Apps makers challenged on giving social solutions
Posted Wednesday, June 13 2012 at 18:13
Mobile application developers in East Africa have been challenged to up their game by creating tools that offer solutions as opposed to focusing on winning awards.
When technology enthusiasts converged for the second edition of Pivot East, an apps competition, last week on Nairobi where an Sh850 million ($10 million) accelerator fund was launched, the budding creators were warned against the allure of copycats.
Launched last year as Pivot 25, the assembly has now been expanded to accommodate participants from other East Africa countries.
Although the event, including the new fund, is supposed to nurture ideas for growth, some presentations elicited murmurs from the sharp eyes of the industry watchers that sounded the alarm: guard against theft of ideas.
Ory Okolloh, Google’s policy manager for Africa later tweeted: “As much as we are crying for seed funding, we are not seeing many apps with a solid revenue model, or scalable user acquisition model.”
Some participants critiqued the lack of creativity and apparent copying of existing solutions, especially in the financial category.
Others said that some of the applications were purposely built to win competitions but not to tackle problems in the market.
Apps development has got considerable attention partly with support from firms, through awards, that were keen on raising a robust generation of technology experts, especially in Africa.
According to the co-founders, the Sh850 million Savannah Fund seeks to introduce the Silicon Valley-style accelerator fund model to Africa, seeing what needs to be changed to make it work for the region.
It is the brainchild of Erik Hersman, a co-founder of Ushahidi and iHub, Tanzania’s venture capitalist Mbwana Alliy and Paul Bragiel, co-founder and managing partner at i/o Ventures, a Silicon Valley start-up accelerator.
Although a section of developers got a harsh verdict, some were recognised for doing a splendid job in coming up with applications that have the potential of solving real life problems.
One of them was an android application, MafutaGo, by a Ugandan that enables users to locate petrol stations and compare prices.
Another one by a Kenyan — mPoultry —is a brooder monitoring system aiming at reducing costs of keeping birds and to improve efficiency.
Savannah Fund will invest in five startups at a time. They will get $25,000 for 15 per cent equity, and have three to six months to prove that the venture has room for growth. Those that fail to pass muster either pivot or leave while those that gain traction will win follow-on funding of between $100,000 and $200,000.
The fund will also invest in other high-growth tech companies in the region.
In the last two years, most Kenyan start-ups have centred on mobile applications or web portal solutions but they lack funding to grow into mass production businesses.
Mr Hersman told Business Daily ahead of the launch of the fund that Kenya’s investment culture underrated technology start-ups preferring traditional vehicles like land, property and equity.
“Kenyan investors are normally cagey about investing in technology, especially start-ups, because they seem high-risk,” he said. “It is true that tech start-ups are high-risk but the returns are equally great and that is why we have a lot of foreign direct investment in the tech sector and local investors are losing out.”