Posts Tagged ‘africa’

Get immersed in African tech opportunities

by Dirk on April 8th, 2011 - Comments (0)

If you enjoyed our recent series on tech in Africa you might be interested in actually checking the situation out, on the ground, with the foremost tech experts on the continent.

Muchiri and Niti have put together a fantastic Africa Innovation Tour. Coupled with the Pivot25 Developer Conference and Startup Competition, this unique opportunity will provide meetings and workshops with experienced investors and venture capitalists deeply exploring topics like:

* Risk and reward in Africa
* Insight on local markets and opportunities
* Networking connections with important technologists, investors and entrepreneurs

This all expenses paid (save airfare) experience is an ideal way to understand or take the first big step toward investing in Africa. Running from June 11-17, 2011 and based out of the Crown Plaza Hotel in Nairobi, Kenya, this trip should provide a nice intersection of culture, knowledge and comfort.

Check it out for yourself…

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Investing in Africa: challenges and constraints

by Dirk on March 30th, 2011 - Comments (0)

This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

Imagine counting kilobytes while surfing the web. Or keeping track of how much data capacity you have left for essential tasks like answering emails. Or avoiding bandwidth-hogging websites, thinking twice about uploading photographs to Flickr or hesitating to ‘Attach’ that PDF to your email. These acts of caution are instinctive behaviours for your average African mobile broadband customer. And that’s just for browsing online: this frugal mindset is even more prevalent when it comes to making phone calls or sending a text message. Checking airtime balances obsessively or using missed calls as a means of contextual communication are documented phenomena across Sub Saharan Africa, where talk time and texts are purchased in advance. Data packages are sold by the amount transferred – say US$5 for 1GB – rather than for a fixed period of time. Thus the user’s goal devolves to making sure access lasts as long as possible. Companies are already taking note of this browsing behaviour and aversion to high bandwidth sites and applications – Facebook’s zero version addresses exactly this problem while local websites offer lite versions designed specifically for mobile phone accessibility.

This ‘prepaid mindset’ or economy is one that extends far beyond the phone and its services in Africa. Rural South Africans purchase electricity in advance while Malawians buy access to satellite TV channels. There are a variety of enabling behaviours to extend the span of the facility prepurchased for as long as possible before the next top up is required. It is a business model that fits the need of a market where the majority of customers derive their income in cash, from a variety of sources, on an irregular schedule. Regular paychecks are typically – both literally and figuratively – a foreign concept. At least 90% of all mobile phone users across the continent are on some form of prepaid airtime and data plans. This is a significant environmental constraint that will influence any design of business models and payment plans.

These conditions have led to a variety of innovative programs launched as solutions to everyday needs – from the failed South African attempt to launch Airtime Airlines, where one could buy tickets with airtime to prepaid healthcare vouchers that can be purchased when cash is available and then used on demand. The very environment that makes prepaid so popular are the very ones that have led to the success of mobile-based money systems like Safaricom’s mPesa in Kenya. Faced with risky options such as sending money home to the village with a friendly bus driver or waiting till a friend travels in that direction, or inconvenient and expensive ones like bank transfers – which may or may not be accessible in the region – this service filled a much needed niche in the market.

With the shift towards local content creation and services as the impetus for shaping Africa’s digital revolution, there is a concurrent increase in attention being paid to the need for venture capital and seed funding for startups in the region. For example, SAP founder Hasso Plattner has established a dedicated Africa fund focused on a region in Cape Town where numerous other local funds are based. Local governments as well as private money seeking to kickstart entrepreneurship are creating various funds and incubation facilities as well, with Nairobi’s fourth one due to open soon. Partnerships with developers, joint ventures and establishing a local office are ways that businesses are participating in future growth. There are caveats to this however: assessing the viability business models and, therefore, risk will require appropriate evaluation criteria. The prepaid mass majority consumer market’s purchasing patterns are too different to simply use the same models as that for subscribers who receive a bill at the end of the month.

Other differences that influence the way of doing business include the preference for relying on trusted referrals and extensive personal networks for business relationships and introductions and – thus – decisions made on investments. Face time spent in social relations is as important to collaboration as detailed plans or P&L statements. Recently established companies like Naspers-backed Dealfish and Mocality have ensured they are able to tap into this domain knowledge to facilitate business by hiring experienced entrepreneurs to lead their regional teams.

Since there is no legacy of an established network and infrastructure for venture development, incubation or a startup culture, just a few industry associations or institutional bodies provide gateways to these markets. How then does one begin to tap into the creativity and ingenuity driving mobile innovation in Africa? It is this challenge that the Afrilabs network hopes to address with their regional network of incubators and open developer community spaces; recently they announced an ambitious conference and competition called Pivot25 to showcase selected mobile startups. Google has gone one step further with the establishment of their first incubator and seed financing facility called Umbono. Established in Cape Town, their objective is to support the growth of the entire internet ecosystem as part of their Africa strategy.

To successfully enter the African consumer market on a tech platform with content and services means there is a need to reconsider three aspects:

1. Business models, which benefit from cash received upfront rather than implementing a costlier billing process and collection cycle

2. Customers, who may not have the purchasing power for impulsive downloads (sharing and exchange are far more common)

3. Services and applications, to leverage the differences in the environment while providing value to both the end user and the company.

Solving the puzzle of African opportunity is eminently achievable, it just requires thinking and acting in ways that are likely new and perhaps uncomfortable. The rewards, however, are well worth the effort.

Niti Bhan and Muchiri Nyaggah collaborate to offer real world expertise and a holistic understanding of the emerging markets of Africa. Semacraft Consulting Group focuses on understanding the mindset and customer behaviour, market segmentation and archetypes that drive effective product and service concept design as well as the supporting business and transaction models.

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Software in Africa: more, better, different

by Dirk on March 25th, 2011
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This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

It may come as a surprise that great software has been coming out of Africa for some time. By 2007, South Africa was already on Gartner’s global top 30 software development outsourcing destinations list, while as far back as 2002 […]

Mobile in Africa: from SMS to Android

by Dirk on March 16th, 2011
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This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

It wasn’t so long ago that if you wanted to post a letter from Ghana, a former British colony, to any of the countries that border us — Cote d’Ivoire, Togo or Burkina Faso, all former French colonies — it […]

Challenges present opportunities: innovation in Africa

by Dirk on March 8th, 2011
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This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

Early last week, rolling blackouts across most of Nairobi interrupted daily life for the better part of two days. Intrepid Data Systems, a local systems integrator who had just moved into brand new office space, found out the hard way […]

From OLPC to VC: Africa leapfrogs the digital divide

by Dirk on March 1st, 2011
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This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

I reach out
Gather the dust in my hands
Let it sift through my fingers slowly
It is barely moist
Barely there
Yet, yes, it is there

- A Quiet Storm is Brewing (Barely […]

Africa: The Next Frontier

by Dirk on February 22nd, 2011
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This series on technology in Africa is written by Involution friends and emerging markets experts Niti Bhan and Muchiri Nyaggah.

2011 is the Year of Africa

The Economist kicked off 2011 with an in-depth look at the latest reports from The World Bank and the International Monetary Fund (IMF) and concluded this is to be the year of Africa. […]