The seven use cases prioritized in Kenya’s Digital Agriculture Strategy

A small scale farmer’s field with Maize and darkening clouds in Lower Eastern Kenya / credits: John Kieti

A report titled Digitization and Coordination of Kenya’s Agricultural Sector Data was completed in July 2019. It is a guide for implementing the data and innovation flagship number 8 of the country’s Agricultural Sector Transformation and Growth Strategy (ASTGS). I got my hands on a copy which was recently publicly available on the Kilimo Open Data portal (download full report (7.9mb pdf)). In this article, I refer to the report as a digital agriculture strategy for Kenya’s Ministry of Agriculture, Livestock, Fisheries and Irrigation (MoALFI).  It is the closest I see to Kenya’s national strategy for harnessing the transformative power of digitalizing agriculture. The report, authored by global consulting giant McKinsey and funded by AGRA on behalf of MoALFI prioritizes seven (7) use cases to be implemented. It is a four year plan covering the fiscal year 2019/20 to 2022/23. I find no in-depth coverage of the seven prioritized use cases, so I feel it’s “better late than never” to write about them, especially considering typical delays in Government strategy implementation. In this post I provide my nuanced summary of what I see as the rationale, and design of the use cases. This is more so as the use cases (at least the second one) typify instances of what my earlier published research conceptualised as an aggregator platform for digital services in agriculture.

Use case 1: Improving farmer inputs subsidization

This use case is designed to improve input subsidization programs supported by the Government and other funders. The problems to be solved under this use case are that government subsidised inputs are not necessarily aligned to soil health management principles, and the unintended creation of a dual-pricing system aggravated through diversion of subsidized inputs by cartels. Other problems to be solved across the stages of the existing subsidy system include rent-seeking behavior hurting farmers, and fertilizer delivery being delayed. The key problem solving elements of this use case are, (a) A digital farmer registry managed by MoALF, (b) eVouchers sent by the national treasury directly to farmers, and (c) Payments to registered agro-dealers being made in a timely fashion while securing traceability of inputs to fight counterfeiting. The spending decision on the eVoucher is to be made by the farmer and is to be guided by the farmer’s uptake of registered agronomic advisors. Funding for the e-incentives is expected to come from a “basket fund”, pooling GoK and development partner finances, and with checks and balances for any release of funds. This use case aims to impact 1.4 million farming households and 2,300 agro-dealers by 2023. Its implementation is estimated to cost KES 1.2 Billion (Approximately USD 11 Million) by 2023. The digital platform implementing this use case is to be hosted by the Kenya Agricultural & Livestock Research Organization (KALRO). The prospects of this use case can be enhanced by harmonizing efforts with concurrent input subsidization programs such as those at the 47 counties and by national programs such as KCEP-CRAL

Use case 2: Improving farming practices through customised e-extension

This use case is designed to improve practices among farmers to enhance their productivity through enhanced agronomic advisory services. This is more so considering a grower-to-extension-officer ratio as poor as 1:5,000 whereas the FAO recommended ratio is 1:600. Data analytics on weather, pest and disease trends, production yields and pricing are envisaged to help amplify improvements in farming practices. The use case envisages farmers accessing expanded resources on farming practices through extension service providers vetted by KALRO. These extension service providers are in turn expected to tap into a searchable portal of digital agriculture solutions to support their consultations with farmers. The extension service providers may include the traditional extension officers, village-based advisors, private sector field officers, model farmers and members of the 4-H foundation. Under this use case, the consent of growers is required for a digital agriculture service to incorporate a grower to its userbase through the government-run digital platform. Growers and other users of the digital platform can be expected to rate and review the constituent digital services. This can boost platform-wide efficiency according to the research on sources of value creation in such digital platforms. Under this use case, the platform reserves the right to remove digital agriculture services whose ratings remain low in what could contribute to loyalty-centredness as a source of value creation. The extension service providers are also to be paid an incentive to log details of their consultations with farmers in the digital platform. This is so as to help generate rich new insights for KALRO and MoALFI. Such details logged may include geolocation, type of digital service used and type of problem solved. This use case targets the registration of 2,300 extension service providers by 2023. It also targets 500,000 farmers per year accessing services to improve their farming practices. The estimated annual cost of this use case is KES 50 million (USD 460 million).

Use case 3: A food balance sheet monitoring national emergency reserves

This use case aims to maintain a reliably robust Food Balance Sheet (FBS) to help MoALFI and the Strategic Food Reserve Trust Fund (SFRTF). This is so as to reduce food shortages during emergencies. The use case is about digital inventory monitoring of national food reserves with accurate and real time data. It includes the use of satellite imagery to gather production data and to predict future stock needs. It also includes gathering intelligence from customs declarations and other trade records as proxy signals for fraudulent or anomalous market trends. Other features of this use case include gathering intelligence from consumption data and projecting future consumption patterns. With a robus FBS, the government agencies will be expected to make informed decisions that will also reduce the cost of procuring stocks under duress. This use case targets reducing volatility in stocks purchased for the SFRTF by 50%. It also targets boosted food resistance among close to 4 million high risk households during emergencies. The annual cost of this use case is estimated at KES 200 million (USD 1.84 million) by year three of the plan.

Use case 4: Early Warning System (EWS) for food price inflation 

This use case seeks to facilitate dynamic trade and price stability decisions using an Early Warning System (EWS) for food price inflation. The problems solved through this use case include the unreliably varying levels of accuracy and frequency of data collection on production which is manually done by enumerators and with limited validation. This use case integrates data with early warning elements to indicate likely changes in the prices of food commodities. Data on production, soil quality, pest and disease trends is expected to have early warning components. So is data on commodity trade from sources such as the Regional Agriculture Trade Intelligence Network (RATIN). The resulting early warning system is expected to be a single-source of information to forecast food price inflation. With such reliable information, MoALFI, the SFRTF and Cabinet can be expected to make timely, cost effective and targeted interventions with minimal distortion to market mechanisms. This use case targets to reduce volatility in food prices by 50% to match regional averages by 2023. The estimated annual cost of maintaining the system for this use case is KES 8 million by year 3 of the plan. I’d argue for additional consideration in this use case to incorporate market data from proven private sector driven price stabilization platforms such as Twiga Foods in the fruits and fresh vegetables space. This is especially with the demonstrated potential to use big data to power inclusive food markets. 

Use case 5: Optimal agricultural value chain selection 

This use case envisages selection and prioritization of focus value chains (crops, livestock, fishing etc) based on land use optimization models. The existing processes for selecting focus value chains by national and county level organs are faulted for having contradictory objectives and not being adequately evidence driven. Data to be fed into the optimization models may include aspects such as soil health and economic data including export markets. The land optimization models  may be tuned with parameters such as environment protection and yield optimization. Integrating the large datasets onto a single platform facilitating modeling under this use case anticipates support from enabling policies for data sharing, security and privacy potentially addressed under use case 7. This use case on value chain selection targets doubling the yields among small-scale farmers by 2023. It also targets boosting household food resilience for 1.3 million farming, pastoralist, and fishing households during drought in arid and semi-arid regions of Kenya. The use case estimates an annual cost of KES 120 million (USD 1.1 million) by year three of the plan’s implementation. It is notable that the implementation of this use case is envisaged to be county-based, allowing more local-level prioritizations that are more likely to resonate with growers on the ground. Grower-level solutions for value chain selection such as Waterwatch, CropIn are also acknowledged in  the plan and are considered complementary to the national and county level prioritizations. This begs the question of whether value chain selection should not be considered a grower-level decision made with the support of agronomic advisory under use case #2.

Growers often prioritise for themselves multiple value chains / photo credits: John Kieti

Use Case 6: M&E dashboard for data collection, verification and visualization

This use case is expected to streamline the data collection, verification and visualization of the outcomes targeted in use cases 1-5 (above). It builds on the observation that there are more than 10 visualization efforts capturing Kenya’s agricultural sector data from 200+ data sets. Some of these efforts are observed to be inactive or outdated, ostensibly due to their scope-related cost constraints. Examples of such visualization efforts include the upcoming KCSAP big data platform funded by the World Bank, the National Crop bulleting, the AfDB’s Africa Information highway, and the defunct Kenya National Bureau of Statistics visualization portal. For simplicity, the focus of the dashboard in this use case is limited to approximately 10 KPIs considered most relevant to the senior leadership at MoALFI. Upon success with the simplified, focused dashboard, the cascading of the same is envisaged within MoALFI and among the 47 counties. More granular project tracking tools are then expected to emerge, automating the build-up of insights for the macro-level dashboard. The estimated annual cost of this module is KES 20 million (USD 184,000)

Use case 7: Standards and protocols for a national data sharing platform

This use case seeks to establish standards and protocols for a national shared-access platform for agriculture data. The idea is to start with data handled by GoK and to progressively incorporate data handled by private sector players. Under this use case, platform users are expected to build on the high volume, highly interoperable data to create new insights for their interventions in agriculture. The problem to be solved by this use case is typified by the existence of multiple siloed farmer registries profiling more than two million farmers. These registries include those maintained by MOA-Info, Digifarm and OneAcre Fund. Under this use case, The Zambia Agriculture Management Information System – ZIAMIS, a FAO supported platform, is indicated as a candidate for adapting and scaling out in Kenya. The estimated annual cost of this use case is KES 20 million which is indicated as already funded by the World Bank under the Kenya Climate Smart Agriculture Project (KCSAP).

Caveat: Government prioritized value chains and intervention areas

It is worth noting the intentional prioritization of digital interventions that the government is well placed to champion and implement among the seven use cases. As such, digital agriculture services deemed best implemented by the private sector and players other than Government agencies were not prioritized in the strategy. For instance, my favourite topics of overall market efficiency and demand driven production did not feature among the digital agriculture use cases. This is ostensibly because such issues are arguably best addressed by the private sector and are arguably related to market linkage concerns being addressed in the warehouse receipt system law enacted in 2019. Furthermore, the use cases have inherent prioritization of selected value chains, especially the grains sub sector including beans, maize, rice, wheat. In any case, I encourage readers keen on the full context and finer details about the planned implementation of these use cases to read the full report. Moreover, the full report has additional insights about implications for data ecosystem requirements in the use cases that should be of interest to the digital agriculture ecosystem actors, especially the providers of digital services.

Appreciation: For this post, I am grateful to Nixon Gecheo, AGRA’s Senior Program Officer for Digital Systems and Solutions for Agriculture. He brought this report to my attention, I have been otherwise clueless.


Loyalty-centredness in digital platforms – What really is that?

My co-authors and I have proposed a two-factor structure to explain the underlying structure of the sources of value creation in an aggregator platform for digital services in agriculture (AP4DSA). This is in a recently published research paper in the Digital Business Journal. We termed the two concepts represented in the two-factor structure as platform-wide efficiency and loyalty centredness. I wrote a brief summary of the issues in the research here. It’s has been some weeks since the publication was out. As I further explore the prospects of AP4DSAs, I ask myself – what really does loyalty centredness mean? In the paper’s discussion section, we attempted to explain the concept in line with where our evidence pointed us. I am obliged to look further into the term and to perhaps solicit more insights from all you fellow thinkers and readers.

Loyalty centredness according to the research is an attribute arising in the viewpoint of likely digital platform users, meshing together the ideas of loyalty and innovativeness. It evokes the notion of altruism and engagement with a digital platform according to the paper. This is as the users or stakeholders feel an increased sense of ownership and affiliation to the platform. The research paper further relates loyalty-centredness with an accountability arrangement among participating actors to generate win-win scenarios for both providers and consumers of services on a platform. According to the paper, the concept suggests the need for a platform to safeguard its ecosystem-wide integrity whereby, “genuineness and legitimacy of actors as well as the information, goods and services accessed through the platform can be guaranteed”. You may read further on these and other explanations of the concept in the research paper which is freely downloadable under a creative commons licence on the link below.

To further illuminate the concept beyond the inherent space limitations of a published scientific article, I have hived off the loyalty-centreness half from the two-factor structure in the figure below :-

Loyalty centredness as a source of value creation in an AP4DSA (adapted from Kieti et al. 2021)

In the diagram, the rectangular boxes illustrate the indicators measured to have strong influences on the loyalty centredness concept. For instance, creating and moderating a virtual community – L4 for users to interact on such a digital platform is influential in value creation as an indicator of loyalty centredness. Likewise, introducing new to the world products, services or information – N1 on the digital platform can strongly influence loyalty centredness as a source of value creation. As such, an increase in any of the 10 indicators results in an increase in loyalty centredness as a collective notion and a source of value creation in the platform.

Essentially, we used the term Loyalty centredness to represent a collective of the 10 indicators in the rectangular boxes. The notion captured in these 10 indicators is certainly not about user-human centred design as might be tempting to broaden out to. It is also more distinct than the wider concept of user centricity. The indicators in yellow(ish) boxes were initially from the concept of loyalty while the items in pink(ish) boxes were from the concept of innovativeness. In the research, the two indicators with the highest influence on loyalty centredness were from the loyalty concept. These most influential indicators were, (a) guarantees for reliability and quality – L6 and (b) upholding trust – L2 which includes ensuring data protection, safety and security guidelines are adhered to. For more on these influences and their strengths, see their factor loadings in Figure 4 of the published paper. These stronger influences and the higher number of indicators from loyalty than innovativeness informed our conceptualization of the collective notion as loyalty centredness.

In the published paper, we argued that, “a new innovation may be onboarded and showcased on a platform yet not be ready to exhibit the kind of reliability and quality guarantees expected by the loyal platform users“. Among the Kenyan participants, it would be that aspects of innovativeness foster the sense of loyalty and pride in affiliating with the platform. Arguably, the indicators from innovativeness might have proved to be more impactful on the resulting collective concept if the research was conducted in a country where the history of innovations in digital agriculture was not as long as Kenya’s. Likely users in those countries may as well have rated the innovativeness indicators more highly, being more easily impressed by such nascent efforts. As such, it may be that innovativeness aspects can be more impactful than the loyalty aspects in those countries.

I am thinking that loyalty-centredness might have acquired a slightly different name if the research was conducted in a country where the excitement and buzz about digital innovations for agriculture are still fresh. This thinking may be worth validation with further investigation among likely AP4DSA users in other sub-Saharan African countries. It may also be argued that in due course, such sub-Saharan African countries would still evolve their digital agriculture ecosystems to the slightly more advanced situation in Kenya. Therefore they would still have to face the concept of loyalty-centredness as a source of value creation in an AP4DSA as their ecosystems evolve.

I am curious to hear what others interested in the value creation mechanisms of digital platforms think about this notion of loyalty centredness.

How could value be created in a one-stop-shop platform aggregating digital solutions for agriculture?

Reports by GSMA, CTA, and Disrupt Africa consistently position Kenya as a global leader in the number of tech ventures and digital solutions for agriculture (DSAs). By GSMA’s 2020 report which tracked 713 active DSAs, 437 (61%) were in sub-Saharan Africa. In the report focusing on low and middle income countries, Kenya led with 95 instances and Nigeria was second with about half of Kenya’s number. The trends suggest fragmentation in digital agriculture ecosystems among other pitfalls. Studies have questioned the ability of these DSAs to scale out so as to significantly impact a sector that is the mainstay of most sub-Saharan African economies (including Kenya).

My co-authors and I sought to diversify the thinking about efforts to unlock the promise of digitalization and digital transformation of agriculture in sub-Saharan Africa as a contribution to literature. We conceptualized an aggregator platform for digital services in agriculture (AP4DSA). This is a special type of digital platform for agriculture whose characteristics can partially be observed in nascent platforms such as Safaricom’s DigiFarm, EcoFarmer in Zimbabwe, Bayer’s Climate FieldView, and an “imaginary instance of Google play store for agriculture”. Such a platform can be expected to address DSA discoverability challenges including fragmentation of the digital agriculture ecosystem, absence of a one-stop-shop, and an unmet desire for comprehensiveness. My co-authors were Prof. Timothy Waema, Prof. Bitange Ndemo, Dr. Tonny Omwansa and Dr. Heike Baumüller

We proceeded to examine the underlying structure of value creation sources in such a digital platform as perceived by likely users in Kenya. Our findings suggest that sources of value creations can be explained in three themes, namely (a) platform-wide efficiency (b) loyalty-centredness (c) platform inclusivity. We have recently published the findings in the peer-reviewed Digital Business Journal via Elsevier. Click on the link or graphical abstract below to access the full article. 

Sources of value creation in an aggregator platform for digital services in agriculture – source: Kieti et al. (2021)

The article is readable online and can also be downloaded freely as a pdf on the basis of the creative commons (CCBY4.0) license. Our findings should be of interest to practitioners such as tech entrepreneurs, accelerator program managers, and large tech corporations endeavouring to actualize the digital transformation of agriculture. Policymakers seeking to unlock the transformative power of digital platforms for agriculture through may also find our findings useful. I look forward to feedback on our findings that could further inform my ongoing research on the prospects of AP4DSAs in sub-Saharan Africa.

Kenya’s top 20 towns on Facebook

Social media giant, Facebook estimates that there are 4 to 4.5 million Kenyans who are its monthly active users. Facebook usage patterns in Kenya are arguably strong indicators of the country’s internet connectivity patterns. Over 60% of Kenyans (2.5 – 3 million) accessing facebook at least once a month are based in Nairobi.  This is very telling especially as Kenya\’s second internet exchange point in Mombasa struggles to make business sense due to having too few users.

I used the Facebook audience insights tool to rank Kenyan cities and towns according to their monthly active users on Facebook. Below are the top 20 cities and towns in Kenya as at 9th June 2015.
City / Town
Facebook Monthly Active People
% of Kenya Facebook Monthly Active People
2.5m – 3m
300K – 350K
50K – 200K
100K – 150K
100K – 150K
50K – 60K
40K – 45K
35K – 40K
30K – 35K
30K – 35K
30K – 35K
25K – 30K
20K – 25K
20K – 25K
15K – 20K
15K – 20K
15K – 20K
15K – 20K
15K – 20K
10K – 15K
10K – 15K

Skyline of Machakos Town – Ranked 13th with
20-25 thousand people monthly active on Facebook 
While Nairobi is the capital city and much economic activity is expected to emanate from such a city, its lion’s share of internet traffic points at concentration in economic activity. This could be an area of concern for leadership of counties which represent devolved economic units. It may also be a major concern for government paid ICT promoters such as the Communications Authority and the ICT authority. Its telling of the success or failure of tax funded initiatives such as the universal access fund and the National Optic Fiber Infrastructure (NOFBI) to advance digital inclusion in the country.

There are areas where the internet and its benefits
can only be imagined and mimicked
A few months back I wrote about the significance of social media platforms such as facebook in agriculture and ranked the top 10 agriculture themed facebook groups in Kenya. There is evidence that internet connectivity and tools promote economic activity. For everyone concerned about using internet related technology to spur economic activity in towns outside Nairobi, the above trends should elicit action.
Internet progressive nations in the region such as Rwanda are reporting advances toward blanketing their smaller land mass with high speed Long Term Evolution (LTE) connectivity. A big question begs as to whether execution of Kenya’s broadband strategy will bear fruit in bridging the country’s vast digital divide.

A World class University is all Konza Technocity Needs: The rest will follow

What is the present day silicon valley might not have become what it is without the existence of Stanford University. In 1876 when former California Governor Leland Stanford bought their first 650 acres of land for a country home in San Francisco, he certainly didn’t have silicon valley in mind. Even as the Stanford couple were deciding to setup an institution in memory of their gone-too-soon son in 1884, the option of setting up a private university appeared not to be a first choice.  As the Stanfords made exploratory visits to the then established MIT, Harvad and John Hopkins universities, they probably didn\’t imagine the scale of impact that would arise from setting up “yet another university” – in memory of Leland Junior. Here is an account of Stanford University\’s history and the rise of silicon valley.

Google Map Screen Damp of Silicon Valley in 2015
A Google Maps Screen Dump of Silicon Valley
That happenings in Silicon valley over the years have shaped the global economy is not in doubt. That many cities and regions in the world are trying hard to replicate the silicon valley effect is also a major discourse often contentious. Robert Metcalfe, co-inventor of ethernet and founder of 3COM once said, “Silicon Valley is the only place on earth not trying to figure out how to become Silicon Valley.” Many people, industry pundits and scholars alike argue that pursuit of such isomorphism is not the way for nations to build globally competitive innovation ecosystems. This school of thought is agreeable partly as far as the ingredients that nurtured Silicon valley over a century could by now be assembled over a shorter period elsewhere. Even so, looking up to Silicon valley will remain unavoidable for as long as we still have a growing list of world changing enterprises springing out of the Bay Area across the decades.
Back home in Africa and Kenya, Konza Technocity is an idea that may have become tired in the minds of industry pundits. I am convinced that establishing a university within the designated space or within 10km radius of the planned city is all that is required for the city to take off. In fact so far I have seen many industry commentators change from antagonism to surprising support of Konza Technocity when the idea of prioritizing a university kicks in to the debate. By establishing a university at Konza Technocity, I don\’t mean just any university: I mean a university designed and led with obsession for innovation and entrepreneurship. I also mean a university designed with sensitivity to local education dynamics, while at the same time uncompromisingly achieving world class standards of management and research excellence from the onset.
Construction of road infrastructure at Konza Technocity in April 2015

Many opponents of Konza Technocity fault its current focus on real estate and infrastructure development as efforts away from the so called \”industry priority\” for human capacity development. Few weeks back in my article on why Konza Technocity will not be a white elephant, I argued that execution towards long term and mid-term objectives must not be mutually exclusive. In fact the case of fast tracking establishment of a world class university is a near perfect match of seeking medium term objectives concurrently with the long term ones. It may not take over a year for fast tracked infrastructural components of a university to come up in Konza. It could take about three years to start graduating world class talent at the university if its structured as a final two year phase of a four year degree program whose first phase is undertaken in existing universities.

Google Maps Screen Dump of The Egerton University Town

Perhaps the story of Stanford and the Bay Area is too abstract for someone considering the reality of government projects and global industry dynamics affecting Kenya. The storyline can be approached from first principles. For instance we have seen thriving new University towns in Kenya. From Egerton, to Maseno, to Daystar and other universities, we see independently thriving ecosystems. These ecosystems include players in transport, agricultural supply chain, hostels and real estate providers, entertainment and others meeting the needs of students, faculty and support staff. This is because human capital development does not thrive in a vacuum. The universities even need primary and secondary schools for children of faculty and support staff, as well as health care services. Emergent aspects of such an ecosystem would be the interest of large multinationals such as Google, Microsoft and IBM setting up affiliations with the university and ostensibly building their on-the-ground mechanisms for harnessing the university\’s talent. Interest in talent and research outputs from the university will also interest local enterprises keen about global scale and competitiveness. More important though is the prospect of university grown startups incubated or accelerated by the university\’s obsession with innovation and entrepreneurship.

Although Stanford University kick started Silicon Valley, it is is not the only significant academic institution shaping the history of technological innovation. Many other top universities have continued to fuel the valley\’s momentum including other notable names in the Bay Area such as University of California Berkelay. There would be space for other universities in Kenya and the world over to contribute to Konza Technocity\’s talent pool. Indeed there\’s space for multiple universities to be physically within the Konza area. The case for Konza attracting global talent in tandem with churning out its own local talent is a matter for another article so I hold my thoughts.
One useful improvement from the first Konza masterplan in the second one delivered by the Masterplan Delivery Partners is bringing forward establishment of a university campus from the second of four year phases to the first phase. Granted the Konza Technocity Authority (KOTDA) already has the elaborate master plan, I think it is not too late to tweak parts of the masterplan so as to further further fast track establishment of its first university. I am of the opinion that merely having a university in the first phase of the masterplan is not enough. In fact the university establishment may need to be hived off and expedited ahead of any bureaucracy or slow process for implementing the masterplan.
I see several big unanswered questions about actualizing this route for KOTDA and other stakeholders of Konza Technocity.
  1. Who would own that urgently needed first university in Konza and how will KOTDA\’s procurement dynamics play out?
  2. How do we ensure that the university is run with the desired obsessive focus on innovation and entrepreneurship?
  3. How do we ensure that the university is as a world class institution from the onset – especially considering that University of Nairobi, Kenya\’s best ranked university at number 855 globally in 2014 may not be considered world class as yet.
There are potential answers to these questions. For instance there could be an efficiently administered tender for the world\’s Ivy league schools to establish a campus at Konza, potentially partnering with local public universities who understand the local terrain. An ivy league university with innovation and entrepreneurship focus such as Stanford could also partner with government institutions such as counties surrounding Konza to co-own and run such a university. I would play down the prospect of a purely private sector driven initiative such as a green field new university regardless of their level of capitalisation. This is because procurement dynamics of KOTDA are such that an intra-governmental procurement conversations could advance faster than arms length transactions.

The Top 10 agricuture Facebook groups in Kenya

There is serious agriculture going on in Facebook. At least among Kenyan farmers, there is those that have found Facebook as the place to research and gather knowledge for application in their agricultural related ventures. Others are finding prices of inputs and produce on Facebook groups. Can one be practicing agriculture on Facebook? I think research and access to relevant knowledge for application in one’s agricultural venture is part and parcel of the venture’s activities; hence there can be agricultural practice on Facebook. I think this is one aspect of information technology driven innovation that Agriculture is facing in emerging economies. As I once wrote earlier last year, these innovations may just matter.
Here is my list of the top 10 Facebook Groups covering agricultural interests that involve Kenyans by membership size.

Facebook Group Name
Size of membership
(March 13th,  2015)

In the list we see an apparent trend of groups forming around a particular agricultural sub-sector such as poultry, dairy, rabbit and pig production. Incidentally, majority of the groups in the list also seem to have a specific livestock focus. This could be resulting from my interest bias or there could be something about the livestock sector that renders itself better to this online phenomenon than crop cultivation.

Joseph Macharia – Founder of Mkulima Young
Omission of Mkulima Young in the list above is deliberate. Their Facebook page has seen phenomenal growth in the last two years. I note it separately as an organizational page rather than an interest group. Also very noteworthy is Mkulima Young’s advancement towards creating their own web platform for not only knowledge exchange on agricultural practice but also a agricultural commodities market place. They also have an active twitter and youtube channel. It appears to be run as an outright business rather than a special interest group. Apart from Mfarm\’s and Shamba Shape up\’s, I have not come across comparable pages built around existing Kenya focused farming and agriculture related enterprises with “page likes” above five thousand. Mkulima young has forty one thousand “page likes” as at mid March 2015.

The Farming Kenya group appears to follow Mkulima young’s path of creating their own independent website. Their website is where only signed up

FarmingKenya.Org Logo

members are allowed to contribute content. Guests are allowed to view content. The website has sections for questions and answers, forums, blogs and photo sharing. Membership in this website requires a special signup process independent of Facebook’s.

Agriculture focused Facebook groups, pages and related websites seem to have a promise for providing the youth with a platform for exchanging best practices in agriculture. They also appear to be an increasingly popular mechanism for market price discovery as regards agricultural inputs and produce. It will be interesting to see how the landscape unravels as agriculture becomes a more youthful economic activity while the youth have greater access to the internet and internet enabled phones.
Since the above list of top agriculture Facebook groups is my first version, I may have omitted an important one with significant membership. I welcome suggestions for additional entries in the list.

Why would you call Konza Technocity a white elephant?

Its been two years since former President Kibaki broke ground and laid the foundation stone for Konza Techno City – back in January 2013. The ceremony was then considered long overdue by industry pundits. The project, estimated to be implemented in about two decades is significant to Kenya’s growth aspirations so much so that it is labelled as a Vision 2030 flagship project. That President Kibaki prioritized Konza City’s ground breaking in the late days of his presidency is telling of how important the project was for his legacy.

Here’s a media clip of the proceedings at the early 2013 ground breaking ceremony. 

Fast forward to December 2014 and there was some traction. The Konza Technocity Authority board has since been set up, and career investment banker Mr. John Ngumi was appointed as its chair. ICT4D specialist Dr. Catherine Adeya – Weya – also got to act as the authority’s CEO for over 2 years. One of the milestones of Dr. Adeya’s legacy has been preparation of a detailed economic strategic plan and implementation master plan for phase one of the project. One more milestone albeit a political one would be a second ground breaking ceremony in December 2014 officiated by the Kenyan Deputy President – see the official speech then. Here’s a media clip capturing some proceedings at the second (infrastructure) launch.
Status Update – :
A detailed update of the project’s status as at November 2013 is found in the slides below.

It is also noteworthy that the ICT ministry and more recently, the authority’s leadership has at different times publicly shared reasons for the slow progress in executing the project. Here’s a clip taken in 2012 with the then Minister citing infrastructural challenges
Here’s another clip taken, where bureaucracy and delays from the National Environment Monitoring agency and Ministry of Lands were to blame.
Is Konza Technocity a White Elephant?
That there has been significant progress at Konza in the last decade is arguable. This month a substantive CEO (Eng. John Tanui) has been appointed. This is a major milestone as it is common knowledge that leaders in acting capacity are oftentimes constrained regarding what bold useful steps they can take. With a substantive CEO the only other hurdle might be the enactment of the proposed bill legalizing the authority’s existence by a statute which would empower the authority to confidently go into binding contractual agreements with investors and vendors.
That the government should further invest in the project is surprisingly more arguable than whether there’s been progress. Its amazing how many Kenyans in social media and blogosphere outrightly condemn the project. For instance, at some point Tech blogger Kachwanya put it bluntly that Konza Techn City would be a moot project in its form as at January 2013. Alliance Technology’s Ngigi Waithaka repeatedly argues that any government resources for Konza should be redirected to other “more promising” innovation promotion projects. As I am a big supporter of the entire Konza Techno City project, I would argue differently. I would suggest though that we first consider the argument of de-congesting Nairobi city, as espoused by Prof. Bitange Ndemo, the former permanent secretary in the information ministry who is easily the most prominent proponent of the Konza project. See the 2012 video clip below.
Urgent Vs important interventions in an economic sector
Many arguments against the project take the form of: “its not the highest priority intervention for the IT sector, so kill it!”. In my opinion, demanding abandonment of the project or starving it of government resources as a matter of priority is akin to arguing that “Since we have built homes in Ongata Rongai (West of Nairobi) and our problem is access to sewer, a major road infrastructure project towards Thika (East of Nairobi) does not benefit, us, so terminate it”. It is also the classical failure to recognise and attend to what is not urgent in the immediate sense but nonetheless important for posterity. The ICT industry in Kenya has many undeveloped interventions, and many of them are of high priority or are very critical for long term success.
Currently a burning intervention gap often cited as top priority is one of skills development. Of course there’s a dire need for the industry to convert raw talent to refined talent for the ICT workforce. With genuine concerted efforts between government, academia other industry players, this appears to be a simpler matter of polishing what exists. That said, Konza Techno City as an intervention is about a framework for attracting investors and hiving off an environment for rapid growth of the sector in years to come. I argue that we cannot interchange execution of long term plans with execution of short term plans in either / or kind of decisions. Pursuit of long term and short term goals has to be concurrent. If short term goals always preempt long term goals, the long term goals must remain a mirage, especially if ineffectiveness of the system’s custodians also results in unaddressed short term goals.
On the matter of skills development being a higher priority, I argue that culture is also important in skills development. Skills development for the context of a thriving ecosystem is richer than skills development without a industry culture for harnessing them. I would argue that creation of an industry cluster such as the Konza Technocity is a key ingredient for creating the right culture: startup, corporate or otherwise for effectively harnessing local and international talent.
Of serendipity and arranged coincidence
As to whether the Konza Technocity should be a real estate development project or not, my answer would be that the city is about talent, innovation and entrepreneurship which thrive in humans. Those humans work, dine and sleep in buildings. People thrive in physical infrastructure. Of course one would say that in the advent of technology and the internet, innovators and entrepreneurs can work and interact virtually. That appears too simplistic an argument about a technology driven economy. Meaningful business interactions are very hard to fully virtualise. As Sam Gichuru of the Nailab once put it, “you cannot find a co-founder on skype”. Even if you first met the would be co-founder on skype or Facebook, there are physical interactions that will precede gathering a level of comfort for goin into the co-founder marriage.
The scenario is more real for investors who would rarely invest in people they have not met, and not just once. Of course if an investor from the Netherlands is coming to meet a prospective investee in Kenya, they would be happier combining the trip to meet many other potential investees – better still if they are found in the same vicinity. And if startups and venture capital are not your cup of coffee, perhaps corporate deals and partnerships interest you. In this case I would suggest that if you can meet all possible partners within the same location, that helps much. This kind of arranged coincidence that a shared physical infrastructure creates is what contributes to the requisite density of certain classes of industry players necessary for a thriving ecosystem.
All that said, with a substantive CEO for the authority, we can now expect good publicity and strong arguments supporting actualization of the Konza Tecnocity dream. We shall also expect to hear more pessimist arguments for further consideration and counter argument.

End of an epoch: Reflections on four years at the m:lab

The last days of February are my final moments at the helm of m:lab East Africa – the m:lab. Its now 4 years since I took up a challenge from the m:lab consortium comprising iHub, eMobilis, University of Nairobi and the World Wide Web foundation to setup and run programs at the m:lab. Back in February 2011, the consortium had just won a much coveted opportunity to host the East Africa instance of infoDev’s mLab concept. Other World Bank supported mLabs would be in Southern Africa (South Africa), Eastern Europe and Central Asia (Armenia), East Asia (Vietnam). The South Asia mLab in Pakistan would not quite take off.

the m:lab as a construction project early 2011
Looking back four years, its been a great experience, sometimes a roller coaster ride – a great thrill, but very importantly; a learning experience for me. With time I was surrounded by a great team; incredibly dedicated with fabulous execution abilities. Representatives of the consortium organizations served as an awesome oversight board that became our biggest fans. With such a team and board level fan base, and a clear opportunity to impact the East African start-up ecosystem, I have my considered successes and failures. My picks for top 7 apparent successes would be:
  1. Hype and Substance: Helping to sustain interest and to create hype about applications, entrepreneurship and start-ups in mobile technology was fulfilling. Apparently this may have been at the expense of other IT sub sectors – an outcome that we did not quite anticipate. The ICT Authority and iHub were co-protagonists in this. The substance would always come behind the hype, and that may continue to be the case – see the authoritative video opinions of hype and substance in the East African Context as discussed during PIVOT East 2014.
  2. Brand Building: Building and curating the m:lab East Africa and PIVOT East names into strong formidable brands as regards mobile innovations and start-ups was quite an achievement. Apparently these two brands are strong offline among software developers, corporates in the mobile space and international development agencies. The brands are quite strong in the social media space but their following on Twitter, Facebook and LinkedIn would be a more objective metric to look at for those with interest. For PIVOT East, a home grown brand to compare favourably against the entry of fairly established brands such as DEMO, Seed Stars, Sankalp, Startup Sauna and others, our team must have done very well.
  3. Interventions for startups: Discovering, and supporting some top next generation high growth start-ups has been fulfilling. To name a few, without any order of remembrance or preference, we have supported Kopokopo (9 months), Totohealth (10 months – ongoing), Eneza Education (24 months), Mfarm (24 months), Uhasibu (24 months), Ma3route (18 months ongoing), MPayer (24 months), MTL / Mshop (24 months – spun off Sendy) and MedAfrica (9 months).
  4. iSarura – Rwandan Startup at PIVOT East
    Image Credits: mlab East Africa

    PIVOT East program: I have seen many alumnus of our four year old PIVOT East program go on to succeed or learn lessons to build great new startups. Somehow I had a soft spot for Tanzanian start-ups such as Go Finance, TiME Tickets and Ubongo Kids and they have not let us down. Overall the PIVOT East program has grown beyond being a potentially \”hit and run\” conference to a substantive start-up acceleration program and support network. Seeing finalist start-ups from Uganda, Tanzania, Kenya and most recently Online Hisab from Ethiopia has been quite satisfying. Seeing some start-ups prudently utilise the little PIVOT East linked funding coming from our modest surpluses was always gratifying.

  5. Worthwhile Experiments: With the immense latitude allowed by the board, we experimented with virtual incubation, a secondary incubation site at the GreenHouse (supported by Nokia) and the mobile impact ventures program focusing on Agriculture, Education and Health startups supported by both Tony Elumelu and Rockefeller Foundations.

    Wireless Wednesday Session in Progres
    Image Credits: m:lab East Africa

    Through these experiments, we are proud to have supported startups such as Ma3Racer, Fomobi, Lipisha, Elimu, Totohealth, Tuma Karo, Smart Farmer, Sokonect, and tens of others I forget. The experiments in startup incubation got us lots of lessons to reflect on and apply in future programs as the significance of the in-residence type of start-up interventions diminishes. Another experiment that would become quite a success and a regular fixture for us would be the \”Wireless Wednesday\” program. The regional ICT4ag competition we organised for CTA was quite fulfilling seeing that startups involved such as Ensibuuko and FarmDrive are going strong.

  6. Ecosystem Partnerships: Unknown to many observers, running the m:lab and any other start-up friendly initiative is a very entrepreneurial role. Keeping the m:lab doors open during and after the modest but critical grant from infoDev (the World Bank) was always a challenge. This meant dreaming up and pursuing intricate value conversations with industry players. Over the four years we have had a wide range of fruitful partnerships and collaborations with infoDev (World Bank), Chase Bank, Samsung, Nokia, Microsoft, Intel, Qualcomm, Facebook, Motorola Solutions (Now Zebra Technologies), Motorola Solutions Foundation, Safaricom, Seacom, USAID, Mercy Corps, CTA, The Global Impact Investing Network, Omidydar Network, CGAP, Crowd Valley, Savannah Fund, Viktoria Solutions and ACCION. There\’s other partners I will beg forgiveness for forgetting to mention. Having numerous high value individual volunteers may easily be the single biggest reason we achieved our apparent successes. These included business coaches and mentors from across East Africa and across the globe. Experiencing such generosity with people\’s valuable time always reminded me that the world has good people.
  7. Training 400+ Mobile App. Developers: From the infoDev sponsored 4-6 month programs to 6-12 week programs in partnership with Microsoft, Intel and others, we have had fairly successful rounds of honing skills of mobile

    Trainees at 4th wave of infoDev sponsored training
    Image Credits: m:lab East Africa

    applications developers. As opposed to our other programs, these trainings admitted individuals and not start-up teams. The trainings have mostly covered technical skills coupled with entrepreneurship, a bit of user experience design skills. The success of this program may be symbolized by the number of start-ups that were formed as an inspiration if the program such as mTracker and mVerified. Many got scholarships to Strathmore University\’s Msc program and many improved their employment chances. Surprisingly many created almost passive revenues ranging from $200 – $2,000 per month from apps used internationally from app stores – especially the Nokia store. More evidently however, the program\’s success is symbolized by MobiDev Solutions, a consulting outfit that sprung out of the fourth wave of the infoDev sponsored training late 2012. About ten of them dared me to support them as they created a mobile software consulting outfit. That would be a difficult gamble on my part as they would not meet my purist definition of a start-up. I can now bet on them being one of the biggest software consulting outfits in the region – in the next couple of years.

The Fail Fair!! One of my greatest lessons at the m:lab was to celebrate failure and to learn from it. My top 5 most memorable failures have been:
  1. Third party investments: Although PIVOT is an investor pitching program, among the 100 start-ups we have supported, conversion from investor linkages to actual investments has remained low (with a couple of surprises). Although startups supported by the m:lab had many potential linkages to source of venture capital, not many of them with founders from within the region closed funding deals. I spare my hypothesis about the apparently low deal closure rate for another long blog article. For now it may be worthwhile for interested readers to watch to related views of Mbwana (Savannah Fund), Johnni(Growth Hub), and Andreata (TLCom Capital) in the PIVOT East video

  2. The seed fund that would become: Soon after concluding the first edition of PIVOT East in 2011 – then named PIVOT 25, I was convinced that a long term and more sustainable revenue model for m:lab would include success sharing with supported startups. This to me would ultimately be strengthened by coupling our intervention with seed capital for startups through our own investment vehicle. That continues to be our much envisaged but not exactly executed sustainability strategy. To be fair, we have ended up making some micro-investments thus far. However, many might argue that an embedded fund has never been necessary for m:lab. Perhaps in future I shall get a chance to blog more about the many lessons learned while trying unsuccessfully to set up this fund.
  3. Financial Sustainability: I like to laugh away at how in our first set of strategic objectives, we envisaged for m:lab to be financially sustainable within the first one year. In hindsight, I would consider the thought that I treated financial sustainability for the m:lab as a sprint rather than a marathon. There are some value propositions, materializing or otherwise that I would have been better off monetizing gradually and incrementally. Inasmuch as we have made progress and de-risked much of our business model, the m:lab remains a startup in that we may not have arrived at a repeatable and scalable business model.
  4. Applications testing and the famous sandbox: Whenever developers complain to Safaricom and others about the absence of a sandbox for testing USSD and SMS apps, I always looked down thinking how much we at the m:lab were best placed to make the sandbox a reality. I could try and explain this failure away but the fact is mobile developers in the region (at least Kenya) do not have an affordable, reliable way of testing low tech mobile applications for which the market is very ready.

    The m:lab\’s Applications Testing Facility
    Image Credits: m:lab East Africa

    Our famous testing room is a great and useful resource although I would have loved to see more developers scheduling time to test phones. The m:lab team continues to learn about these things.

  5. Rusty Blogging – Considering I am the long-post type of blogger, the hustle and bustle of running m:lab took its toll on my ability to churn out as many blog posts and reflections on the startup ecosystem as I wished to. Working with numerous startups and industry players has a way of highlighting key patterns and trends about teams, product development, and the market structure. The article I wrote early 2014 on startup team composition is perhaps the best I did to share my synthesis of these patterns and trends. I regret that I didn\’t write more to capture the wealth of such insights through blog articles. Apparently, the article on estimating startup market size through Facebook audience insights didn\’t generate as much interest as I thought so it may be yet another challenge to bring the right startup topics to the fore.
  6. Weak government linkages – Perhaps having been part of the Kenya government system has a way of keeping one away from government relationships. I did some time as part of a government system before getting the the m:lab. For the most part while at the m:lab, I failed to adequately pursue collaboration opportunities with Kenya government institutions such as the ICT Authority, NACOSTI, CAK and the ministry of industrialization and enterprise development. In general I was not a government connections guy and that may have cost the m:lab much.
  7. There\’s many successes and failures on my part that I don’t remember. I shall let readers here guess and comment on these that I forget or conveniently fail to share.

So what\’s next?
The m:lab has great prospects! The board and team I leave behind are great! Building on our successes and failures will open a new chapter for the m:lab and its affiliates for its prosperity in the next couple of years.

As for me, I enrolled for doctoral studies at the University of Nairobi back in 2013. Currently my research area traverses information systems, entrepreneurship and agriculture in somewhat unrealistic ways. Its been quite an evolution and a while now since enrollment and its told anecdotally that over 60% of people who start such studies the world over don\’t complete to graduate. 2015 is the year I have set aside to improve my chances of falling on the 40% side. I shall remain a strong exponent for tech startups in the region. Perhaps I shall also drink more water than wine in an economic space where entrepreneurial ventures are our best chance for emancipating our masses from poverty and injustice.

My reflections would be incomplete if I did not mention that working with Erik Hersman, Ken Mwenda and more recently, Josiah Mugambi who represented co-leads of the m:lab consortium was the most supportive and reassuring aspect of running the m:lab. Toni Eliasz and Dr. Tim Kelly from infoDev (World Bank) were another great source of encouragement.

Using Facebook’s Audience Insights to Estimate East Africa’s Digital Market Size

Global social media giant Facebook has over 1Billion monthly active users. The immense popularity of Facebook reflects easily in internet usage patterns among people in East Africa. Back in 2010, a research by Synovate indicated that 79% of internet users in Kenya had Facebook accounts. The Communications Authority of Kenya( CA) – formerly CCK places the number of internet users in Kenya at 21 million as at December 2013.

I am skeptical about the CA\’s estimation formula for estimating number of internet users in Kenya. However if the trend highlighted by Synovate in 2010 remained, and CA\’s number was close to accurate, there would be about 16 million Facebook accounts belonging to Kenyans. That said many people having a Facebook account reflects how many people became aware of it and signed up, not necessarily those who use it actively (eg. at least once a month). The 16million estimate on Facebook users would therefore not be a reliable benchmark for market estimation among start ups or corporate marketers.

Of Facebook\’s Audience Insights

Shortly after the PIVOT East conference in June, I had a chat with Matthew Papakipos – Facebook\’s Engineering Director that was an eye opener. Matthew took me through Facebook\’s new audience insights tool that helps to reveal not only Facebook user demographics (anonymised) but also inferences about the general internet market place. The tool which was launched for US markets early May, and is now available in other markets will change how regional digital entrepreneurs estimate their market sizes.

To feed my never ending curiosity about mobile devices used in the East African market place, I used the tool to quickly generate a table comparing some key numbers. The tabulation below begins to tell how East Africa, though with much potential falls behind Egypt, Nigeria and South Africa on active internet use.

<!–td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}
Population (million)²
Facebook Monthly Active People¹
Total Own Mobile Devices Own Android Devices
1 Kenya 43.18 4m-4.5m 3m-3.5m 1m-1.5m
2 Uganda 36.35 1m-1.5m 1m-1.5m 250K-300K
3 Tanzania 47.78 1.5m-2m 1.5m-2m 600K-700K
4 Rwanda 11.46 350K-400K 300K-350K 100K-150K
5 Burundi 9.85 100K-150K 70K-80K 20K-25K
East Africa³ 148.62 7m-8m 6m-7m 2m-2.5m
Ethiopia 91.73 1.5m-2m 1.5m-2m 500K-600K
South Africa 51.19 10m-15m 9m-10m 2.5m-3m
Nigeria 168.8 10m-15m 10m-15m 3m-3.5m
Egypt 80.72 15m-20m 10m-15m 7m-8m
¹ Facebook Audience Insights as at 4th July 2014
² World Bank 2012 Country Statistics
³ Aggregate numbers for 5 East African countries
A further glance at the audience insights roughly hints at the popularity of feature phones across East Africa at about 50%. From the insights, about a third of mobile devices owned by Facebook\’s monthly active users run on android – by far leading other smart phone operating systems such as Windows and Apple IoS. Popularity of android in Egypt stands out, estimated at about 70% of mobile devices (using the lower limit data points).

A promising market place for digital entrepreneurs 

A closer look at the figures above indicates much potential for East Africa as a common market place among digital entrepreneurs. The region\’s close to 150 million residents compares only with Nigeria\’s population of 170 million. East Africa\’s 150 million people coupled with the prospects of integrating the traditional East African economy with Ethiopia (92million people) portends even much more for regional digital entrepreneurs.

Assuming that  East Africa\’s people will rapidly embrace internet and mobile technologies, the next few 3-5 years may deliver a digital revolution to the economies involved. This is especially if the regional economies persist at increasing coverage of 3G and 4G across the countries. The promise of this increased mobile network coverage is quite evident in Ethiopia and Rwanda.

Why Team Composition in Tech Startups Matters Much

Since 2011, the m:lab has organised PIVOT East – an annual competition for mobile startups in East Africa. Much has evolved about the competition since the inaugural edition was held as PIVOT 25. Some of the evolutions were aptly captured by Nicholas Friederici, a World Bank consultant then documenting the Tech ecosystem in East Africa in this article.

MedAfrica (MedKenya) winning team of PIVOT 25 in 2011

Incremental Improvements

One incremental improvement that PIVOT East continues to emphasize on is for participants to regard the competition as a platform for organizational development and business model refinement. Inasmuch as few participants may still see it as one of the many competitions where they could “earn” prize money, there’s many that are getting the geist of the matter and are taking their businesses more seriously with competitions.

In the 2013 edition of PIVOT East, market traction was emphasized in the criteria for all selection stages. This helped to minimize the so called “compe-preneur” effect. Market traction included earning or growing revenue, increased active user base, and other growth metrics. Selection criteria in the competition will continue to emphasize market traction. Team composition has been another criteria item emphasized in the 2012 and 2013 competitions. In 2014, strength of individual skills among team members, the complementarity of team skills sets, and members\’ long term commitment to the teams will matter even more.

The Team vs the Idea

Many investors will tell you that a bad idea can be improved or killed altogether to take up another better idea. Ideas are cheap and generally worth nothing, unless they are executed into revenue-earning and growing businesses. Often times, especially among “Compe-preneurs”, the execution teams\’ skills are shallow as focus is more on the idea and the all well elaborated planned business plan. For a startup, the “coolness” of the idea and sticking to the initial elaborate plan A will not necessarily bring revenue and growth.The team has to speedily iterate from the plan A to a plan that works. As Ash Maurya would advise, 66% of successful companies reported drastic changes in their original plans along the way.

To execute a great idea into a viable high growth business, calibre of the team is important. If an investor invests in a bad team, they are trapped in a suboptimal investment, difficult to get out of without upsetting the founding team set up. A badly set up team is a hindrance to the kind of efficient, focused execution that a startup requires in the search for a repeatable and scalable business model.

Skills Depth and Experience – for execution

Skills sets and experience of designated team members for key roles in a startup matter much. Many a times startups designate key roles to team members that are not fit for the tasks. Founders should strive to co-found with the best talent in the market that brings on board certain key skills to the startup. These could be technical developer skills, design or UI/UX skills or business development. This is because good talent can be rare and expensive to hire later on in the startup. Founders should avoid co-opting each other into a startup without vetting each others’ skills and the experience each brings on board. More importantly though, founders should be honest enough with themselves to recognize a skills gap arising as a going concern to fill it with the right talent while offering strong incentives such as stocks, an interesting culture and or a noble mission. The later it is in the life of startup this gap is recognized the less likely it would be for stocks, culture and mission to beat instant cash remuneration as the motivation for new talent.

Complementarity of Skills

The product of a Tech startup is not merely the technical solution. Its the overall business model which in the lean canvas representation includes 8 other components. To build a product that customers pay for, a startup requires collective team ability to understand and deal with customer segments and their pains, acquisition channels, revenue and cost structures among other key business model components besides “coding” the solution.

Dream Team of The Hacker, Hustler and the  Hipster?

Many Tech startup teams over-emphasise the role of the Tech co-founder, so much so that they simply constitute as, say three developers (hackers) assigning each other roles such as CMO, COO, CFO and CTO. The same happens where business founder (hustler) underestimates the need for a Tech co-founder. In such cases the “hustler” ends up with arrangements where the hacker is a consultant or a temporary employee – often engaged only to build the first prototype. In PIVOT East we have seen comic cases such as the loosely engaged developer disappearing with the code for a prototype that calls urgently for iteration.

Besides having a hacker and a hustler in the mix of skills sets, importance of the user experience (UX) designer (the hipster) is often underestimated by startups. This currently occurs among startups in East Africa and is partially attributed to the general scarcity of such skills in the Tech community. For many consumer driven internet solutions, user experience is a big differentiator. Attracting the best talent among user experience designers (often converts from graphics design) to be a co-founder may be the clever-most decision in a startup.

illustration of popular Hacker, Hustler, Hipster dream formation

Domain expertise in specialised fields

For startups seeking to disrupt or impact specialised domains such as health, education, agriculture and engineering, the importance of a domain expert in the founding team is very important. Recently I asked Jamila Abass – CEO of Mfarm what was one thing she would do differently if we rewound the clock by two-three years. Quite profoundly, her answer was something like “I would co-opt people with agriculture domain expertise in the team the earliest possible”.

The importance of domain expertise in the founding team is demonstrated by some domain specific startups in East Africa such as Eneza Education. The startup has a founder, Toni Maraviglia who is a career teacher by profession. Having deep understanding of market setups, domain technical skills and other domain specific intricacies helps startups to speedily navigate around challenges and opportunities in the domain. The emerging success story of Eneza education is partly if not significantly attributed to the domain knowledge infused by Toni in the startup.

As an experiment, we have set Inclusion of a domain expert in startups in specialised domains of the new mobile impact ventures program at m:lab East Africa a requirement. We anticipate good results especially with respect to appreciation of customer insights.

Passion, commitment and motivation

Apart from having super skills deployed for required areas of expertise and having complementary teams, inherent interests among team members matters. Commitment level for a super talented team member engaged as a temporary consultant is not as inspiring as a super talented team member who is a co-founder with significant stock allocation in the startup. To investors, business partners and even customers, there’s more confidence in the future of the product when key team members have demonstrable long term commitment.

It may be that consultants and employees on contract may be the most practical way to deploy certain high caliber skills required. In fact its the default scenario for most mature corporate organizations. For a startup which mostly has constrained resources, it appears wise to sell the vision to key talented members that remain in the team with stock incentives rather than paying fat consultancy-like paychecks on a on occasional basis.

A challenge may arise for founders in convincing the right talented people with the right attitude to join the startup – besides having to convince them to take small paychecks in the “short term”. In this case its worth considering founder / employee recruitment as an investor pitching exercise. Besides investing time and skills to the startup among other opportunity costs, the new team member has to invest psychological commitment to the startup’s vision. That way the team collectively builds the right culture, attitude and agility towards achieving the startup’s mission.

Entrenching vested interest

Vesting agreements help founders and investors to secure commitment from key personnel (especially founders) to the mission and course of the startup for the long term – usually four years. A typical founder vesting schedule is incorporated in a founders agreement or the shareholders agreement. If you search hard for lawyers around tech hubs in East Africa you will find lawyers that could help structure one. This is not to say that startup lawyers are easy to find in the region.

The vesting agreement is very much like founders giving back their shares so that they can earn them over the time the company stabilises towards its vision actualisation. For instance, a typical challenge appears when 9 months down the line after the startup is founded, one co-founder wants to leave. It could be for “good” reasons such as “business co-founder gets a green card to canada or another country”. The prospect of moving to a land of “milk and honey” with a stable n-figure salaried job can be too compelling to ignore. The question then would be; Do they relinquish stock worth 9 months of extraordinarily hard work or do they move over to Canada with their entire stock allocated to them even though they haven’t quite worked for its entirety?

A typical founder vesting agreement reads as follows :-

  • Until and through [FIRST VESTING DATE], neither Founder’s shares will vest
  • On and not before [FIRST VESTING DATE]– [25% ] of each Founder’s shares will vest
  • On and not before the 1st of every month thereafter, [1/36TH] of the remaining [75%]will vest 
  • Thus, on [END DATE] (the \”Full Vesting Date\”), each Founder will be 100% vested.
Very often when investors suggest to introduce or re-set vesting schedules for key talent (especially founders) in a startup, its demonised as one of  “vulture capitalists” way of short changing founders. It may be different if understood from the perspective of a vision sold by the founders that only they can pursue to fruition. However, whether revising vesting schedules based on an investment deal is fair to startups or not is irrelevant in this post.

Vesting agreements seem to be an important instrument to demonstrate long term commitment among founders and even among employees that have stocks or options. Startups in East Africa should be encouraged to embrace vesting agreements among founders and employees. This is because securing talent in a region where entrepreneurship and startups are a second option is JUST HARD considering the prospect of better paying jobs coming up is always hanging over the heads of key personnel.

With good vesting agreements among startup teams, it should be easy for startups to demonstrate their mission commitment to investors. This is an aspect that PIVOT East organizers in 2014 will be watching out for.