Ecosystem Deep Dive #10: Kenya - East African Pioneer
Carried by early, market-creating innovations such as M-Pesa, Kenya continues to boast one of the hottest African start-up ecosystems to date.
Kenya has always been a heavyweight in the African start-up/innovation scene at large. The East African country enjoyed some key, early developments that allowed its ecosystem to flourish faster than its neighbors’. One of those early developments came in 2009 with the construction of TEAMS, an undersea fiber-optic cable that gave many Kenyans access to faster internet than people in the US. That project still carries its weight today, with 95% of Kenyans in urban areas having access to the internet. That boosted the timid but growing innovation scene that was already taking shape in the country, exemplified by M-Pesa, a mobile-money wallet piloted by telco giant Safaricom in 2007, and Ushahidi, a crowdsourcing platform launched to track election violence.
M-Pesa in particular would turn out to be what author Clayton Christensen refers to as a “market-creating innovation”, a concept he outlines in his fantastic book “The Prosperity Paradox”. According to Christensen, market-creating innovation “transform complex and expensive products and services into simple, more affordable products, making them accessible to a whole new segment of people in a society whom we call non-consumers”. In other words, a market-creating innovation introduces a whole new part of the population to a service/product, enabling entrepreneurs to capitalize on it. In M-Pesa’s case, Safaricom combined the concept of using a mobile phone as a “digital safe” for cash with a broad network of agents through which users could access their “real” cash. Today, 70% of Kenyan households use M-Pesa, a boon for Kenya’s private sector.