That may be true and Robina's first take on size of ambition as well.
But make no mistake the venture funds that you talk about have also been biased towards the skin color. How many of these funds have come in to pure-play 100% Kenyan business??
I would tell you that the market isn't that open for local ventures. They don't think you have the creds for their funds. I know of some very not so able fellow who i would say must have been one of the most useless fellows i encountered who has set up a string of ventures across Kenya and Nigeria and has received venture funding at every instance even when his ventures (hospitality industry) haven't really panned out or taken off. I would say he is nothing short of a serial conman to me.... and why has he been getting people to listen to him.... the color of his skin! So, money into the tech space will continue to go mostly to "tech-prenures" coming out of the silicon valley or US eco-system as they have some dotted access to the venture funds which are looking for some play in Africa.
Big money into the Energy sector is happening...... a couple of hundreds of millions... not strictly venture investment but rather project financing is coming in (in fact local banks cannot even take the ticket... they have to syndicate a couple of the big boys and they won't do it because another challenge kicks in... jealousy. The local bank honchos don't see how RV Pundit or Robina can be pulling such a massive project... needless to say, their money is so expensive... mostly around 7% interest (libor +6 almost); way too expensive, you can't possibly make a good return or break even by the standard 7 years which is the "gold standard" for a good infra BoT.
The way for me seems to be around local venture investors being the initial angel/seed investors to the tech businesses, then baby-sitting them upto a certain stage 2-3years down the road; then helping them get some "series b" funding and progressively preparing to unlock to bigger venture funds and as well as bigger market. This is quite how Cellulant has grown. So has Twiga... unfortunately for likes of Seven Seas, turbulent times there and time/need for a change of tack and business focus. The business model of hardware sales or strictly as an SI are long gone... one has to be creating something that assures you recurrent revenue and that you control and can grow into a wide customer base.
You nailed it. The difference btw average kenyan business and say american business - is the size of ambition. Most kenyans or African we have very small ambitions. We just want to buy a house in Karen, own some few cars and some land. We don't have regional nay global ambitions. Whenever I have worked with Americans - I am always amazed by the size of their ambition.
It's probably our education or attitudes or lack of exposure.
Private sector really need to up their game. They shouldn't be complaining and looking at 3rd world gov for support in this century - when the world is now a small village.
Entitled with low ambition. Many businesses think GoK or banks owe them capital. Which is just silly. It is your business - it is your job to hunt for resources. They also think small - so you see a company like say Virtual City or Seven Seas or Craft Silicon - or even Cellulant - they think $50m is heaven. Of course it isn't - cause you need that size of seed to get off the ground - properly scale fast & furious. They don;t look global. Cellulant you can see is a barely successful business - but they are 15 years old "start-up" only in a handful of African countries. While Uber , Stripe are 10 years old and global - with billions in VC. Folks like Safcom think they are big - with less than a B in the bank. Building tech like satellite or buying out startups is a big deal for them - it out of their small mental box. They are such a tiny company with slow, uninspiring ideas and vision.
If you look at McKinsey reports across the board and compare - typically if you do an analysis of a SMB in the west - you find there is about 5 to 10% headroom for optimization at best. In Kenya - the KQ report made my jaw drop - with 200% room for improvement. Very inefficient business. Safcom would think you're crazy if you ask them to do an external SWOT. They are so successful, right?
GoK borrowing big and beating private sector is good - even Safcom should be declared monopoly for their own good. These spoilt brats need tough love.
