Emerging Markets Report
Feb. 8, 2012, 12:00 a.m. EST
Ghana hatches start-ups with high hurdles
West African entrepreneurs seek to chart future of Internet
By Clair MacDougall
ACCRA, Ghana (MarketWatch) — In a light blue, three-story concrete house in the suburbs of Ghana’s capital, young entrepreneurs are developing online applications they hope will make them into the Mark Zuckerbergs of Africa.
They spend long days and nights coding, strategizing and preparing to launch new software companies in an environment where competition is becoming stiffer and more Ghanaians are striving to create Web-based offerings they dream might become the next Facebook.
These entrepreneurs are the top graduates of the Meltwater Entrepreneurial School of Technology, an academy at the center of one of the highest-profile efforts to boost software development in sub-Saharan Africa. At the school’s incubator, as well as in other classrooms and informal gatherings around the country, a burgeoning number of tech-savvy people are charting the future of the Web in Africa and hoping to influence the world’s online ecosystem. But they face high hurdles in a continent with low Internet penetration and poor infrastructure, as well as scant progress in literacy.
MEST
The Meltwater Entrepreneurial School of Technology campus. With the MEST Incubator facilities next door, trainees can interact with those starting new companies. MEST, set up in 2008 by Jorn Lyseggen, a Norwegian tech entrepreneur and chief executive of the Meltwater Group, graduated its first 20 students in 2010 and 20 more last year. At the light-blue incubator next door, graduates are using seed funding of between $30,000 and $200,000 to develop software businesses that will reach both Ghanaian and global markets.
“What we are trying to do is create a demonstration effect through companies and illustrate that software is a medium to achieve great things,” said Michael Szymanski, MEST’s director of business development.
Explosive growth in mobile Web
Many of the software firms being set up by the entrepreneurs at MEST are mobile-based, with developers acutely aware that most Africans now access the Internet via wireless phones.
In 1998, there were fewer than 4 million on the continent, but today there are around 500 million, according to the 2011 Mobile Africa Report, published by Internet organization Mobile Monday. Ghana currently has a mobile-phone penetration of 80.5%, the country’s National Communications Authority says.
However, Ghana and Africa as a whole are still lagging far behind other nations and regions in terms of Internet usage and access. The continent only has an Internet penetration rate of 11.4%, compared with the world average of 30.2%, according to Internet World Stats. Ghana is well below the African average, with 5.2% penetration. But telecommunications companies such as Vodafone Group PLC (NASDAQ:VOD) , South Africa’s MTN Group Ltd. (JNB:ZA:MTN) and Glo are expanding Internet service in Ghana. It may be just in time: Almost 40% of the population is under age 15.
Click to Play How young’s too young to be CEO?Facebook’s Mark Zuckerberg (above) is 27 and Groupon’s Andrew Mason is a few years his senior. Dennis Berman and Evan Newmark discuss. (Photo: Getty Images)
Projects being developed at the MEST incubator include Claimsync, an online system for processing health-insurance claims; Saya, a Web-to-SMS chat application suitable for lower-end phones and BlackBerrys; and Streemio, a music-streaming service.
Another is Nandimobile, which makes software that companies can use to communicate with customers via SMS and search for patterns in queries so they can quickly respond to customer requests. In February 2011, Nandimobile won the “Best Business” award at the Launch conference in San Francisco, in competition with almost 100 Silicon Valley start-ups.
More than MEST
Interest in tech development in Ghana extends well beyond MEST and its incubator. In the nation’s major cities including Kumasi, young techies are pushing the boundaries of software development, social networking, tweeting and blogging. Forums like BarCamp, TEDx Ghana and events such as Accra Startup weekends — where software entrepreneurs have 54 hours to create a viable Web or mobile application and business model — attract hundreds of Ghanaians.
Chapters of the group Mobile Monday, which sprang up in different cities around the world about 10 years ago, meet monthly in Accra. In Kumasi, weekly forums focus on the way in which mobile apps can be used to improve basic services in the country. “When I’m at the Mobile Monday events, I feel like I am at any tech conference or informal meeting of tech entrepreneurs in Silicon Valley,” Szymanski said.
Ghanaian Web developer Bobby Okine, who works with the IT department at Ghana’s Kwame Nkrumah University of Science and Technology, and Haitian-American Pierre Bruanche Jr. decided to start up mFriday events, a takeoff of Mobile Mondays, after undergraduates at the school expressed an interest in software development.
“We identified those who were technically competent, selected some people to train,” said Okine. “We have it up and running now; there are over 200 students.” Visit the mFriday site.
While Internet developers are optimistic about the future for software development in Ghana, they face a number of hurdles. Edward Amartey-Tagoe, a co-founder of Nandimobile, said the main challenge is coming up with applications that are appealing to and usable by people outside of Ghana, which is about the size of Oregon and has a relatively small population of more than 24 million and fairly low — if rising — literacy.
“We have enough brainpower to come up with the kind of software; the problem is whether or not we will have enough usage locally and whether we can get enough people in Ghana and in Africa to use the software,” Amartey-Tagoe commented. “That problem is tied to our low levels of income and low literacy rates. … When you come up with apps that are complicated, you don’t get too many people using them.”
Yet the success of companies such as Esoko, a mobile-based agricultural information platform that allows farmers, businesses and organizations to receive and share prices and other information via text message, shows that Web-to-SMS applications can cater to groups of people with lower levels of education and technological skill.
Esoko, formerly TradeNet, was launched in Ghana by Welsh-South African tech entrepreneur Mark Davies in 2005 and now provides market and pricing data to around 10,000 farmers in Ghana alone. Information from the 16 African countries in which Esoko operates is channeled through the company’s modern, three-level office in the heart of Accra, where 65 Ghanaian developers and support staff work.
Homegrown talent
Kwesi Acquah, a Ghanaian blogger who works in the communications department at Esoko, said that most of the developers at the company and in Ghana had been educated here at home: “Most of the older generation of Ghanaian developers went abroad, but you will find developers of this generation were trained locally.”
Dr. Nii Narku Quaynor — often called “the father or the Internet in Africa” because he established some of the first connections in Ghana and other parts of West Africa — long has argued that the Internet has a central role to play in driving economic development throughout the continent and bridging the north-south economic divide.
Dr. Nii Narku Quaynor In his office in Accra, the 62-year-old Quaynor fiddles with an iPhone as his iPad sits in front of him. “We have to be involved,” he said. “If you are not involved, you are just a consumer of foreign things. But you want these things to be localized to fit your environment.”
Quaynor has often spoken about the emancipatory potential of the Internet for Africa and argues that more needs to be done to increase Web penetration in Africa and to boost innovation and technology education across the continent. He also makes the case that the Internet can help strengthen democracy efforts, in a place where dictatorship and war have cast long shadows.
“Let’s democratize it and make sure everyone can get involved,” Quaynor said. “It’s a revolutionary mission.”
Back at MEST, Szymanski and the new generation of developers in Ghana think the small West African nation is well on its way to becoming the continent’s nerve center for software development.
“I split my time between Ghana and San Francisco, and in terms of the quality of the ideas I don’t see much a difference,” he said. “The creativity is there, the excitement is there, the networks are developing and I think that it could be new the Web hub of Africa.”
Feb. 8, 2012, 12:00 a.m. EST
Ghana hatches start-ups with high hurdles
West African entrepreneurs seek to chart future of Internet
By Clair MacDougall
ACCRA, Ghana (MarketWatch) — In a light blue, three-story concrete house in the suburbs of Ghana’s capital, young entrepreneurs are developing online applications they hope will make them into the Mark Zuckerbergs of Africa.
They spend long days and nights coding, strategizing and preparing to launch new software companies in an environment where competition is becoming stiffer and more Ghanaians are striving to create Web-based offerings they dream might become the next Facebook.
These entrepreneurs are the top graduates of the Meltwater Entrepreneurial School of Technology, an academy at the center of one of the highest-profile efforts to boost software development in sub-Saharan Africa. At the school’s incubator, as well as in other classrooms and informal gatherings around the country, a burgeoning number of tech-savvy people are charting the future of the Web in Africa and hoping to influence the world’s online ecosystem. But they face high hurdles in a continent with low Internet penetration and poor infrastructure, as well as scant progress in literacy.
MEST
The Meltwater Entrepreneurial School of Technology campus. With the MEST Incubator facilities next door, trainees can interact with those starting new companies. MEST, set up in 2008 by Jorn Lyseggen, a Norwegian tech entrepreneur and chief executive of the Meltwater Group, graduated its first 20 students in 2010 and 20 more last year. At the light-blue incubator next door, graduates are using seed funding of between $30,000 and $200,000 to develop software businesses that will reach both Ghanaian and global markets.
“What we are trying to do is create a demonstration effect through companies and illustrate that software is a medium to achieve great things,” said Michael Szymanski, MEST’s director of business development.
Explosive growth in mobile Web
Many of the software firms being set up by the entrepreneurs at MEST are mobile-based, with developers acutely aware that most Africans now access the Internet via wireless phones.
In 1998, there were fewer than 4 million on the continent, but today there are around 500 million, according to the 2011 Mobile Africa Report, published by Internet organization Mobile Monday. Ghana currently has a mobile-phone penetration of 80.5%, the country’s National Communications Authority says.
However, Ghana and Africa as a whole are still lagging far behind other nations and regions in terms of Internet usage and access. The continent only has an Internet penetration rate of 11.4%, compared with the world average of 30.2%, according to Internet World Stats. Ghana is well below the African average, with 5.2% penetration. But telecommunications companies such as Vodafone Group PLC (NASDAQ:VOD) , South Africa’s MTN Group Ltd. (JNB:ZA:MTN) and Glo are expanding Internet service in Ghana. It may be just in time: Almost 40% of the population is under age 15.
Click to Play How young’s too young to be CEO?Facebook’s Mark Zuckerberg (above) is 27 and Groupon’s Andrew Mason is a few years his senior. Dennis Berman and Evan Newmark discuss. (Photo: Getty Images)
Projects being developed at the MEST incubator include Claimsync, an online system for processing health-insurance claims; Saya, a Web-to-SMS chat application suitable for lower-end phones and BlackBerrys; and Streemio, a music-streaming service.
Another is Nandimobile, which makes software that companies can use to communicate with customers via SMS and search for patterns in queries so they can quickly respond to customer requests. In February 2011, Nandimobile won the “Best Business” award at the Launch conference in San Francisco, in competition with almost 100 Silicon Valley start-ups.
More than MEST
Interest in tech development in Ghana extends well beyond MEST and its incubator. In the nation’s major cities including Kumasi, young techies are pushing the boundaries of software development, social networking, tweeting and blogging. Forums like BarCamp, TEDx Ghana and events such as Accra Startup weekends — where software entrepreneurs have 54 hours to create a viable Web or mobile application and business model — attract hundreds of Ghanaians.
Chapters of the group Mobile Monday, which sprang up in different cities around the world about 10 years ago, meet monthly in Accra. In Kumasi, weekly forums focus on the way in which mobile apps can be used to improve basic services in the country. “When I’m at the Mobile Monday events, I feel like I am at any tech conference or informal meeting of tech entrepreneurs in Silicon Valley,” Szymanski said.
Ghanaian Web developer Bobby Okine, who works with the IT department at Ghana’s Kwame Nkrumah University of Science and Technology, and Haitian-American Pierre Bruanche Jr. decided to start up mFriday events, a takeoff of Mobile Mondays, after undergraduates at the school expressed an interest in software development.
“We identified those who were technically competent, selected some people to train,” said Okine. “We have it up and running now; there are over 200 students.” Visit the mFriday site.
While Internet developers are optimistic about the future for software development in Ghana, they face a number of hurdles. Edward Amartey-Tagoe, a co-founder of Nandimobile, said the main challenge is coming up with applications that are appealing to and usable by people outside of Ghana, which is about the size of Oregon and has a relatively small population of more than 24 million and fairly low — if rising — literacy.
“We have enough brainpower to come up with the kind of software; the problem is whether or not we will have enough usage locally and whether we can get enough people in Ghana and in Africa to use the software,” Amartey-Tagoe commented. “That problem is tied to our low levels of income and low literacy rates. … When you come up with apps that are complicated, you don’t get too many people using them.”
Yet the success of companies such as Esoko, a mobile-based agricultural information platform that allows farmers, businesses and organizations to receive and share prices and other information via text message, shows that Web-to-SMS applications can cater to groups of people with lower levels of education and technological skill.
Esoko, formerly TradeNet, was launched in Ghana by Welsh-South African tech entrepreneur Mark Davies in 2005 and now provides market and pricing data to around 10,000 farmers in Ghana alone. Information from the 16 African countries in which Esoko operates is channeled through the company’s modern, three-level office in the heart of Accra, where 65 Ghanaian developers and support staff work.
Homegrown talent
Kwesi Acquah, a Ghanaian blogger who works in the communications department at Esoko, said that most of the developers at the company and in Ghana had been educated here at home: “Most of the older generation of Ghanaian developers went abroad, but you will find developers of this generation were trained locally.”
Dr. Nii Narku Quaynor — often called “the father or the Internet in Africa” because he established some of the first connections in Ghana and other parts of West Africa — long has argued that the Internet has a central role to play in driving economic development throughout the continent and bridging the north-south economic divide.
Dr. Nii Narku Quaynor In his office in Accra, the 62-year-old Quaynor fiddles with an iPhone as his iPad sits in front of him. “We have to be involved,” he said. “If you are not involved, you are just a consumer of foreign things. But you want these things to be localized to fit your environment.”
Quaynor has often spoken about the emancipatory potential of the Internet for Africa and argues that more needs to be done to increase Web penetration in Africa and to boost innovation and technology education across the continent. He also makes the case that the Internet can help strengthen democracy efforts, in a place where dictatorship and war have cast long shadows.
“Let’s democratize it and make sure everyone can get involved,” Quaynor said. “It’s a revolutionary mission.”
Back at MEST, Szymanski and the new generation of developers in Ghana think the small West African nation is well on its way to becoming the continent’s nerve center for software development.
“I split my time between Ghana and San Francisco, and in terms of the quality of the ideas I don’t see much a difference,” he said. “The creativity is there, the excitement is there, the networks are developing and I think that it could be new the Web hub of Africa.”
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