Nairobi Skyline

“This is the future of African technology, and if you blink, you’ll miss it.”  ~Erik Hersman

On the ‘Silicon Savanna’

Last month in Nairobi, Kenya, a conference called Pivot25 connected 25 promising mobile app developers from East Africa with investors and venture capitalists. Events like this one, based on the Y Combinator model, give aspiring developers a rare chance to pitch their ideas for possible seed capital.

What’s intriguing about Pivot25 is the attention that it drew from outside the region. TIME Magazine ran a piece about the conference from the standpoint of Nairobi’s contribution to global technology. CNN’s Global Public Square covered the event, too. Why so much attention?

It’s due to Nairobi’s growing reputation as a hotbed of mobile software development. The city has earned the moniker ‘Silicon Savanna’ due to high-profile, innovative mobile ventures launched there including Ushahidi, the ‘open source’ crisis-mapping platform, and M-Pesa, the world’s first mobile money service — a model for ‘access to banking’ services.

Both platforms were originally modest, homegrown solutions for local problems that were later widely adopted outside the region. The global tech community is expecting stellar performers in Nairobi’s next wave of apps and services, too.

The right stuff

On the surface, Nairobi may not look like a prime contender to be the next ICT hub. With a population of 3.5 million, it’s only the 12th largest city on the continent, but it’s one of East Africa’s most vital commercial and cultural centers.

Incubators are springing up in Lagos, Accra, Dakar and other large African cities, but Nairobi stands out due to the top-tier multinational firms using the city as a base for serving Africa’s booming mobile markets.

Nairobi is becoming known for its vibrant community of mobile developers whose ingenuity and confidence are growing over time. Their cleverly designed apps — elegant in their simplicity — are now part of Africa’s social landscape.

The city is also home to a small, vocal cadre of tech advocates who’ve trumpeted their community’s early wins, convincing audiences around the world that there’s more innovation on the way. The impact of potent advocacy is often overlooked when observers speculate about why Nairobi has the right stuff to be the epicenter of mobile technology.

An ‘ecosystem built on talent’

One of Nairobi’s more influential advocates is Erik Hersman, co-founder of Ushahidi, and founder of iHub (‘innovation-Hub’), an open-space tech incubator with over three thousand members. He contends that Nairobi’s pool of gifted developers is responsible for the region’s dominance.

“It’s an ecosystem built on talent,” he said in an interview with TNW Africa. “Nairobi is exploding with world-caliber techies, and companies such as Google, Cisco, Nokia, Seimens and Airtel (all of which built their African headquarters in Nairobi) have recognized that.”

He added, “Certain cities tend to be hubs, success breeds success, so when someone wins in a place like Nairobi, it quickly attracts more entrepreneurs and spinouts.”

A global stage

Success does indeed breed success, but the region also benefits from Hersman’s unique ability to attract capital for funding new projects. He’s not only a champion for Nairobi’s talent, he also creates workspaces for nurturing it.

In addition to his iHub initiative, described as “part open community workspace, part vector for investors and VCs, and part incubator,” Hersman is a driving force behind m:labs — Africa’s first mobile incubator launched on the heels of Pivot25 with support from the World Bank, Nokia and the Government of Finland.

Through his influential ‘White African’ blog and his roles as a TED Fellow and a PopTech Fellow, Hersman has a global stage on which to showcase his community’s engineers who bring, as he says, “ingenuity born of necessity”.

His latest contribution to building Nairobi’s image as an tech hub was his involvement in the Kenya Open Data Initiative (KODI), launched July 8, when Kenya became the first African country, and one of the first in the world, to make government data accessible to its citizens. (Here’s more on KODI.)

Hersman’s pitch to investors is compelling: Nairobi’s talented developers are creating the next wave of mobile software for the African market and beyond. Like their predecessors, the most promising new apps will affect a large number of people in a meaningful way.

This is an exciting space to watch. We’re witnessing history unfold now in Africa. As TIME Magazine’s Africa bureau chief put it: “…this is not a story merely of how technology is changing Africa. Africans are changing technology right back.”

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Image: ‘Nairobi from Uhuru Park’ Courtesy of Arthur Buliva

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Want more info on this subject?

• –Superb WIRED piece, Switching On: Africa’s Vast New Tech Opportunity (7/11).
• –Other champions of Kenya’s mobile tech community include Ory Okolloh of Google Africa and Juliana Rotich of Ushahidi
• –Hersman makes the case (2 clips): Africa in the 21st Century, and in his ‘09 TED Talk on launching Ushahidi
• –For context, Ken Banks, founder of kiwanja.net and FrontlineSMS, shares his views on mobile usage in developing markets
• –WIRED piece (July 12, 2011): Switching on: Africa’s new tech opportunity
• –TED Global – Africa (’07) series from Arusha, Tanzania — it’s amazing how far the African tech scene has evolved since then
• –A Touch Points post on Ushahidi’s role in the aftermath of the Haiti earthquake

• –Addendum: Hershman post (7/18), “What makes iHub work?”

As always, I’d appreciate your views…

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To support his argument, he cites the case of PUR, a low-cost water purification system developed by Procter & Gamble. The product provides the obvious benefit of affordable clean water where the risks of drinking contaminated water are high. But curiously, PUR* achieved low market penetration rates in test markets.

Why would consumers reject a product as salient as PUR? The author contends that Western companies simply haven’t created demand among low income consumers. “Companies must create markets—new lifestyles—among poor consumers,” he insists. His prescription is that Western businesses need to do a better job “conditioning” low-income  people to be better consumers.  Really?

He argues that Western businesses ought to show people in emerging markets how enjoyable life would be if they were using products like PUR.  Companies, he says, ought to “make the idea of paying money for the products seem natural,” and “induce consumers to fit those goods into their long-held routines.”  Get a load of our stuff!

The fact is that consumers in developing markets usually know value when they see it. For example, businesses don’t have to create demand for mobile phones bought by the millions at the Bottom of the Pyramid—the fastest growing mobile market in the world. Consumers in developing markets can see how phones improve their lives.

Low-income consumers often buy mobile phones from street vendors, and they continually invent ways to squeeze more value from the devices than designers could have imagined. Customers use the devices to handle tasks like transferring money and finding markets for their goods that were never conceived by the phone’s developers or market researchers.

Jan Chipchase, a field researcher at Nokia who studies user behavior in developing markets observes that however cleverly products and go-to-market strategies are designed, “the street” figures out novel ways to distribute and use them.

So what does it take to sell products in developing markets? Listen to and carefully observe potential users. It makes sense to educate and inform emerging market consumers, but businesses have a lot to learn from them about creating value in their markets.

A more enlightened approach to serving the needs of potential consumers in emerging markets is to bring them into both the product design, communication and distribution processes.

I don’t mean to sound flip but next time a Western company comes up with a hot new product for the Bottom of the Pyramid, they should keep it out of the hands of marketing gurus. Instead,  they ought to consult vendors on on the street and figure out a way to share the revenue with them.  If street vendors can’t sell it, no one can.

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* P&G now sells PUR in developing markets at cost and is partnering with non-profit organizations to distribute the product through humanitarian relief networks.

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What do you think? As always, I’d love to hear your views…

Want more on this topic?

Check out INSEAD’s piece, Social Innovation — Creating Products for Those at the Bottom of the Pyramid. For a broader perspective, read C. K. Prahalad’s classic, The Fortune at the Bottom of the Pyramid.

My related posts include Mobile Growth in Emerging Markets and various posts on emerging markets.

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