Category Archives: iHub

Startup Battlefield Africa by Techcrunch and Facebook

The Techcrunch Startup Battlefield Africa, supported by Facebook, was won by Lori, a logistics platform being developed to simplify the movement of cargo in Kenya.

At the TechCrunch event in Nairobi, 15 startup companies pitched and demonstrated their concepts in between chat sessions on the unique business climate of Africa that featured other seasoned entrepreneurs, advisors, and funders, with moderation by Facebook and TechCrunch staff.

The competing companies were drawn from sectors like finance (WeCashUpAbacus), data collection (Form+Delivery Science), logistics (Lori Systems), sales (Sellio,  SynCommerce), entertainment (Big5 Games, Tango TV, Gazkar from Lomay), health – ConnectMed,  education (M-Shule, Dot Learn), recruitment – Talent2Africa and agri-business – AgroCenta.

Lori won the day and walked away with $25,000 and an all-expense paid trip for two to compete in  TechCrunch’s flagship event: Disrupt SF 2018

Winners will join TechCrunch’s Startup Battlefield Alumni Network. Alumni have collectively raised nearly $7 billion and produced nearly 100 exits and IPOs to date.

Some excerpts from the day:

  • Brands are creating collections and Michele, Beyonce, Rihanna are wearing African brands – that’s opportunity @KISUAonline #TCBattlefield
  • Most lucrative buyers for @agrocenta are big companies such as breweries, animal feed, soya oil #TCBattlefield
  • Logistics is a $500B market for innovations that eliminate middle-men and make food supply and demand efficient – @agrocenta #TCBattlefield
  • 80% of farmers don’t have access to direct markets and logistic inefficiencies lead for 25% of food being wasted – @agrocenta #TCBattlefield
  • Black Africans in tech are not getting a lot of the money coming into tech – @africatechie #TCBattlefield
  • I’m in Silicon Valley; I may be on a board, but I’m not at the birthday party or talks for the next round – @africatechie #TCBattlefield
  • @big5games builds localized data-optimized easy-to-play games on sports, farming, stocks with partners like Kwese & telcos – #TCBattlefield
  • If you arrange for 20 cargo trucks between Nakuru to Eldoret, 15 will commit, 5 agree on price, but 2 will show up – Lori #TCBattlefield
  • A typical lorry takes 3 days to load its cargo, to make a 12-hour journey, then another 3 days to unload – Lori #TCBattlefield
  • Products cost more in Kenya as the logistics chain is broken; trucks are empty or idle 93% of the time – Lori #TCBattlefield
  • Today @AbacusKe launches Kenya’s first automated investment service – using algorithms to personalize advice – @TheMacharia #TCBattlefield
  • @AbacusKe aims to be Africa’s e-trade; local & foreign investors can make stock debt property & unlisted buys – @TheMacharia #TCBattlefield
  • @wecashup does 1M transactions per month of ~10 euros and partners with banks so they don’t need a license for every country #TCBattlefield
  • @wecashup 2.0 integrates payments whether cash, mobile money, cards, crypto-currencies in 42 countries, and own 6 patents #TCBattlefield
  • You can build a $50M business serving a Lagos neighbourhood; but there’s a daily swing between risk & uncertianity – @EghosaO #TCBattlefield
  • Local investors say – don’t tell me about 10-yr plans when I can bring a container from China and make more money – @EghosaO #TCBattlefield
  • Africa is about iceberg micro-economies; see below the surface – biggest opportunity is organising offline markets – @EghosaO #TCBattlefield
  • Saying Nigeria has 180m people or Africa has 1.2 billion brings wow – but you should think at city levels – @EghosaO #TCBattlefield
  • Our challenges include raisng capital and dealing with regulators & muscled players (non-market forces) – @oviosu #TCBattlefield
  • Nigeria is the biggest market in Africa. River State is bigger than most African countries – @oviosu #TCBattlefield

Co-Founder Agreements for StartUps

Last week there was a talk at the iHub about founder stock agreements i.e. the agreements that people enter with each other as they set up companies. John Freeman, an attorney who has advised on tech startups in the US & Asia, as a venture capitalist and now as an angel investor, said that most founders allocate their shares 50/50 when starting our  or in other equitable ratios.  Barclays Kenya agreement was a Parliament Act

But he said that this was a wrong allocation and that company founders should instead take some time to run a “founders pie calculation” (designed by Frank Demmler) to assess the founders commitment and responsibilities at the companies to determine exactly how much each founder is entitled to get.

He also said’ it’s important not to have too many cofounders (never more than 5) as when they get new investment, their stakes may be diluted to become negligible. As more key people are, added, they should remain employees, but who can earn bonuses and options that vest over several years.

Founders also need to come up with term sheets, employment agreements (e.g. which note that the company owns all intellectual property developed) and shareholders agreements that have clauses such as right of first refusal. (He said if a company does not have this clause,  it is not worth investing). The clause determines who can invest in the company even if a cofounder leaves, dies or gets divorced etc. Founders who leave companies should also sign termination notices.

He said that there is an increasing trend or more convertible debt in lieu of equity investments. The documentation for theses is much faster (he does this in two weeks) and cheaper compared to equity investment, but that many  Kenyan lawyers do not understand the convertible debt  agreements. He mentioned that investor templates could be found at sites such as founders workbench,  startup percolator, cooleygo, ycombinator and orrick.

The iHub event was in partnership with m:lab East Africa and uWakili.

Joi Ito in Nairobi

This week, Joi Ito was in Nairobi as part of a team from the MIT Media Lab where he is a Director. While here, he gave a chat on his time as an academic and an entrepreneur in the technology sector.

(Wikipedia excerpt about him:  Ito is a venture capitalist and angel investor and was an early stage investor in Kickstarter, Twitter, Six Apart, Technorati, Flickr, SocialText, Dopplr, Last.FM, Rupture, Kongregate, Fotopedia, Diffbot, and other Internet companies).

Some points from his talk

There’s a bit of luck in life: He is here because he survived,and because he is lucky. What’s worked for him may not work for anyone else, and while some successful people think they have a magic touch, it’s a bit of luck they have had in their lives.

Advice for young people: 1. Question authority 2. Think for yourself – don’t look for an answer, look for your own provocation, as there’s no single answer for anything

His Learning Process: Some people learn in universities, or apprenticeships, but he learns best when in conversation with other people, not when he is reading. E.g. he apprenticed in a pet store, and on a movie production set. His well-educated sister realized that her uneducated brother (Joi) was doing o.k. – so she studied him and found that the social context is an important reason for learning – and she published these as Hanging Out, Messing Around and Geeking Out

He said the reason women don’t code, is because there is no fun for them, while guys teach other code in a  context they enjoy, but which  girls’ don’t find to be fun and that has to change for. Earlier he commended the AkiraChix for what they’ve done in inspiring and enabling young girls to learn to code, and said they were far ahead of some US institutions that were still made dominated and had not made strides in inspiring girls.

His Mission in Life: This he found was to build community whether at Mozilla while running community commons, or working in a nightclub as a DJ (something he described as harnessing the flow, of the room, all without leading). 

He found that street gangs in Chicago had more compassion and willingness to help people in their community than kids who were competing and studying hard in his physics class at. university – and that he learned more about community and human values on the street than in a class.

Choosing the Right Partners: There’s an alchemy involved when creating a community – and he’s always failed when he picked a person for their skill over their personality. He said investors have ruined more companies than founders – so be very careful who you invest with…he also noted that you may inherit some members of a team /organization like founders who you can’t get rid of.

Agility over Planning  Trends are o.k., but trying to predict when something will happen is foolish, as there is so much complexity. Just be aware of what is happening (use a compass, not a road map), understand what you have, and what’s going on around you and figure out your next move – and if the code/plan is not working, dump it .. E.g. Youtube has gone through many iterations from 2005 when it was a dating site with video, then Flickr with video .. but they always want to be the biggest video site..

Joi Ito once sought $600,000 from a company to set up an ISP in Japan. And that company then spent $3 million on a study to tell them that they would not invest in an ISP (the cost of mapping is expensive, and don’t wait for all the info before making a decision).

Take Risk Early  He was $200,000 in debt when he was 18, as his mum was sick, but he was working in a  tough job at a Japanese company, and was eventually able to pay it back. He’s since taken lot’s of risks, and created a lot of companies that have failed and it’s better to do this early in your career. He was into video games as a kid, learned to code, run bulletin board systems and computer networking (which never made money). But when TCP/IP came out he realized that was the future and he went on to build an ISP, a search engine, then an app company…

Also, the cost of trying things is going down (Facebook and Yahoo grew out of dorm rooms, not out of big capitalized companies ) – and likewise the cost of failure is now cheaper so you can take more risks. What’s important is not to get rid of risk, but to take it well.

World Opportunity:  Joi Ito said he’s a bit negative about Japan which is becoming less relevant with an aging population, worse education system, and conservative politics – but then he’s on the board of Sony because he wants to save the company that’s going through a tough time

Kenya/Africa have young populations and growing consumers, and while there are issues (like incumbent Telco’s) there are also opportunities.  He compared that that to Silicon Valley which is saturated with 100 companies chasing an idea, each with $10m funding. He said it’s possible to connect the networks and thanks to easier communications companies here can find partners in China to enable them to overcome some obstacles.

Bio-Engineering the Future: One big future trend will be bio-engineering. There are now gene hacks being done by school kids, and the cost of hacking genes going down six times faster than Moore’s law. While Monsanto used to spend billions on genetic engineering, the future is not going to be about such big companies..the solution to malaria will not be from a rich guy at Harvard, but it may be from kids hacking solutions in Africa.

Award Season Part Trois

Following on part II

The Anzisha Prize for young Africans (15-20 yrs) who have solved a problem /challenges in their community (via @kenyanpundit)

The Android App competition. in the X.com dev. challenge participants can win prizes of up to $25,000. D/L is 14 May.

The 2nd eLearning Africa Photo Competition runs through April 21.

Facebook’s first hire in Africa – will be a growth manager in Nigeria (via @bellanaija)

The 2011 Freedom to Create Prize main prize and imprisoned artist prize is open to 15 July (via @Kwani)

Various jobs at Google East Africa .

iHub Mentorship program. D/L is 6 April.

Partial scholarships available to attend the 4th Global Forum on Innovation & Entrepreneurship. D/L is April 1

Kenya Government Science & Technology scholarships (29) to study in China, for undergraduates and postgraduates in engineering, medicine, computer science, and pharmacy. D/L April 7.

Connected Kenya Vision 2030 ICT awards from the Kenya ICT Board.

Maisha Filmlab with free screenwriting directing camera sound and production workshops in East Africa. (via @mkaigwa)

Mass Challenge a $1 million start up competition (via @egm_photo)

Panos Eastern Africa media fellowships. D/ L April 6.

Strathmore University’s Mobile Academy . D/L 31 March

Winners of the Nokia Idea storm will have their ideas developed into phone apps. D/L is April 14.

TEDGlobal 2011 takes place in Edinburgh, Scotland in July 2011. It moves from traditional Oxford this and 75 places available, and D/L is April 4.

Africa Youth Trust Young Women Leaders funded by the UN Women Governance and Gender Programme. D/L April 15.

Modern careers: Someone got hired via twitter

Sports: The Watamu Triathlon takes place April 9 & 10 at the Kenya coast. D/L April 4.


Photo is from a blog tracking a Cairo to Cape 12,000 kilometre bicycle expedition (equivalent to 4 Tour de Frances in 4 months). It’s now complete after a tough stint in Kenya.

From Huawei to Makmende

Last Tuesday was a roundabout day that began with the Equity Bank half year results announcement at and ended with Safaricom launch of a U8220 Android phone made by Huawei.

In between I shook hands with James Mwangi, Churchill dodged my paparazzi snap attempt, a friend of mine missed out on a free giveaway of the Huawei phone, and I missed out on buying some shares in Equity Bank as my stockbroker (temporarily) misplaced my funds.

At the Huawei launch, I had interesting chats with one pal on Kenol and another who found out an interesting tale about mobile spectrums – basically Kenyans should ignore mobile phone company promises and forget about 4G as its’ reserved for the Kenya military until further notice.

Huawei and Safaricom were jointly launching an android phone to the Kenyan market and since the Safaricom COO was late in traffic as per his boss, Michael Joseph the CEO stepped up and launched the phone on his behalf. The CEO seemed underwhelmed by the occasion, maybe because his retirement was about to be officially announced or maybe because it was because the Smartphone being unveiled would cost about Kshs 30,000 and was nowhere near the $100 (~Kshs 8,000) price for a smart phone which he has commented as being a key target for future data growth.

This ambivalence perhaps cascaded down because when Safaricom ran adverts for the new phone in the next day’s paper , they were advertising a VF845 costing Kshs 16,500 ($206) and not the U8220, which had just been launched. The ‘correct’ ad for the U8220 then ran the following day pricing the phone at 27,200 (~$340)

Two days later, Bank of Africa formally opened their Ngong Road branch at Bishop Magua Center. This is their second branch opening this month after Nakuru and they have set out to go after the not for profit customers. They have launched a Goodwill Current Account with goodies for NGO’s including waiver of monthly ledger fees, cheque book costs, (Kshs) withdrawal/deposits, internal transfers, incoming wires, banker’s cheques, interim statements and a minimum operating balance.

And finally on Friday, in the same building, the iHUb hosted a launch by Kuweni Serious (Get Serious) of a of a series of clips aimed at getting young Kenyans to participate in the constitutional referendum and in public life and starred Makmende.
Here’s one clip