After a successful tenure as chair of The Association of Startup and SMEs Enablers of Kenya (ASSEK), Bernard Chiira handed over the leadership mantle to leading biopreneur and co-founder of Villgro Africa, Dr. Robert Karanja.
The like-minds met at Strathmore University in 2014, striving to grow a blooming Kenyan ecosystem. Bernard founded I-biz Africa, one of the earliest university-based incubators in Kenya; similarly, Dr. Robert also founded a science-based incubator within the university.
I-biz Africa hosted Villgro at their space for two years, where both worked to support the entrepreneurs that Villgro was incubating effectively. Only time would tell that these two ecosystem leaders would meet again, this time as predecessor and successor to the highest seat in Startup and SME enabling in Kenya.
Interested in getting the hot scoop on the future of innovation and business enabling in Kenya, we caught up with them recently in an interview.
Their journey in enabling
Back at Strathmore University, While Dr. Robert helped scientists commercialise their research, Bernard, having founded I-Biz, joined Afrilabs, a pan-African network of innovation hubs.
The conversation of that time was centered on the much-needed connection of key ecosystem players to accelerate Africa’s businesses.
Bernard served as Afrilabs’ board secretary, connecting and interacting with hub managers from across the African continent. From those interactions, he gained a deeper understanding of the underlying challenges that African innovation hubs face and opportunities that need to be capitalised on.
The evolution of the ecosystem
i. From activities to research
B: “The evolution has been both exponential and linear in many ways. When we started having a lot of activities related to the ecosystem, Ihub was that melting pot where minds and talent would meet. Later, we started seeing evolving to research spaces with more structure and hubs going specific value adds in the ecosystem.”
ii. The rise of incubators and accelerators
B: “We have also seen a move towards incubation…the rise of accelerator programmes where it was about how to get there faster and cheaper..”
iii. Consulting firms branching out to SMEs
B: “We have also seen an evolution in consulting or service provider space targeting smaller companies.
iv. From competitions and grants to investment
B: ” Initially, there would be competitions where maybe the first three would be given the prize. Despite that model being useful for sparking interest and attracting problem solvers. As an ecosystem matures, then it starts building the structures and the entities that now we call Angel Investment, Venture Capital, who inject capital that can move a company from one stage to another.”
v. Existence of African unicorns
B: “We see a different picture for African startups. We see unicorns from Nigeria, many African companies raising seed rounds of USD 1M+, and Kenya taking the lead in the amount of investment raised.”
vi. Existence of ASSEK
B: “There is a lot of ecosystem maturity, and this was the premise of forming ASSEK because we needed to have conversations on barriers affecting our growth as an ecosystem. There is an evolution in the willingness to collaborate amongst actors. Before ASSEK, it was tough to get more than 2-3 hubs in a room and talk about how to help entrepreneurs…”
Challenges
i. Disconnect between the triple Helix linkages
R:”The function of an ecosystem is to form a cohesive, well-oiled machine. We have a triple Helix: a government that sets the agenda, academia is a knowledge producer for solutions, inventions, and expertise, and finally, the private sector that can create industry opportunities from both agenda and expertise. Despite this, we are doing well as the linkages between the triple Helix are way off. The income that the SGB (Small and Growing Businesses) sector brings to Kenya is significant, yet when we think of mainstream entrepreneurship in Kenya, it is more about subsistence entrepreneurship rather than supporting high-growth SMEs in Kenya.”
ii. The missing middle
R: “It may be easy to get funding of up to USD 10,000, but between that and USD 0.5 M, there is a huge gap where nobody is willing to fund it (a Startup). We know from the VCs (Venture Capital) and PEs (Private Equity) that the fund economics for doing ticket sizes below USD 1M are very tough. They really cannot serve that part of the value chain. We know that there is a pipeline that we are building, as members of ASSEK, but we get stuck in the missing middle.”
iii. Inability to identify the Standard Gauge Railway (SGR) opportunities
R: “The railway was not built for us to import, rather for us to produce and export. When we cannot connect the dots, the work that the ASSEK membership is doing is not visible to the government…we look at the enabling environment that they have created, which is like any other sector. We come in and try to own it. Can we see the triple Helix in action where the government can anticipate the needs of small businesses?”
iv. Weak procurement systems
R: “For sectors such as health, the biggest market is government. We have procurement systems that do not work. You cannot deal with the procurement of technology, like the procurement of stationery for your office. The same procurement bill that governs how treasury is run is the same one that governs the Kenya Medical Supplies Authority (KEMSA). There is a need for alignment and getting into high gear so that we can become the success story that the rest of Africa can learn from.”
v. Access to information/data
B: “We hope that as an ecosystem, that we can leverage on ecosystem data better. This data is needed to inform policy, planning, and even government spending. We have seen the economic effect of Covid-19; how can we build sustainable structures that enable the government to support the ecosystem?”
vi. The danger of depending on global supply chains
R: “What Covid has taught us is that our dependence on international supply chains can cost us lives. If we do not have local supply chains that do not supplement or at least substitute, what happens is that when something like Covid comes and disrupts the global value chains, people will take care of their own first. If we are dependent on India and China, they will take care of their 2 billion first before they can export anything to us.”
Opportunities: capitalising on the silverlining
i. Launching an ASSEK code of conduct.
B: “I think, in there lies what can perpetuate the culture that we want at ASSEK, the quality of engagement that we want in the ecosystem. It is going to take time to live it, practice it and share it for us to see the results.”
ii. The KIEP project
B:”As ASSEK, some of the challenges that we have tried to identify is trying to build some muscle so that when we approach government so that they can recognise that this we are voice representatives of a certain sector. When we have projects like the Kenya Industry and Entrepreneurship Project (KIEP), which is a loan to the government to develop the entrepreneurship sector, we have great engagements and negotiations to ensure that some of the funds do go to support ecosystem development.”
iii. The forming of the Kenya National Innovation Agency (KENIA)
B:”I am glad to see that this ecosystem is producing leaders who are taking up roles in government entities that have this mandate, case in point being the Kenya National Innovation Agency (KENIA), led by Tonny Omwansa.
iv. The Startup Bill
B:”We have seen conversations on a Startup bill; platforms like ASSEK amplify the public participation. This showed the ecosystem that we can influence policy, you can participate, and demand for what is needed.”
What are other opportunities that you can identify on the horizon?
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About the experts
Bernard Chiira
Bernard Chiira is a purpose-driven Startup innovation and development support professional. He is a Business and Information Technology degree graduate and mobile telecommunication and Innovation masters post-graduate of Strathmore University. Bernard is a Stanford Centre for Professional Development certified course graduate on venture capital and new technology venture development.
He has global leadership and management experience spanning 8 years, working across diverse technology and entrepreneurship development projects with partners and Startup funders across Africa, Europe, the United Kingdom and the United States of America. He has worked with Strathmore University, Afrilabs, Pangea Accelerator & Pangea Trust, Global Innovation Catalyst, Association of Startup and SME Enablers of Kenya (ASSEK), Kenya Innovation Agency among others.
Robert Karanja
Robert was the CEO, Villgro Kenya where he spearheaded the replication of the Villgro incubation model of social entrepreneurship and impact investment in the healthcare and life sciences industry. He has over 10 years of experience in global health R&D as a biomedical scientist at the Kenya Medical Research Institute (KEMRI) where he discovered his passion for impacting peoples’ lives through science and innovation.
