My Month exploring Nairobi, Kenya's Startup Ecosystem

Reflecting on my time in Nairobi, there are a few things that stand out to me. While the Nairobi scene is still young, local entrepreneurs have an incredible amount of opportunities to pursue looking forward at the next 5 years. Technology companies from the US, China, and Europe, who are looking to expand to Kenya will continue to have a tough time figuring out how to execute on localization strategies for Kenya. This presents an enormous opportunity for local entrepreneurs to find an idea that’s worked in a developed market and start building it for an African consumer base. This will lead to numerous multi-million dollar acquisitions as most companies wanting to enter Africa will look to acquire local startups with tractions instead of trying to execute themselves. This is exactly what Nairobi needs to get to the next level as an ecosystem. Headlines of successful startups exits will help to solve the current achilles heel for Nairobi’s startups, a lack of access to capital. Once local startups can start to engineer solid exits, local angel investors will start getting interested in high-risk technology investing, as opposed to real estate. It will also attract more venture capital from the developed world.

Myself with the Cofounders of Sky.Garden, an African clone of Shopify

African clones aren’t the only way entrepreneurs in Nairobi will win. Businesses are created when an entrepreneur finds a problem they’re passionate about, and they solve it. There are plenty of problems to be solved in Nairobi, from clean water, to infrastructure, to farming. I personally believe the first really innovative wave of IOT companies will come from the developing world. Most IOT companies here in the US are creating products that solve minor inconveniences in day to day life. However in Nairobi, the opportunity is there to solve huge societal issues at scale using smart devices for farmers, in cars, and more.

Picture of Gearbox, Nairobi's leading Hardware incubator and accelerator.

I was super impressed at the software and hardware engineering talent I met. Organizations like the Moringa school, Gearbox, and the iHub are doing an incredible job at providing resources for young Kenyans to learn coding, 3d printing, and hardware manufacturing. What Nairobi needs right now is more business people starting companies. More of a focus on turning products and apps into companies. I don’t believe entrepreneurship can be taught in universities, it’s something that has to be learned through experience and failure. The future technology ecosystem leaders in Nairobi are going to be the local entrepreneurs who take the leap, fail, learn, grow, persist, and then inviability win.

For investors, there is an enormous opportunity for Seed/Series A VC's to infuse startups successfully executing in one of Africa's larger cities and then helping them scale to the other cities on the continent. Africa’s markets are different and entrepreneurs will need to slightly adapt their strategy depending on where they’re expanding to, but that’s a challenge almost everywhere else in the world as well.