Catalyzing the growth of the Kenya tech community

m:lab East Africa Outcomes - Two Years Later

By John Kieti
m:lab
  Published 26 Jun 2013
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m:lab East Africa Outcomes - Two Years Later

It is two years since the official launch of m:lab East Africa. Much was anticipated with regard to the m:lab's contribution to the regional mobile ecosystem. The sheer interest and attendance by industry stakeholders at the June 2011 launch in Nairobi pointed at great expectations and an implied mandate for the m:lab to stir up the mobile ecosystem to progress. A seed grant totaling $725,000 given to the m:lab by the World Bank's infoDev program also solidified expectations of stakeholders across the board.

Key findings of an outcome and impact study by University of Nairobi of the m:lab's two year activities were reported at the third edition of Pivot East - the m:lab's annual regional mobile startups pitching conference. The study which was conducted between April and May 2013 focused on 3 key activity areas at the m:lab namely (a) mobile entrepreneurship training (b) Pivot East regional competition and (c) the incubation program. Below are some of the findings.

The m:lab has attracted major partnerships, sponsorships and brand associations with industry players across the board. Besides infoDev, the m:lab's key partners over the two years have been Samsung, Nokia, Microsoft, Qualcomm, inMobi, Intel and Mocality International Holdings (MIH). Other key partners that have sponsored the m:lab's ecosystem building activities are Mercy Corps, USAID, CGAP, Omydiar Network, Uganda Communications Commission, National IT Authority - Uganda, Kenya ICT Board. Mobile network operators such as Tigo, Safaricom and MTN have also contributed financially and in kind to the m:lab's activities over the last two years. Other private institutions such as Equity bank and CraftSilicon also contributed generously to the m:lab's programs.

Mobile entrepreneurship training:

The m:lab held five waves of mobile entrepreneurship training programs each lasting over four months. A total of 125 trainees were recruited with 103 individuals completing the program. In the study, technical training, business skills , pitching skills and business networks were rated as the most beneficial aspects of the training program by the program beneficiaris as indicated in the chart below

training benefits 500 Benefits of training according to trainees

75% of the training participants were found to have been college graduates and 64% were between the ages of 21 - 24 years. A male to female participation ration of 4:1 was observed in the program. About half (55%) of the trainees had never run a business prior to being in the program. The study also found that among alumnus of the program, 72% continued to be involved some form ofentrepreneurialactivity by the time of the study. 16% of the alumnus were found to to be working at their startups on a dedicated full time basis. Key recommendations of the study regarding the training program were :-

  • To extend the training's business support period
  • To formaliseentrepreneurialsupport beyond the training
  • To diversify the mix of participants by gender, professional background and citizenship
  • To enhance the business training component
  • To integrate the training with mentorship
  • To create a knowledge loop with past graduates
The regional mobile startups pitching conference - Pivot East:

The annual competition and conference whose first edition was in 2011 has gone on to be a strong regional brand. The competition has evolved from focussing on great mobile apps to great mobile enterprises according to interviewees in the study. The study found out that most (80%) Pivot finalists in 2011 and 2012 had registered companies. The study also found that 75% of the founders in previous finalist startups were still continuing to work at their startups. Most of the founders (90%) of the companies reaching the finals were male and most (86%) had a computing background.

According to the study, the most valuable benefits to finalists of Pivot in 2011 and 2012 were acquired pitching skills (87%), visibility (74%), training and coaching (68%). The finalists found least benefits in Pivot's outreach activities and meetups (27%) and getting investment (37%). An expectation gap was found among the previous finalists in that for some, anticipation to meet partners (38%) and attract investors (14%) was not fulfilled. The most largely met expectations of the previous finalists were visibility (67%) and business skills (64%).

The study found that75% of previous finalists stated that their businesses had been growing. 19% of them had suspended their business.

pivot company status - 450 Status of startups pitching at Pivot in 2011 and 2012

Through the competition, every year 25 startups have pitched to an audience of investors and industry players. Five category winners were awarded a $5,000 prize each in 2011. In 2012, fivewinners were awarded a prize of $10,000 each. In 2013, five winners of Pivot East will be awarded a $5,000 grant and a $5,000 investment option.

Among the previous finalists, 47% had began generating revenue according to the study

pivot company revenue status - 500 Current financial status of startups pitching at Pivot in 2011 and 2012

The study found areas of improvement as follows :-

  • There was a mismatch of interpretation of purpose of PIVOT between the finalists and the organizers
  • There's a need to ensure that everyone who got to finals was a winner in some way
  • Follow up mechanisms beyond competition were required
  • There's need for increased incubation capacity
  • There's a need to bridge the apparent gap between investor and start-up expectations
  • Attract skilled business people into start-ups
  • Tiered competition levels
The on-site incubation program

The m:lab's onsite incubation program has had 8 startups incubated. These are Kopokopo, MTL systems (MShop), Uhasibu, Mfarm, MedAfrica, Whive/CrowdPesa, Zege Technologies and MPrep. Among these, two of the startups (Kopokopo and MedAfrica) graduated from the program within the 12 months of being there.

Expectations of the startups with regard to the incubation program are depicted in the chart below

incubation benefits 450 Expectations of startups incubated at the m:lab

According to the incubated startups, the m:lab was most helpful in giving visibility (62%) and access to business networks (50%). The least helpful component was in pitching to investors (38%) and Technical skills (12%). The study also found that the most useful aspects of being incubated at the m:lab were office space (75%), shared meeting rooms (75%), internet connectivity (75%) and coaching (50%). The study also found out that 7 out of 8 incubates perceived their businesses to have grown. Areas of business growth as perceived by the startups were :-

  • setting up own offices
  • positive cash flow
  • evolution of business and products
  • Growing customer numbers
  • Growing visibility
  • Partnership commitment
  • Signing on investors
Of the 8 startups incubated, 4 of them had signed on new investors according to the study. The greatest challenges expressed by the incubated startups were scaling businesses, fundraising, and arriving as a business model.

The study recommends the following as areas of improvement

  • morepersonalizedcoaching and mentorship
  • creating stronger investor networks
  • bridgingthe investor - startup expectation gap
  • Support on going to market.
The m:lab is hosted by a consortium comprising iHub, eMobilis, The World Wide Web foundation and University of Nairobi

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