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African Tech Innovation. You Don't Need Bandwidth To Be Awesome.

It's only right, given the nature of SXSW to open source all the notes for Brett Haggard and my "core conversation" that we hosted on African Tech Innovation. It's such an important and interesting topic. Thanks for everyone who came and took part in this discussion.
The notes are messy and badly credited (but I did try to credit EVERYTHING where possible - it was collective knowledge we pulled from) - hopefully you'll find some stuff of value. Such amazing stories.

Enjoy,
Andy


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You Don’t Need Bandwidth To Be Awesome
SXSW 2012. OPEN SOURCE NOTES.



Always-on, high-speed connectivity is the ticket to doing awesome stuff in technology today. But in a continent like Africa, ‘The Cloud’ is something ‘The Rain’ falls out of. And still, innovation in the technology realm has managed to flourish and even outpace the more developed world.
And with global growth being led by the developing world, these are lessons worth learning.

We’re talking about television services that use the DVBH standard to beam football matches and news into rural villages; social networks that were designed for exclusive use on mobile phone platforms; funds transfer and electronic payment systems that require nothing more than a SMS text message; insurance products that can be provisioned and procured from the most rudimentary mobile phones.Outside of the ‘never say die’ innovation Africa employs there’s a great deal the developed world can learn from the developing world, particularly when it comes to building practical solutions that solve real problems. 




Introduction - Andy
  • Welcome and hello. 
  • Africa may be the place where The Rain comes out of The cloud but... it does offer us some really interesting examples of innovation despite itself.
  • Really easy to come up with examples of how the third world can learn from the first world.
    • Like Square - mobile payments.
    • Like the app payment model, in app purchases etc
  • Harder to turn that argument on its head. That's what we want to do, to explore African innovation and see if any of it's lessons can be applied in the tech world
  • Here’s the situation as we see it
    • America is fucked. Access to credit is going to be harder and harder. You’re credit heavy and credit dependant. Therefore they need to look at the pay-as-you-go model for basic and complex services
    • We think America can learn from Africa. We don’t have credit. We don’t have bandwidth. Yet we provide basic and complex services to 1 billion people through innovative use of simple technology.
  • Does America have code and media bloat because of an abundance of everything - they’re not thinking as optimised as they used?
  • There’s too much choice in the American market. Easy to use, simple stuff from the emerging world could be a rad differentiator.
  • The digital divide gets crossed with innovation. When there is no capital available - there is a focus on brain power.

Introduction - Brett
  • How this is going to work. We’re going to take you through a bunch of interesting African tech projects going on right now
  • You’re going to debate them out with us, and see if there’s anything to learn
  • Some will be easy, some will be very specific to an African context (I mean, when was the last time you guys heard the phrase “I’ll trade you 20MB data for that goat!”
  • What we want from you - test the hypothesis, can we find lessons to learn. Should this kind of innovation (efficient) be happening more in the tech hub if the world?

WHAT THE HELL IS USSD (An intro for the 1st World)


  • USSD
    • 100% penetration (except Windows Phone - haha!)
    • Chat(PEPtxt)
    • FNB Cellphone Banking
    • Merchants; Airtime advance (Vodacom); Prepaid Zones (MTN)
    • Hollard Life Insurance Pilot
    • Describe the tech

  • maybe the story about how south africans use Please Call Me’s as a communication medium? 1 billion + PCM’s sent per month in SA alone...
    • Funded by advertising

  • Cardless ATM withdrawals



Case Study - MPESA


Description
  • How MPESA agents get money “into the system” but also act as distributed retail input spots. It’s like AMWAY model of using people to sell for you - but for money, insurance, services. These agents disintermediate the banking system. Americans don’t trust banks. When are they going to create an alternative? (p2p loans? bitcoin?)
    • FNB SendMoney
    • Cardless transactions

What are the lessons?
  • The reverse is true in the US: mobile money isn't leapfrogging the payment card industry, it's augmenting it.” http://www.csmonitor.com/World/Africa/Africa-Monitor/2012/0113/Why-mobile-money-is-popular-in-Africa-but-not-in-the-US/(page)/2   
  • This model applied to US large immigrant population? Migrant work force (Mexico!)
    • Warning: don't talk about immigrants, Texans HATE THEM.
  • Disintermediates banks (Americans hate banks for shozi)
  • Cricket Mobile has similarities
  • Create jobs (eg. MPESA agents)
  • NFC is awesome. If you’re a geek with the phone that supports it. But now try equipping merchants and ever not-a-smartphone out there... it’s not pervasive because
    • IT’S NOT BOTTOM OF THE PYRAMID TECHNOLOGY
    • How long did it take chip and pin to kick in? :)


Case Study - Quickie Scratch Card Insurance

Description
Herman Chinery-Hesse. Quickie: For “Quickie,” Black Star Line collaborated with an insurance company to launch instant, on-demand cover through the use of scratch cards and mobile phone networks.

Just like Keba-Ekong!, Quickie uses the potential of the cloud to offer smart solutions tailored for the Ghanaian market. The product is designed to accommodate the needs of those who are not keen to pay large sums for insurance once a year, says Chinery-Hesse.

The technology is just one component, we’re setting up a whole new ecosystem.
Herman Chinery-Hesse. “Quickie” users can activate their cover by sending an SMS with the unique code that appears on the card that they’ve purchased from vendors of telecom products.

“You scratch the card, you look at your registration number, you stick it in to our server, you’re insured and the rest is history,” says Chinery-Hesse.

http://edition.cnn.com/2012/01/26/tech/herman-chinery-hesse-technology/index.html 


What are the lessons
  • The secret to third world product adoption is low upfront payment, flexible remaining payment rate and high utility.
  • Solve an actual problem.
  • This is starting to make a lot of sense in a credit stressed environment like the US.


Case Study - EGG Energy. Netflix for Batteries

Description
EGG Energy has created a new system that could make getting battery power easier than ever. Taking a cue from Better Place, the company is starting up a battery sharing program with a structure similar to Netflix - a person can pick up a battery at a nearby station, use it until the charge is gone, then go drop it off and pick up a fully charged battery with ease. This means affordable lighting for the home so children can do school work, or a fully charged cell phone battery so families can keep in touch for everything from the status of their crops to health care.

The subscription-based service starts with a $27 membership for the first year's subscription service. An additional $0.40 is charged per battery swap. The battery will help the user charge their lights, cell phones, radios, and other household devices. Starting in rural Tanzania, EGG Energy is hoping to spread across Africa and into other countries where inexpensive, easy-to-access power is needed. The company has already created the first distribution center and signed on over 60 members. They feel it's just a matter of time before the business takes off.

http://tlc.howstuffworks.com/family/battery-sharing-developing-nations.htm

What are the lessons?
  • Great example of taking a “rich” bandwidth intensive service and applying it to a highly practical problem.
  • What about provision of services, where do we think it’s going to go? Deliver basic services free to everyone - ala socialist state? Or if we’re still going to have to pay for stuff, maybe shared / subscription based models make some sense?
  • What else could this model be applied to?


Case Study - Shop Africa 53

Description
ShopAfrica53 is an African product and services marketplace on the Internet that offers a direct worldwide channel between customer and merchant. It is a medium through which customers can purchase African products and services remotely and payment is guaranteed and timely for the merchant.

What are the lessons?
  • Like Square, but facilitates payments via SMS. Meaning extremely low barrier to entry (ie no credit card, no iPhone)
  • Are there any first world examples we can think of where people don’t have a credit card and a smartphone? Trailer parks people!
  • Has the US forgotten about the penetration power of SMS because it's an unsexy technology?
  • Connects unconnected markets? Do we really think eBay and Paypal are fulfilling this in middle America?


Case Study - Alternative Energy

Description
  • Energy-Generating Soccer Ball to Power Lamps, Save Lives in Africa 
  • A soccer ball that generates and stores energy while it's being kicked around is the latest idea for generating energy for that all-important tool: the light. Generates enough energy to power an LED light or charge a small electronic device may not seem like much, but in Africa, it could literally mean the difference between life and death. Kerosene lamps are both incredibly common, and incredibly harmful to human health, creating gasses that equate to smoking two packs of cigarettes a day. As popular as kerosene lamps, however, is the game of soccer. That's where the sOccket comes in. So far the sOccket is in prototype mode. It uses an inductive coil mechanism similar to the technology found in shake-to-charge flashlights. By kicking the ball around, a magnet is forced through a metal coil, creating a charge. For each 15 minutes of play, the ball can store enough energy to illuminate a small LED light for three hours. That's impressive. While not equal to regulation soccer balls, it will certainly suffice in villages that need alternative lighting sources. The design team is currently working on getting it past the prototype stage an into production where it can move into a buy-one-give-one program to overcome the distribution hurdle
  • EcoNet Solar
    • We’ve been polluting the skies, pumping dangerous chemicals into the seas and all the time, ignoring one of the most readily available (and completely renewable) sources of power in the world, namely the sun, for too long now.
    • And ironically, the folks that have never had access to electricity – having instead to contend with candlelight and paraffin – are the ones that are showing us the way.
    • Solutions such as the Home Power Station from Econet Solar are removing the need for traditional light sources such as candles and paraffin lamps and saving people money in the process.
    • Delivered as a turnkey solution in concert with the cellular operators in each of the countries the company has operations in, Econet installs a solar panel, battery pack, four LED light points and a charging point for a cellular phone on the side of the user’s house.
    • The installation is done free of charge and funded using a subsidy from the cellular operator. The cost of the equipment is recouped over the life of the product (approximately ten years) as customers ‘rent’ power back from Econet and the cellular operator.
    • 30-days worth of power (for about 7 hours a day) for the four LED lights and a cellphone charging point costs a user $2 US (under R16) in airtime, which is ‘sent’ to their Home Power Station by SMS.
    • That revenue is split between the operator and Econet in order to cover costs.
    • But, the solution isn’t just about uplifting communities however. There’s a strong business case in play too.
    • 12 top ups a year over a ten year period equates to 120 top-ups over the life of the product or a revenue of $240 US, depending on the way you want to look at it.
    • Since the value of the equipment comes in at about $100, it’s safe to say that there’s a profit of  $140 to be had. That’s a figure for many cellular operators that’s pure gold.
    • The bigger opportunity lies however in the fact that with this solution in place, prepaid cellular users in the middle of nowhere can suddenly begin charging their mobile phones. And since the research shows it’s a lack of available power (and not economic circumstances) that keeps rural people from using their mobile phones (and in doing so generating revenue for the operator), it’s a solution that ends up driving the average revenue per user for mobile operators up in the rural environment.
    • Is this just another feel good story?
    • Well, let me answer that with a question.
    • If this can be applicable and economically viable at the lowest end of the market where $2 per month for power is a reasonable fee, what can be done higher up the food chain where there’s more disposable income to go around?  




What are the lessons?

  • Don’t try to eat the whole elephant in a single bite. It takes lots of small bites, over time to eat an elephant - all solutions help a little
  • Standards already exist in the power production space. Solutions with alternative energy in mind should just integrate with those standards.
  • Using smarter devices on the ‘end’ of alternative power solutions means more efficient power usage e.g. LED lightbulbs.
  • Alternative power solutions can be enablers for other revenue streams - i.e. selling power in one instance, but also enabling people to charge their cellphones, thus upping the ARPU in pure cellular revenue terms.    



Other Case Studies, Notes and Possibilities for Discussion


  • Airtime as a currency - already happening in some parts of the continent.

  • We’re talking about television services that use the DVBH standard to beam football matches and news into rural villages;

  • MXIT (recently purchased for between $40 to $60 million) - social networks that were designed for exclusive use on mobile phone platforms;

  • Funds transfer and electronic payment systems that require nothing more than a SMS text message; BSL also has a system that connection european buyers through a web interface to african sellers via SMS. Europe uses the web, software translates to SMS, transactions occur.
    • So what though? What’s the angle?



BACKUP CASE STUDIES

East Africa App Winners. http://appfrica.com/2012/01/14/a-look-at-the-apps4africa-2011-winners/

1st prize of $15,000 – The Grainy Bunch by Eric Mutta (Tanzania)

The Grainy Bunch is a national grain supply chain management system that monitors the purchase, storage, distribution, and consumption of grain across the entire nation. It was developed with the understanding that selling “the effects of efficiency” to actors in the grain supply chain is much easier than selling “the effects of climate change”.

Grain is nicknamed the “white oil” which lubricates the engine of Tanzanian growth. Even short-term disturbances in its supply chain adversely affects hundreds of thousands of people. To ensure both food security and economic security for all Tanzanians, a system is required to both monitor and facilitate the supply chain of grain, from the soil to our plates.

2nd prize of $7,000 – Mkulima Bora – Stepheno Maleche, Gerry Nandwa, Joseph Onginjo and Oliver Otieno (Kenya)

Mkulima Bora enables farmers to input the type crop they wish to plant into an app, then it cross-checks meteorological data to determine if the crop is suitable given the timing and location. Mkulima improves farmer yields, saves them time, and money

3rd Prize of $3,000 – Agro Universe – Oliama Brian, Daniel Mumbere, Nabuto Josephine, Bossa Alex, Sanya Duncan, Olwenyi Victor, Kato Charles, Masaba Kizito, Kalema Moses, Namuyiga Winfrey (Uganda)

Agro Universe allows farmers with agriculture products or livestock to alert the app’s community so that they can buy and sell goods from each other. It works on both mobile and the web. The aim of Agro Universe is to create a regional marketplace where products can be sold that may have no demand in the user’s immediate area but that might in areas farther out.


West/Central Africa Winners

1st prize $15,000 – HospitalManager by Victor Ogo Ekwueme (Nigeria)

HospitalManager is a web-based application that helps hospitals and health organizations prepare for disasters such as floods and storms. More frequent heat spells, rains, and floods are leading to heath emergencies, both due to the event itself, and later to water related disease. HospitalManager will help hospitals in Nigeria, and potentially throughout Africa, identify patterns in patient visits following rains and floods, so that staff can better prepare for these situations and save more lives. Hospitals can anticipate incoming disease and emergency patterns using real time climate forecasts. On longer time scales it will allow policy makers to plan locations of new hospitals.

2nd prize $7,000 – Eco-fund Forum by Assane Seck, Guillaume Blandin and Markus Faschina (Senegal)

Eco-fund Forum is a web-based community organizer and geo-localized data exchange tool to help individuals and communities working on sustainable resource management throughout Africa to share their own experiences on best practices. Thus they will better understand and respond to the climate change challenges impacting each specific local context. For example, coastal communities in Senegal that suffer from erosion can learn from neighbors that are successfully and durably overcoming the same problem by regenerating and preserving a littoral forest. Furthermore, the Forum will give those communities a voice which should alert political decision makers to address climate change challenges in time.



TRICKY THINGS AMERICANS COULD ASK US
  • Crap - web 2.0 has shown more optimisation and single-focussed development than ever before. we’re lean mean and commercially viable. you’re all starving and corrupt.
  • Why do we want to go backwards?


READING / OTHER

JOKES:
  • Half your population lives in trailer parks yo!
  • In Kenya, there are bars where you CANNOT pay cash for beer. They only take MPESA.
  • Trade you that goat for 20MB data

  • First world problems...





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