Why Emerging Market Entrepreneurs Should Look to Silicon Wadis, Savannahs, and Tigers
In the innovation hubs and entrepreneurship
circles of emerging economies, the term “Silicon Valley” is an
extraordinarily potent one, evoking rich emotions and idealistic
notions. Visions of big ideas launched by bold entrepreneurs from
beanbag chairs. A place where investment flows like spring rain and
24 year olds become titans of industry.
In the startup ecosystems of emerging economies, Silicon Valley is
studied, revered, respected and admired. “A Silicon Valley
entrepreneur/investor is coming to meet us?” Eyes light up. “In
Silicon Valley…” You have our attention.
Yet my friend Mbwana Alliy, a former –yes, Silicon Valley -
entrepreneur who now manages Savannah Fund, a Nairobi-based seed
capital fund specializing in high growth technology, has told me
repeatedly that Silicon Valley is not a place, thing, or specific
model.
“It’s a concept” Alliy says, a “set of principles.”
The Silicon Valley approach rewards and encourages extreme risk
taking, accelerating potential high net worth companies by
splashing large amounts of cash across several ideas with the hope
that one in a hundred succeeds.
Yet Silicon Valley is a long way both in physical proximity and
context from the world’s new centers of innovation. It offers a
very different set of social, cultural, economic and even legal
conditions and constraints than the emerging markets of the
world.
In this final installment of our three-part series comparing the
vibrant startup environments of Amman, Jordan, and Nairobi, Kenya,
I’d like to explain the ultimate point of this little series; We
need to forget about the valley, and start looking at the wadis,
savannahs, and tigers.
What I mean is that technology startups and entrepreneurs in
emerging markets need to begin looking outwards, and at each other,
for inspiration, ideas, and guidance.
Looking East
We saw that in some regards Jordan looks more
like Kenya than Silicon Valley, and that despite certain
differences in entrepreneurship ecosystems and cultures, thee
two places have quite a lot in common. And why shouldn’t they?
Emerging economies around the world, specifically in Africa and
Asia, are becoming key drivers of new global economic growth,
transforming the global balance of power as their rising middle
classes and hungry workforces create billions of new consumers and
potential employees.
Yet their barriers to entrepreneurship are often universal:
Unemployment. Talent gaps. Broken education systems. Absent or
risk-averse capital. Corruption. Murky business, bankruptcy and
investment laws. The list goes on.
Because of these unique challenges, mostly absent in Silicon
Valley, places like Kenya and Jordan in Africa and the Middle East
have more reason to look at each other, or India, China, and the
east Asian ‘tigers’ to learn how to build ecosystems.
India’s model of outsourcing might not map directly onto Kenya’s IT
sector, while China’s model of iterating quick, less expensive
versions of new global products, may not be a tactic that Jordan
will directly aim for.
But the ways that these ecosystems build and scale companies while
training and nurturing talent could be useful to learn from.
Companies that are flourishing in today’s emerging economies have
done so because they have either pioneered their own models, or
adapted Silicon Valley concepts to fit their specific
circumstances.
Innovation in Localization
The point is simple: Silicon Valley certainly has valuable
lessons to be learned and shared, and sound principles, theories
and strategies that can be tested globally. But, as the developing
world looks to solve its own problems and address specific needs,
new models of innovating by localizing will rise.
The relevant questions become: What could Kenyan e-commerce
startups learn from Jordan’s MarkaVIP or Dubai’s Souq? What could Jordanian mobile
startups learn from the success of Kenya’s
M-Pesa, or the companies filling Nairobi’s M;Lab incubator? How
could Ushahidi’s
crowd-mapping platform exchange knowledge with incident monitoring
platforms like 7arat.com in
Jordan or Harass Map in
Egypt? What could a Nigerian agricultural entrepreneur learn from a
successful seed distribution company in Kenya? The list goes
on.
I want to see more Kenyans in Jordan, and Jordanians in Kenya. I
want to see Rwandans learning from Nigerians and Egyptians learning
from Pakistanis. I want to see the same excitement and enthusiasm
when a successful Indian or Chinese entrepreneur walks through the
door as I see when someone visits from Silicon Valley.
I want to see entrepreneurs looking at cases of success and failure
from Accra to Karachi, Freetown to Kigali, and from Amman to
Nairobi, that may be offer more relevant instruction for emerging
economy entrepreneurs than the rise of Facebook and Google.
And forget the “get-rich-quick” myths that perpetuate in startup
scenes. Building in an emerging market takes a slower approach, one
that builds up the entire ecosystem instead of a single company,
and one that is constantly learning and adapting to the global
marketplace.