Entrepreneurship in ICT – talk by Richard Bell CEO Wananchi – Held on 25th May 2007
He started by giving a brief history of his time in Africa, starting with his stint at the Royal Marines, to a Security Consultant in the Sudan and Somalia, before settling in Kenya doing some import and export business.
While involved in business, he realised that while using the KENPAC service for sending and receiving faxes, he was spending quite a bit of cash on international faxes. This was around 1992 and Telkom used to charge $3.50 to send a fax to the US.
While in the US, Richard arranged to meet the owner of Swift Global who were able to arrange a fax service between Kenya and US. After buying equipment at a highly inflated rate , and importing it to Kenya, he set up a service that allowed him to offer fax services internationally from $1.50.
Needless to say, getting customers was not an issue, and lots of money was made (and spent) in the process, as he was getting charged $0.10 to terminate the fax connection in the US from Kenya.
After that, he opened a Uganda office was opened, lots of money was made (and spent).
Swift became a fully fledged ISP later on. Richard the went on to start KDN.
After selling KDN, he later joined London Business School as a Sloan fellow.
He formed East African Capital Partners, a venture fund and acquired 30% of Africa Lakes (which owned Africa Online) a LSE listed company, and after a takeover battle with Telkom SA for the rest of the company, sold the 30% stake at a premium early this year.
Several lessons were learned, not really about technology but things like the importance of having a knowledge of Accounts, Economics, People, Consumers, Employees. It is important to have knowledge of these areas among others for a startup to succeed.
In ICT, it is important to get a job that will provide real hands on experience. For the first 2-3 years, experience not money is the most important thing.
Learning does not stop after college or campus. In business, taking courses in Economics, Finance Accounting can make the difference between being successful or not. ICT after all is a tool.
It is important not to get ‘stuck in rut’, but remain passionate, enthusiastic and keep looking for opportunities, put 150%+ in everything.
Several Questions were raised.
Concerning the ‘first job’ – what should one be looking for?
One that allows hands on use of equipment (not necessarily being hardware). Interact with those with experience. Fix stuff that does not work. Learning takes place when stuff does not work and one has to fix it.
What skill set should one concentrate on developing? Technology vs (e.g) Finance?
This depends on the individual. It is important to work on stuff that you are not normally good at. One never gets good at everything. When developing your business, have people that have skills that you don’t so that they complement you.
How does one attract the first customers.
90% of new businesses fail. The business value proposition should be a ‘no-brainer’ – e.g. offering fax services for $1.50 vs current rate of $3.50.
Where are the opportunities in ICT?
Content – the question is – what do Kenyans want to do on the Internet.
Kenyans are a naturally enterprising lot. (He said that virtually everyone he has employed had a side job, where they worked at over the weekend.. )
To drive the creation of local content. Wananchi will be setting up a sort of incubator where people (especially students) with product ideas will be allocated server space, and can be able to come when available. They will get plenty of local bandwidth (and a little international bandwidth) – all this for free (until up to 3 years – based on their business ideas).
How does one get Venture Capital?
- The investor does not believe your projections, he just wants to know whether you know what you are talking about.
- the ‘YOU’ factor
- Commitment – demonstrate your commitment.. how hard has one tried to get funding – if you have a rich father and haven’t tried him yet, one probably won’t get funding.
Has the problem of Reverse Subsidies been solved?
Thanks to the support Ministry of Information team of PS Bitange Ndemo and Minister Mutahi Kagwe, at least 2 international fiber optic cables will be landing at Mombasa next year. Reverse Subsidies will become less of a problem.
Filed under: economy, Employment, Internet, investment, kenya | 10 Comments