Doing Tech Business in Africa: A Few Lessons from Twitter’s Rise in Africa

Very recently Portland Communications released some data from research carried to find out about the usage of Twitter in Africa. The report was received quite well and received some notable attention across the web. Much of what has been written has looked mostly at just the implications of the research on primarily social media and it’s use and growth in Africa. But I’d like to take a different turn and perhaps use some of the insights from this research to shed light on the subject of tech startups in Africa and what works.

Qualitative vs Quantitative Factors

According to the report, South Africa is the continent’s most active country by volume of geo-located Tweets, with over twice as many Tweets (5,030,226 during Q4 2011) as the next most active Kenya (2,476,800) and third comes  Nigeria at 1,646,212 tweets. This continues to give credence to the idea that these three are the countries to watch as far as technology and innovation in Africa go.

Mbwana recently wrote a very well thought out exposition on what factors to look at when selecting which country is best to do business in Africa. Among the factors, Mbwana points out that one should look at are regulatory and macro-economic factors. Looking at rankings based on World Bank and IFC data, these three countries feature prominently among the top 15 countries in Sub-saharan Africa that are easiest to do business in – South Africa ranks 2nd, Kenya 9th and Nigeria 15th.

It is interesting, however, that based largely on more quantifiable terms such as taxation and credit rankings, the latter two of  these three countries do not appear to be the most promising to invest in a tech startup relative to others on the list. There appears to be other factors that are making these countries rise above other states that would seem obviously better candidates when considering where do a tech startup than these.

It seems the more qualitative aspects have a strong bearing on where to do tech business in Africa. Borrowing from Mbwana’a article two key qualitative considerations are:

An entrepreneurial support network – Startup Culture:

Basically is there a critical mass of other like minded people in the country? People you can learn from, people who’ve already interacted with the system and have learnt how to go about things in that country when doing tech business? In any case having more people trying to achieve in the same area as you are also makes it exciting to do business and creates a great ecosystem to operate in.

Perhaps that’s why so many tech startups move to Silicon Valley, there’s something about being in a place where there are many people competing and co-operating and those clusters create great feeding ground for investors. Vibrant innovation hubs such as Nairobi’s Innovation Hub and Nigeria’s Co-Creation Hub are indicative of the presence of a strong entrepreneurial support network.

Lesson: Don’t forget the qualitative aspects. Balance out the quantitative aspects verses the more qualitative ones.

Local Culture:

In ‘Pondering Africa’s Tech Investment Potential for 2012 and Beyond‘, we noted how devastating it can be for the foreign investor to fall into the misunderstanding that Africa is one country, with one culture.

The diversity of cultures in different parts of Africa has a strong bearing on not only how people do business there but also on how consumers will respond to products – not just the product itself but how it is presented and the messaging around it. You can have a great product and kill it with your advertising messaging.

A great example of how understanding the culture can make a great difference in how well the target market take up a product in Kenya is Safaricom’s advertising. Many of Safaricom’s products were more widely received than competing offerings simply because they understood local Kenyan lingo and incorporated it in product names and advertising messaging.

For example, transferring airtime credit from one’s Safaricom line to another is dubbed “Sambaza” the competing Airtel service (this was really the mistake of Airtel’s predecessors, Airtel seems to be doing much better) called their own similar offering “ME2U”, people took to Sambaza versus ME2U and nowadays you’ll hear a Kenyan with an Airtel line saying they want to “Sambaza” credit to another Airtel line…. this is a bit hard to explain given most of the people reading this are not Kenyan but it’s exactly the same thing as saying you are going to “Google something on Yahoo

Lesson: Keep in mind the context of your operation

The Youth of Africa are where it’s at

The report indicates that 60% of Africa’s tweeters are between the ages of 20 and 29. That’s pretty amazing if you think about it.

According to the 2011 Africa Youth Report compiled by the Economic Commission for Africa:

The majority of Africa’s population is below the age of 30… Young Africans are the key to an African renaissance and will remain players in and advocates of social transformation and development in many spheres. The enormous benefits young people can contribute are realized when investment is made in young people’s education, employment,health care, empowerment and effective civil participation

According to this document from the Africa Commission:

Almost two-thirds of the population in Africa is below 25 years of age. More than 20 per cent, or almost 189 million, are youth between 15 and 24 years of age. This share will remain more or less constant for the next 10 years.

This presents an unprecedented market and labor pool (Read: Kenya Julisha ICT report: Invest in new skills. It’s called Human Capital) if tapped. Many are tech savvy and connected unlike ever before on the African continent and they are willing to learn & try new things. They do not have immediate memory of colonial times, and so are not living with that burden on their minds, they see a world open to them to explore, where they can compete with contemporaries from across the globe, and share and learn from them.Thanks to the Internet and web (particularly delivered via mobile) they have ready access to information and this has empowered them.

Lesson: Tap into the youthful African population

Reflecting again on the Twitter report, it is interesting that majority of Twitter users in Africa are using it to stay connected with friends – 81% of those polled saying that they mainly used Twitter for communication with friends. One could easily draw a parallel between Twitter and SMS messaging (only that Tweeting is cheaper). Perhaps one reason why Twitter is picking up is that Africans can already relate to sending short messages via mobile and so it is really to turn to the internet based for communication with friends – the principle is the same.

Lesson: If you’re introducing something new, it could be helpful if you can mimick something that’s already common to increase adoption rate

The Power of Mobile (duh)

The Portland Communications research indicates that close to 60% of tweets from Africa are sent via mobile phone. Now, the amazing link between Africa and the mobile platform is not a new subject but one that deserves mention over and over again. The simple fact is that the mobile device will remain the most powerful platform to reach the mass market in Africa for some time to come.

There are companies that are doing pretty well by tapping into this. For example, ForgetMeNotAfrica brings internet messaging and social networking to every mobile phone including the most basi ‘feature’ phones without WAP.