Over the last couple of years, we have seen a steady increase in the number of ventures claiming to be businesses based on the web (e businesses). Everytime I attend yet another local techies conference (as an impostor since I’m not a techie), I have high hopes that someone will present a revolutionary, well executed business concept.
I’m not faulting all web based concepts, we all know Ushahidi as one of the best executed ideas in this planet and for a good cause. However, there are two things our local ventures lack and for as long as these aren’t present, we will continue to cry that no one funds technology businesses in Kenya till the kingdom come. Because believe me, even if we presented some of our business ideas to the Silicon Valley venture capitalists pre tech burst in the US, they wouldn’t touch them.
INNOVATION: Something our tech entrepreneurs don’t seem to have understood, quite ironically, is that the world is a global village (quite literally). Unlike the physical market place where I can travel to Nairobi, find a business concept that’s working and replicate it in my village in Meru with measured success, you can’t do the same with e business. We already have a Facebook and a Google.
What value does a Kenyan based ‘Facebook’, ‘Twitter’ or search engine add? If nothing, it is more limiting. I am not discounting businesses targeting Kenyans in Kenya, but when you study the numbers, does it even make business sense to have these businesses in the first place?
E businesses are thin margin businesses and as such capitalise on traffic. That’s where innovation comes in and you have to sell to the world. Paypal for example makes a couple of cents per transaction. How large would it be if it was based only in South Africa or United States for example? Critical mass is key.
EXECUTION: There are a couple of truly good ideas out there. We’re dying for an online house hunting agency that will save us from unscrupulous agents, I would love Bookstop to have an online store saving me time, and saving them floor space and all. Unfortunately the attempts at these have been at best pathetic.
We have websites claiming to be online house rental agencies and the houses advertised were in the market 2 years ago, we have online bookstores which are more expensive than walking into the store and buying the book, we have online clothing stores selling items imported from Turkey where experience has taught us ladies that size 36 could mean different things (no standard sizing making ordering online quite a risk).
Basically, our tech businesses need to stop playing victim on this one. Sure other businesses get more commercial funding than e businesses, but even a venture capitalist won’t look at you twice, unless you combine innovation with excellent execution.
{ 8 comments… read them below or add one }
Kenyans are so risk averse that they don’t dare think outside the box! I know of no I.T Company thats even dared to build a mobile phone APPLICATION that is practical and easy to use. Everyone thinks v photocopying grand ideas and then trying to paste them on to the local market and hope it works! Newsflash..if its not tailor made for the local market..then it wont work!
And u need to drag me to the next “techie convention”. Like you.. I’m not one but I love new gizmos and new ideas!
Amen my sister. Could not put it better if I tried. I will gag if i see the next Kenyan social network that has the EXACT SAME features as Facebook!
If i get you right people should not try something which is already being done or what is already dominant in the market. Since there is Facebook there is no need for another social network site, since there is Google there is no need for another search engine
Let start with Google the fact that it dominate the search engine Business did not deter Wolfram|Alpha from launching another search engine and they are doing very well. The same applies to Cuil and the renovation of msn to Bing.
Search Engines
* Ask.com (formerly Ask Jeeves)
* Baidu (Chinese)
* Bing (formerly MSN Search and Live Search)
* Cuil
* Duck Duck Go
* Google
* Kosmix
* Sogou (Chinese)
* Sohu (Chinese)
* Yahoo! Search
* Yandex (Russian)
* Yebol
Why can’t a Kenyan start a search Engine site for particular sector and be successful?
I believe Kenyans should come up with original ideas and innovation but that does not mean they should not do business which others are already doing or done . Let come the local scene if if we were to just say if there is this there is no need of trying it, then nobody else should ever try being mobile phone network operator beacuse we already have Safaricom, Zain and the others. Really do we want that?
The problem we have in Kenya as I had mentioned on my blog post http://www.kachwanya.com/2010/02/05/ten-conclusions-from-mobile-web-east-africa-conference/ is the “have it all attitude” and probably lack of trust. The people who currently have good cash to invest are still grabbing land, and they don’t understand the value of internet business, or the issue of computerization. The big businesses steal ideas from the entrepreneurs, so today you see something being done by Nation Media or Safaricom and you think wow, this is great while the idea is from someone you are passing on the street and did not have the cash to implement it. The truth is the guys who understand the e business in Kenya are still light weight in terms of money. And that is why there is still no funding or major investments in the IT industry in Kenya. I bet in the coming future when the Facebook generation would be controlling the things around, all this will change.
@Raymond look out on Twitter for the next one.
@M even worse, the real Facebook has had issues making business sense, how will ‘Uso Kitabu’ make money?
@Kachwanya thanks for your comment. I agree competition is good, but have you had a chance of looking at our said local search engines? It’s a copycat gone horribly wrong. If you’re going to copy a business, the best you can do is be better than the original man, otherwise you will always trail. It would make sense for me to use a local search engine if Google never generated local results, and this is a relatively web literate typical Kenyan user.
Then, surely, comparing China with Kenya? What population of China is using the internet Vs Kenyan population? A Chinese search engine would work even if it were local.. I didn’t say we shouldn’t copy, but do we have the critical mass to copy successfully?
About land grabbers, that’s another blog altogether. My post was in reference to commercial lenders. The IFCs and the venture capitalists of this world.
I just bumped into your site. Very informative. I shall become a follower. Keep it up
@Raymond: Well you are wrong look for http://wmworia.wordpress.com or Wilfred Mworia – Kenyan young,tough and heavy in the circles of creating apps.If you need to be dragged to a “techie room” just to show you what people are doing beneath the sun.
Rookie: Well,I would suggest the same for you.Am in the IT circles there are so many nice apps that execute lots that are being built in the Kenyan market. Like an app that intergreates MPESA and ZAP and somehow cross platform. Kahenya is also there.Before I forget too, there is Mbugua Njihia – Good developer with interesting apps. ,I think we have a local pool of Talent,all I know is techies are poor in marketing. and thats what needs to be improved.
@Muendo I didn’t say we’re doing nothing. What I was criticising was the business rationalle behind it, and the reason why VC firms won’t touch our tech businesses with a 10 foot pole. I respect Mworia, Erik and Mbugua. These are three out of hundreds of initiatives I see around.
I worked in a tech company that was touted as an example to watch out there, only to get in and realise while the technology behind it was awesome, there was no business case. Execution was at best pathetic.
We have the artists, but to be honest, we’re a long way to having viable businesses, and it’s not the financier’s fault.
the web is the channel, it still has to be a viable business idea remember the dot com crash of 2000? guys thought the internet was some kind of magic formula but whatever is done online has to make basic business sense. You’re right about global village. in this age of fiber optics and all we have capacity not just to download what’s out there but create stuff for people out there to download from us
{ 1 trackback }