In recent years, Kresten Buch has become a name strongly associated with the emerging mobile-based startup scene in Kenya. The Berlin-based “serial investor” is behind several projects and initiatives designed to support the wealth of young entrepreneurs and innovators in Kenya and the rest of the East African region, mainly through the seed-investment company 88mph, and through the professional social network, HumanIPO, which he co-founded.
Kresten’s latest venture, Startup Garage, is set to open in Nairobi in mid 2012, and will be the largest coworking space in East Africa to date. He also plans to introduce a desk-exchange between coworking spaces in Nairobi and Berlin, in which betahaus will take part.
You initially worked within Denmark and Northern Europe. How did you become interested in Kenya, and what made you eventually change your focus to East Africa?
It all started when I sold a company in 2006 to investors in Eastern Europe. As part of that sale, I had to build a company in Eastern Europe, so that was what first got me out of Denmark. Following that, I decided to take a 14-day business course at Stanford University, and it was there that I then met David Owino, then the COO of Kenya Data Networks Limited. At that time, I was looking to start investing in tech companies, and he told me a lot about what was going on in East Africa: about mobile money and the growth of the mobile industry. Soon afterwards, I decided to spend a week in Kenya to see this for myself, and that’s how eventually started working there.
There’s plenty of talk about mobile business leading the way in regional development, not only in East Africa, but in a lot of developing regions of the world. How widespread throughout the economy and throughout Kenyan society are the benefits of this development – are they limited to only certain economic sectors or certain classes of people?
Mobile technology has really increased its presence in Kenya these days. For instance, the biggest mobile operator in the country, SafariCom, has over 22 million subscribers, and the population of Kenya is 40 million. One thing mobile technology has brought to a lot of rural Kenyans is the ability to have a bank account. SafariCom offers subscribers access to banking services, so they not only get access to a phone - something they may not have had before, but also the opportunity to send or receive money from the cities, or from abroad, with their mobile bank accounts. Phones prices are also much lower these days - you can easily get a perfectly-functional, Chinese-made smartphone running an Android system for about 80 USD.
Despite there being such a promising, talented population, Africa is still unfortunately associated with poverty, corruption, political instability, and the resulting capital flight, which, of course, deters potential investors. Do you believe that, through the growth of the mobile start-up scene - this so-called "mobile revolution" - this stereotype can eventually be overcome in the international community?
That’s definitely one of the more interesting challenges we are trying to face. There needs to be a change in the way people look at Africa – too many people only associate it with poverty, charity work, and so on. Africa also needs to be seen as a land of opportunity that is attractive to investors. We hope that we can eventually create some kind of regional success story through our work which would spread worldwide thanks to social media, ultimately changing everyone's perceptions of Africa for the better.One thing I’ve noticed is that, when you’re in Kenya, you feel surrounded by growth – strong population growth, economic growth, and so on. You’re able to take on projects which may not have the same impact on the markets in Europe. For instance, we founded a football website, Futaa.com, which found great success in the Kenyan markets - something that would not have happened as readily in Europe. A lot of people who do show interest in investing in East Africa mainly see the region as a source of cheap labour, and ignore the true potential of the local population and markets.
Will this also change the way in which business is conducted between Europe and Africa, as people become more aware and more respectful of the local population and business culture?
Of course. Obviously, I encourage Europeans to go down to Africa and start something. It’s great for the local population to be able to collaborate with foreigners, exchange skills, experience and expertise, and to eventually start their own companies based on that. I think that all successful economic growth is based on interaction between nationalities. In order for the economies in East Africa to grow, the local population has to be a part of it; and as equal players. I would love to see small companies being formed by a mix of nationalities – that’s one of the reasons why I’ve decided to start a desk-exchange with betahaus and other coworking spaces in Europe.
HumanIPO has just announced a desk-exchange between coworking spaces Berlin and Nairobi, and that betahaus will be participating. What are some of the main differences between the coworking scenes in East Africa and Western Europe, and what could either side learn from this kind of exchange?
When you look at Kenyan startups, you notice that the entrepreneurs there are a lot more hungry and a lot more driven than those in Europe. One of our employees in Kenya, for instance, had his taxi hijacked, and was held hostage all night. The next morning, he went straight to work, as if nothing had happened! Needless to say, many European entrepreneurs can at least be inspired by that level of determination. I also find that, in Africa, people are much friendlier and more passionate. This creates a good contrast when paired with Germans, who are more structured, formal, and reserved.The space in Nairobi is almost ready for the desk-exchange; so it’s just a matter of enough people from Berlin applying for it. Our newest space, Startup Garage, is about to open, and should be ready in a week. The space has about 120 desks – not quite as big as betahaus, but so far the biggest coworking space in East Africa. Mind you, coworking is still a relatively new trend over there, as many Kenyan companies still hold on to a very traditional, hierarchical office mentality. However, there are more and more young, educated people today who are embracing the concept of coworking - of working openly with others. We’re hoping that, by allowing Kenyans to work in German spaces, and vice versa, we can not only promote coworking in Kenya and in East Africa, but also change the perspective many people in Europe have of Africa, and of doing business there.
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In addition to the betahaus locations, we've formed a close relationship with some of the world's best coworking spaces. With your betahaus membership, you can work from any of our partner spaces for 1 day per month.
Republikken // Copenhagen, Denmark // Vesterbrogade 26, 1620 København V, Denmark
Le Laptop // Paris, France // 6 Rue Arthur Rozier, 75019 Paris, France
utopic_US // Madrid, Spain // Calle de la Colegiata, 9, 28012 Madrid, Spain
Nest 71 // Saravejo, Bosnia & Herzegovina // Milana Preloga 12, Sarajevo 71000, Bosnia & Herzegovina
Toolbox // Milan, Italy // Via Agostino da Montefeltro, 2, 10134 Torino, Italy
Edspace // London, England // Block D, Hackney Community College, Falkirk St, London, UK
Bios // Athens, Greece // Pireos 84, Athina 104 35, Greece
CoWorx // Kristiansand, Norway // Markens Gate 8, 4611 Kristiansand, Norway
CRU – Loja / Cowork // Porto, Portugal // Rua do Rosário 211, 4050-524 Porto, Portugal
SPARK // Mostar, Bosnia & Herzegovina // Bleiburških žrtava, Mostar 88000, Bosnia & Herzegovina
StartUp Armenia Foundation // Yerevan, Armenia // 0019, 1 Marshal Baghramyan Ave, Yerevan 0019, Armenia
Tøyen Startup Village // Oslo, Norway // Hagegata 23, 0653 Oslo, Norway
Smart Coworking // Prague, Czech Republic // Václavské nám. 806/62, 110 00 Nové Město, Czechia
Lighthouse // Tel Aviv, Israel // HaHaroshet 14-16 Ra'anana, Tel Aviv, Isreal
Fueled // New York City, USA // 11, 568 Broadway, FL 11, New York, NY 10012, United States **Maximum 3 Days
Capital Factory // Austin, USA // 701 Brazos St, Austin, TX 78701, United States
Público // Mexico City, Mexico // Puebla 403, Roma Nte., 06700 Ciudad de México, CDMX, Mexico
Area Tres // Buenos Aires, Argentina // El Salvador: El Salvador 5218, C1414BPV CABA, Buenos Aires, Argentina // Soho: Malabia 1720, C1414DMJ CABA, Buenos Aires, Argentina
HubBOG // Bogota, Colombia // Cl. 98 #18-71, Bogotá, Cundinamarca, Colombia
CIT // Taipei, Taiwan // 10452, Taiwan, Taipei City, Zhongshan District, 玉門街1號
Of10 // Mumbai, India // Prudential, Ground Floor, Hiranandani Gardens, Powai, Mumbai, Maharashtra 400076, India
Kibar // Jakarta, Indonesia // Jl. Prof. Moh. Yamin No.1, RT.7/RW.5, Menteng, Kota Jakarta Pusat, Daerah Khusus Ibukota Jakarta 10310, Indonesia
Midori.so // Tokyo, Japan // Midori.so Nakameguro: 3 Chome-3-11 Aobadai, Meguro-ku, Tōkyō-to 153-0042, Japan // Midori.so Nagatacho: 2 Chome-5 Hirakawachō, Chiyoda-ku, Tōkyō-to 102-0093 // Midori.so2: 3 Chome-13 Minamiaoyama, Minato-ku, Tōkyō-to 107-0062, Japan
Launchgarage Innovation Hub // Manila, Philippines // Level 2, Industria Mall, Circulo Verde, Calle Industria, Bagumbayan, Quezon City, 1110 Metro Manila, Philippines
Independent Studios // Melbourne, Australia // 39/40 Porter St, Prahran VIC 3181, Australia
Urban Station EGYPT // Cairo, Egypt // 2 Wadi El Nil Mohandeseen, Cairo, Egypt
Nairobi Garage // Nairobi, Kenya // Nairobi Garage, The Mirage, Chiromo Rd, Nairobi, Kenya
BONUS: Cowork & Relax at the Coliving Space, Coconat // Brandenburg, Germany // Klein Glien 25 14806 Bad Belzig, Germany // Get €10 off your stay
Toni: Currently, we’ve somehow ended up in this niche of building a lot of internal tools for startups and teams. But this is not the only thing we want to do. What I like about it is that we’re starting projects from scratch and we have full control over them.
Martin: The first project we worked on was a tool for a large scale real estate development company. What they needed was a tool for their Sales people - to be able to mark their different spots and locations at different stages of the sales funnel. So we created a tool that helps them in this process.
Toni: And this one actually served as a starting point for the tool we’ve developed for betahaus, which aims to allow the Sales and Management team to see which team rooms are occupied right now, which ones are free or will be occupied in a few weeks or months, so no double bookings appear.
Alex: These two projects were more focused on real estate, let’s say, but we’ve also done more design-heavy projects like the one we did for Artique which is an online artists agency. For them, we built a whole website and an online system to present their artists starting only from their logo. It had to be very flexible, because the artists needed to be able to edit their own profiles, putting their resume, changing colours.
Toni: Honestly, we have skillsets that you don’t usually find in developers. Because we've had lives that were not just about computer science. I think to some extent this is what makes us different.
Martin: I believe one of the reasons why people pick us over other studios is because it can be very hard working with developers. If you’re not understanding their work, if the communication is not flowing, you, as a client can feel lost. We're easy to communicate with and we’re always open to feedback and we're open to discuss anything. In the end, after all iterations, if you say we need to start the website from scratch and that you don’t like the idea, we won’t take it personally.
Alex: Also, I think, since we all work as coding teachers, we are officially qualified to explain what coding is to people who don't code, which is actually really rare because a lot of developers, as Martin says, don't want to, or literally just don't know how to articulate what they're doing. Whereas we are trained in articulating what it is that we're doing, why it's meaningful and why it takes a certain amount of time.
Alex: Zimt & Mehl - the Turkish bakery around the corner. It’s just soo good.
Martin: Oh, there is this Italian restaurant called Ristorante del Arte
Tony: Oh, my God, this place is so funny. It looks like a pretty average Italian restaurant, but the whole interior design inside is just decorated in such a weird way. The entire place is covered in frescoes. They have crystal chandeliers and Easter bunnies. Some Greek columns. It has a different name on the menu, on the side and on the Internet. And it was an ex-shoe-store.
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