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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Working for Lufthansa back in 2002, Joachim (CEO & founder @ Jolocom) had the idea to develop a better system for companies to swap data internally and for people to share their data with companies. Back in 2002, the resistance to open networks and communication was strong. However, just a few years later, social media and blockchain changed the rules of the game, which led to the founding of Jolocom in 2014. (Read the whole story here)
Ellie joined the Jolocom team in the fall last year. She’s part of the content team and is responsible for communications and online platforms maintenance.
Volker is currently studying IT-Systems Engineering at HPI, working on his master thesis with Jolocom. He joined the software development team in March this year and has previously worked from betahaus for another startup company.
With two locations in the heart of the city, betahaus l Sofia is a home of some of the most successful Bulgarian startups and is one of the leading innovation hubs in Sofia. Their main space is located just two minutes on foot from Sofia University and the second one stands right at the central Slaveykov Sqaure and has a beautiful view over the city.
As all of our locations, its pet and bicycle friendly and offers the same comfy and relaxed atmosphere you've come to expect from betahaus. Identical to our space, betahaus | Sofia uses glass doors for its team rooms, to build transparency and inclusion.
betahaus | Sofia is spread across 1800 q.m. divided into 2 separate spaces. Shipka 6 is 1300qm and takes over the entire 3rd floor of the UBA – Union of the Bulgarian Artists. Slaveykov Square is placed on the roof top of another historical building in Sofia. There they have two balconies with 360 degrees view, a cafe/bar and a shared kitchen.
Membership plans start from 350,– BGN for Workspace and go up to 435,– BGN for Private Offices. Currently, the space has around 190 members and will soon implement also Club Memberships plan. Every member of the Club will have access to events, conference room and betahaus community.
Ellie: Currently we have around 5 active pilots and we effectively work B2B2C. So we build our application for businesses which have their own user bases.
Volker: One of our ongoing projects is a pilot with Telekom. With their team, and partners from Riddle & Code and Simple Mobility, we have created the Magenta Scooter — an innovation in e-mobility that allows users to ride share while using their decentralized digital IDs. That means users can rent the scooter with our app and our identity. The main advantage there is that you can store your drivers licence in your Jolocom SmartWallet and then share this license with the app of Telekom. This eliminates the long onboarding process of verifying your license.
Ellie: Another example is our e-government collaboration with The City of Antwerp called Blockchain on the Move. Using the SmartWallet, municipal employees can issue and validate their own credentials and create eIDs for citizens – it’s a digital ID with which you can register at the university or go to a swimming pool, as two examples.
Ellie: Two years ago we adopted a new legal structure for Jolocom GmbH according to the purpose model of ownership, manifesting our commitment and dedication to building a self-sovereign organization. That means we can’t take VC funding or sell public shares of the company.
Volker: Jolocom is a community driven organisation – both in a tech sense but also much further beyond. We’re hugely involved in the DWeb community where we organize and attend events for the decentralized community. Every year we also help organize and attend the DWeb Camp in San Francisco, which brings together all kinds of creatives so this technology of tomorrow is built in a collaborative way.
Ellie: I know that before joining betahaus Jolocom was in the Ethereum office – a collaborative blockchain space for companies also building on the same platform and the idea was always to stay within a coworking space. When they closed and we had to move, the next closest choice in terms of company culture was betahaus.
Ellie: The people in the building and the spaces are just really cool. I personally don’t go to community events as much as i would like to but I still end up meeting a lot of people here. Mostly in the kitchen. One of my good friends is actually someone I met in betahaus.
Volker: I once saw a friend of mine presenting at betabreakfast and I didn’t know that he would be here. It was so funny seeing him on the stage.
Volker: There is this really nice place, called Green Rabbit with salads and baked potatoes where I like to go to. Sometimes I just keep it simple and go to Lidl.
Ellie: I eat a lot in west.berlin cafe which is here around the corner and I love the Matcha Lattes from Starbucks.