Tuesday, June 10, 2014

Ethiopia’s tech landscape: unique challenges, massive potential

Having recently visited Addis Ababa, I thought I might write down some of my impressions. The last time I was here was over 20 years ago, as I would fly between Khartoum and Nairobi for boarding school. Needless to say, much has changed, except for the warm hospitality of the Ethiopian people.

EXPERIENCING ETHIOPIA

Mobile carriers and their spam advertising

It’s non-existent here. I was shocked when I landed at the airport, since there were no billboards or ads for any mobile operators (only the phone manufacturers). I didn’t realise how much mobile operator advertising there is in the world until I got to Ethiopia.

2G vs 3G SIM cards

“What is that!?” I thought the guy who was telling me about them was confused, but he wasn’t. They actually sell SIM cards that are different here, and you can’t buy 3G SIM cards right now, since the government-run company (ETC) that manages all ISP and mobile carrier traffic is upgrading to 4G. They’ll sell 4G cards then, and until then you’re stuck with sipping out of the 2G straw.

Rent-a-SIM

Luckily I have a friend who has a friend, named Feleg, who rents SIM cards. He’s an Ethiopian techie who spent much of his life in Colorado, and is now back building his own businesses. Besides hooking me up with a 3G SIM which now runs in the BRCK, it turns out Feleg is a really good front-end engineer and UX guy.

The Internet Speeds

They remind me of internet speeds in Kenya in 2007, pre-undersea cable. Usable, but not great. Everyone says that they were faster until recently, when all the big road works started to cut the cables and cause some disruption in the service.

The Roads are Amazing

There’s hardly any traffic and the roads are really well built. There are advantages to a centralised autocracy, as Rwanda shows us as well. Police/soldiers are everywhere — literally on every corner. Traffic is hit or miss, but overall it moves faster than in Kenya. Mostly due to there not being a lot of cars. Importing a car here has seemingly arbitrary rates of duty, ranging from 100% to 500% (so I was told) and that number might change while the vehicle is in-transit.


Great Leather

I didn’t know this before, but Ethiopia is renowned for its leather. Some of my old contacts have a shoe company called Enzi Footwear, which makes some of the best quality leather shoes you’ll find anywhere. One of the founders works in Italy’s fashion markets, so you can guess just how nice they are. Unfortunately, they didn’t have my big shoe size, but you might see Bono wearing a pair from time-to-time.

ETHIOPIA’S TECH HUBS

As I was getting ready to head to Ethiopia to speak at a conference, one of the main things on my agenda was to see the hub IceAddis. To my surprise, I also found out of a new community-based tech hub, called xHub. Here are some of my thoughts on both.
IceAddis is renowned in the African tech hub community for its amazing design. This is for good reason, as they sit on the EiABC, the architectural and design school at the university. It’s been part of the AfriLabs network from early on, and one of its co-founders, Oliver, was kind enough to pick me up and take me to see the space.
There is a semi-finalist from Ethiopia in this years Pivot East event, for the first time ever, and it’s not surprising that they came from IceAddis. In fact, I ran into one of the founders in Addis, and I’m excited to see a company from a new country in this year’s event.
I’ve never been a fan of seeing tech hubs or labs showing up on university campuses (as I’ve never been a fan of government run/setup ones).
The team at IceAddis confirmed why. Due to the amounts of bureaucracy inherent in the system, it makes doing anything almost impossible. Their space was fairly empty when I came through, likely due to time of the day, but this also might be due to its location in town or due to being on campus.
One really great thing I got to see was their maker space, which is only used by the architectural school, but they do some amazing things with it and it holds great promise. Now, if only Ethiopia would bring some consistency to component and equipment import regulations.

xHub
Teddy Tadesse of xHub

The moment I stepped into the hotel in Addis Ababa, I was met by one of the local tech guys, Kibrom Tadesse, who started telling me about this new tech hub that he was planning called xHub. I was surprised I hadn’t heard of it, so he arranged for me to be picked up by his business partner and primary driver behind the space, named Tedd Tadesse (his brother-in-law).
I wasn’t sure what to expect, to be honest, and was thinking that they might be better served by joining with IceAddis. However, after talking at length with Teddy and seeing the location, I changed my mind and realised that there was indeed room for both spaces in the community. The community badly needs a space that is enterprise and entrepreneur-focused, that is welcoming to the business community.
First, the xHub space is amazing. The building that it’s at and floors it can take up are just what you’d expect from a top-end community tech hub in one of Africa’s major capitals. If they can wring a deal out of the landlord for the roof space, it’ll be the best event space on the continent.
The plan is to get the community involved in the build-out, design and use of the xHub right away. I’m excited about it, and I know the community is as well, as I talked to a number of young entrepreneurs and coders later that day.

Thoughts on the Addis Tech Community

After a lot of discussions with the tech hub leaders, a few tech entrepreneurs, over a dozen computer science and engineering students, and then experiencing the internet in Ethiopia, I came away with a few thoughts.
The tech community in Addis is smart, hungry and realises the potential of the country they live in. It felt a little like Nairobi in 2005, where there was this growing desire to get connected (faster), build businesses and show up on the global stage.
The infrastructure of connectivity in Ethiopia is constrained by government monopoly on telcoms (mobile) and internet, so they really struggle for good service.
Due to their foreign currency trade restrictions, investors aren’t keen to work in the market too deeply. This means funding and access to other markets are hard.
With the size of the local market (some 80 million people) they realise there is a home market, and some of the businesses are honing in on the b2b and public-sector opportunities.
I’m curious as to what will happen next. The tech hubs seem like the best vector, since they provide a nexus point for activities and people to find each other. Being in a country where government control is so heavy, these tech hubs have to work with the government, and I hope that this will open doors and increase the flow of capital into the startups rather than constrain them.
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