The Internet of Things (IoT) is literally the interconnection of everything to everything. Imagine your toothbrush has a sensor connected to the Internet that periodically sends reports on the state of your dental health to your dentist, who’d recommend diagnoses — say — by instructing Amazon through his voice assistant to deliver a special toothpaste for you.
Depending on how old you’re, this sort of machine-to-machine interaction is not entirely surprising — at least back in the day, machines responded to stimuli programmatically; vending machines, motion sensor security lights, etc.
It seems the only difference now comes from the Internet being connected with the ‘things’ in question.
Different kind of IoT
Ericsson predicts that there will be 29 billion Internet connected devices by 2022, thanks to the continuing IoT trend.
The Internet of Afrikan Things — let’s call it IoAT — takes a different dimension. It sits at the intersection of electricity and Internet (just like its IoT contemporary), but also at the extension of markets, platforms, and distribution channels. Indeed, while electricity and the internet are bedfellows, Sub-Saharan Afrika’s (SSA) heady start in the last decade to leapfrog into the digital tomorrow has been snarled by structural impediments. Of the 3 billion people that do not have access to the internet world over, 800 million live in Afrika. That means that Afrika yet again is reduced to the pack of statistics, with only about 30% connected to the Internet.
Even though figures show that more Afrikans than ever before are connected to the power grid, over 600 million are without electricity — half of the entire continent’s population.
Disconnected from the grid
Let’s do some hairsplitting.
In Kenya, about 50% of the population has access to electricity. In rural areas, it is as low as 5% — with firewood accounting for 77% of the total energy consumed. In Uganda, approximately 20% of the population has access to electricity. This slips to 7% in rural areas where the bulk of electricity is supplied by alternative sources such as generators, car batteries or solar photovoltaic units.
It’s clear that macro-statistics abstract a whole lot more than meets the eye. As seen above, different scenarios highlight the gaping holes within communities. They also provide insight into constraints and implications that pave way for designing possibilities and futures for the problems at hand.
Welcome the Internet of Afrikan Things.
Henri Nyakarundi is the founder of African Renewable Energy Distributor (A.R.E.D) — a renewable energy startup operating out of Kigali, Rwanda and more recently Kampala, Uganda. He is aware of the aforesaid unenviable status quo. He has read the damning reports, many of them.
Born in Burundi, consequently ending up in U.S to emigré parents, the image of despair and destitution is not something new to him. SSA has particularly been painted by all kinds of brushes, but before he breaks into an monologue on his life’s journey, I query the thinking behind his new ‘overnight’ upstart that has been in the making for years now.
Henri Nyakarundi (center), ARED
His value proposition is simple: package a raft of services such as phone charging, and airtime recharge cards in a kiosk that will be strategically placed in high traffic towns and cities in Afrika. Since such kiosks are all too common, especially in East Afrika, due to the prominence of mobile money (Kampala alone has more than 150,000 mobile money agents usually crammed in such tiny kiosks), developing a cleaner and smarter alternatives to the kiosks could have open new markets and unlock value.
For the alternatives, equip them with solar so that the all year long supply of sunshine is harvested into batteries that is in turn used to power clients' mobiles. But also equip the smart solar kiosk with Wi-Fi so that access tokens are sold at competitive prices to the dwellers and — the sweet point — keep a cache of popular content (from creators or resellers) that can be downloaded even without the Internet.
Think of it as a miniaturized content distribution network (CDN) that serves content locally and directly via an intranet; a network where users do not have to incur data costs to download multimedia content.
Call this smart solar kiosk the Shiriki hub.
Entrepreneur charging people's mobile phones on ARED's solar powered Wi-Fi enabled Shiriki Hub. ARED
The hubs are basically Wi-Fi hotspots-on-wheels that beam Wi-Fi up to a radius of 100m through which clients can take a peek at their WhatsApp, but also local content networks where clients can download popular content such as music videos and funny short clips and films without necessarily using the internet.
Users of these services could consume the content absolutely free of charge by viewing adverts or filling in surveys.
“We launched with four wifi hotspots in Rwanda. Having launched in Uganda earlier this year, we’re targeting a base level of 100–200 smart kiosks.”
“The internet economy is going to be the future,” Henri says, “In 5 to 10 years more people will be having smartphones. We have built technology for the future. Are you targeting a customer for today or for tomorrow?”
At face value, it’s not clear to see the thinking behind solutions such as the Shiriki hub. The strengths lies in the product’s ingenuity as much as in the market and distribution economics.
Distribution in underserved and emerging markets in SSA requires, if not demand, novel approaches. This makes distribution fundamentally different.
In this case, SSA’s distribution conundrum comes from the prohibitive costs required to build the pipes/plumbing for distribution and their consequent maintenance especially in sparsely populated and rural areas — where majority of Afrikans live — which do not reconcile with probable economic returns or even potential for growth. Other than that (the hard part), electricity generation is easy, so is the bottling of soda.
That is why techies and innovators are using alternative forms of unique infrastructure to capture and unlock value. A good but probably hackneyed example is the invention of mobile money. Before it became a thing and a huge cash cow for the first to lay claim on its intellectual property (hint: Vodafone UK). Afrikans were already sharing (discounted) airtime credits amongst themselves as a way of transfer of value by use of low-cost, low-tech and nearly ubiquitous basic phones.
Besides the mobile telephony miracle that has birthed M-Pesa, M-KOPA, and a bunch of other M-stuff, infamous motorcycle taxis (bodaboda, okada, etc) have long been the backbone upon which rural/underserved economies run. And we can see some of this thinking is already evident in some product offerings on the market.
Consumer facing companies have reached "peak bottom" in search of unbanked, unconnected, un-catered for people. In this race to cobble the remaining pie of the market, players have had in many cases to reimagine their entire value chains from bottom-up.
For example major pay-as-you-go solar companies maintain bespoke value chains and distribution networks. Mobisol, Fenixintl, BBOX, heck, M-Kopa have their own distribution networks. And about 5,000 others operating in the same space on the continent.
In Rwanda, for example, BBOXX has piloted a product similar to ARED’s. On top of their solar home systems product catalogue, BBOXX now seeks to provide subsidized internet services to her underserved target market.
BRCK’s Moja is an ad-supported public WiFi network accessible in select locations (in Nairobi so far) where anyone within range of the signal can connect to the Internet. One can watch shows, listen to music or read books from the stored content on the network for free. Moja service is powered by supaBRCK — a waterproof, solar-powered Wi-Fi box that operates as a 3G hotspot and off-grid server. There are several supaBRCKs installed in strategic locations in Nairobi, but what I find particularly interesting is the fact that over 800 have been installed in matatus (passenger buses plying major routes in Nairobi and surrounding areas) — making it some sort of internet-on-wheels; certainly almost similar to ARED’s Shiriki hub. Given there are over 10,000 matatus, the potential looks great.
Fair enough there is a real time Moja service Wi-Fi map.
Moja service map. BRCK
Where’s the alpha?
Research and development is the fuel for innovation. Companies interested in off-grid and especially last mile solutions are on the grind. They favour pragmatism over theory. They are in unchartered territory. They are moving fast and breaking things.
In this race of finding a market winning product, duplication is not always the issue. The market itself weans off the losers out anyway. Those whose products are not adopted must go home.
ARED’s position as the only maker of smart kiosks in sub-Saharan Afrika is probably a moat (alpha) for them because replicating their product (both hardware and software) could be an incredibly difficult task, at least for now. But in a market where spurious Chinese hardware knockoffs can come off the conveyor belt as fast as kids in Silicon Valley program mobile apps, they are careful not to outsource their product development to China yet, in spite of China’s dirt cheap and efficient labour force — and, of course, weak intellectual property laws.
It took ARED between 3 to 5 years to develop their first model. Upon subsequent iterations, the model they are piloting in Uganda is their 4th and final for this particular model. The product development process did not come without its woes and unique threats.
“In sub-Saharan Africa, there are few decent and promising product development companies,” he says, “I can count them off my fingers”.
That is why they chose to develop their smart kiosk hub from Germany, notwithstanding that their largest investor — GreenTec Capital — is a German-based venture fund. He says they have been working with another German hardware company (TechSoluts) for about three years now. On top of developing the hardware, the company also designed and developed the software the controls the logic of the business processes the smart kiosk offers.
He is glad they have used a top product development studio in the world. What looked like a preserve for those who are first to claim intellectual property onto existent but informal means of value transfer(re: mobile money case) doesn’t look the heavy stumbling block it initially was. He acknowledges that none of the dominant pay-as-you-go solar companies in SSA are Afrikan founded and owned. “M-KOPA, BBOXX, OffGrid Electric (now ZOLA), Angaza, MPAG, etc. None!” So this is further a reason for him to push further.
Advancement in IoT have come with great benefits for the smart solar kiosk company. Previously they could only learn about users in a limited way. In fact, it was quite difficult to define who/what a user was.
The gambit on sensor and physical computing technology has supercharged an IoT revolution that the company says could be the silver bullet in unlocking business and matching value for the users.
“Sensor technology allows us to improve operations. GPS and Motion sensors can tell how many people are around, charging sensors show how many phones are plugged into our system”, he says, “technology has lowered costs of operation by over 45%”.
The data collected about each kiosk’s business operations translates into better decisioning and faster product development cycles. For example, last year, they were able to serve up to 44,000 users out of 38 kiosks in Kigali. These were a record 150,000 transactions. Their platform can know in real-time how many users are using the platform (data collected on a varied number of benchmarks to inform business intelligence).
You can see the same kind of localization strategies applied by traditional FMCG companies such as Coca-Cola reflected in product roadmaps of homegrown internet companies and upstarts like ARED. Getting soda to all corners of the continent requires devolving distribution to cater for the last mile.
Products are distributed from a master depots located in city centres to region specific distribution outlets/agents who serve relatively smaller or even harder to access markets. This top-down agent model incentivizes distributors at every level of distribution.
To revisit the mobile money reference made earlier, a great deal of mobile money success in SSA can be alluded to rich agent networks located allover the continent, most remarkably in rural areas. Mobile money agent networks similarly follow some form of top-down agent model where “super-agents” directly strike deals with major telcos to manage mobile money. These super-agents act as mediators between the telcos and other (smaller) agents who the resell the services in different locations. This multi-tiered agent model rewards whoever is in the value chain for their efforts. This commission based structure not only retains agents but attracts others to join the network.
Similarly, ARED have structured their agent model along multi-tiers. Think of it as a micro-franchise model. They outsource the smart kiosks to local (super-dealer) partners who understand the business terrain and are able to see the opportunity. The local partners make an initial deposit of US$ 100 upon which they make periodical installments of US$ 200 for insurance, maintenance, servicing of the kiosks. ARED reports that it cost them more than US$ 2,000 per kiosk.
Remember, they do not seek to sell the smart kiosk, rather, they seek to expand the network. More kiosks only mean a wider market.
“How can we develop a business in a box? Can we enable a vendor to develop a business in a box with access to electricity, wifi, content, et al.”
He rhetorically poses. That is why they are working toward to a more portable solution where they retrofit existing kiosks to with features that exist on smart kiosks. This business-in-a-box solution is five times cheaper and more pragmatic for the micro-franchise model.
“We’re for social and economic impact. Upgrading a basic street vendor, an airtime/mobile money kiosk to a more efficient and smarter solution is everything we dream of.”
For this to work, direct partnerships beyond just super-agents will be critical. ARED hopes that partnerships with larger entities such as telcos will come in handy. They stand to benefit by leveraging telcos’ networks, and getting paid directly by the telcos themselves, hence cutting the burden for the micro-franchisees to pay monthly lease fees. Telcos would benefit from resale of their products and collection of more relevant data about their customers through the use of IoT.
The partnerships also have a non-profit element especially with multilateral organizations and aid agencies looking out for smart mobile facing solutions to marginalized communities such as refugees.
ARED’s core value proposition is now clear, to support digital connectivity through reimagining the entire value-chain. And ancillary (digital) services such as mobile phone charging, wifi tokens, airtime top-ups, among others as part of the substrate. A (re)charged mobile device is where the whole story begins, then one can unlock the benefits of connecting through the internet. A highly localized agent network acts the plumbing for content distribution — undersigned through consumption of ads and filling in surveys. A new data driven economy tailored to suit SSA’s connectivity demands and sensibilities.
“We tend to follow hot trends in SSA; Artificial Intelligence, blockchain, etc, yet we don’t even have energy for (the basic needs of) our people. We surely don’t have power (electricity) for blockchain technology, do we?” he ponders sarcastically. Behind that half-wry smile, there is a well thought out strategy to build real solutions for the SSA’s digital tomorrow — the Internet of (African) Things.
Cover Image credit: Henri Nyakarundi. ARED