How Uganda's Startup Economy Fell Behind Kenya (and Why Catching-Up is Not the Option)

I am no thought leader when it comes to tech ecosystems or startups but I surely have my own opinions. Seeing as you are reading this, you might as well read on but first help me answer a few questions that I have had to face that put things into perspective for me.

  • "How many startups in Uganda have attracted funds externally and gone on to grow regionally?", asked a brilliant Indian American venture capitalist working with the IFC as I settled into his DC office.
  • "What would you say is the most successful startup in Uganda that I must know about?", He went on.
  • “The numbers show that 50% of African tech ecosystem is in 5 countries. Kenya being one of these, why is the ecosystem there so much different from Uganda’s?", He concluded.

Thank God for a report by Virgin Group that names Uganda the most entrepreneurial country in the world - I always seem to have a comeback.

I would really love to here your answers but lets explore further the differences between the two countries.

First movers vs Fast movers.

The Kenyan ecosystem is known for both. This is not about one and not the other for them. In a post written in March 2010, the iHub was announced to the world in what would be a FIRST for the region. About the same time infoDev, the government of Finland, and Nokia launched the Creating Sustainable Businesses in the Knowledge Economy (CSBKE) program to derive and test new approaches to advancing innovation and entrepreneurship in developing countries.

An extract about the program quotes;

“ Based on the vast growth of mobile content and access technology, a large part of the program focused on support for innovation in mobile applications and software (or “apps”). Through CSBKE, the concept of “mobile entrepreneurship enablers” was developed, of which two forms were tested: Mobile Application Laboratories (mLabs) and Mobile Social Networking Hubs (mHubs). mLabs are specialized mobile app business incubation and acceleration service providers; mHubs focus on mobile tech community building by convening stakeholder groups at informal gatherings. mLabs were intended to reach a region comprising several countries, whereas mHubs serve only a single city.

Uganda got an mHub, in other-wards serving only a single city — Kampala. This was the popular MobileMonday that everyone would smile at first mention given the impact it created and how it converged the ecosystem under topical themes. Unfortunately this is no more. Reports by infodev will show this was funded $35,000.

On the other-hand, Kenya got both an mHub and mLab - funded $55,000 and $850,000 respectively. In other-wards, spanning regions comprising several countries (mLab), but also serving only a single city - Nairobi (mHub). So what? you ask. This is not about the money, its about the difference between an mHub and an mLab. See for yourself.

[caption id="attachment_504" align="aligncenter" width="800"] An illustration of the difference in services offered by an mHub and an mLab[/caption]

It is fair to say based on the what is currently happening in the Ugandan ecosystem we are seeing more of events, conferencing and workshops.

We seem to have caught the bug and cant seem to have enough of it. Take a pick of any week/month/day and you will find not less than one event happening that you would like to attend focusing on innovation this — innovation that.

All the while the Kenyan ecosystem was nurturing the complimentary critical components that make an ecosystem tick. These included aspects that have since become a mainstay in Nairobi like formal mentor-ships by experienced entrepreneurs, prototyping events(not talks), contacts to investor networks, formalized incubation programs among others listed up there.

How does Uganda catch up? Not the option!

I remember listening to Dave McClure of 500Startups at the Dubai Future Accelerator the evening he just flew from Nairobi to speak at The fourth Angel Fair Africa. The Fair is another story for another day but featured speakers such as Chris Kirubi (Chairman of Centum Investment Group), Tim Draper (Founding Partner of Draper Associates) and Dave himself.

In Dubai, Dave was explaining the factors that have shaped their fortunes. A key consideration was the size of the markets. His ideal market is 100 Million potential users of a solution. East Africa, on the other-hand, has a total population of 160 Million people.

What might you think is the population of actual technology market in the region to adopt solutions?

This is beyond catching up, or anyone Country in the region thinking its better than the other. Innovators need to begin seeing East Africa and beyond as one market.

Think BIG; then after that - think BIGGER, Think global then act local - local being the region not your country.

View you venture in light of the questions at the beginning.

Can your startup attract funds externally and go on to grow regionally?

How does your startup rate regionally? What would it take for you to be the most successful startup?

Who is across the boarder that I can collaborate with?

The next challenge for startups, and sector players in the region is how well we converge to build a connected ecosystem across boarders leveraging each others uniqueness.

This article was first published on CK's Medium account on January 29, 2017. You can follow him here.

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