a16z Podcast

Things Come Together — Truths about Tech in Africa

Nkiru Balonwu, Alan Knott-Craig, Nanjira Sambuli, and Sonal Chokshi

Posted 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.

connectivityThen 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 household per device(s) not just per person … and whether women, too, truly have such access given power structures. 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 7-second YouTube video could cost a low-income African family an entire month of groceries. Yet mobile and wi-fi may be collapsing and renegotiating Maslow’s famous hierarchy of needs. Perhaps the truth is at the heart of these contradictions…

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. 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

Show Notes

Discussion of Africa as a collection of countries and regions, not as a monolith [1:40]

The importance of mobile phones and issues with internet access [5:42], including shared devices and types of content that are popular [14:09]

Africa’s growing middle class [20:06], issues with apps and data usage [25:21], and the rise of WhatsApp [29:30]

Discussion of local advantage when doing business in Africa [34:58] and women in technology [40:46]


Sonal: Hi, everyone. Welcome to the “a16z 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 Knott-Craig who runs Project Isizwe, 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 Isizwe, Alan was an entrepreneur who ran Mxit, which is one of the largest mobile social networks created in Africa. Nkiru is our next guest, and she is the CEO of 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 is headquartered in Nigeria, but they’re also elsewhere in Africa and also in Europe, and in the United States. Fun fact, Nkiru 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 Sheryl 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.

Understanding the diversity of Africa

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 wanna start with is, sort of, just this notion of — when we talk about people talk about technology in Africa, the first notion I wanna 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 Nwapa.

Nkiru: Yeah.

Sonal: Yeah, Chinua Achebe and others, Wole Soyinka. 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.

Nanjira: 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 in South Africa, the model will work in Kenya and Nigeria. And so a lot of business mistakes are being made from that notion, and it’s that sort of actually homogenizing of it. But, yes, there are notions where — I mean, the little cultural nuances that make it seem like a country, but they’re very contextual and very — 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.

Nkiru: I definitely agree with Nanjira and her experience. It’s sort of very similar to mine when people say Africa, I sort of, like, “Oh, there’s 53 countries, and 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 that 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 differences are really, really — they’re quite harsh, the differences. And so when you say you backpacked across the continent for three weeks, and then you then say you’re an Africa expert, it’s a bit irritating from my perspective. But just generally speaking, one of the more — maybe interesting things is when, you know, Americans are doing African voices in film, it’s always a South African accent trying to be Nigerian, or a South African trying to be, you know, a Kenyan.

Sonal: 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.

Alan: 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 sub-Saharan, which is a little bit more homogeneous, and then sub-Saharan you kind of divide it between the West African trading bloc and the East African trading bloc and the Southern African trading bloc, which is — you know, Southern Africa is about, you know, SADC, really — South African Development Community. South Africa, Mozambique, Zimbabwe, Botswana, Namibia. 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 in one big <inaudible>. And, you know, from our perspective, we kind of — very much, you know, at least from an English-speaking perspective — sub-Saharan Africa is as close to a homogeneous market as you can get.

Sonal: Oh, okay, that’s actually interesting.

Alan: But I just wanna 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 car. So, you know, South African product is respected, but South Africans aren’t always the most welcome. You know, Kenyans are well known for talking a hell of a good game, and the guys from Nigeria, they know how to make money.

Nkiru: Oh, no.

Mobile phones and internet access

Sonal: We have stereotypes like that in regions of India as well. Okay, great. So, you guys — 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 a sort of this great — I don’t wanna say the word equalizer, but at the same time, like, it does have that sort of a power.

Nanjira: 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 speak terms being leapfrogging. It’s helped them leapfrogging so many things — communication, access to finances. And this is where we go — again, cue M-Pesa.

Sonal: Right. M-Pesa as in, the company that came out of — the payment system that came out of Kenya, and it’s basically mobile payments.

Nanjira: Essentially. 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 [the] 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, you know, the front leader, the trailblazer, so to speak.

Alan: And in terms of commonality, it seems to me that most countries in Africa just are not connected. So, that’s whether it’s roads, or trade, or financial services, or actual, you know, bandwidth. You know, having, personally, you know, 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 to, kind of, get any traction on 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 spend — if you watch a 7-second YouTube video on 3G at South African data rates, it’ll cost you about $20.

Sonal: Oh, my God. That’s a lot.

Alan: Yeah, that’s a lot of money. It’s, you know, a monthly grocery bill for your average — your low-end household. So, where we’re coming from, you know, after trial and fail here and there, around trying to get more people on to apps and internet applications, decided to go back to square one, and kind of get people on the internet before you try — start selling them things on the internet. And, you know, from my perspective, it just kind of dawned on me that the only way it’s really gonna 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 subsidized by taxpayers, and everybody is entitled to a daily quota.

Nkiru: 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 it should be a human right. I’m not that, you know, advanced in saying that, but I still think it should be a 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, and 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 then use in, you know, daily life, daily business, health, education whatever.

Nanjira: 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 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 government that there isn’t enough money. The issue, as you’ve rightfully pointed out, Nkiru, is 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.

Sonal: 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 as 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, etc., etc. 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 3 years away. And that’s basically about one 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?

Nkiru: So, I can generally just talk about smartphones. Oh, actually, smartphones — I think about 100 million on the continent, considering we’re about 1.1, 1.2 billion now. I don’t know. I’m not quite sure, maybe about a billion. 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.

Sonal: Right. I’m glad you’re reminding us to make that distinction.

Nkiru: So, smartphones are 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 forecasts about how fast smartphones will penetrate the markets, but they haven’t come as quickly, because they’re really expensive. Of course, with the new — with Androids now becoming much cheaper, we’re seeing penetration is becoming higher, but it’s still not catching up as quickly as we’re hoping.

Sonal: 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.

Nkiru: Exactly.

Nanjira: 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 through which, you know, access should be facilitated. I mean, because — there’s also the question we are asking ourselves now is — in studies that we’re conducting with people at, sort of, the base of the pyramid, or 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 there are those that maybe, you know — we have cyber cafes, for instance, that still exist. And so one, you know, cybercafe 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 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 the internet?

Sonal: So, that’s actually really interesting. Do you have some of those statistics? Or, can you give us a little bit more flavor about what that looks like?

Nanjira: Right. So, what we’ve 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 start 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 cannot 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.

Sonal: That’s a really good point.

Nanjira: So it’s — this is important statistics. They’re good for estimations. But we also need to bring in the qualitative insights.

Nkiru: The single most instrumental fact on people not owning smartphones is actually the price of smartphones. Well, yes, there are 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, $17. And I’m sure in the next year or two, there will be Android phones for less than $15. And I think the cheaper the phones get, the more people will have them.

Sonal: Alan, do you wanna 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 Nanjira 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?

Alan: I’ll just give you an example. In a South African township, in a place like Soshanguve or Mamelodi, 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 on 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 they hand in their CV, and then they wait for somebody to get back to them. And that’s, you know, between $4 and $10, 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 no ubiquity of the internet for most people in Africa.

We’re now involved with the deployment of the largest public free Wi-Fi network 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, 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, it’s about how many households have a device. And if there’s between 5 and 10 people living in a household, you know, then your device penetration goes up quite a lot, because those 5 or 10 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 when it takes you one minute, even if the video happens to actually be more data, and you’re just on a faster network. So, there’s a lot of education that has to go around there. 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, Yahoo saying, “This is the internet. Click here for, you know, 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 gonna do with this?” And some of the communities aren’t literate either, which brings me to the content. And the content is — I mean, music videos are just a killer category, which is fun. That’s gonna 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 see in our networks that Blackberry is a massive chunk of the market. I mean, I know in America, Blackberry is dead. You know, people laugh about Blackberry, but around here, it’s still pretty big, and Huawei — Huawei Android devices are pretty big. So, I think it’s a little bit different from what’s happening in the States.

Sonal: 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 the 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, you know, go with the power structures that you mentioned, Nanjira — 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 an 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, Nkiru, given that you run a music company?

Africa’s growing middle class

Nkiru: 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, fell swoop. 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 swatting flies, and sort of, that’s not — I mean, yes, there’s poverty, but there’s great stuff happening here as well. So, entertainment is huge because people are — people have, you know, more income. Well, maybe not in Nigeria. Right now, we have a recession. But people have more income and they want us — you know, they want to spend money, you know, doing chill, cool things. And, for example, going back to mobile phones, they’re aspirational.

So, you know, in the way that you want to, sort of, move to Lagos, because you’re in the town — so, 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 poor, and some people are really rich. And there’s 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.

Sonal: 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 statistic, 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.

Nanjira: Yeah. I’d say another angle 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 <crosstalk>, or 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, rather, inhibit us from seeing a bigger picture on how people could actually contribute and benefit from the global economy that’s also gonna be a very digital one.

Sonal: 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 do something with it?

Nkiru: So, when Nanjira 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 generally — I need to have, you know, like, lights. You know, I need to have power 24/7. So, it’s really, sort of, like — I don’t then say, “Oh, there’s no power here.” Because we have to produce our own power. Like, at Spinlet here, we really have to run a generator 24/7. You know what I mean? So, these are crazy things that happen here, but yet, you know, we’re still thinking about, you know, how we wanna code. So, I think it’s just an interesting place to be, where you can do both.

Sonal: 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 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.

Nkiru: Yeah. I mean, I must say, it’s really interesting to see how even in development considerations and development agendas, what 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 question. 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 a 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 into 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.

Alan: So, the main thing is governance. You know, 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, etc. So, when it comes to votes, and deciding who gets them to power, we’re never gonna have better leadership if people don’t know what’s going on.

Sonal: Oh, that’s a good point. So, like, sort of knowledge as a way to, sort of, break down some of that discussion.

Alan: Yeah.

The popularity of messaging

Sonal: I wanna 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 parsimonious about that use of bandwidth. 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?

Alan: You know, we deal with some U.S. companies that try to come into, you know, to Africa. I find that maybe some “first world” kind of companies underestimate the consumer. You know, so they think 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 experience — consumers seem to be demanding as good of user experience as anywhere outside of Africa. But you just have to make it mobile-centric. You just have to make it mobile-centric. You know, there’s just — it’s absolutely irrelevant whether it looks nice on a laptop, you know, it’s just not relevant here.

Nanjira: For us, one way we try to understand that — and also not homogenize users, end-users — is encourage, especially startups that we house here and other clients really, to consider user experience designing there, 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 this standard typical user who just needs to get this and that and that, but they’re very — they’re different nuances. So, if it’s a woman, again, who’s trying to use a mobile health app, there are gonna be things that she sees 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.

Nkiru: 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, prefer to 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 on apps, you know — 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 a browser, you don’t have to download an app that could, sort of, chop up all your data.

Alan: Yeah.

Sonal: 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.

Nkiru: Exactly, yeah. Just design — mobile-friendly designs — as opposed to, you know, when, you know — the whole new concentration on 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 here. It’s expensive. So, people are counting every second they spend, you know, on the internet.

Nanjira: And apps are not 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 app. So if you go to Facebook, you’ll probably have links to this page that also has information, and that kind of thing. So, yeah, before you invest in an app, you have to really check whether it’s actually the appropriate technology to use for advancing your agenda.

Sonal: Right. I would actually say, anecdotally, that’s also very true in India. I just came back from a trip a couple of weeks ago, and I noticed how very few apps anyone around me had on their phones. I mean, what I am curious about is whether you see people doing a lot more stuff over messaging, the way we’ve talked about, like, 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?

Nkiru: I mean, WhatsApp is popular everywhere.

Nanjira: WhatsApp is huge here, but, you know, it’s a millennial thing, isn’t it?

Nkiru: Yeah.

Nanjira: You know, millennials react the same way everywhere in the world, and so WhatsApp is really huge, too.

Sonal: Oh, is it really a millennial thing? I was gonna say, because — I was gonna say, in India what shocked me when I went a few couple of years ago was that grandmothers and aunts were using WhatsApp, and that’s what was surprising to me.

Nanjira: This is true. But then you’re, 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 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 they like, “Have you heard of the new thing coming in?” So I think it’s general — worldwide things that are trending everywhere. 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 — if you’re, I think, maybe middle class where you have internet access, and then you can then make cheaper calls from WhatsApp compared to using the usual Telco line.

Nkiru: You’re mentioning very U.S.-centric apps, and I actually wanted to direct this to Alan to talk a bit about Mxit and its heyday.

Alan: Well, so, you know, I have the questionable honor of residing over probably the biggest tech failure in Africa.

Nanjira: Oh, no.

Nkiru: It was a success at some point.

Nanjira: This isn’t what we want.

Alan: But at the same time, it was probably the biggest <inaudible>, so there were some good things out of it.

Sonal: What were some of the learnings?

Alan: Mxit’s success came from the fact that it made it really, really cheap for people to text one another. That was it. So SMS or texting was — it was too expensive, and Mxit was first moving and built this massive network effect. So, it’s a killer app. You know, one of the lessons is, never ever go up against American companies. You’re dead. Silicon Valley, they’re gonna crush you. 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 — likes for WeChat aren’t to be underestimated — but just aspirationally, in our markets, we can see that WhatsApp is winning. It’s at a youth level. It’s at a middle-age level, and it’s [at] 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 wheel. So, I think that that ship has left, and WhatsApp has won the race.

Sonal: 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 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, etc. 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.

Alan: 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.

Sonal: Oh, wow.

Alan: So, streets all have, you know — the block, or street, or whatever street has got, like, a WhatsApp group. Everyone participates in it, and anything that happens or any suspicious vehicles or anything, you know, people are always — the feedback group is WhatsApp. And it’s, like, 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 in — especially in a community like Mamelodi or one of the townships, the street names aren’t very obvious. The addresses 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. You’ve solved a massive problem.

Sonal: Wow.

Alan: But chat is a massive component of that, you know. And you need the officers 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 — just, you know, if you can plug WhatsApp into it, you don’t have to reinvent the wheel.

Nanjira: Perhaps another way of looking at WhatsApp and, you know, similar chats, like WhatsApp is that it’s come — for me, it’s become so everyday that I don’t even think about it. You know, it’s how people interact, it’s 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 Mxit — and I thought that that’s interesting — 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 gonna 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.

The importance of local advantage

Sonal: I guess what I really wanna get at here, as well, to build on your question is, is there a local advantage, or does it not apply when a global player comes in?

Alan: 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 — some guy sitting in a cappuccino — having his cappuccino in San Francisco is just not gonna think about. You know, 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 to 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 spaces, you’ve got to make sure that someone in the States ain’t gonna, like, just see your idea, copy it, and just come take you on. And the real capital advantage other than the, you know, the hugely talented, aggressive, you know, hard-working people. Just the capital advantage is so overwhelming.

So, in my opinion, you know, we invest in businesses 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, you know, kind of, closed markets to the U.S., 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 land grab had 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 this buyer-seller or friend-friend network in place before. Or know that you can get it before anyone in America gets wind of it.

Sonal: Alan clearly has a very specific perspective. And do you guys agree, disagree?

Nkiru: 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. So, I train my staff, and clearly I’ve spent so much time training them. And then, you know, whoever — the American person is coming in, and they have a lot more money, like, 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 spent all this time training these people.” But then, I also don’t wanna have people working at Spinlet, for example, where nobody wants to hire them. So, it’s like, you know, what came first, catch-22. But I think, you know, an Apple or an Amazon or — I think local advantage is very important, and I’ve talked about, you know, you can’t be an Africa expert 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 how I see it. So, I’m with Alan on this one.

Nanjira: I’ll give maybe two examples of where local advantage is giving a quick win for some startups here. One is very well-known. That was Ushahidi. 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, Ushahidi 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 BRCK that’s being built as appropriate technology for facilitating 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 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 beat you to market in 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.

Sonal: 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.

Nkiru: 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 — you know, is trying to establish footprint on the continent, and the general mistake that, you know, internationals 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 — 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.

Doing business in Africa

Sonal: Reflecting on this notion of competing with business around the world, and locally, any final reflections on things that people should know who are trying to build businesses in Africa?

Alan: Yeah, I once 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 cashflow. 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 are you gonna make money pretty soon. And if you’re not, well, then you’re really up against some guy who’s funded out of Silicon Valley.

Sonal: 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.

Nanjira: Sure. You know, 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 numbers still lag behind in comparison to men. And that could be seen, you know, 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, you know, income-wise, who get to participate — we are seeing such opportunities to raise agency. To have agency to, you know, speak up about issues, to address and to really mainstream the idea of gender in very various considerations.

So, for instance, you know, 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 filling a diversity quota.” And so, you’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 NGO-y, where it’s just driven by citizens who are engaging on platforms that facilitate free expression. So this is fantastic. That said, there’s still women who are keeping off because they’re attacked, and there’s a lot of digital safety considerations to have. And this, you know, 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.

Sonal: Or probably, more likely both, actually.

Nanjira: Yeah, or both. I mean, society does exist in contradictions. And in fact, as a parting shot, I also wanted to add that there’s a fact that we need to have more research supported to really unearth these 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 they’re more mobile phones than toilets. I get that statistic, but then I’m, like, “To what end are we — what are we saying?” You know?

Sonal: Right. What does that mean exactly? Right. That’s a good point. We use it actually. I’m gonna confess, we use that statistic ourselves. I’ve linked to that or quoted that in various pieces, and you’re right to call BS on it a little bit. I mean, not BS necessarily, but to say, like, “What does that even mean?”

Nanjira: What does that actually mean?

Nkiru: That is actually BS.

Nanjira: It’s a statistic to be used <crosstalk> for a U.S. state, so there are more mobile phones than there are toilets — does that apply across the metric, if you’re using it as a comparative? Or is it just for Africa and the developing world? So, there’s a need for more nuanced research to strengthen and, sort of, flesh out those 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.

Nkiru: 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 that the phrase, in itself — instead of creating or, sort of, incubating, you know, a whole group of women who are get — then gonna have more low self-esteem, because or inferiority complex, because we then assume that you have to be great at math to do — to work in a tech company, for example. And, you know, and I feel like when we, sort of, create these things that will help women — or we need to have women do more math — these are, like, 9-year-olds we’re talking about, and 12-year-olds, 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, put light to them.

Sonal: 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, Nkiru, and Nanjira, I just wanna say thank you again for taking the time. This has been an incredible conversation. We’re gonna continue it, I’m sure, in the near future, and the first of many, and thank you.

Nanjira: Thank you.

Nkiru: Fabulous. Thank you so much.

Alan: Thanks very much.

More About This Podcast

The a16z Podcast discusses the most important ideas within technology with the people building it. Each episode aims to put listeners ahead of the curve, covering topics like AI, energy, genomics, space, and more.

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