Rise of innovation hubs bridges gap for tech start-ups
Posted Wednesday, August 1 2012 at 18:20
It is exactly 10am at the iHub and there is silence as Erik Hersman introduces the main speaker to a group of 30 or so men and women, all in their twenties.
This is one of the many developer meet-ups organised at the incubation lab and today’s forum revolves around how to execute a convincing presentation and pitch a start-up to investors.
For the next two hours, the young software developers will be taken through aspects of creating effective PowerPoint slides and elevator pitches and handling tough questions from venture capitalists.
This is just one of many activities that take place at this pioneer innovation lab in the East African region, which turns two years old August.
The iHub was formed in the sidelines of Ushahidi as the founder, Mr Hersman, together with a group of young developers, volunteers and journalists passionate about technology sought space to work.
Today, the same demand for working space by young techpreneurs has led to the rise of more than a dozen incubation labs in Eastern Africa in the last two years.
Recently, the GrowthHub in Nairobi became the latest entrant.
Ngong Road in Nairobi has come to be synonymous with technology start-ups with six of the eight hubs in the city setting up residence there. Three more tech spaces by Equity Bank, Nokia and the iHub are set to be opened in the tech corridor by year end.
The incubation labs not only provide thousands of young techpreneurs with the infrastructure to enable them launch their start-ups and take their products to market, they also raise the country’s clout as a regional technology powerhouse.
However, their role has come under scrutiny lately after it emerged that most techpreneurs do not have sufficient business skills to take their ideas to market.
At the Africa Innovation Summit held in Nairobi two months ago, Information and Communication Permanent Secretary Bitange Ndemo stated that most techpreneurs miss out on funding because they lack a clear business plan.
“Most of our young techpreneurs do not understand the amount of resources required at any particular stage in the process of transforming their ideas into market products,” Dr Ndemo said.
“We have had cases where young entrepreneurs cannot even differentiate revenue and profits and end up consuming everything in fancy lifestyles. This has scared away many foreign and local financiers since no one wants to engage their money in an uncertain venture,” he said.
In addition, Kenya performed dismally in the latest world ICT ranking by the World Economic Forum and INSEAD School of Business.
The country dropped 14 places to position 93 owing to poor connectivity rates, low ICT skills and a poor regulatory framework.