If in the United States and other more conspicuously developed countries nerds are considered rather ridiculous - right up until they're worth $10 billion - they are possibly even less well regarded in Kenya, where both government officials and the representatives of large companies largely downplayed their importance in the country's, and Africa's, future.

That is hardly to say that government interest in such a top-heavy country as Kenya is unimportant to these groups, it just seems they have little hope of great support anytime soon. And, instead of despairing, they have all created different ways of reaching out to, and beyond, Kenyan society. In fact, one of my primary impressions was how these developers, as focused as they are on their own markets and the needs of their own society, are nonetheless well versed in global development issues and best practices and are in constant contact not just with each other, but with their peers and with corporations as far flung as Finland and the Silicon Valley.

iLab Africa

My driver Johnson looked around the parking lot of the iLab on the built-out campus of Strathmore and shook his head.

"I never even knew this part of the campus had been built," he said. "You know this university? If you're smart, you can get into the University of Nairobi. But this place is for the elite."

It certainly had its share of Biffs and Betties. No one was wearing old jeans and cast-off t-shirts, that was certain. The iLab building itself was so new that it would be two more weeks before the rest of the furniture was in, according to Dr. Kerretts. The cube-shaped, multistory building had the openness and clean lines of a Scandinavian furniture store. There was none of the rotting brick and peeling paint you saw at the U of N. In fact, the whole cost of the building had been furnished by Safaricom and is full-on fiber-equipped. Samsung and other international high-tech firms have donated money, materials and expertise to the lab. But any fear that the iLab was a function of a new high-tech colonialism was quickly put in the ground.

"They have come to ask us to explain African markets and consumers to them," said Kerretts. "The I.P. of any product or application developed here is retained by the student or faculty member." The sponsoring companies can offer to license an app created at the lab, at favorable terms to the developer, but control is retained, she said, by the developers themselves. There is no liberty without owning the fruit of you own mind.

I sat down with three students at iLab - all of whom must be Masters candidates - to review some of their projects. All the projects were mobile apps, three focusing on medicine and one on housing. I asked why there was such an emphasis on social good, instead of, say, entertainment.

"Our teachers tell us, 'focus on the needs of your society,'" said David Owino, a well-turned out grad student clad in a pressed purple dress shirt and loafers. Quick to smile but very focused, David was the de facto spokesman for the trio, which consisted, in addition, of John Kulova and Sammy Onkoba. "But it's also about the market."

You want to make cash, I suggested.

"We want to make money, too, for sure."

It's a significant step toward parity for African developers to be solicited for their own intelligence and intellectual property and for they themselves to set up a situation in which they retain the I.P. they produce.

Owino is currently shopping his app, a mobile-based pharmaceutical sales tool, to investors. The sales proposition is easy.

"We'll sell it to large pharmaceutical companies," he said. The tool avoids fraud by GPS tracking the sales staff and sending all orders immediately to the company's database. No one can pocket cash or claim expenses for a trip to Mombasa they never took. Customers can be assured of reference to their orders with a phone call.

Next page: iHub

iHub & m.lab

If a Western geek knows anything about East African developers, it is probably in terms of iHub. Set up in March of last year by Erik Hersman and others involved in the creation of Ushahidi, it takes up most of two floors in the pleasant multiuse Bishop Magua Center on Ngong Road in Nairobi. The space is light with tall windows, balconies that let out over a sea of feathery acacias and open working space. The space was secured and renovated with funding from the Omidyar Network and Hivos, the lease is covered by Ushahidi and the Internet connection provided by local company Zuku.

Memberships are offered in color. White is virtual, green is resident and red requires a fee of $100, securing the member a reserved work space. Members are offered business mentoring, Internet access, the cross-pollinating presence of their fellow nerds and access to events and speakers. The events include barcamps (one of which ended while I was on the plane to Nairobi, unfortunately) and hackathons. The latest was focused on water resource issues. iHub speakers have included Google's Marissa Mayer and Vint Cerf.

Perhaps the most important ingredient in the iHub recipe is Pete's café located inside the space itself. Pete's coffee, which he roasts himself, is sick.

On a separate floor sits m.lab east africa, the go-to-market side of iHub. Graduates of iHub whose developments seem the most marketable are offered residence there, for at least six and no more than 24 months. One of these is the Kuyu Project, which we've written about before. Simeon Oriko of Kuyu and John Kieti, manager of m.lab, said m.lab gives developed projects a chance at financial viability. The University of Nairobi, the World Wide Web Foundation and eMobilis work with iHub to sustain the World Bank-funded lab and its fellows.

m.lab provides subsidized office space, access to otherwise expensive market intelligence, business advising services and application testing services.

Nailab

Nailab, led by Sam Gichuru, is just across the hall from iHub. Built on the Y Combinator model, Sam invites startups to compete three times a year and the winners are given space, connectivity and mentoring as they try to build their apps and find their markets.

"We can't offer our residents money," said Gichuru, "so we offer them space and access to excellent business knowledge." Some of the residents have used that to make their own money. One group of animators was practicing world-class motion capture but Gichuru advised them to create more basic, but still stylish, animations for corporate clients. In the last six months they sold ten animations at $2,000 each.

"We are very concentrated on markets," Gichuru said.

Another resident, Nyatha Githinji, had designed an app, SchoolsSMS Premium, that allows parents and school administrators to communicate with one another. The app covers school fees, attendance, sick days and more. So far he's sold it to half a dozen school districts around the country and has amassed enough data from those trials to provide any potential user with proof of concept.

He also won a $2,500 prize from a development contest, ipo48.

"Here in Nairobi, that means he, as a single guy, can afford to pay rent and eat and do nothing but work on his product for three months!"

Nailab also offers more advanced-stage developers and startups with space and connectivity.

DIY

I can't speak for the nerds I met and the nerdatoria I visited in Nairobi. But I can tell you what I saw and you can take it from there.

In a country with a disproportionate government sector, where a legacy of colonial control has made that government slower and less responsive than it could be, startup-minded propellerheads have no choice but to act. Well, they could wait around for government help, or, if they're well connected, they might be able to mine those connections. But even if they're plugged in, most nerds don't want to yoke their wagon to an ox that slow, regardless of the power he brings to the plough. So they are seeking alternatives. And they are finding them.

Lone-wolfing it, creating and joining incubators, exploring alternative funding sources, both international and domestic, connecting directly with a global market, and setting up public-private partnerships are all things I've seen the Nairobi nerdoisie do, all while focusing on their own needs and their own markets. This urge to seek new avenues to success is part of the reason, along with a culturally entrepreneurial mindset, that there are so many of them and why they are going to be a big deal in time.

Sub-Saharan Africa is a region with 1 billion people, over 60% of whom are under 30 years old. High tech has been a primary driver of East Africa's 40% growth over the last decade and small and medium-sized enterprises are poised to take over a great deal more of that growth going forward, according to a recent study, anyone who is not paying attention to the continent, and paying attention to it as a forge, not just as a market, is going to swell the ranks of the "if I had invested $100 in Apple in 1981 I'd be a billionaire" crowd. I fear that the government itself, as well as the large tech companies so avid for the continent's growing purchasing power, may be among them. But that won't matter to the Afro Nerd Superstars. They've got things to do.

Update: Kresten Buch, the founder of IPO48, wrote to say that Tusqee had received a 25,000 Euro investment from Buch's company, 88mph.co.ke

Photos by Curt Hopkins | Disclosure: the reporter's airfare and hotel were paid by the Republic of Kenya

The series is based on a conversation I had with Gustav Praekelt, a mobile entrepreneur located in South Africa. Part 2 is here.

Africa: An Emerging Market?

Running Through the Numbers:

Africa is a continent which is inhabited by roughly 1 billion people. Astoundingly, the "Dark Continent" has been a fertile market for the mobile industry, with 300 million Africans currently carrying an active mobile account. This is an adoption rate of around 30% on a continent that is not known for having an affluent population.

In some African countries, mobile adoption nears 80-90%. Specifically in South Africa, which has a population of 47 million people, 42 million carry and use mobile networks.

Like the rest of the world, excluding North America, most African mobile customers opt for pre-paid mobile phone accounts. In South Africa, only 10% choose to have a service agreement with a specific mobile network operator. In some African countries, pre-paid customers account for 95-96% of the mobile customer base.

Going High Speed

More people in South Africa have 3G high speed-capable handsets than traditional wireline broadband. Praekelt says "traditional broadband is just not going to happen here." He also added that South Africa was the second place in the world to receive an HSDPA network following only Germany. Because a strong traditional broadband infrastructure doesn't exist in South Africa, there aren't many Wi-Fi hotspots to accommodate wireless consumer needs. HSDPA gives customers high speed capable networks that are highly practical and portable at the same time.

Only a few countries on the African continent have 3G including Nigeria, Tanzania, Ghana, Mauritius, South Africa, and Swaziland. In the next year however, many new countries will come on board with 3G data service. However, not all customers will be able to afford 3G handsets right away.

With adoption numbers around 30%, how many of these mobile customers are using the mobile Internet? According to Praekelt, only 1-2%. However, some mobile websites based in Nigeria are attracting up to 200,000 users. Praekelt noted that when he was recently in Lagos, he saw people with 3G handsets even though such a network has yet to be built.

Finally, I asked Praekelt how many African's have smartphones. He replied by saying adoption is very low at around 5% at best. In some demographics, as much as 10% of mobile handset sales are smartphones. For example. his company built a mobile advertising platform that required a smartphone. The campaign, featured on a local radio show as a trial, drew 10% of 18-24 year olds.

Even though smartphone adoption may be low, 50% of African mobile customers use WAP services. Even though smartphones feature rich internet applications, most modern cell phones have browsers in them that enable users to download ringtones and use WAP sites.

Africa as An Inviting Mobile Market

Almost every African country has at least three major mobile network operators. However, initially in the 1990's, none of the major international carriers thought Africa was worthwhile to explore as a potential market. A few key mobile network operators including Vodafone, Celltell (now called Zain), and MTN explored certain African geographies, selected markets and, as a result, cleaned up in terms of market share. In Africa, Vodafone network has 7 territories, Celltell has 10-15 territories and MTN has 21 territories. Local companies understood the emerging environment and the challenges ahead and built out wireless networks. Now they are benefiting from these early bets.

It is astounding how these mobile network operators are able to thrive in markets where average revenue per user (ARPU) is relatively low. For example, in the North American market, normal ARPU is around $60-$70 per month. But in markets such as Africa and India it is much less. AirTel in India has the world's lowest ARPU, however, they area able to turn a respectable profit by making it up in volume with massive subscriber counts.

According to Praekelt, an inviting regulatory environment makes it possible for mobile network operators to come in and do business in Africa. Also, traditional copper phone lines take so long to get that wireless is a no-brainer to most customers who need communications solutions. The long wait for a traditional phone line, combined with firece wireless competition caused wireless phone service prices to go down, leading to success for mobile network operators.

Regarding Open Source and Mobile Handset Adoption, and the iPhone

I asked Praekelt what impact the open source on mobile movement would have in Africa. With developments such as the LiMo Foundation pushing Linux on Mobile, Nokia buying and open sourcing Symbian, and Google's Android now on the market, how will this impact emerging markets? Prawkelt replied, "In a word: nothing".

He expanded by illustrating that Finnish handset maker Nokia has gained such a solid footing in the mobile handset market, "almost everyone is on Nokia."

Nokia is successful in markets such as Africa because they make such a wide array of handsets with a plethora of feature sets and price points. Nokia has a huge market share because they market cell phones that are cheap, expensive, and everywhere in between. Nokia has been able to be successful on both the high and low end of the price spectrum. Plus, Africans like Nokia handsets because they find them easy to use. Oddly enough, the Nokia E90 communicator is quite popular in Africa because it is the one phone that can do almost anything, as Praekelt points out. A very practical device, the E90 features 3G connectivity, a full QWERTY keyboard, and a large screen, adding to it's popularity.

Additionally, application developers are attracted to the Nokia/Symbian platform because of its "openness". For example, a programmer working on Symbian can release mobile applications and services in a non-walled garden environment, unlike Apple iPhone developers. Many African mobile users depend on functionality that is locked out by the iPhone, such as full access to the Bluetooth stack and MMS capabilities.

In Praekelt's opinion, no one will be able to afford an Android handset. An entry-level Android handset might appeal to some Africans, but only if it's offered at a low price but only time will tell, as Praekelt stated.

Also, looking at the iPhone, Praekelt doesn't anticipate these devices taking off in South Africa as purchasing the Apple mobile phone requires a contract with a specific mobile carrier. Plus, at present, South Africans are unable to access the iTunes store for purchasing music and media. The iPhone will likely appeal only to extremely rich persons who are willing to pay $500 for a mobile phone.

This mentality regarding the iPhone carries over to other emerging markets as well. In areas such as Africa, India, and China, iPhone sales are not strong. This means you have 3 billion people who are overlooking Apple's iPhone. The iPhone has been effective in advancing usability in the mobile phone industry through competitiveness, however, the platform is too closed off for many customers in emerging markets.

How Africans Use Their Mobiles: Making Easy Mobile Payments

Africa is home to the largest mobile-based payment network in the world, M-Pesa is a mobile payment system that allows users to exchange money via SMS. A cross between PayPal and Western Union, M-Pesa works with pre-paid mobile calling credit. If you wish to pay a friend or colleague, you can simply use SMS to transfer money his M-Pesa account, resulting in a credit to his calling balance. You can even go to an M-Pesa agent and get cash payments from your M-Pesa balance.

What makes Africa a great environment for a mobile payment system? It's a matter of their economic and societal make up. Most of the one billion people in Africa do not have bank accounts. For example in South Africa, only 13 million out of 47 million people have bank accounts. Of these, only 2 or 3 million have traditional internet access that would allow them to log in to their bank account online to transfer money. For a population who deals mostly in cash, being able to transfer money via a mobile phone payment system presents a huge opportunity to them.

Leapfrogging PC's and Going Mobile

If you look at South Africa's mobile adoption, virtually 100% of the population has a mobile phone (actual adoption is at roughly 91%, but excluding children, it's close to 100%). This drastic adoption has occurred just 10-15 years after the first GSM network was launched in South Africa.

Western based companies who are building their website and web presence tend to think of their mobile internet site as an afterthought. What is often forgot is formating and structuring the site to appeal to mobile internet users in addition to 'traditional' PC-based Internet users. Mobile websites, in Praekelt's experience, are referred to as "the same thing" when in reality the requirements for mobile are quite different. This mentality is not relevant in mobile-heavy populations such as Africa. In a society where virtually everyone is reachable by SMS, new marketing opportunities present themselves.

Mobile customers in Africa are leapfrogging the "traditional" web and going straight for massive WAP and mobile web adoption. 3G phones are available in countries such as Ghana, Tanzania, and South Africa. Combine this capability with inexpensive 3G data rates and a fully-capable 3G phone such as the Nokia E90 Communicator, and you have a population of mobile consumers that sees the online world through an entirely new lens. As Praekelt stated, "with these capabilities, who needs a PC with web access?"

In the markets described above, traditional DSL or cable-modem based internet adoption is relatively flat and growth is linear. However, the mobile adoption is exponential year after year.

Conclusion

The adoption numbers and usage models found in Africa point to a population who has quickly taken an enabling technology and woven it into their daily lives. The next part of this series will illustrate how the Praekelt Foundation has teamed up with social organizations and NGOs to deliver mobile-based social marketing solutions for social good.

About the Author

Jason Harris is a technology and mobile enthusiast based in Portland, Oregon. To connect with Jason or read more of his posts, check out his blog at Techcraver.com.

Photo: Paul Watson

UPDATE: See also Africans and Their Mobiles, Part 2: Using Mobile Phones For Social Good