- 6:45 What is the startup landscape in Nairobi Kenya? The small population and scarcity of talent and resources impact which businesses thrive.
- 18:45 What is M-Pesa and why is it such a big deal? M-Pesa is mobile money sent through text. It makes business safer and easier for Kenyans.
- 26:00 What are the biggest challenges to starting a business in Nairobi? Companies have to be solving an immediate, critical problem and avoid government corruption.
- 31:00 How does technology impact building a company in this ecosystem? The technologies that work are very simple and they solve a pertinent problem.
- 37:30 What will it take for people to get access to basic needs and address the Global Goals? Maurice talks about social impact companies that give people jobs while they address systemic problems.
All entrepreneurs to have an equal opportunity and access to resources across the globe. To do that, we form partnerships in the middle east, Asia and Africa so that by 2025 each of those markets are connected and able to move from a nascent to an established entrepreneurs ecosystem.
Currently, Metta is located in Hong Kong and Nairobi. They will be starting in Bali and Thailand soon, and they have representatives in 14 countries. Through the virtual platform, their members can log in and meet each other.
“If I was to predict, I would say probably South America will be next for us.”
Meta is not just a place where entrepreneurs come together, but a place for them to find resources, community, and mentorship.
“We are limited in terms of mentorship to grow businesses into unicorns, and limited in terms of investment opportunities. We’re also limited in terms of finding talent. …So, we’re offering something different than coworking spaces and accelerators. We’re offering shared resources.
Business in Nairobi
“The difficulty you face in East Africa is that we are a very small population. Within even the small market the people are at the bottom of the pyramid.”
Maurice talks about the market in detail: “Since technology innovations are new to the market, there’s very little investment in those projects in Kenya.” Many of the people are involved in NGOs and are refugees from other countries. So, the mentality, Maurice says, is “Gimme gimme gimme.” Startups and investment are a new conversation.
What does success look like for startups in Africa?
The successful companies, Maurice says, are companies who don’t mind sharing. Also, they are the ones creating solutions for people living on $1 per day or less. The individual entrepreneurs who are successful are the ones who take meetings and go to events frequently. They spend money to get talent, too.
“They do spend an arm and a leg to get the talent they need. But you need a good team who can hold fort while you go to brave the fronts of getting investment.”
First World Problems
Maurice teases about first world problems that Americans deal with versus survival problems that Africans deal with. “Do we even have a road?” he laughs.
It is easier for an expat to start a business in Kenya because they can look at what businesses worked in their country, and bring those same business models back to Kenya.
The Benefits of Starting a Business in Kenya
Maurice lists the benefits for founders in Kenya:
- Payments are transmitted so quickly through M-Pesa
- The weather is good and Nairobi is beautiful
- Kenya needs businesses and startups
- Most Kenyans speak 3-4 languages. English, Swahili, language from schooling (Japanese, French, etc) and one of the 14 tribe languages.
- Moderately expensive to live there, but more stable than neighboring cities and countries.
- Many expats and company headquarters based in Nairobi as well.
- No internet access needed
- Money transfers through text
- There are 100k agents or dresser-sized ATM’s to get money
- Banks are now partnering with M-Pesa to put your money in your M-Pesa wallet
Interestingly, there are still 70-80% cash transactions in Kenya, but the technology is spreading rapidly. M-Pesa was a major need in Kenya because opening a bank used to be for the rich. The minimum deposit for a bank account is $100, so it was too much to open and maintain a bank account for most Kenyans.
Also, carrying money is dangerous in underdeveloped countries. So M-Pesa provides a measure of safety.
Challenges of Doing Business in Nairobi
Maurice says that in order to be successful in Nairobi, you have to be solving an immediate, critical problem. He notes key areas that impact business growth in the country:
- Addressing an immediate need
- Avoiding corruption – caution when interfacing with the government
“Funny enough, we’ve had the most recent political assassinations of any country. That was an eye opener. Also, Europe is 35 years behind Silicon Valley, and Africa is 10 or 15 years behind Europe. But I think right now, it’s coming of age.”
Do Tech Companies Survive in Emerging Markets?
“The fundamental thing people are forgetting is that you are solving a problem first, before you introduce the tech. So over here you find that the technologies that work are not that advanced. They are very simple and they solve a pertinent problem.”
Problems like “How to get milk to a place that has a lot of bananas” – these are the simple technologies that work in Kenya.
Blockchain has been recently introduced to address corruption in the government, and Maurice says that is a huge step. “It’s simple but very very key.”
As far as exponential technologies, Maurice says they are present and it’s a matter of time before they begin to spread. Adaptability is the issue, though. For example, in order for Uber to spread to Kenya, people have to know how to use Google Maps. Google Maps hasn’t been adopted yet, and the country isn’t well mapped. Once distribution, basic data, and familiarity with basic applications are established, exponential tech can grow. “10-20 years, I’d say,” says Maurice.
What It Will Take To Address the Global Goals
“It’s already started” Maurice says. He talks about social impact companies that give people jobs while they address systemic problems.
- M-Pesa: 30 million people rely on M-Pesa for their transactions through their flip phones.
- So, wherever you go, you’ve gotta have a financial foundation!
- M-Pesa addresses the corruption and banking problems that made starting a business next to impossible.