through all the challenges and figure out the right skill for the task.

Product-market fit

Ultimately, finding the right product-market fit is rather a proxy for developing the right skills to succeed in unchartered territory. Let me leave you with a few examples: Think of code-switching, for example, or in other words the ability to tailor and pitch essentially the same idea to different audiences. It is easier said than done but rather requires an in-depth knowledge of your audiences and the codes/words they use to describe their world. Another one is balancing donor and VC interests in your business model.

It can be done but it is a challenging management task as both groups may pull you into different directions. Having the skill to harmonize those demands is a rare asset. Similarly how you configure and manage your team effectively, whether you deliberately opt for a very diverse or rather homogenous team on factors such as experience, competence, network, market exposure and motivation is an important choice.

The right skills to maneuver through new waters are likely to be found in a peculiar team blend. Questions such as how and who do you hire are important tasks that both Innova founder Conrad Akunga (Reflections on the Hiring Process: What Happened to Curiosity and Passion?) and Okhi founder Timbo Drayson (Finding the Right Problem to Solve) share their thoughts on. The skills that form the ideal technology entrepreneur in Kenya are still floating around and are manifested in many individuals — each one of them has figured out a piece of the puzzle. It is now about bringing that together, making it accessible and teaching it to others. Bitange Ndemo and I are out there trying to make that happen.

Order a copy of the book, or download for free.

Tim Weiss​ is a postdoctoral scholar at the Center for Work, Technology and Organization housed in the Management Science & Engineering Department at Stanford University. His research focuses on the impact of today’s global phenomena on the lives and organizations of Africans and on Africa’s unique responses to grand global challenges.