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Pivot 25 and the Silicon Savannah

July 7, 2011 |
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In Silicon Valley, the word “pivot” has a specific, even hallowed meaning. “Pivot means you adjust as necessary,” says Mbwana Ailly, an entrepreneur in residence at I/O Ventures, a startup investment company in San Francisco. “When a tech investor bets on a project, they’re betting on the team and their chops not only to develop a product, but to adjust as needed… Pivot means okay, this didn’t work, but let’s go!”

This spirit of maneuvering, creativity and clever workarounds is second nature in east Africa. If necessity is the mother of invention, the world’s youngest, least developed continent is the mother of necessity. Nairobi, Kenya was thus the perfect host to Pivot 25, a competition and showcase for the latest in mobile technology born on what’s being termed the "Silicon Savannah." Teams of developers from Kenya, Uganda, Rwandaand Tanzania descended on Nairobi for a grueling two days of presentations to potential users, fellow technologists and - most importantly - investors. 

The event introduced managers at regional and global firms such as Google, Equity Bank, Nokia and Samsung to bootstrapping young entrepreneurs who know their way around a computer lab. In this sense, Pivot 25 replicated the format of Californian startup incubator Y-Combinator’s famed “presentation days,” in which businesses present a rapid-fire pitch to investors hungry to buy the next Twitter or Tumblr.

The competition covered five categories: Mobile payments; gaming and entertainment; government, agriculture and education; business and enterprise; and mobile health. Whereas Y-Combinator’s most recent class of trainees produced “first world” applications—a way to manage all your social networks at once, for example—the east African Pivoters produced a surprising proportion of truly “social” ventures.

Finalists KopoKopo and M-Payer in Kenya and Bikoto in Rwanda have each created new models for improving access to financial products in resource-poor settings. M-Farm, which also won the US State Department-sponsored “Apps for Africa” competition in 2010, allows farmers to search for real-time pricing information over the phone. Clarisse Iribagiza, a 23-year old Rwandan who developed a watchdog-type program called Gahunda to hold agencies and ministries accountable to citizens, says her app “is for anyone with a government.”

The overall winning venture, MedKenya, offers users the ability to manage health care and provide useful services, from first aid tips to epidemic warnings and Ministry of Health alerts in real time. The developers, Shimba Ventures, took home $5000 and a chance to compete at Demo, a global competition for technologists.

Some of the Pivot offerings are purely for entertainment. Eat Out is a type of Open Table for Kenya and beyond. Its popularity is growing, and with an upfront investment of about $1200 is now producing revenues of $200,000 annually. Tuvitu allows one’s web searches to become widgets on a telephone—a way of managing large flows of information. Whive, another phone based social platform, can help take lunch orders by SMS, for example.

Some ventures are hybrid—aimed at making life easier for users in Africa, where any increase in efficiency goes much farther. One company aims to reduce the time city residents spend circling in traffic by managing parking spaces in an online database. Craft Silicon’s Elma platform allows users to buy phone airtime, pay utility bills, book travel tickets, file local taxes, manage school fee payments—even make church donations from a mobile phone. Perhaps the most innovative feature of Elma is an electronically generated one-time credit/debit card that enables online purchases for users that don’t have easy access to traditional finance. Another exciting venture, Niko Hapa (“I am here”), combines two Silicon Valley darlings—Foursquare and Groupon—with an African twist. Users “check in” at stores and receive discounts based on return visits. The kicker? The entire model works without using GPS.

The judges—part of east Africa’s investor class—effectively pressed each of the presenters on the specificity and uniqueness of the products on tap. They wanted to know not just how seed funding might be spent, but how a venture might “change the culture of small business in Kenya.”

Notably, the funding equation is much different than in Silicon Valley, where Ailly, born in Tanzania, says bubble IPOs and “me, too” ventures are driving the market. On the Silicon Savannah, by contrast, companies are lean and in many cases require upfront investments in the tens of thousands of dollars—not millions. Sakanya, for example, is a service that would match lost documents with the government and the owners of the documents. The company (four main self-funding managers and programmers) requires $60,000 for the next six months.

Despite the comparatively low cost of investment, access to finance is difficult—a member of Kenya’s ICT board suggested that many banks simply do not understand “’e-this’ and ‘e-that’” as well as they understand real estate or other more conventional investments. Richard Bell, who founded the first venture capital fund in sub-Saharan Africa, summed up the mood 10,000 miles from California: “Who cares about Silicon Valley?”

It remains to be seen if the inverse is true—but with Pivot’s winning team headed to face off against American innovators, the answer is coming soon.

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