So, what exactly makes the Nairobi Tech Scene Tick?

Yesterday we attended the Ventures Unknown Happy Hour with founders in Nairobi. Met amazing people like Sherif Nessim and Shawn O'Connor among many others. Shawn asked me something about the biggest change I've seen in Nairobi and so this morning, I got to thinking more about it. As usual, I reflected more on my life and personal experience than on statistics since I've had the privilege to experience both sides of the divide in my 28 years of life (27 if we correct for Covid). Here are some of the things that stand out:

1. Mobile phone penetration: I remember in the early days, only one man had a mobile phone in our entire village - a Motorola C19. When my grandma died in 2003, we had to travel on foot and by bicycles to relatives to tell them about the sad news by word of mouth. Up until when I was in form 4, my parents had no mobile phone. When I look around today, not only does a 90 year old in a remote village own a smartphone but even 7 year old kids have smartphones. This #platform change is the single most important thing that has happened not only to Kenya but to any other developing country in the world

2. GSM/Internet Connectivity: Even as mobile phones slowly started expanding, connectivity was a nightmare. I remember our teachers would walk all the way uphill to the school fence so as to receive or make a phone call. Only specific areas in a given place had proper connectivity and so people had mobile phones they seldom used. Airtime was expensive and people were conservative; only making the most important calls or waiting for one otherwise, the phone was safely kept away. The screen time was nearly non existent; contributing to this also was the trouble in charging these devices. Today, you go to a mama mboga shop and when they're not serving a customer, they're on their screens. Safaricom PLC has ensured that every corner of the country is connected. Roughly 10 meters from our village home is a Safaricom BTS - the connectivity at our village home is more powerful than the connectivity in some cities around the world.

3. Rural Electrification: As I said earlier, even though people started owing mobile phones, it was a nightmare charging the devices. Back at home, we relied on barbershops where they'd use their batteries to charge the phones for others - a booming business then. They themselves had to travel 10km to go and charge their batteries - an exercise that took several hours and during which their shops were closed. Nobody could rely so much on the mobile phones because 80% of the time, it was shut off due to lack of power or to conserve the little power it had. Today, nearly every village has connectivity to the national grid. When I travel home, I can continue working in the house and attending zoom meetings as if I had not left the city.

The three above: mobile phones, internet connectivity and electrification are like The Roman Triumvirate of Julius Caesar, Pompeius Magnus and Marcus Crassus. They have made the mobile device the single most important platform upon which innovation has skyrocketed in Nairobi. But we're not yet done:

4. Mobile Money: With the triumvirate above, one of the very first beneficiaries is M-PESA Africa . I remember the very first time I heard about M-PESA; my uncle was in a teachers teaching college very far away and he needed money. The parents had trouble knowing how exactly they could send him money and then they learned that there was something in a nearby town where you could go and "send money" to the uncle. So they went to that town, left their money there with the hope that their son was going to receive it (Spoiler Alert: he did receive the money). As a curious kid, I couldn't wrap my mind around it and wondered how exactly this magic works: do you put money in a hole and then it's transported to someone else? That magic was M-PESA and its agency network. Today, you don't have to travel that far to access an M-PESA agent; you simply need to look in front or turn right or turn left or check your back: you will see one. Just like that, Kenyans who were hitherto locked out of the formal financial services, had it at their palm. With that, a string of financial services have emerged; some very successful ones being on top of M-PESA itself such as Fuliza.

The above four have enabled and powered several fintechs we see in Nairobi including our very own Patika (YC S22) . There is no way a mama mboga would have used Patika in those early days I was growing up but today, the mama mboga has access to a smartphone, has access to (maybe) the cheapest internet in Africa, has access to electricity and can keep her phone charged at all times and has access to the most ubiquitous mobile money service in Africa. This has allowed her to use an app like Patika (YC S22) to digitise her business and further gain access to more financial services as well as to increase her cashflow.

This is how powerful ubiquitous platforms can be: they enable the next wave of solutions that make the lives of people even better and push the economy forward. It's not over yet and we're no there yet as the growth in penetration is increasing year on year. What we're seeing is that our fellow East African markets are also forced to keep pace; now growing at a similar rate. With the EAC getting stronger and the DRC now being one of us - I see the next decade having the EAC as the largest market in Africa (Sorry Nigeria). I would definitely bet on it any single day and I am proud and happy that myself and my co-founders Sidney Rema and Bernard Momanyi Nyagaka are working day and night to make the lives of SMBs much better and give their businesses a surviving chance - millions of families depend on it.