Mama Mikes on You Tube
My good friend Seg has had an “interesting” time navigating the challenges of being a young entrepreneur in Kenya. It makes me very proud to see that he’s managed to avoid getting beat down (no easy task) and continues to stay innovative. Please check out the Mama Mike’s ad on YouTube and give them your support.
An aside: Had an interesting conversation this weekend about the sky-rocketing property prices in Nairobi and the booming stock market. Clearly, there’s a shortage of investment options in Kenya, but we couldn’t for the life of us figure out how to channel the excess capital to start-ups for instance (I’m thinking of the beyond micro-finance but smaller than big private equity investments) - beyond the risk factor, any ideas on other obstacles and how to work around these obstacles?
Popularity: 18% [?]
on November 27th, 2006 at 17:22
Damn, you beat me to it, I was actually going to blog about Segeni’s ad tonight!
Well, I might as well give him his props here.
I think that Mama Mike’s is a great idea whose time is coming once KTs can get past the initial mental obstacles associated with doing business with a Kenyan company over the web. Maybe I can even do some business with this this Christmas season.
I have to take issue with the first part of your aside though (in the interests of stimulating discussion rather than just being contrary). Why would you think that there is a dearth of investment opportunities in Kenya? What with the mobile phones, the pending implosion of the housing/land market, net and the sub-par services offered by many stockbrokers who are the effective gateway to the NSE, I want to argue that there are a host of new business opportunities coming up from cell based businesses (money-transfer/banking applications) to internet based businesses (legal transcription, customer service/application development).
Even the stock exchange is a viable option if you have more than Kshs 500,000 to get you in at the better brokerages like Krestrel.
I think that a huge part of the problem though is the fact that Kenyan big money is still pretty myopic in terms of what it will invest it. They will certain invest in KCB/KQ/StanChart for tens of millions or pump another but they will not put
on November 27th, 2006 at 17:27
Sorry, your blog ate half my comment, I will try to be brief.
I was saying that banks/investors would not put
on November 27th, 2006 at 17:28
Wow, it swallows more each time.
I give up.
I will post something on my site and cross link.
on November 27th, 2006 at 23:12
I watched the ad and frankly I was impressed, I’d like to know how well his business is doing.
on November 28th, 2006 at 0:24
Ory,
Coincidence! this evening I was looking at the December issue of Harvard Business Review and one of the articles poses the same question you did. Kenya is cited as one of the few countries where “disruptive innovation” (No idea what that is!) is having social impact. Check out the Health Store Foundation and KickStart whose clients generate annual profits in excess of $47 million.
Here’s an excerpt……” Its not a lack of solutions but rather misdirected investments. Too much of the money available is used to maintain status quo because it is channeled to organizations that are wedded to their current solutions, delivery models and recipients”.
That is the same thing Ntwiga is saying of the moneyed folks in Kenya.
For now, I think micro lending still has a role to play by creating an environment that will attract the big time lenders. That’s where innovation can be tried out on a smaller scale before the big boys jump in.
I see what happened here in the US playing out in Kenya in the few years that lie ahead (Citbank has over 200 strategic partnerships with Community based Financial Institutions). Wachovia has about 95.
The Micro Lending Bill in Parliament is a first step towards creating that environment.
on November 28th, 2006 at 6:44
The technical term is graduate - i.e how a kiosk can grow into a supermarket . The owners of such businesses are unable to get banks laons to expand - even though we all say we have programs to assist the SME sector.
In order to graduate, startup companies have to be true muhindi-style companies -and grow through savings and reinvestment - not from borrowing from banks or other investors.
on November 28th, 2006 at 8:52
@Banks, i am working with a mama Mboga to see how well that Kiosk to Supermarket can go. Will tell you if it gets there and how soon.
on November 30th, 2006 at 0:18
[...] d. As a work-around, I decided to post some thoughts here and cross link to that debate at KenyanPundit. I am of the opinion that Kenyan entrepreneurship is on the cusp of something big. One [...]
on November 30th, 2006 at 0:29
Great comment Ken.
Disruptive Innovation.
I can think of 3 of these right off the top of my head:
- mobile phones
- micro-banking which you mentioned
- matatus (yes, matatus)
on November 30th, 2006 at 6:58
[...] Global Roundups Kenyan Pundit writes about a young Kenyan entrepreneur who is getting innovative with YouTube. Ndesanjo Macha « Malawi: lotter [...]
on November 30th, 2006 at 15:17
Ntwiga,
I think what the article raises is nothing new. J. Schumpeter (that great economist) raised this issue but he used a different term “Creative Destruction” driven by entrepreneurs.
I think that’s what we need and I see it in lot of folks in our generation.
on December 6th, 2006 at 13:08
In regards to ’shortage of investment options’, I beg to differ. I would argue that the only obstancle is poor linkage and networking between entrepreneurs/viable business concepts and interested investors. In other words, people are not utilizing existing social networks to their full potential. We all know and love our personal networks be they family, school buddies, professional acquintances etc………….there is enormous possibility in circulating viable investment targets within these circles especially since there is already personal familiarity and intimacy between the potential entreprenuer and his targeted benefactor. Granted, perhaps we need a more formal and coherent system such as a SME/microentrepreneur association or trade body that coordinates and represents the interests of this sector…however in the meantime, we can work with what we have already.
I speak from experience, we (I and husband) were approached by some school buddies/old pals with a business proposition that we thought was very innovative and potentially lucrative……we invested/became part owners by leveraging the equity on our house. The rest is history…business is up and running….SHAMELESS PLUG AND SELF PROMOTION…www.atrams.com. In a nutshell, the originators of the idea were constrained by the usual hurdles faced by the SME……..little or no options for financing from the mainstream financial markets, intimidated by the many challenges of starting a business i.e. LACK OF CASH, INCURRING GREAT RISK, FEAR OF THE UNKNOWN etc.
Moral of the story, the small investor and the micro-entrepreneur are two ships passing in the night, this need not be the case if people were more agressive in sounding out each other.
on December 11th, 2006 at 12:04
[...] te that is going on about the shortage of investment opportunities over at this post and this other one, I am of the opinion that investment professionals have their work cut out. There [...]
on December 21st, 2006 at 10:10
Great to see segeni doing well.
About the NSE and Nairobi property prices, I think on one level Kenya has quite a lot of international exposure compared to most African countries. Nairobi happens to be one of the better cities in that region and is a major hub for businessmen and tourists. Secondly, there is a lot of remittance money that is being channelled into hard, easily monitorable assets. Stock you can get in and out of. Property never goes down particularly in a place with almost perfect weather like Nairobi and a place that is a tourist magnet.
For SME’s capital is tough to come by everywhere in the world and the Kenyan economy is no different from many early-stage economies. But I think making these opportunities available to investors requires innovations that are not present on the ground from what I can see.
Lets not forget credit cards, junk bonds, venture capital are US innovations that people there created to value start-up and high-risk operations so we in Africa (I am Nigerian) have to come up with similar innovations that works for the lender and for the borrower at the same time.
In addition, we need to do more networking. Seriously! Being an entrepreneur requires major networking and again for those of you who have been in the US you should know the value of investment clubs, entrepreneurial clubs, business events, conferences for meeting potential partners, exchanging ideas and even getting potential investors who will lay down their money because they believe in your idea.
Do we have these kind of clubs in Kenya? Nigeria? Africa? Do we have these kind of conferences? If we don’t maybe a starting point is setting up these in Nairobi or wherever else so you can bring in entrepreneurs, financiers and people that want to setup their own businesses.
It might be the jumpstart that you need to get that capital to get your business moving or the people you need.
on January 24th, 2007 at 3:10
[...] w up on the interesting comments around entrepreneurship in Kenya that were sparked by my post on Mama Mikes by “interviewing” the founder of the company - Segeni Ng’ethe. While r [...]
on March 14th, 2007 at 4:11
The ability to diversify investments is not one that is available to the ordinary kenyan. Sometimes its all about survival - and when no one will give you the extra push needed(read capital)…………..
on March 29th, 2007 at 8:44
[...] -line Kenyan marketplace called Mama mikes and I came across an article on Kenyanpundit.com where the founder, Segeni Ngethe is interviewed about his experiences of trying to set up an [...]
on November 8th, 2007 at 11:28
[...] A young Kenyan entrepreneur. [...]