The challenge and opportunity of starting ICT enterprises in Kenya

1
The challenge and opportunityof starting ICT
enterprises in Kenya

• Mike Eldon
• Executive Director, Symphony
• Chairman, Kenya ICT Federation
• Governor, Kenya Private Sector Alliance

2
Start with the SWOT

• Strengths
• Weaknesses
• Opportunities
• Threats
• for Kenya, and for ICT

3
The strengths

• Our people
• Energetic, educated, English speaking
• Our geography
• Time zone between the West and the East
• Central in Africa
• Our communications
• Regional hub, air in particular
• Services
• Financial, media and ICT

4
The weaknesses

• ICT policy, champion, focus, resources
• Infrastructure
• E-Government
• Bureaucracy
• Fiscal incentives
• The economy
• Enabling environment!

5
The opportunities

• Domestic urban rural
• Regional
• International

6
The threats

• India, Pakistan, Sri Lanka
• South Africa, Egypt
• Ghana, Uganda, Tanzania, Rwanda
• You name it!

7
Whats your SWOT?

• Start with SELF EXPLORATION
• deep, comprehensive, realistic!
• What could and should you be doing?

8
Are you a trader, a box pusher?

• Sourcing, logistics outlet
• Low margin, high volume
• High stocks, high working capital
• Commodity, many competitors

9
Or a Service Provider?

• Systems development, web design
• Systems integration infrastructure
• applications
• Project management
• Consulting Audit, Strategy
• Business continuity
• Call centre, help desk
• ISP, ASP

10
Then do the research

• Again deep, comprehensive, realistic
• Finally, match
• self-exploration to research,
• offer to need

11
The pattern I have seen

• ICT technical education
• ICT technical employment
• ICT company start-up
• (mysoftwarekiosk.com)

12
Timing, sequence, partners

• Unless youre Bill Gates, dont drop out of
  college to start your company at 20.
• First work in a professional organisation for 3-5
  years. Listen, learn dos and donts.
• Get set for a life of insecurity
• Dont go it alone complementary skills
• Build your networks all along

13
The challenges

• Immediately
• Legal/corporate issues
• Finance loans, credit, debts, cash flow
• Then
• HR, administration, structures, systems
• Account management, product development
• Jack of all trades
• 24/7

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The solution?

• Think big but start small
• Learning by doing, quick wins
• Partner, network
• Leverage, synergise
• Stick to your knitting
• But become a true CEO
• Focus on customers and cash flow

15
Market realities

• Clients prefer to deal with those who have
• done it before
• are well known preferably internationally
• or
• who are cheaper than you
• (briefcase operators!)

16
More realities

• Clients are conservative. That means
• They dont want to be first
• They need a lot of education
• (demand creation)
• So you have to be patient
• and have deep pockets

17
Starting up a plus and a minus

• The minus
• You dont know what you dont know
• The plus
• You dont know whats not possible

18
Financing a dismal tale

• Banks?
• High-tech, high risk, forget it!
• Angel investor?
• or crocodile?
• Venture capital?
• In Kenya, whats that?
• Anyway, too small, too risky
• My/our savings?
• As good as it gets
• plus client revenues

19
NB

• c4IDEA.com
• Knowledge Factory Investments
• Kenya ICT Services Exporters Cooperative

20
and then

• USIU Centre of Excellence in Entrepreneurship
  Development
• Western University incubator
• Other emerging university initiatives

21
Getting to the next level

• Bring in extra shareholders
• Merge
• Acquire others
• Be acquired
• Form strategic alliance(s)
• Local/international

22
Two steps forward

• Life is neither linear nor continuous.
• Just as youre getting really successful
• Market saturation
• New technology/competitor
• Poached staff/clients/principals
• Implementation problems
• Cash crunch

23
Why ICT entrepreneurs fail(c4IDEA.com)

• No business model
• Whos the customer?
• What does he value?
• How do I make money while
• delivering value?

24
Why ICT entrepreneurs fail(c4IDEA.com)

• No competitive strategy
• How will I be different, better?
• In which niches will I excel?
• With what products, services?
• For which customers?

25
Why ICT entrepreneurs fail(c4IDEA.com)

• No business processes
• What are my procedures, workflows?
• How do they help deliver both
• customer value and my bottom line?

26
Why ICT entrepreneurs fail(c4IDEA.com)

• Most dont make time for laying the foundations
  the planning, the structures.
• Theyre too focused on short term survival,
• on crisis management. They dont delegate.
  Theres too much doing, not enough thinking.
• Hence incubators they provide management
  support /or infrastructure/shares services

27
ICT in thing or illusion

• Making a difference
• Intellectual challenge
• Emotional intelligence
• Hybrid (wo)man
• Survival of the fittest
• Keeps you young