The a16z Show - a16z Podcast: Things Come Together -- Truths about Tech in Africa

Episode Date: January 25, 2016

We often hear stats like “more people have mobile phones than toilets” about places like Africa, but what does that actually mean for people? “It is b.s.,” (no pun intended), argues one of the guests on this episode. Then there are statistical predictions about mobile penetration and usage — for example, that there will be one mobile phone per African within just three years. But how do we make sense of such stats, in context? It may make more sense to measure devices per household … and to also consider power structures and whether women, too, truly have such access. Finally, since access is mainly about affordability, what good is a smartphone with an internet connection if data plans are prohibitively expensive? Watching just one YouTube video could cost an African family an entire month of groceries. Yet mobile and wi-fi may be collapsing Maslow’s famous hierarchy of needs. With three experts from various backgrounds and regions of Africa — Nkiru Balonwu of international music media company Spinlet; Alan Knott-Craig of free wi-fi non-profit Project Isiszwe; and Nanjira Sambuli of Kenyan startup incubator iHub — we explore the nuances of what connectivity in Africa really means, from the field. How does this change app design? What does it mean for doing business with Africa? What does it mean for businesses in Africa trying to compete with Silicon Valley (is there really local advantage)? All this and more in this episode of the a16z Podcast. photo: David Mutua Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi everyone, welcome to the A6 and Z podcast, and today this podcast is all about technology and Africa. Now, that's a really huge topic. So we have experts from various backgrounds and regions of Africa to help us cover a lot of interesting nuances behind the stats that we typically hear, as well as a lot of the buzzwords that we commonly hear. Our three guests to help us do this today are Alan Not Craig, who runs Project Isisway, an NGO based in South Africa that helps African governments get free Wi-Fi in poor communities. Their goal is to create internet access as a utility. Prior to founding project, ASEIZEWA, Alan was an entrepreneur who ran Mix It, which is one of the largest mobile social networks created in Africa.

Enkiru is our next guest, and she is the CEO Spinlet, a digital media company that focuses on African-centric music and has music available on iOS, Android, and also via web browser. And we'll talk more about why, about that later. Spinlet's headquartered in Nigeria, but they're also elsewhere in Africa and also in Europe and in the United States.

Fun fact, Enkidu was actually an IPO lawyer who joined the company as general counsel before becoming CEO. And she actually didn't think she was ready to be CEO until she read Cheryl Sandberg's book Lean In, which actually inspired her to go ahead and take the CEO job. And now she's been in it for the past year and a half. And finally, we have Nanjira, the research lead at IHub. IHub is an incubator, not an accelerator, although it does lead to acceleration of startups. It's based in Kenya and provides a physical space for connecting entrepreneurs a way to test their

ideas, provide info to them, and much more. And they do a lot of interesting research as well, and some of that will come up in this podcast. Okay, so that's our guest on today's pod, and we're honored to have you all join all the way from various parts of Africa. I think the first thing I want to start with is sort of just this notion of when we talk about, people talk about technology in Africa. The first notion I want to just jump right into is actually de-homogenizing what people mean when they say Africa, because Africa is clearly a huge continent, but we have a tendency to refer to Africa as like one big place. And, you know, I don't have any personal experience in Africa. My mom was born and raised in Uganda and I studied African literature in particularly

Nigerian authors like Flora Napa. Yeah, Chinua and others, Voye Shoa Inka. But anyway, what I'd love to hear from you guys first is how would you sort of define sort of what you consider some of the universals when people refer to Africa? And then what are some of the more, you know, things that people need to pay attention not to clump in together when they're referring to Africa, the continent versus like different countries. The notion seems to be especially in business that, you know, buy one, get 53 free. So, you know, if you get your business working inside Africa, the model will work in Kenya, Nigeria.

And so a lot of business mistakes are being made from that notion. And it's that sort of deho- or actually homogenizing all of it. But yes, there are notions where, I mean, little cultural nuances that make it seem like the country, but they're very contextual, they're still emerging. we're all still learning who we are as a collective. And so, yeah, I hope maybe by 2017 we still won't have to say Africa, you know, to remind people Africa is not a country. I definitely agree with Nigeria and her experience.

It's sort of very similar to mine. When people say Africa, I sort of like, oh, there's 53 countries, very different experiences. And particularly when people say, I'm an expert in Africa or in Africa, and I'm thinking, what does that mean? I live in Lagos, and I'm not even an expert in Lagos. On Lagos, anything it has to do with Lagos, there's different people, different kinds of people living here, we're really, really extremely different.

Of course, there's similarities like everybody else, but the difference is really, really, they're quite harsh, the differences. And so when you say you backpack across the continent for three weeks and then you then say you're in Africa, expect, it's a bit irritating from my perspective. But just generally speaking, one of the more, maybe interesting thing

is when Americans are doing African voices in film, it's always a South African accent trying to be Nigerian or South African trying to be a canyon. Right. Well, Alan, what's your take on this? You were born and raised in Africa and in South Africa, specifically. And, you know, interestingly, given that your company focuses on providing free Wi-Fi and working with different governments and communities, you must actually see more of the commonalities across the regions. The way I look at it is you've got kind of Arabic Africa, which is very much the northern part from Sahara up, and then you've got subsisting

Saharan, which is a little bit more homogenous. And then sub-Saharan, you kind of divided between the West African Trading Block and the East African Trading Block and the Southern African trading block, which is, you know, Southern Africa is about, you know, Satic really, South African development community, South Africa, Mozambique, Zimbabwe, Botswana, Milibia. And then you've got English-speaking and French-speaking Africa, which are vastly different kind of communities. So it's impossible to kind of lump it all together and one big And from our perspective, we kind of very much kind of think, you know, at least from an English-speaking perspective, sub-Saharan Africa is as close to a homogenous market as you can get.

Oh, okay. That's actually interesting. But I just want to say also, you know, there are some stereotypes that the people should know. So, for instance, South Africa is a bit like Germany in Europe, you know. No one in Europe likes Germany. Everyone drives a German cop. So, you know, South African product is respected. but Africans aren't always the most welcome.

You know, Kenyans are well known for talking a hell of a good game. And guys from Nigeria, they know how to make money. We have stereotypes like that in regions of India as well. Okay, great. So then what is the major commonality then? Because, you know, based on what a lot of the reports that I read about technology in Africa, a big focus is talking about mobile as sort of this great, I don't want to say the word equalizer, but at the same time, like, it does have that sort of a power.

It's true. Mobile has really been that technology that has been perhaps most disruptive. And in terms of one of the sort of development's peak terms being leapfrogging, it's helping liprogging so many things. Communication, access to finances, and this is where we go again, Q M-Pesa. Right. M-Pesa, as in the company that came out of, the payments isn't that came out of Kenya. And it's basically mobile payments. Now, the thing is, I think I'd love us to not restrict ourselves to thinking that mobile is the only sort of tool through which advancements and developments can happen as far as ICTs go. There's so many other things that come with the idea of a mobile phone. So yes, it's been that technology that has advanced so many things, but now we're talking about the infrastructure that needs to be underlying access to Internet or access to certain services that are offered via the Internet.

And so that also goes beyond just providing through the narrow spectrum of mobile. though that has obviously been the front leader, the trailblazer, so to speak. In terms of commonality, it seems to me that most countries in Africa just are not connected. So that's those roads or trade or financial services or actual bandwidth. You know, having personally tried and failed a number of times, I've done okay here and there, but for the most part, any internet startup in Africa is really struggling too good. can get any traction in its local market because there's just not enough people on the internet. And whilst 3G is pretty ubiquitous and LTE is becoming even more ubiquitous,

the question is not so much about accessibility. It's a question of affordability. And the vast majority of people in Africa can't really afford the kind of going rates for 3G. Just to put things in perspective, if you watch a seven-second YouTube video on 3G at South African data rates, it'll cost you about $20, $20, $20. Oh, my God. That's a lot. Yeah, that's a lot of money. It's a lot of money.

It's a monthly grocery bill for your average, your low-end household. So where we're coming from, you know, after trial and felt here and there around trying to get more people onto apps and internet applications, decided to go back to square one and kind of get people on the internet before you try setting them, start setting them things in the internet. And, you know, from my perspective, it just kind of dawned on me that the only way it's really going to happen in our environment is if the government starts getting very much involved in infrastructure, subsidizing it, and making it free. And in a country like South Africa, water and electricity is constitutionally a right for everybody. So everyone in the country gets a basic quota of water and electricity, and the government pays for it from tax money.

And we're trying to kind of push a model whereby public Wi-Fi is provided by. the government as well as substiles by taxpayers and everybody's entitled to a daily quota. The commonalities are that it's a difficult terrain to navigate, but I think also that's one of the strengths that we have is that there's like immense opportunities here in terms of finding, you know, you can sort of create magic out of nothing here because there's just not a lot to work with. And so that's what I find very interesting, you know, here. And I do agree to, I totally am sort of a believer in the internet being. I mean, I sort of, I'm not saying I should be human right. I'm not that, you know, not that advanced in saying that, but I still think it should

be right access to it anyway, because from my perspective, what the internet affords is access to the world, access to education, you know, the things that maybe government can't really provide because, you know, government doesn't have as much money as it should do, because of mismanagement, but if people had access to the internet, perhaps, I think that it creates like a whole opportunity for people to access information that they're being used for, you know, daily life, daily business, health, education, whatever. I mean, or maybe we should just have it as a right. I mean, maybe we should dare to dream because I think the Internet's,

and access to it and affordability, as Alan rightfully pointed out, are the two key things we're looking at. But also the fact that participating in society and economies going forward is actually going to be facilitated primarily by the Internet. And so we need to maybe dream and have a bit of a more lofty goal other than just accepting from our governments that there isn't enough money. The issue, as you've rightfully pointed out,

it's actually that, you know, we're not poor. It's actually just mismanagement. So it would be actually nice to probably dream for that and actually push for that. And I think you guys are completely right. It's worth actually taking a pause for a moment to reflect on those words because we tend to throw them around very loosely here in the U.S.

like access, affordability. But you're actually talking about true access as a right. Affordability is one of the mechanisms for making that happen. And then what you're really saying, Nanjira is that there's an element of inclusion as well, that it's about getting people the ability to be included in this larger, broader global movement where they do have access to this knowledge, information, et cetera, et cetera. Well, just to put things in perspective, so I read a statistic that estimated that the number of smartphones in Africa would be about

930 million by 2019, which is just three years away. And that's basically about one phone, mobile phone per African. How do you guys see that on the ground there? And that, by the way, as we've just learned, does not equate with actual internet access. So what's the sort of differential between having a mobile phone and then the penetration of access to bandwidth? So I can generally just talk about smartphone. Oh, actually, smartphones, I think, about 100 million on the continent. Considering that we're about 1.1, 1.2 billion now, I don't know. I'm not quite maybe about a billion. Okay.

The penetration hasn't been as fast as people have sort of forecasted. Well, almost everybody has a mobile phone, but they're not smart enabled. So there's a difference here. Right. I'm glad you're reminding us to make that distinction. So smartphones not penetrating as fast as we, you know, all the predictions have said. I think a lot of businesses have been predicated on the, you know, the different, what do you call it, the different forecast about how fast smartphones would penetrate the markets,

but they haven't come as quickly because they're really expensive. Of course, with the new, with Android's now becoming much cheaper, we're seeing that penetration is becoming higher, but it's still not catching up as quickly as we're hoping. Okay, so you think one of the reasons things haven't penetrated as fast as forecasted and businesses are being built on these assumptions is because of the fact that the phones are not quite as cheap yet, necessarily, for everybody.

Exactly. Yeah, and I think it's, again, context, you know. Again, just back to the point I made earlier about the ecosystem and looking beyond the mobile phone as the only tool that through which access should be facilitated. I mean, because there's also the question we are asking ourselves now in studies that we're conducting with people at sort of the base of the pyramid, those who are about to be first-time Internet users, to better understand their needs and their understanding of this oncoming device or space that is the internet, just to better understand that, there are needs that go beyond the mobile

phone. And so that those, there may be, you know, we have cyber cafes, for instance, that still exist. And so one, you know, one cyber cafe could serve maybe 100 people in a locality, and maybe they don't have mobile phones at home. But they're still getting access, right? Or other centers like that. So there's a need to start taking all statistics, beyond the rush to quantify Africa, as I call it, to take statistics in common. context and bring them all together to a holistic picture. So maybe not mobile phones. There may be a plateau, obviously, because of the affordability aspect or that last mile connectivity element. But what about other ways people are accessing their internet? So that's actually really

interesting. Do you have some of those statistics or a little, can you give us a little bit more flavor about what that looks like? Right. So what we found, and it's really mostly studies that we do, user experience studies, just better understanding the target user for any mobile phone application or service is that, you know, these are very, and especially in a country like Kenya, and I'll use Kenya as an example here, is much famed for elements like M-Pesa, but there are other cultural factors that also have been hindrances to that last mile connectivity. So you'll find, for instance, it would be traditionally that women may not have access to a mobile phone because of how structures of property ownership exist beyond, you know, or predating technology. And so

how to overcome those? And if that lady comes to, not own a phone at home, maybe she can access the same services she needs on the internet via a center she can go to during the day when nobody's bothering her. We don't know who's holding what to your head when you're accessing a mobile phone. That's a really good point. So it's that these are important statistics. They're good for estimations, but we also need to bring in the qualitative insights. The single most instrumental fact on people not owning smartphones is actually the price of smartphones. Well, yes, they're obviously qualitative reasons why people don't have, you know, different people, but the majority of people don't

own smartphones because they're expensive. And that's what's cool about Android compared to iOS, which is that, you know, you can now get an Android phone for like $70. And I'm sure in the next year, too, there will be Android phones for less than $50. And I think the cheaper the phones get, the more people will have them. Alan, do you want to jump in here and maybe share a perspective on what you're seeing from a more systemic level, working with governments across Africa, especially because I think what Nigeria brought up about the last mile is a really, really interesting point. What are some of the obstacles that you're seeing culturally as well as technically? I'll just give you an example.

In a South African township in a place like Shoshangorberi or Mamalodi, 70% of people, if they want to apply for a job, they need to get in a taxi, they need to go to the local community center. They look on a board. They look for the jobs posted on the board. They write down the contact details for the job. They get in a taxi. they go to a printing shop, they print their CV, they get in a taxi, they go to the offices

of the employer and their hand in their CV, and then they wait for somebody to get back to them. And that's, you know, that's between four or four and ten dollars kind of cost and takes you a whole day. And that's something that, you know, a lot of people in the world haven't done for 20 years. So just to, you really have to go back to basics. You know, there's, we're not talking, there's no ubiquity of the internet for most people in Africa. We've now got, we're now involved with the deployment of the largest public free Wi-Fi Netric on the continent. And, you know, we find there's some interesting behavioral stuff.

First thing is that there's not a very big penetration of smart devices. So Wi-Fi-enabled devices are maybe not, maybe 50% of households in low-income communities. But there's a big sharing behavior. So a lot of people are sharing devices. So it's not so much about how many people have a device. how many households are the device. And if there's between five and ten people living in a household, then your device penetration goes up quite a lot

because those five or ten people are sharing one device to get on the web. Secondly, a lot of low-income communities who are not accustomed to the internet are still measuring data in minutes. So if it takes you five minutes to download a video, they think it's more expensive than it takes you one minute. Even if the video happens to actually be more data and you're just in a faster network.

So there's a lot of education that has to go on around that. old people, basically anybody over there doesn't really know what to do with the internet when you give it to them. So it's a bit like being an American in 1995. You need to have like a landing page from AOL or Yahoo saying, this is the internet. Click here for something that's useful. So you can't give people a clean Google page. It's absolutely meaningless for most of the communities we deal with. It's like, what is this?

What are we going to do with this? And some of the communities aren't literate either. So which brings me to the content. And the content is, I mean, music. videos are just a killer category, which is spin-leds going to make lots of money. Christianity is a massive faith-based content, particularly Christian faith is massive, and European football. I mean, in South Africa, the Premier Soccer League is quite big, but just generally,

English Premier League and European football, particularly clubs like Chelsea with lots of African players, it's a massive content category. You don't understand how many people are following that kind of stuff. And we say in our networks that Blackberry is a massive chunk of the market. I mean, I know in America, Blackberry is dead. People laugh about BlackBerry, but it's around. Yeah, it's all pretty big. And Huawei, Android devices are pretty big.

So I think it's a little bit different from what's happening in the States. That's actually super helpful for fleshing out some of the statistics we're talking about. Together, you guys are sort of sharing both different ways of putting those numbers that we typically hear in context. I think what you pointed out about measuring things in terms of people versus devices in a household is really important to talk about that penetration rate. and even the misconceptions people have around minutes versus data size is also really interesting. And then we also talk about some of the more qualitative behaviors that go with the power structures that you mentioned in Jira where it's sort of like about like, you know, is the woman the one who has a device? And she may be in the same household with like 10 other adults, but is her power and access equal to, say, the men in the house?

I mean, it sounds like there's a lot of different things to think about. Alan, I think it's also really interesting that you talk about entertainment-based content being very popular, because you would almost think that with this being sort of this utility model that we're all sort of arguing for, it's interesting that the things that people find most popular are actually still down to entertainment, music, sports. For some people, they would consider faith and entertainment. I mean, it's sort of like how people pass their free time in a lot of different regions. That's actually kind of counterintuitive to me.

And how does that play out with your observations in Giro, given that you run a music company? It's a big continent, and there's definitely a lot of poverty. But in saying that there's a growing middle class, and you know, you can't solve Africa's problem or the world's problem in one, you know, in one's fell sweep. So is the growing middle class big enough for us to sort of like look at? I think so.

I think that, you know, the whole picture of, you know, when you see on CNN, when there's, you know, black kids, sweating flies. And so that's just, that's not. I mean, yes, there's poverty, but there's great stuff happening here as well. So entertainment is huge because people have, you know, more income. Maybe not in Nigeria

right now, we have a recession, but people have more income and they want to, you know, they want to spend money, you know, doing chill, cool things. And for example, going back to mobile phones, they're inspirational. So, you know, in the way that you want to sort of move to Lagos because you're in the town, sorry, you're in the rural area and you want to

move to Lagos. Things are aspirational here. People want to be cool. People want to associate being Nigerian is cool now. Nigerian music is cool compared to American music. You know, those kinds of things are things that we consider. So there is a huge growing middle class, we think. And that's why you see that, well, some people are poor and some people are poorer, and some people are less born, and some people are really rich. And I think there's a spectrum of people that are all African,

and we can sort of like look at different perspectives rather than just focusing on all the bad stuff that goes on here, as everywhere else. I think it's interesting, actually, because you guys are painting a whole range, which is sort of the fact. that the mobile phone can be everything from utility, which we've heard that common statistics that more people have mobile phones than they do toilets in a lot of developing countries.

And then at the other end of the spectrum, you have this notion of the mobile phone as a very aspirational device, ecosystem, and all these things that come with it. I think the point you're drawing about focusing on the growing middle class is incredibly important because that is on a continuum. I mean, we can't be focusing only on one extreme,

the very rich or the very poor either. It's certainly true in thinking, about this? Yeah, I'd say in other angles is also, let's even imagine a utopia where every African has a mobile phone. Are they actually able to create? Are they able to code on that mobile phone and contribute to another portion of internet? They're just going to be consumers. And this is where we need to start asking these questions around what access to the internet and how we're facilitating so that this fixation on a particular device does not inhibit, or other inhibits us from seeing a bigger picture on how people could actually contribute

and benefit from the global economy that's also going to be a very digital one. There's this famous quote about Steve Jobs, I don't know if it's true or not, if it's just anecdote, saying that, you know, getting this criticism that the iPad was only intended to be, you know, for consumption

and him feeling very, you know, affected by that and trying to, you know, work on that. And clearly this huge ecosystem of apps have grown up around since the launch of the iPad where people can actually produce versus just consume on mobile devices. That said, we tend to take a very academic approach, I think, to that debate. It's almost like frosting on the cake versus what you're describing is actually, again,

incredibly important to the notion of inclusion and being included in this larger global movement. Like, can you create code? Can you create art? Can you not just be a consumer who's taking yet another technology from elsewhere or even locally and just providing money to it versus actually being able to. to do something with it. So when Nigeria is talking about, oh, can you code on your mobile phone? Can you do this? I'm thinking, I don't even have water. I need to have generate, I need to have, you know, like, life. You know, I need to have power 24-7. So it's really sort of like,

I don't even say, oh, there's no power here because we have to produce our own power. Like, I at spend that here, we really have to run a generator 24-7, what do you mean? So these are crazy things that happen here. But yet, you know, we're still thinking about, you know, how we want to code. So I think it's just an interesting place to be where you can do both? Yeah. No, I think it's fascinating. It's like collapsing Maslow's hierarchy of needs. It's sort of like saying there's like this funny diagram that

periodically makes a rounds on the internet where it's like Maslow's hierarchy of needs where you have basic things for survival and at the very bottom it's Wi-Fi, exactly. Yeah, and I mean, I must say it's really interesting to see how even in development considerations and development agendas, where we're starting to see is whether it's a zero-sum game.

So do we invest in water or internet? It's starting to become a very short-sighted you know, does it mean then we should not focus, should we get everyone access to water so that we then get people internet? So the hierarchy of needs is being renegotiated even from a state perspective or donor perspective, you know? And each, you know, there's so many nuances to each aspect because either way, even if we waited and divested money to bringing in water first, we're still going to be missing out

for those who already have access or those who could have access. So it's a really interesting development question. So the main thing is governance. If you're living in South Africa or Nigeria or Kenya or Zimbabwe or any part of Africa, actually any part of the world come to think of it, we're all kind of complaining about the same thing. You know, our leaders aren't doing a good job, et cetera. So when it comes to votes and deciding who gets into power, we're never going to have better leadership if people don't know what's going on.

Oh, that's a good point. So like sort of knowledge is a way to sort of break down some of that discussion. I want to revisit a theme that you guys brought up earlier, which is, you know, you mentioned, Alan, that people get a little taken aback when they see a clean Google page because they sort of need some instructions on how to navigate for first-time internet users what to do next. One of the interesting insights that I heard on our podcast about China and India is how people actually get taken aback with a very clean, uncluttered page because they're so used to having limited bandwidth that they want high information density. Like they'd much rather have a design

where there's just a bunch of links for the sake of being personimonious about that use of bandwidth. it. What are some of the interesting things happening on the design side of all these apps and things that you guys are seeing and using in your various regions or that you're working on? You know, we deal with some of the, some U.S. companies that try to come into, you know, to Africa. And I find that maybe some first-world kind of companies underestimate the consumer, you know, so I think something, something pretty B-grade, they can get away with it. But, you know, the internet is here. People can look around and see for themselves what's good and what's not. So provided it's not consuming too much data, I think user experiences, I mean, consumers seem to be demanding as good a user experience as anywhere outside of Africa.

And you just have to make it mobile centric. You just have to make it mobile centric. You know, it's just, it's absolutely irrelevant whether it looks nice on a laptop. You know, it's just not relevant here. For us, one way we try to understand that and also not homogenize users and users is encourage, especially our startups that we house here and other clients, really, to consider users. experience design in their, you know, in their iterations of either applications, mobile websites, or any offering they're giving to the internet. Because, yeah, it's usually assumed, you know, there's a standard typical user who just needs to get this and that and that. But they're very,

there are different nuances. So if it's a woman, again, who's trying to use a mobile health app, there are going to be things that she sees value, to have value maybe at the landing page, just seeing all the different ways they could go to one place, other than just landing on a single page, as you mentioned. So there's so many nuances. You know, everyone's talking about mobile phones and how people are using mobile phones. But we found that, so we've had to recently redo our browser, you know, website, because we found that people who have advanced feature phones actually, you know, perfect sort of like or can only sort of access us via browser as opposed to downloading an app.

And in any case, when you download an app, it sucks up your data. So that's really, you know, it's a very curious thing where we are still doing a lot of browser work as opposed to just concentrating an app, going the app way because of the mobile phone filtration. So we find that the browser is equally important, if not more important, because of the fact that data is so expensive. So when you're accessing the internet via browser,

you don't have to download an app that could sort of chop up all your data. Yeah. It also puts to rest some of the academic debates people have about whether mobile-centric isn't just about, like, being on the mobile phone. you're saying it's down to the nuance of whether you're designing for a browser versus the app itself. Yeah.

Just design mobile-friendly designs as opposed to, you know, the whole new concentration in the apps. Like they're expensive to run. They chop up all your data. And then that means that you can't actually, data is one of the biggest problems there. It's expensive. So people are counting every second they spend, you know, on the internet. Right. And that's a lot that popular, really, actually.

A lot of studies we've done, especially for, you know, applications for governance issues, they're not popular. People are happy to either get their information again from the popular apps. So if you go to Facebook, you'll probably have links to this page that Tulsa has information and that kind of thing. So yeah, before you're investing an app, you have to really check whether it's actually the appropriate technology to use for advancing your agenda. Right. I would actually say anecdotally, that's also very true in India. I just came back from a trip a couple weeks ago. And I noticed how very few apps anyone around me had on their phones. I mean, what I am curious about is, well,

whether you see people doing a lot more stuff over messaging, the way we've talked about what's happening with WeChat in China or WhatsApp in India and elsewhere. Do you have any perspectives on where messaging plays out into all this? I mean, WhatsApp is popular everywhere. WhatsApp is huge here, but it's a millennial thing, isn't it? So I think millennials react the same way everywhere in the world. And so WhatsApp is really huge?

Well, our parents do. Oh, is it really a millennial thing I was going to say? Because I was going to say in India, What shocked me when I went a few couple years ago was that grandmothers and aunts were using WhatsApp. And that's what was surprising to me there. This is true. But then, you know, like just generally all the apps. So there's Snapchat now.

There's all kinds of new things that I can't keep up with. And I keep getting, get told about them from, you know, my team. So WhatsApp is huge, huge, but other things are becoming equally huge. I think it's a trending, you know, like the trend, something is in and then something is out. And then, like, have you head of the new thing coming in. So I think it's general worldwide things. or the trending area. But WhatsApp is huge because you can make free calls from WhatsApp if you have internet, of course. But then that means that you're then, I think maybe middle class

when you have internet access, and then you can then make cheaper calls from WhatsApp compared to using the usual telco line. We were mentioning very US-centric apps, and I actually wanted to direct this to Alan to talk a bit about Mixit in its heyday. Well, so, you know, I have the questionable honor of residing over probably the biggest tech failure in Africa. Oh, no. Success at some point. But at the same time, it's probably the biggest tech success story. So there were some good things out of it. What were some of the learnings? Mixit's success came from the fact that it made it really, really cheap for people to text one another. And it was so SMS, texting was too expensive. And Mixit was first mover and built this massive network effect.

So it's a killer. It's a killer. It's a killer. In the, you know, one of the less. is never ever go up against American companies hit-to-head. Silicon Valley, you got to crush you. Right. So, you know, as soon as the smartphone kind of wave started breaking, you know, WhatsApp just won the race. It has won the race. It will win the race. I like WeChat. I mean, I don't think the likes of Ouichette are really underestimated, but just aspirationly in our markets, we can see that WhatsApp's winning. It's at a youth level. It's at a middle-aged level, and it's an old-people level. So it doesn't matter what it is. And I'm quite excited actually to see WhatsApp opening itself up to be a bit of a

platform. Because if you can plug that community into whatever application you've got, you know, boom, you don't have to reinvent the wheel. And everyone's trying to reinvent the instant messaging will. So I think that boat is, that ship has left and WhatsApp's won the race. Well, it's interesting that you talk about it opening itself up into a platform because that's exactly right to see what comes next. But what I think is really fascinating is the use cases where I've seen abroad, where people are actually using it less for mass. messaging in a typical way. And for example, they're using it as a news source. They're using it to vote in elections in certain places or to like do certain things. I've seen relatives use it exactly the way

you would use a social network. But instead of using an actual social network, they're just using messaging to do all those things, like share status updates, share photos, et cetera. How is the use of messaging, I guess I'm trying to get a little bit more understanding of how people are using some of the messaging apps in Africa in this context, and anywhere in Africa, not just all over, but in this context of messaging as a broader trend. In South Africa, we have a massive crime problem. So security is a big concern for a lot of people in South Africa. And WhatsApp has become the de facto means of communities organizing against crime.

Oh, wow. So streets all have, you know, the Laoclipan Street or the whatever street has got like a WhatsApp group. Everyone participates it. And anything that happens or any suspicious vehicles or anything, you know, people are always, the feedback group is WhatsApp. and it's far and away the most powerful tool for something like that. And the way I see this kind of evolving around here is one of the new services we're helping the government deploy is the equivalent of Uber, but for the police.

So if you see a crime, especially in a community like Maulodi or one of the townships, the street names aren't very obvious, the dresses aren't very obvious. But if you can use GPS to pin where you are, you can report it to your nearest police cars, and they can kind of respond without having to go through call centers and all the translations in between all. You've solved a massive problem. Wow. But chat is a massive component of that, you know.

And you need the offices to be able to communicate with the citizen and vice versa and just kind of, just the more feedback there is the faster people can respond and kind of get to the incident. And that's where, I mean, chat is integral to everything that we do that we see in the app space. And WhatsApp will, you know, if you can plug WhatsApp into it, you don't have to reinvent the wheel. Perhaps another way of looking at WhatsApp and, you know, some of the chats like WhatsApp is that it's come, for me, it becomes so every day that I don't even think about it. It's, you know, how people interact is how you get even, you know, work conferences on WhatsApp. Everyone, as you say, uses WhatsApp. But what I wanted to sort of like maybe sort of like take us to is when Alan talked about when WhatsApp came to the market and what it did to mix it. And I thought that that's an interest in when the Americans come in.

So, for example, Apple Music, Netflix is coming in. Netflix is already here. Apple Music is here. And so what's that going to do to the, you know, existing African SMEs in the market? I think that would be interesting for me to sort of hear everybody's perspective as well. I guess what I really want to get at here as well to build on your question is, is there a local advantage? Or is it not, does it not apply when a global player comes in? Do not ever take on America.

So that's the golden rule. But there's lots of things that in Silicon Valley, you know, people and some guys sitting in a cappuccine, having his cappuccino in San Francisco is just not going to think about. If you've got a problem that's unique to Africa and you're trying to tackle that problem, and it must be unique to not necessarily just Africa, but just not at all obvious in Silicon Valley,

then you've got a shot. But of course, if you get any kind of traction in any of the space, you've got to make sure that someone in the States ain't going to like just see your idea copy it and just come take you on. And the real capital advantage, other than the hugely talented, aggressive, you know, hardworking people, just the capital advantage is so overwhelming. So in my opinion, you know, where we invest in businesses is only if there's a network effect and if someone's already dominated the market. So something like e-commerce, you know, Jack Ma or Baidu or Tencent, they all benefited from kind of, you know,

kind of closed markets to the US where they could build up the network. effects for e-commerce or for social. And by the time they kind of opened it up to foreign competition, you know, it's kind of the landfair that happened and you've got this massive moat protecting you from Silicon Valley. And there are some things like that in South Africa, and I know in some places, the rest of Africa, but there's not a lot. And you really have to have a buyer-seller or friend-friend network in place before or know that you can get it before anyone in America gets wind of it.

Alan clearly has a very specific perspective. and do you guys agree, disagree? No, I think I generally agree, but of course there's, I mean, local advantage is, I mean, important and necessary, but the thing about local advantage is that local advantage can be bought. So, for example, yeah, yeah, so I train my staff, and clearly I've spent so much time training them,

and then, you know, whoever, the American person's coming in, and they have a lot more money than I do. They have the capacity, they have, tech capacity, they have, you know, capital capacity. And it doesn't take, you know, a huge, you know, what do you call it, increase to just make them jump. Am I angry about that? Maybe when I'm really sort of like, oh my God, I spend all this time training these people, but then I also don't want to have people working at Spinlet, for example, where nobody wants to hire them. So it's like, you know, what came first, Katz 22. But I think, you know,

an Apple or an Amazon or, I mean, local advantage is very important. And I've talked about, you know, you can't be an Africa expat just by spending two weeks here. But also, you can't compete with the American power of, you know, capital and, you know, tech power as well. So that's where how I say it. So I'm with Alan on this one. I'll give maybe two examples of where a local advantage is giving a quick win for some startups here. one is very well known that was a Shahidi. I mean, it came up from a very contextual situation and occurrence here.

But that was a specific use case. But for them to survive, they've also had to, you know, to embrace the Americans. So Shahidi has a team that works from the U.S., a team that works from Kenya and a team that works from other countries. And that's how they've been able to co-opt that expertise that's ready in the market in the U.S., for instance, so that they're not necessarily bought out. Another example that's starting to come up now is the brick that's being built as appropriate technology for facilitating router,

a Wi-Fi router access, right? The idea being that, you know, while I may buy a router for my house in the urban area in Nairobi, it may not necessarily be the most appropriate technology for beaming Wi-Fi access when I'm out in my grandmother's village, you know. So it needs to be something rugged, something that could withstand, you know,

falling and dropping and that kind of thing. Now, they have that local advantage by understanding that, but it also becomes a game of really, a game of wits in terms of once you start gaining traction, as was mentioned, once you start gaining attention and other people start to see what you're on to, how do you make sure they don't breach you to market? It's something that's faster, cheaper, and there's the second to market advantage. So it becomes a game of smarts here. And it's one we're learning by, you know, it's baptism by fire, if ever there was a case.

Right. Well, it's fascinating too because what you're describing is competition everywhere, But there's also a factor here where there's a power differential between, as you mentioned, access to capital, access to, you know, it could be like Chinese investors coming into India or Jeff Bezos going to India with Amazon. Or it could be right. I mean, no one can compete with that sort of deep pockets at a certain level. But at the same time, we do see success cases where they compete in different ways. The one thing I can say about a local advantage where it really is an advantage is when like an international is coming in to. who is trying to establish footprint on the continent. And the general mistake that, you know, international seem to make

is that they assume that by hiring someone out of, you know, business school from somewhere, I don't know, they have, you know, they can do it. And that's where you need the local, that's where the local advantage will always, you know, sort of overpower the, you know, the farm. Because you cannot come to, you know, Lagos if you've just, you know, been here one week. and you cannot go to Kenya and, you know, set up a company without having, you know, the local insight, the local, you know, local knowledge, just sort of how to navigate the terrain. And so that's where local advantage would always, you know, beat, you know, the clout and the power. And so I think it's just finding a way to do things in collaboration.

Reflecting on this notion of competing with business around the world and locally, and, and, you know, final reflections on things that people should know who are trying to build businesses in Africa? Yeah, I want to read a blog that Silicon Valley, you know, gives you 16 metrics to chase for a startup. And a lot of people in South Africa and Africa and the rest of the world read those blogs and think that's the Holy Grail. But there's only one metric and that's cash flow. Advertising is not a business model. One day we'll sell to Google is not a business model. You really need to be kind of thinking like a traditional business, like how you're going to make money pretty soon.

and if you're not, well then you're really up against some guy who's funded out on Silicon Valley. So one final question that's come up a few times is thoughts on, you know, technology and how women are using it at all ages in various regions of Africa. You've brought up the notion of women doing things a little differently a couple of times. I wanted to make sure you guys could share some thoughts on that. Sure. The World Development Report by the World Bank just came out and reconfirmed the notion that, yes, much as there are many women who are participating online, the number still lag behind in comparison to men. And that could be seen as an indicator of existing inequality, so to speak.

But the internet and access to it, for those who do get access to it, and who are able to bypass certain barriers that are socially, culturally, income-wise, who get to participate, we're seeing such. opportunities to raise agency, to have agency, to speak up about issues, to address and to really mainstream the idea of gender in various considerations. So for instance, it's no longer sufficient to just have numbers of women on a panel. It also goes now to, we will criticize whether they actually get to be asked questions based on their expertise and not just because they're feeling a diversity quota. And so we're going to see these kinds of conversations taking place online.

There's so many campaigns we're seeing that are helping mainstream the idea, taking on, you know, I would say misogynists who are both men and women. We're seeing fantastic campaigns coming up about that sensitization on these issues in a way that's not just preachy and traditional NGOe, but it's just driven by citizens who are engaging. We're on platforms that facilitate free expression. So this is fantastic. That's that there's still women who are keeping off because they're attacked, and there's a lot of digital safety considerations to have. And it's not to make women seem like some little eggs in a sense. It's just these are just indicators of existing patriarchal structures.

And so it's really the internet and access to it is really one of those things that could either perpetuate this patriarchy or start deconstructing it as we all get connected. Or probably more likely both actually. Yeah, or both. I mean, society does existing contradictions. So we, and in fact, as a patting shirt, I also wanted to. there's a fact that we need to have more research supported to really unearth this qualitative insights that then complement these numbers that we're getting. I mean, I don't know whether to be offended or amused by the statistic, you know, that there are more mobile phones and toilets. I get that

statistic, but then I'm like, to what end are we, what are we saying, you know? Right. What does that mean? Exactly. Right. That's a good point. We use it actually. I'm going to confess that. We use that statistic ourselves. I've linked to that or quoted that in various pieces. And you're right to call, call BS on it a little bit. I mean, not BS necessarily, but to say, like, what does that even mean? What does that actually mean? It is actually BS. It's a systemic.

But what do you think is to say for a U.S. state, so there are more mobile phones and there are toilets? Does that apply across the metric if we're using it as a comparative? Or is it just for Africa in the developing world? So there's a need for more nuanced research to strengthen and sort of flesh out this numbers being thrown out. So let's not just quantify Africa. Let's bring other qualitative insights that bring out its diversity and also make for wise investment decisions, actually. I wanted to talk about, like, you know, the idea of women in technology

and how it's been niggling at me for a while now. And I think the phrase in itself is sort of creating or sort of incubating, you know, a whole group of women who are then going to have more low self-esteem or inferiority complex because we then assume that you have to be great math to work in a tech company, for example. And I feel like when we sort of create these things and we'll help women, or we need to have women do more math, these are like nine-year-olds we're talking about on 12-year-old and 14-year-olds.

There's a whole group of 25-year-olds and 22-year-olds who are long out of school who don't need to be told that. They just need to be told that they need to excel in whatever they're doing because they can do anything. And so I'm sort of worried about the terminology that's suddenly creeping up in the past two years about, oh, how women need to be encouraged to be, you know, in STEM and all that stuff. So I hope that we can talk about these things more frequently and sort of like and put light to them.

Well, I actually agree with you personally as well. I think that that discourse is important, but also troubling when it puts this hierarchy of skills that's sort of not honoring some of the more nuanced qualitative sciences as well, which is a meta theme in this conversation as well. Alan Enkidu and Nanjira, I just want to say thank you again for taking the time. This has been an incredible conversation. We're going to continue it, I'm sure, in the near future, and the first of many. And thank you. Thank you. Fabulous. Thank you. Thanks very much.