[Column] Patrick Ndegwa: Growing a successful tech startup in Kenya, 4 key elements

The tech scene in Kenya is thriving. Even amid a global pandemic, economic uncertainty, and election fever, our dynamic African country has found a way to cut through the clutter and establish itself as the world’s ‘Silicon Savannah’. With an annual growth rate of 10.8% since 2016, Kenya’s ICT sector has contributed to significant economic development and job creation.

Tech entrepreneurs have been working hard to make their mark in this burgeoning business. The StartupBlink Ecosystem Index Report 2021 evaluates innovation ecosystems in 100 countries and 1,000 global cities based on technological advances in foodtech, transportation, energy, and environmental developments. In the report, Kenya ranked 61st overall and second in Africa – proof of the country’s commitment to growing this crucial economic sector. 

But it’s not always smooth sailing for Kenyan startups. Despite expanding Internet access, increasing interest from international investors, and a young tech-savvy population, research shows that 70% of small- to medium-sized enterprises fail within their first three years. This number is high in other countries, too – in the UK, 50% of SMEs fail in the first five years – so it’s not just an African problem. However, it’s worth looking at how tech-based startups can overcome initial growing pains to really make moves in the digital economy. Here are four essential strategies to ensure Kenyan tech startups reach their goals.

Know your product

Before you start tackling startup strategies like marketing and networking, you need to make sure you have a valuable product. Understand the problem it solves and dive into market research to support its use case. Create something that’s innovative and unique, and investigate competitors to see how you can disrupt the industry and differentiate your offering. Because the tech space is constantly evolving, it might be worth starting with a minimum viable product (MVP) to test the waters and gain feedback. Keep it simple in the initial stages and use your MVP to better understand your customers’ needs. Then, you’ll be in a position to fully develop the product and make improvements based on real customer insights and constructive criticism.     

Have a solid business plan

This step is essential, especially for a smaller tech startup. If you’re going to approach investors, seek additional capital, or even take your first marketing steps, you need to have a solid business plan. It demonstrates credibility to interested parties and will help guide decision making. Set out basic business features like operational goals, financial objectives, and your specific target market. Determine realistic timelines and develop budgets for the various phases of product roll out. Because the industry moves at such a fast pace, and market research evolves amid changing customer needs, keep some goals flexible and be willing to adapt as you learn. Small failures are common in the first few years of entrepreneurship, so don’t let setbacks derail you. These experiences often lead to a better understanding of the market and invaluable first-hand knowledge.    

Build the right team 

When launching a new company, it’s critical to have great people around you who share your passion and vision. You need to consider personal strengths and weaknesses so your team complements you and covers as many bases as possible. It’s also an opportunity to give entry-level jobseekers in the tech industry a leg up. Kenya’s Moringa School offers transformative tech-based learning experiences for students looking to launch careers in coding or software development. In partnership with Ugandan tech hub Outbox, the school offers full-time coding bootcamps, and hopes to train 200 software developers each year as part of the Outbox EDU initiative.  

Despite best efforts, entrepreneurs can’t feasibly do everything themselves – like handle daily admin, monitor staff productivity, manage the accounts, generate new business leads, and all the other myriad aspects that come with starting a business. Surround yourself with people you trust and delegate certain responsibilities so you can focus on your own strengths. Establishing this kind of cohesive company culture early on will pave the way forward for long-term success.  

Don’t go it alone

Competition is high in Kenya’s rapidly evolving tech space, and working with the right tech partners could help foster a formidable business foundation. There’s something to be said for learning from others and, in 2020, Kenya had 48 active tech hubs throughout the country. Among these is Nairobi’s renowned iHub which was launched in 2010 as an innovation centre focused on accelerating tech startups and nurturing successful business leaders. iHub is part of the broader Afrilabs network that includes Bongo Hive in Zambia and Uganda’s innovative Hive Colab. Today, over 450 startups can trace their roots back to iHub. The Swahilipot Hub in Mombasa opened its doors in 2016. It’s run as a non-profit organisation that offers professional mentoring, technical training, support, and networking opportunities for business leaders and individuals in the tech and creative industries. 

These African incubation and innovation hubs are dedicated to propelling tech startups into the future. Partnering with the right organisation and being open to learning from industry professionals will help enable your business’s long-term growth so you can actively contribute to Kenya’s digital economy. 

To establish Kenya as a major player in the Fourth Industrial Revolution, tech-based startups need to be encouraged and supported. While this refers to crucial business foundations, it also means creating an environment for these businesses to flourish. Providing people in rural and urban areas with access to Internet and establishing reliable fibre connectivity is vital if tech startups are to reach audiences, develop better digital skills, and improve overall quality of life for all Kenyans. Technology and connectivity can be leveraged as drivers for economic inclusion and innovation, enabling all of us to reap the benefits of a thriving digital economy.

Patrick Ndegwa is Business Sales Lead for SEACOM East Africa.