Find out what it takes to build a winning app

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By BONFACE NYAGA
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The Kenyan tech ecosystem is the envy of the world with a rising class of innovators.

Tech incubators such as iHub and Nailab are coming up all over Nairobi with groundbreaking innovations and top dollar acquisitions, earning the city the nick name, ‘Silicon Savanah’. Some of the greatest success stories to come from Kenya include Ushahidi, a real-time reporting tool developed after the post-election violence in 2007-2008. The software has so far been used by the World Bank, the Red Cross, World Vision and the US Department of State.

Another major breakthrough technology to come out of Kenya was BRCK; a self-powered mobile WiFi device. Billed as the backup generator for the Internet, the device can run for almost eight hours without power, meaning the Internet does not go off when the power does. 

Although most Kenyans are oblivious to these developments, the world is taking notice. A couple of months ago, Mark Zuckerberg was in Kenya on a fishing expedition. His foundation is reported to have invested $24 million, (Sh2.4bn) into Andela, a company based in Lagos and Nairobi that trains and deploys software developers.

Local tech companies are also reaping big, for instance Weza Tele, which was bought off by financial service group, AFB, for an estimated $1.7million, approximately Sh176million. Just a few weeks ago, an investor forum held at the Intercontinental Hotel, Angel Fair Africa, attracted tech venture capitalists from all over the world, who came to the country seeking to make deals.

So vibrant is the tech space in Kenya, that people from all over the world are coming here seeking golden opportunities. We spoke to some of these tech-entrepreneurs who are making it big in Kenya. If you are a young techie, you will find their stories illuminating.

Daniel Yu, 22, Founder and CEO, Sokowatch. PHOTO | DENNIS ONSONGO

Daniel Yu, 22, Founder and CEO, Sokowatch. PHOTO | DENNIS ONSONGO

Daniel is the founder and CEO of Sokowatch, a company that does last mile ordering and delivery for informal kiosks. The Chicago native found his big break in Kenya and was last year named in the Forbes 30 under 30 list. Through his app, kiosk owners can restock their shops without having to close shop or incur expenses.

According to Nielsen, a consumer research firm that monitors global trends, in 2015, about 95 per cent of Kenyan shoppers frequented kiosks, with about 70 per cent of them doing their daily shopping in these informal outlets. These shops are primarily run by sole-proprietors who often have to close their shops to source for stock.

“The problems of Africa are actually the opportunities of Africa, the business I am doing makes no sense in the US, for instance, where systems work. In Kenya however, the technology is a very useful tool that connects formal manufactures and informal retailers.”

The company has agents who move around signing up shop owners and geo mark their location to enable tracking of future orders. When the shop owners wants to re-stock, they simply send their orders on their Sokowatch app and the message is processed automatically.

The delivery agent assigned to that region then receives an alert to pick and deliver the goods in 24 hours at no extra cost to the shopkeepers who only pay the wholesale price for their stock.

Sokowatch acts like middle men, who get their products from the manufacturer at special rates that enable them to make a profit when they distribute to retailers.

The idea for Sokowatch came to Daniel when he was in Egypt on an exchange program. Then, he was at the University of Chicago. In terms of delivery of services, the disparity between his home town of Chicago and where he was based was stark. He realised just how much the small shop owners struggled to restock their small shops. He also noticed that everyone had a mobile phone, and with a computer programming background, began sourcing for a mobile technology that would solve this problem. The idea started out as Reliefwatch a cloud platform that used cell phones to help health clinics track and manage inventories. The concept won second place in the 2013 Social New Venture Challenge, winning about Sh1million. In 2015, he won the Prince of Wales Young Sustainability Entrepreneurs Prize, beating 816 other applicants.

Reliefwatch would later develop to become sokowatch.

“Once we finished building the app, we contacted big companies that we thought might find the technology relevant,” he says.

A year later, the app helps to supply goods to over 5,000 kiosks in Kenya, with Unilever, GSK, PSI and Chandaria Industries as their main clients.

Sam Wanjohi , 36, Founder and CEO, Popote Payments. PHOTO | COURTESY

Sam Wanjohi , 36, Founder and CEO, Popote Payments. PHOTO | COURTESY
 

Popote Payements is the world’s first digital payments and expense accounting platform. It eliminates the need for cash and cheques by taking financial management a 100 per cent digital. It also reduces the chances of fraud and gives the business owner direct access to payment process, thus reducing the risk of fraud. This in turn reduces a lot of the back office accounting work.

So, could this disruptive technology one day take over accountants’ jobs?

“Popote does reduce the back office accounting work, but I don’t think it will completely do away with accountants, what it means is that they can be more productively deployed, other than just entering numbers,” says Sam.

The clients log into the website, and once they have gone through basic regulatory procedures, they create an account and designate how much access each user can have. Those at administration level can only raise payment and fill in all the required details of the payment so the managers can ascertain what the payment is for. Once they finish, the payment automatically appears on the manager’s phone, and when they approve payment, the money is automatically transferred to the respective person’s phone or bank account. The app is linked with the company account and can make payment to a supplier’s phone, bank account, and even do an international transfer. After the payment is made, the system automatically enters expense accounts. On average, the app handles about 140,000 transactions ranging from Sh100 to Sh10 million. Some of their major clients include Premier credit, Avanti group, Hajar Services Ltd and Babs Security Group.

“Cyber security is a major concern for us, we built the system from scratch and put in security features at every point – we are audited every year by an international expert to ensure we have bank level security in our system.”

Sam’s inspiration for Popote Payments came while he was running his first business, Foresight Interior, a construction and interior design company. He realised that he was spending too much time on administrative work and not enough building and growing the business that he loved. It was not possible to delegate payment without risking fraud.

As the sole signatory, he could not leave the office for more than one day at a time. After realising that there was no system that would allow him to effectively run his business remotely, he designed the app. After using the system for some time, he realised the potential it had and decided to transform it into a business offering the service to other entrepreneurs going through the same problems. His advice and factors worth noting to upcoming entrepreneurs:

  • Keep your day job until your business is up and running.

  • The failure rate for startups is extremely high.

  • Getting funding to start or scale up such a venture is difficult because most investors prefer traditional sectors such as real estate. 

Waweru Kuria, 30, Founder and CEO, iNuka Pap. PHOTO | COURTESY

Waweru Kuria, 30, Founder and CEO, iNuka Pap. PHOTO | COURTESY

According to the 2016 financial household survey by FSD Kenya, 2.7 million people in Kenya chose Saccos as their preferred financial service provider. Unlike banks, Saccos offer favourable interest rates, however, they are open to abuse because they are not as highly regulated as the Banks. iNuka Pap digitalises the operations of Saccos and enables members to better monitor their savings. The app also makes loan approval and payment more efficient, allowing members to borrow small amounts of money.

“People prefer to use Saccos because the profits eventually go back to the members. When we started out, we realised that most people were accessing loans for medical emergencies, so we struck a deal with several health insurance firms to offer the service to our member Saccos. Anyone who has savings above Sh20,000 can now access medical insurance through the app.”

Once a Sacco signs up with iNuka Pap, they pre-approve all their members in terms of who they are, how much savings they have, and how much they can borrow without collateral. After the Sacco signs up, their members can then download the app and begin transacting with it. Because the app keeps members’ data, it makes loan approval easy and cheap, thus enabling the Saccos to lend small amounts in a cost effective way.

“This year we have investors who are willing to put up Sh300million to expand our partner Sacco’s long-term lending capacity. We target the rural dwellers and the lower class. This service is a life saver for people who would otherwise not be able to access regular financial services.”

Having come from a poor background, Waweru knows how hard it is for those at the bottom end of the economy to access basic needs such as medical care, and is glad that he and his team are doing something to make this possible for a number of Kenyans.

The company currently employs seven, a team he attributes to his success.

 Zoe Cohen, 32, CEO, Echo Mobile. PHOTO | COURTESY

Zoe Cohen, 32, CEO, Echo Mobile. PHOTO | COURTESY

Availability of reliable market data in Africa is a major challenge. The continent has a market of over a billion people with increasing purchasing power, yet very little is known about them. Echo mobile uses the mobile phone to collect information such as consumer trends, taste and preference. Some of their clients include the World Bank, UNICEF, IPSOS, UNDP and the Aga Khan Foundation.

“In the US for instance, there are so many consumer data collection points – every time one clicks on a website, there are a cookies collecting and correlating data. That data allows businesses to make informed decisions. In Kenya however and Africa in general, that data is not readily available, we don’t know what people want or how much they are willing to pay for it, where they buy what and why,” observes Zoe.

It is a mobile-based customer engagement and marketing platform that organisations can use to collect credible information to assist them make business decisions. The platform uses SMS, USSD, web, android and voice sensors to collect data – the actual deployment is custom-made for each client.

“The actual application varies, in some cases clients set up sweepstakes for their customer base and use the registration process as a data collection point. In other cases they use warranty registration or customer support centers as a data collection point. Through this back and forth communication, governments, private companies and NGO’S can collect data that can help them achieve their mandate.”

Echo mobile was founded by its current Chief Technology Officer, Jeremy Gordon. In 2013, the 31-year-old took a break from Stanford University to set up his startup in Kenya, where he first visited in 2010 as a volunteer on an exchange program. He first worked with Juhudi Kilomo, a microfinance, after which he intended to resume his studies. With time however, he got so engrossed with the roles he had taken up, he just never got to complete his degree, instead choosing to focus on his startup, Echo mobile, a company that has been steadily growing since its inception in late 2012. 

Eric Osiakwan is a Ghanaian tech entrepreneur with over 15 years of industry experience - he is an angel investor and founder of Chanzo Capital. PHOTO | COURTESY

Eric Osiakwan is a Ghanaian tech entrepreneur with over 15 years of industry experience – he is an angel investor and founder of Chanzo Capital. PHOTO | COURTESY

Eric Osiakwan is a Ghanaian tech entrepreneur with over 15 years of industry experience – he is an angel investor and founder of Chanzo Capital. Over the years, he has invested in various startups in Kenya, Ivory Coast, Nigeria, Ghana and South Africa.

He is also a co-founder of Angel Fair Africa, a deal-making conference that connects innovators with investors. At the event, venture capitalists from all over the world come to listen to business pitches from African techies and invest in their ideas if they are impressed by them. Since its inception, successful participants have received over Sh2bn worth of investment from various venture capitalists.

What are the characteristics of a winning app, one that can make you money?

  • It needs to have market fit, so create a technology that is exactly what people want and need. It also needs to have massive user adoption. A good example is Facebook and Mpesa; these are technologies that have been adopted on a large scale.

  •  Before getting down to create an app, what factors should one consider?

  • You need to understand what problem you are solving and ask yourself whether users would jump on your solution.

  •  How can Kenyan techies commercialise their tech ideas?

  • By making sure they can attract customers who would pay to use their innovation. They also need to understand Intellectual Property laws; IP is the core value in any technology. Lawsuits and IP disputes can dissuade investors especially when you are selling your idea to a big company. 

  •  What are some of the mistakes that Kenyan techies make while creating products?

  • They focus too much on the coding and the technical aspects of software development and less on selling the product to customers who would pay to use it.

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