Ideas, Stories, and Profiles

As CanGo (formerly SafeMotos) has operations in Kigali and Kinshasa, with a technology team in Nairobi, it means that I have spent a significant amount of time in each of these cities over the last several years.

A part of the technology startup entrepreneurs mind is looking for pattern recognition between users and places with the idea of differentiating what is a great idea for a small number of people, then what is a great idea for a huge number of people. What has often surprised me, and not just with these three cities but many cities across Africa, is how different the mindset and consumer behaviour can be between places which, for the casual observer arriving by plane may seem largely similar. The purpose of this blog is to capture an outsider’s perspective of these cities in a way that sheds a bit of light on the different forms of technology ecosystem taking place in Africa.

First a caveat, while I have been based in Africa for most of the last decade, I am a Canadian. There is certainly no offense meant in any of these insights, my belief is that an outsider perspective can often bring certain insights that a local might miss, but that an outsider is going to always miss a lot of icebergs in terms of insight.

Photo by CanGo

Another quick caveat: what I’m primarily looking at here is city-oriented, for-profit businesses that use technology as a scaling mechanism. This is just a limitation of the fact that this is the space where my own business operates. I am appreciative of the incredible innovations that have been focused on rural areas of Africa, as well as the exciting projects led by non-profits that, somewhat surprisingly, have often been innovation leaders.

Nairobi, Kenya

Let’s start with Nairobi. There can be no getting around the fact that Nairobi’s adoption of technology is in a class of its own, not just in Africa but globally. For the urban middle class of Nairobi, technology is not something people are wowed by, it’s something they adopt, embrace and take as a part of their daily life with staggering quickness. My co-founder Peter’s family is often a litmus test for the Nairobi mindset. They are not the early adopter, young adopter crowd but more parallel to my own aunts, uncles, and cousins in Canada. Where for my family AirBnB is still a wild thing, and Uber is something you might use to get home from the bar if you’re desperate, in Nairobi it’s normal weekend banter to discuss where the best AirBnBs are and Uber’s vision of replacing cars is already realized by a huge subset of the population.

I would honestly say that of any city I’ve been to in the world, Nairobi has most fully embraced technology into their daily lives. People seem used to the disruption of technology and instead of being bothered by it, seem whole-heartedly to take pleasure in riding the disruption wave. It’s quite remarkable.

What this means is that Nairobi’s reputation as a tech hub is wholly justified, and it really is a natural place for international companies looking to put a toe into Africa to treat as their beachead.

However, that naturalness has some downsides: its ease of tech adoption is matched by a typical lack of loyalty to products, with consumers taking whichever product is the cheapest that day. A core part of success in a startup is to figure out competitive defensibility, but Nairobi is a nightmare for this as more and more companies pile in to get access to the incredible Nairobi early adopters, but no one seems to have a plan of how to win an incredibly crowded playing field. Off of the top of my head, if you are looking for a food delivery service, you could use Uber Eats, Yum, Jumia Food, and Glovo; while if you want to take a ride-hailing option, there is Uber, Bolt (formerly Taxify), Little, and SafeBoda.

While there is the obvious problem for myself and my company that it’s close to zero fun to enter into a price war in a crowded mature market place with better capitalized rivals, there is also the secondary problem that it feels that every service is trying to beat the other for the first low hanging fruit on the tree, without the strategic breathing room to think at a more macro level. For me there is an existential question for Nairobi of just how large the early adopter market is: Are the trends experienced in Nairobi a town of innate early adopter geeks, or are the lessons scalable across Africa?

Photo by CanGo

My personal belief is that the best way to roll out a startup in Subsaharan Africa – South Africa (SSA-SA) is to consolidate as many related services into one. Have the largest and most engaged user base, and to have clear differentiation from the tech Goliath's prowling any market that looks promising.

Mpesa is a great example of this. It is an organic monopoly with incredible natural network effects. For my personal area of expertise of on-demand, Nairobi is a battle for the startups there, where I believe if any victory is going to be possible it will be very pyrrhic. It is a great place to hunt for future opportunities on the level of a next Mpesa. I just believe there is a warning for future entrepreneurs that they need to consolidate the market and not let anyone else in. I’m still scratching my head how Uber and Taxify left the oxygen for all these other startups.

Kigali, Rwanda

Kigali is a fascinating place. The stats that come to mind for Rwanda and Kigali are things like it is the fastest improving place on a human development index for the last twenty-five-plus years; that Kigali is often ranked the cleanest city in Africa and Rwanda has the highest ease of doing business in Africa, outside of South Africa and Mauritius. This is the city that I had the privilege to call home longer than any place outside of my childhood home in Canada.

But fascinating is an interesting choice of words. What took me longer than it should have is to realise that Rwanda has put the cart ahead of the horse. Instead of creating a vibrant and innovative tech ecosystem, Rwanda has branded itself as the capital of a vibrant and innovative tech ecosystem, and is hoping by and large that the ecosystem catches up. What seems to be largely missing in Kigali is the ‘animal spirits’ that typically are core in unlocking business opportunity. In most places, the metrics are easy: people want money and are okay using money as a measurement. In Kigali, what most business people say is they’re shocked by just how little anyone actually talks about money; it would seem that money isn’t the goal. While I’m not going to dive into what alternative motivations could be, and whether that’s a positive or a negative, what it does mean is that Kigali is not anchored as a normal place.

Let me give you an example: the much touted high-ranking Rwanda experiences on the ease of doing business index. The way this model typically works is academics look at a small basket of indicators on an economy that can be used to be indicative of the whole. An example might be how you can test a Mexican restaurant by the quality of its guacamole (or a Kigali restaurant by the quality of a brochette). However, the powers that be understand that mindset and have, to use the framing again, put the cart ahead of the horse: the entire economy of Rwanda is oriented around ease of doing business indicators. Children are taught it in school, businesses are measured on them and ministers sweat over them in every project they oversee. Now why is this a problem? There is a mindset that if it’s measured, it’s important; if it’s not measured, then it may as well not exist. Going back to the Mexican restaurant analogy, let’s say they have great guacamole but the service is poor, the kitchen isn’t hygienic, and other things on the menu are not at the same level. Even if a Mexican restaurant can usually be measured to some level by its quality of guacamole, that is a proxy, and a good guacamole can hide some serious gaps. Such is the way with Rwanda, where unfortunately the gaps (specifically in education and speaking an international language of business) though may be unmeasured, often can be canyons.

That being said, Rwanda is incredible for some things. The fact that there are visas for technology entrepreneurs, you can register a business in a day, and it’s considered safe to visit does make it attractive for a certain stage of development for a startup. For CanGo, we use it as a ‘showroom’, where we can use the public relations engine to our advantage.

Kinshasa, D.R. Congo

Last, but certainly not least, is the mega city of Kinshasa. I have to be very open with the fact that we are betting my company’s future on Kinshasa, as well as the fact that I am personally fascinated by it. It is the most I can say a place is my home since I was a child and, with fairness to the unpredictability of life, I would be more than happy for this place to be my permanent home.

There are some obvious macro things that makes Kinshasa so positive a place for myself and CanGo: it’s a city of somewhere between 10-20 million people with good mobile internet and no startups (outside of CanGo!) of note. In my opinion, this is the perfect environment to attempt a v2 of Nairobi, where the same incredible empowering forces of technology can be unlocked, but avoiding the brutal segmentation and price wars of Nairobi by working to consolidate the ecosystem into a defensible fortress before competition arrives. (Shhhh, don’t tell anyone.)

Photo by CanGo

There is a secondary reason that Kinshasa seems to me so remarkable. I personally believe it can provide more scalable lessons in tech for good than any other city in Africa. The rationale for this is a couple of steps, so lend me your patience.

In most of the world, technology startups are firmly focused on the middle class since this is where the greatest purchasing power is. This mindset has largely followed into technology startups strategic direction in Africa (with many notable exclusions). A great example is the recent billion dollar IPO of Jumia, a company seen as a leader in the technology revolution in Africa, yet a company that to me still has quite a bit of daylight between who they think their users are and what the mass market of Africa actually is. An easy example is the fact that Jumia demands login via e-mail when a huge number of smartphone users don’t have  active e-mail addresses; largely excluding them from Jumia services. In my opinion, the company that will be most exciting in Africa is not the company that localized international products for the middle class of Africa, but rather whichever company creates the ‘killer app’ for the unfortunately still-broke African mass market. I believe Kinshasa is an ideal test case to develop this killer app; its challenging business dynamics, giant population, relative isolation, and unfortunate levels of poverty mean that the sort of product that will flourish here cannot be the same product that flourishes in Silicon Valley — it needs to be a new approach entirely. However, for a product to pass this threshold would mean that it would have practical lessons learned for the rest of the African mass market.

Photo by CanGo

Looking ahead

As a company, CanGo is looking to have its cake and eat it too. We are not just idly noting the differences between these cities but using them to our advantage. Our tech team is based in Nairobi, where we are harnessing the engine of its tech visionaries. We have our head of innovation based in Kigali, where we are using its best in class capacity to launch new ideas and to be our new products factory. Then, we are making our growth engine Kinshasa: a giant city where we are working to be its introduction to the life-changing potential of technology at scale. Every place in the world has something incredible to offer, you just need to know what you’re signing up for so that the different puzzle pieces fit together.

This article was originally published on CanGo blog.

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