Africa's Biggest Tech Incubator is the Diaspora

Governments around the world, from Kenya to Russia have realized that technology is the future of the services sector and are putting down public money to back this claim. Yet, these investments have not produced much fruit, relative to their cost.

However, I believe that, the African diaspora (emigrants and their children) are an emergent group that are perfectly positioned to create the next “killer-app” for their homeland.

Unlike the hyped, NGO funded accelerators and incubators in the news, these invisible, scattered, entrepreneurs live in communities that are abundant in the things technology startups in Africa lack:

  • Reliable communication infrastructure,
  • Regulatory environment,
  • Risk-taking culture,
  • Experienced programmers,
  • Powerful social networks and
  • Capital

Let me be clear, before I back up these claims, my experience is one of a first-generation American.

As such, I am beholden to the natural bias and perception that business opportunities, for someone in the diaspora, are advantageous. Likewise, writing about the state of technology across Africa is difficult, at best.

Africa, unlike other continents, like Europe or South America, finds itself in a hodgepodge of economic development.

A select few countries, like Nigeria, with it’s 12 million Facebook users, and Kenya, with the popular M-PESA, mobile payment system, have vibrant communities of entrepreneurs producing quality technology startups.

There is another group of countries, like my father’s native Ethiopia, that intentionally suppress free enterprise in the technology sector in favor of government monopolies. However, many African nations also find their economies locked in to the same agrarian and extractive industries as the colonial days.

Also, the high income inequality, notably in South Africa, means that even within the same country it is difficult to make accurate generalized statements.

Despite these caveats, I think that people in the diaspora are uniquely positioned to create
technology startups.

1. Eye for User Experience

Increasingly, the tech industry is realizing the importance of user experience. When Instagram launched, instead of adding many new features the development team focused on improving the experience of posting and sharing photos.

Personally, I am always surprised at how quickly Instagram photos are uploaded. I’ve since learned, from an interview of Kevin Systrom, that the upload process begins concurrent to when the user is typing in comments for the photo. This emphasizes a user experience focused on rapid communication and sharing.

However, dreaming up new paradigms for user experience takes creativity. We all carry assumptions about how design works that we unconsciously take for granted. Most people that have travelled internationally can speak about how the user experience of every designed object, the height of toilets, design of sidewalks, and queueing process at restaurants, suddenly becomes uncomfortably foreign in a new place.

This is what I call “design ideology”. In particular, diaspora communities experience these feelings of discomfort as they adjust to a new society. The dogma of their upbringing is challenged by a new environment.

Emigrants and first-generation entrepreneurs are familiar with the design ideology of their homelands but have an added reference point from which to draw inspiration. They may be more open to creative ideas in the design process and more likely to dream up the next paradigm of user experience.

In the same way, diaspora communities may find inspiration from existing products that they have experienced in the diaspora.

What is Ezetap but an Indian version of Square? What is AliBaba but an iteration on the Ebay model for an export-centric economy? These companies are great examples of how innovation can be in localizing an existing concept that has been technologically proven elsewhere.

2. Talented Risk Takers

Entrepreneurship is hard work. It takes many unpaid hours to push an idea forward and build out a prototype, not to mention scaling up and introducing monetization. Most of the time, the latter will never happen and the startup will reach a common fate, failure.

A persistent entrepreneur learns from their past mistakes, brushes off the failure, and starts working on a new idea. Many emigrants have already encountered life changing, sometimes even life threatening, risk head on and continued down the path of most resistance - exit.

At the same time, a good number of these emigrant risk takers are chasing educational opportunities unavailable elsewhere. To be clear, there are educational opportunities in their former lands but the glaring reality is that, if a student from anywhere in Africa wants to attend a world class undergraduate or graduate school, they will need to leave the continent.

Once, they do come here, the diaspora, they hit the books unlike anyone else. In the United States, the startup capital of the world, African immigrants lead all other demographic groups in educational attainment.

African Immigrant Education in USA Image Credit: USA Immigration Policy Center

We, those in the diaspora, face discrimination and other unique problems of immigrants but for those that don’t take the former educational route, informal opportunities for advancement to learn abound compared to where we come from. It is understandable, given the stiff competition in many African labor markets, that our cultures create a narrow definition of success (our own African Parents memes reveal this reality humorously).

African Parents memes

An unintended consequence is that many talented people never get the chance to prove themselves. The relatively low unemployment rates in the diaspora mean that those who are talented, but did not do well in school, may have a second shot in the work world.

Furthermore, as higher education becomes increasingly bifurcated from the needs of the work world, the importance of education will diminish further.

In some ways, this split was inevitable - the education system reinforces the same barriers that tech breaks. While your African parents preach the benefits of academia, Google has already stopped checking traditional metrics and much of the tech industry is following suit.

The sum of these factors is that the diaspora gathers and fosters a multitalented palette of risk-takers.

3. Capital through Communities

Investors are realizing that some of the biggest opportunities in tech now lie in the emerging markets. Two years ago, when I was visiting Oasis 500 in Jordan, a representative from a major VC fund in Silicon Valley sat in on the tour and quietly slipped away with the investment team.

Other big names in the VC world are openly speaking about the lack of true innovation in the conventional places, like the Valley, that tech investors go to find startups. At the same time, many investors get squeamish in foreign markets, especially those that don’t have clear
regulatory frameworks and expensive hidden costs (corruption and extortion).

African entrepreneurs in the diaspora offer investors a unique opportunity that combines the advantages of investing domestically while still targeting these emerging markets.

Outside the big money, the capital is still flowing in other ways. Many African diasporans bring their traditional financial methods, notably Rotating Savings and Credit Associations (ROSCAs), to their new homes.

The higher wages offered outside of the continent turn these ROSCAs into serious pay advances that allow even the most lowly of taxi drivers enough capital to fly to their homeland and start a business.

Furthermore, the relative stability of the US Dollar, British Pound and Euro when compared to some African currencies effectively grows the capital of those in the diaspora as inflation in their homeland and foreign exchange reactions devalue the currency and eat away at wealth.

Anecdotally, in an extreme example of this effect, one of my friends from college raised $50,000, in ten minutes, for his startup, by simply presenting his idea to his mosque.

4. Networked for Growth

A diaspora, before the internet, was exactly what the root word means, a scattering of people from one place.

Today, the fiber optic strands of the internet are pulling these disparate communities together to create cohesive, geographically distributed, markets. I can send a text with a new business opportunity to my family in Canada, Germany or Israel, via Whatsapp and follow up with a short chat over Viber.

The weakness, in former decades, of not being around your culture geographically, has suddenly become a strength, in the digital age, because launching a product globally is now as simple as sending your family and friends a link to share in their local community.

This effect acts as a multiplier on the social graph of those in the diaspora because they are unlikely to share many mutual connections with those that they stay in touch with in other countries. In less abstract terms, it’s the difference between advertising to 20 people in the same city versus one person in
20 different cities.

In addition to the communication between diaspora communities, there is a cultural transfer back to the African countries where family and friends still reside. The size of the multibillion dollar African remittance market clearly points to the strength of this continued connection to those in the homeland.

In my experiences, marketing directly to the diaspora has an interesting consequence of increasing demand in the homeland. Although, in hindsight, it is stunningly obvious that those in diaspora wield powerful cultural influence upon their friends and family back home.

Would the world know about Azonto had it not been for the hundreds of viral videos of Ghanaians in the diaspora dancing?

It is a great example of how the cultural influence of the diaspora made a song and dance go viral. They made it “the cool thing to do”. Similarly, technology services, specifically things that are social, have an easier time growing if they are perceived as cool.

5. Technologically Mature Markets

The diaspora has the gadgets and access communications infrastructure today of future African markets. They give startups a good testing ground to begin iterating their concept with a userbase more similar to the consumers of the future market than anyone else in the world.

For example, EthioType, our most successful app at the Axüm Group, a keyboard and communications app, is only useful to those that write in Amharic, Tigrinya and Oromo, languages used in Ethiopia, Eritrea and Kenya.

Unsurprisingly, the undeveloped communications
infrastructure and low incomes in the former two countries mean that the markets are simply not ready for an app made for smartphones. In fact, over 80% of EthioType users are in Europe, North America or Australia.

Each keystroke and new word typed is offering a precious data point for improvement and iteration that couldn’t take place in an otherwise undeveloped market.

The takeaway? Keep an eye on the diaspora, for now

Making predictions, especially about the future of the technology sector, is difficult for anyone. Often times, it is tinkers in garages, not the major projects in R&D departments, optimistic press
releases, or shiny tech parks, that produce the products and services, which reinvent our world.

There are plenty of tinkers in Africa today doing incredible work and some have even become massively successful. The advantages of cross-pollination and capital offered by the tech incubators popping up all over Africa are real - the alternative is the backwardness of consuming technology created off of the continent.

Furthermore, the FAA statements pertaining to Amazon’s delivery drones, China’s obtuse response to Bitcoin and the Supreme Court ruling against Aereo all point to room for new tech hubs.

However, I’d still pick, at least for now, to remain a tinker in the diaspora.

Cover Image Credit: AFS-USA Intercultural Programs

Daniel Worku is a Minneapolis based Apple iOS developer and first-generation American. He develops iPad apps for a Fortune 500 company, in medical device sector, and founded Axüm Group, a mobile app development collective of ICT professionals focused on creating technologies for the Horn of Africa.

Daniel Worku

About Daniel Worku

Founder of Axüm Group, mobile app development collective of ICT professionals focused on creating technologies for the Horn of Africa, and iPad apps for a medical devices Fortune 500 company.