My Message to Egyptian Entrepreneurs

On Thursday at the Smart Village Egypt outside of Cairo, I had the opportunity to give a keynote speech during the NexGen IT Entrepreneur Bootcamp award ceremony.

The winning teams were Bey2ollak, Inkezny, Supermama, and Crowdit. The team from Bey2ollak and one other team TBD will be interning at iContact in North Carolina in October. The other two winning teams will be participating in a three month Danish startup bootcamp in the Fall.

My message to the young Egyptian entrepreneurs in the room was “You can achieve anything you set your mind to.”

Mike Ducker from the Global Entrepreneurship Program at the U.S. State Department gave an introduction and then I jumped right in.

Here are my prep notes from the speech:

Intro

• Congratulations to all the teams that have participated in the NexGen IT Entrepreneur Bootcamp.
• Coming here Monday I wasn’t sure what to expect.
• The quality of the young tech entrepreneurs here in Cairo is world-class.
• The youth of Egypt have already proven their ability to affect change, and this class of tech entrepreneurs has been extremely impressive.
• I run iContact in North Carolina. We do email marketing and social media marketing software and services for small and mid-sized businesses.
• I also have a small investment fund called HumanityFund that invests in entrepreneurs who are changing the world in both the United States and in East Africa.
• I hope someday to have my first investment in Egypt.
• Today I’m going to challenge you to be a leader.
• Be a leader in in your community.
• Be a leader in your nation.
• Be a leader in changing the world.
• Entrepreneurs change the world.
• Entrepreneurship is not about making money.
• Entrepreneurship is about helping others.
• Entrepreneurship is about creating value–for your customers, employees, community, and shareholders.
• Wonderfully, the more you help others and the more value you create, the more money you will make that you can then invest in giving back and helping other entrepreneurs succeed.

My Story

• I started in business at age 11 helping senior citizens learn how to use the internet in Florida.
• I learned that word of mouth marketing is the best type of marketing you can get because it is trusted and it is free.
• At 14 I had a business creating web sites.
• I learned that you need to hire a team of people around you to scale the business.
• By 18 I was the CEO of iContact.
• I learned that if that you hire people much more experienced that yourself, amazing things can happen.
• Today iContact has 300 employees and $50M in annual sales.
• Here are the eight of the lessons I’ve learned in business in the last fifteen years.

Lessons Learned

1. Set your goals high. Write them down. Frame them. When I was 16 I wrote down the goal to build a company to 1 million in sales by the time I turned 21. At that point I was making $4000 per year designing web sites, so it was an ambitious goal. I missed the goal. On September 1, 2005 iContact reached 1 million in sales. Eighteen days after my 21st birthday. Because I set that specific definite goal, I went after figuring out how to get the people, knowledge, and resources into my life necessary to make it happen, even though I wasn’t sure how it would happen when I set it.
2. Don’t be afraid to fail. Fail your way to succeed.
3. Surround yourself only with positive people. Avoid negative people.
4. Hire people more experienced than yourself. You should never have a direct report who can’t do their job better than you could do their job.
5. Have fun. Enjoy the journey. Don’t be boring. Consciously create an awesome culture at your company.
6. Think big and think globally when you build your business.
7. There are two types of people in the world. People who watch more TV than they read. And people who read more than they watch TV. Be the second type of person. Read as often as you can. Five hours of reading per week minimum. Book recommendations: Rich Dad Poor Dad, Think and Grow Rich, and How to Win Friends and Influence People.
8. Create your business around one simple principle, “do unto others as you’d have done unto yourself.” Make every interaction you have with every employee and customer follow this principle.

Final Thoughts

• As entrepreneurs, you are all in the business of changing the world.
• Our generation can communicate and collaborate globally like none other before it.
• Work hard, collaborate.
• You can do anything you set your mind to.
• The world is watching what you do now.
• Be a leader.
• End with chant of “I’m an Egyptian. I can change the world.”

What message would you have shared with an auditorium full of future Egyptian changemakers and innovators??

Egypt: From Political Revolution to Entrepreneurial Evolution

I came to Cairo five days ago not knowing what to expect. I leave knowing there are world-class tech entrepreneurs here in Egypt.

In April, I learned I had been selected as one of six American entrepreneurs who would be mentors for a USAID/State Department program backed by the Danish and Egyptian governments to mentor tech entrepreneurs here in Cairo. I learned about the program from Scott Gerber of the non-profit Young Entrepreneur Council.

The program, called the NexGen IT Entrepreneur Bootcamp kicked off on Sunday in Egypt’s Smart Village, just outside of Cairo.

The Mentors

The six American entrepreneurs were:

• Jeff Hoffman, Co-founder, Former CEO of Priceline.com
• Scott Gerber, Founder, Young Entrepreneur Council
• Alexis Ohanian, Co-founder of Reddit
• Shama Kabani, CEO of Marketing Zen
• Kevin Langle, Global Chairman, Entrepreneurs Organization
• Ryan Allis, CEO iContact

We were joined by four entrepreneurs from Denmark:

• Thomas Madsen-Mygdal, Podio
• Natasha Friis Saxberg, Gignal
• Kamran Jamshidi, Marketing Lion
• Alex Farcet, Startup Bootcamp

Together, we worked with nineteen teams young Egyptian tech entrepreneurs age 18-30 on Sunday-Wednesday to help them refine their business models and pitches in preparations for the final pitch competition on Thursday. It was extraordinarily impressive to see the immense improvement in the pitches as each day passed.

The Winners

On Thursday we held the final pitch session. Each team presented for 8 minutes followed by 2 minutes of Q&A. We served as the judges, scoring each team across five category. After four hours of final pitches, the four winners were announced:

• Crowdit -A digital collaborative storytelling platform that is using real-time pictures, video, and social media reports to reinvent the way stories are told and shared online. Their first project will be called 18 Days in Egypt and provide a 360 view of the Egyptian Revolution told through the eyes of the people of Europe.
• SuperMama.me – The iVillage of the Middle East. Creating a community of mothers designed to connect and empower the women of the Middle East / North Africa region.
• Inkezny (RescueMe) – An iPhone app that enables travelers to make emergency calls (Police / Ambulance / Fire ) in any location they are traveling in the world without having to know the local emergency phone number, as well as seeing GPS directions to and phone numbers for the nearest hospitals, and posting a panic notification with location to a users social networks.
• Bey2ollak – An iPhone app that provides live user-generated reports of traffic conditions on the streets of Cairo. They already have 50,000 users shortly after launch and are working on expanding their application globally.

In addition to these four winners, I also really liked

• Balooshy – A location-based ad network for mobile content.
• Tabshora – A 37-signals like tool enabling designers to easily get feedback on design comps from customers.
• OfferQ – A social network for daily deals.

Across the board, the quality of the teams was high, nearly akin to what you might see at a Y Combinator or TechStars in the USA.

The Winners to Intern at iContact

Two of the winning teams will be coming to North Carolina in October for a three week internship at iContact. We are very excited to host them.

They will have a chance to observe every area at iContact including marketing, customer service, sales, finance, and technology. They will also have a chance to meet with investors in both North Carolina and New York City.

The other two teams will have the chance to attend the three-month Startup Bootcamp in Denmark in September, October, and November.

Creation of an Investment Fund for Egyptian Tech Entrepreneurs

On Wednesday night, we all had the opportunity to have dinner at the residence of the Danish Ambassador to Egypt.

While there, we met Hany Al Sanbaty, an Egyptian venture capitalist who runs Sawari Ventures and�Flat6 Labs, an incubator and fund that is launching in Egypt in July.

We were so impressed by the quality of the Egyptian tech entrepreneurs. We wanted to do something tangible and meaningful to show our belief in that these businesses would succeed.

After discussing, members of the American and Danish delegations came together that evening to create a $100,000 pool of committed angel investment funds (which has since grown larger) to invest in the Egyptian tech companies that will come out of the Flat6 Labs incubator in the coming months. The excitement on both sides was palpable when we announced this commitment the next day at the finals. It was clear that we believed in these Egyptian entrepreneurs and were willing to back them with more than words.

Leaving Cairo

And so, after a wonderful celebratory dinner cruise for all participants on the Nile earlier tonight, now I am in the Cairo airport heading back home to the USA.

Tonight, I leave Egypt inspired. And I leave immensely impressed by what Egyptian youth can accomplish, whether it is in eighteen days in the Spring or five days in the Summer.

Going to Egypt Tomorrow

Hello from Boston. I’m here today for year three of the EO/MIT Entrepreneurial Masters Program.

I am excited to be heading to Egypt tomorrow as part of a U.S. State Department and USAID funded program in alliance with the Egyptian and Danish governments. I’ll be headed there with American entrepreneurs Shama Kabani, Alexis Ohanian, and Scott Gerber of the Young Entrepreneurs Council.

We’ll be mentoring 48 young Egyptian tech entrepreneurs ages 18-30 in Cairo with the NextGen IT Entrepreneurs Bootcamp and judging a business plan competition. Four of the winners will be coming to the US in October to intern at iContact for three weeks. I’m passionate about using business, technology, and entrepreneurship as tools to make a positive impact in the world, so this will be a great opportunity to see Egypt and work with great tech entrepreneurs in an exciting part of the world.

This will be my fourth trip to Africa, but first in North Africa. In about 5% of my spare time, I invest in tech entrepreneurs in the US and Africa via the Humanity Fund, so when I was asked to go by Scott Gerber I knew it would be right up my alley.

Egypt is passing through a very significant time in it’s history and it will be fascinating to be there. Quoting one of the participants in the program, “Egypt holds an important place in human history as one of the birthplaces of commerce, and the knowledge and experience of Egyptian business people will lead to many exciting and valuable products, services, and innovations for years to come. This is a great time for Egypt to truly shine.”

Here’s some additional info on the program. More blogging to come as I’m there…

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NexGen IT Entrepreneurs Boot Camp
Background

The NexGen IT Entrepreneurs Boot Camp, is a collaborative effort by the Government of Denmark, the U.S. State Department’s Global Entrepreneurship Program, the United States Agency for International Development’s Egypt Competitiveness Project, and the Technology Innovation and Entrepreneurship Centre, affiliated with the Ministry of Communication and Information Technology. The NexGen IT Boot Camp is a series of training events that includes a Business Plan Awareness Class and an IT Master Class. The later will be taught by US and Danish Delegates in which prizes will be awarded to four winning teams. Two of the winning teams will travel to the US in October to intern at iContact, a very rapidly growing American tech company.

More on the US internship @ iContact

The US internship will be with iContact in October. iContact is based in Raleigh, NC and is working to make email marketing and social marketing easy so that small and midsized companies and causes can grow and succeed. Founded in 2003, iContact has more than 300 employees and more than 700,000 users of its leading email marketing software.

As a B Corporation, iContact utilizes the 4-1s Corporate Social Responsibility Model, donating 1% of payroll, 1% of employee time to community volunteering, 1% of equity, and 1% of product to its local and global community as part of its social mission. iContact works hard to maintain a fun, creative, energetic, challenging and caring company culture. The Triangle Business Journal has named iContact one of the best places to work. The company has been listed on Inc. 500 3 years in a row and its founders Ryan Allis and Aaron Houghton were selected by Inc. Magazine 30 under 30 in 2009.

Two of the winning winning teams, composed of two individuals, will win the opportunity to gain critical knowledge of how to grow a business during a three weeks internship at iContact in Raleigh North Carolina. The iContact internship will be an entrepreneurial rotation in which the interns will learn about the critical parts of the business including marketing/sales, IT, customer service and finance. The internship is paid for by USAID through the Egyptian Competitiveness Project (ECP).

Announcing iContact Free Edition

iContact is announcing iContact Free Edition today – a no cost version of our email marketing and social marketing tool designed to enable more individuals, community organizations, and small businesses to grow and succeed using the power of easy online marketing tools.

Here’s the video announcement…

For more info, take a look at the iContact Blog Post – Helping More Companies & Causes Succeed with iContact Free Edition.

iContact Free Edition:

• Is available for anyone with up to 500 subscribers on his or her list and who wants to send up to 2,000 emails per month
• Allows anyone to manage his or her list of contacts; use our professionally designed templates; send email and social messages; and track opens, clicks, and social views
• Includes 24 premium designer templates in addition to a library of basic templates
• Includes social media integration with Facebook and Twitter, free iPhone and Android apps, and a built-in survey tool
• Includes chat and email support

You can give iContact Free Edition a try at www.icontact.com.

Here’s an excerpt from the blog post Aaron and I wrote as co-founders on the iContact blog this morning…

“We want iContact to become a great global company someday–a great company that is passionate about customer success, building easy online marketing tools, and social responsibility.

And so today we have an exciting announcement that we believe enables iContact to help more companies and causes succeed.

We’re proud to announce iContact Free Edition, a no-cost version of our email marketing and social marketing tool.

We believe that everyone needs a chance. As two entrepreneurs who set out to build a company while still in college, we can’t count the number of people who helped us get started.

For individuals, community organizations, and small businesses that are just starting out, we believe email marketing and social marketing should be free, easy to use, AND backed by great customer support.

Whether you use iContact Free Edition, iContact, or iContactPlus, we’re passionate about your success.”

Finally, here’s an awesome photo from a helicopter yesterday afternoon of our employees preparing to announce iContact Free Edition to the world by spelling out the word ‘free’ in our courtyard…

CEO Role #1: Setting the Mission, Vision, & Purpose

Here’s a short except from the article “The CEO Job Description” that I’m slowly writing over the course of a couple months whenever I have a few moments…

CEO Role #1: Set Your Mission, Vision, and Purpose (MVP Statement)

Why does your company exist? What is the problem you are trying to solve? Where are you going in the future? In order to keep your growing team on the same page you should define (and put up on visible flat screen monitors if you can) your purpose, mission, and vision.

What’s the difference between a purpose, mission, and vision. Mission is the WHAT, the vision is the FUTURE, and purpose is the WHY.

Mission – Your company’s mission is the WHAT you are trying to achieve

• iContact’s Mission: Making online marketing easy so companies and causes can grow and succeed.

We also have a “specific what” that is a quantitative mission. We call this our 2020 mission, which is “to become the largest global provider of software and services that make online marketing easy so companies and causes can grow and succeed.”

Vision – Your company’s vision is the description of the FUTURE

• iContact’s Vision: Build a great global company, based in North Carolina, for our customers, employees, and community.

Purpose – Your company’s purpose is the WHY behind what you do what you do.

• iContact’s Purpose: Create value for our customers, employees, community, and shareholders while having fun and serving as a model for what a high-growth venture-backed company can become in terms of social and environmental responsibility.

CEO Role #2: Defining the Culture

Here’s an early excerpt from the article “The CEO Job Description.” It’s an early “unfinished” version that I’m just getting out there because I can’t stand writing sitting on a computer doing nothing . Enjoy!

On the topic of building culture, take a look at this News & Observer article on iContact’s office space if you haven’t seen it yet… http://www.newsobserver.com/2011/03/16/1056612/going-all-out-to-make-the-office.html

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Excerpt from “The CEO Job Description” by Ryan Allis

CEO Role #2: Defining Your Culture

One key role of the CEO is to set the tone for the culture of the organization. Fish rot from the head down. How you act and the words you use will have a big impact on your ability to recruit the best and brightest and create an unforgettably wonderful work environment to retain your superstars. So will how your senior team acts and the words they use.

So, what the heck is culture anyway?

A culture is the set of unique activities that a group of individuals do that differentiate them from another group of people. These groups could be called tribes. So what it is that your tribe does that differentiates them from your competitor’s tribe? What are your unique tribal traits (UTTs)?

Culture (n.) - the set of unique activities that a group of individuals do that differentiate them from another group of people.

Defining your company culture clearly can attract the type of people to your tribe that you want, in turn creating a more passionate team who then create wow products and provide wow service to your customers, ending the cycle in creating a base of loyal customer evangelizers.

Culture is something that must be authentic. It can’t be faked. But it can be guided over time by hiring people that align with the values you hold dear and holding them accountable to living these values.

There is a three step process to begin to define your culture as CEO:

1. Define your unique tribal traits
2. Define your values
3. Define the actions you take to support your tribal traits and values

Step1 in Building Culture: Define Your Unique Tribal Traits (UTTs)

Step one in defining your culture is defining the words that you want to describe your culture that are inherent in your team DNA. In August 2010 we went through an exercise during a monthly Culture Committee Meeting at iContact. We asked a cross-section of our employee base to write down the five words that they would use to describe our culture. The five words that came up the most frequently in the group of employees were:

• Fun
• Creative
• Energetic
• Challenging
• Community-oriented

Great. Now we knew how team members described our company culture. At least according to our tribe, we were MORE fun, creative, energetic, challenging, and community-oriented than most other companies. These were our Unique Tribal Traits, our cultural DNA. This process gave us critical knowledge about our culture and how to invest in it.

What are your company’s UTTs?

Step 2 in Building Culture: Define Your Values

Step two in defining your culture is defining the values you and your company holds dear.

Values – Your company’s values are the unique precious behaviors you want your team members to hold dear and go above and beyond in bringing to life. For a value to be a company value you must be willing to fire someone if they didn’t display that behavior. You should have no more than five values so they can be remembered. Ideally you’d have an acronym that can be pronounced to correspond with your values. Avoid generic values that everyone uses that don’t actually differentiate (honesty, integrity) and ensure your values start with verbs and not nouns. Most people think values are things. Values aren’t things they are behaviors.

iContact’s Five Values (WOWME):

• Wow the Customer
• Operate With Urgency
• Work Without Mediocrity
• Make a Positive Wake
• Engage as an Owner

Step 3 in Building Culture: Define The Actions You Take to Support Your Tribal Traits & Values

Step three in building your culture is defining the actions that you take as a company that support your cultural descriptors and values.

We’ve learned a lot about consciously building culture as the company has grown from awesome companies like Zappos and Google.

Here are some of the things iContact does to help us live up to our tribal traits:

Fun, creative, & energetic:

• We have Cool benefits like monthly massages for employees, free drinks, monthly lunches, annual car washes (along with the standard health, 401(k) matching, and options)
• We hold a quarterly high-energy team kick-off with costumes to share, align, and celebrate
• We hold new employee graduations in full regalia with pomp and circumstance
• We have a 17′ slide that goes from the game room to the product and marketing area
• We divided our two floors into the northern and southern hemispheres (with the slide between them). The continents of Africa and South America are on floor two and Europe and North America are on floor three. Each continent has four region. Each region has a team leader. Each regional area has designed their space and conference rooms to be representative of their region of the world including turning cubes into African huts in the Serengeti and mounting taxidermied moose in Eastern Canada.

Challenging

• To work at iContact you must be passionate about serving the customer and working hard. We are a high-growth internet company and recruit the best and brightest. We very much are a performance-based meritocracy and those who perform well stay and grow.

Community-oriented

• We are a purpose-driven company and B Corporation
• We have a 4-1s Corporate Social Responsibility Program. We give 1% of equity, 1% of product, 1% of payroll, and 1% of time back to the community.
• We give each employee an added 2.5 days off every year to volunteer in the community, tracked via a tool called VolunteerForce

Define The Actions That Support Your Values

In our annual performance review process and in every coaching conversation we refer to our values and give each employee a 1-4 ranking on how they are doing in living up to the value. (1=red, 2=yellow, 3=green, 4=supergreen).

Noting that some of these are aspirational and still being perfected, other actions that we work on taking at iContact to support our WOWME values are:

Supporting Actions to Wow the Customer

• We work to create an unforgettable overall customer experience.
• We take complicated things and make them simple through design and UI.
• We make the product experience unforgettable.
• We make the service experience unforgettable.
• We work to highlight the customer’s success in everything that we do.

Supporting Actions to: Operate with Urgency

• We use the agile development methodology on a ten week release cycle so we can get new features to market quickly.

Supporting Actions to Work Without Mediocrity

• We put out quality work that is engineered for scale.
• We put every new team member through company training and product training to share with them our values.
• Every year all new managers go through our Managerial and Leadership Training (MALT) Program.
• We don’t accept mediocrity as leaders and managers.
• We move people out of the organization that are not performing well.

Supporting Actions to Make a Positive Wake (similar to actions to making us community-oriented)

• We ensure team members build people up
• We are a purpose-driven company and B Corporation
• We give back through the 4-1s and VolunteerForce
• Our employees receive an extra 2.5 days of PTO for volunteering each year
• Our internal and external communications are fun, creative, and energetic
• We have a slide in the office and decorate the office like our sixteen geographic regions to further creative thinking

Supporting Actions to: Engage as an owner

• Every employee receives options to be able to become a shareholder
• We act like owners because we are owners.

So what actions will you take to ensure you and your team members live your values?

In Summary

So, in review, the three step process to begin to define your company culture as CEO is:

1. Define your unique tribal traits (UTTs)
2. Define your values (precious unique behaviors)
3. Define the actions you take to support your tribal traits and values.

What is your company culture like? What are your unique tribal traits? What are your values? And what actions will you be taking to define and build your company culture as you grow???

The Rise of Rwanda

Muraho from Kigali, Rwanda!

I’m on my way back to the USA today after eight days in Rwanda.

Below are some photos from Kigali, Rwanda taken this week. While here I had a chance to explore Kigali, meet with entrepreneurs, trek with the gorillas in the Virunga National Park, hike on the mountains overlooking Lake Kivu in Gisenyi, and see the future campus of the Akilah Institute for Women in Bugesera District. Kigali is probably the cleanest city in East Africa with lots and lots of paved streets and sidewalks.

The World Bank in its 2011 Doing Business Report named Rwanda as the most improved country in Africa and 2nd most improved globally for ease of conducting business. The Rwanda Development Board (RBD) is working hard to streamline business and investment regulations to make doing business in Rwanda attractive. Take a look at this Powerpoint slide deck from the RBD detailing business reforms and this news article “Rwanda is Now Open for Business.”

The Kagame Administration is halfway into executing on their “Vision 2020″ to build Rwanda into a middle-income country by focusing on economic development from the IT and tourism industries. You must read this Vision 2020 PDF if you are at all interested in economic development or solutions to ending poverty.

Interestingly, President Paul Kagame is perhaps the most active Twitter user among African Heads of State, connecting globally with the IT-savvy world.

Carnegie Mellon will be setting up a computer science school in Kigali in 2011 to train the next generation of East African programmers. And the Marriott, Hilton, and Radisson are all building hotels here to open in 2012 along with the new Kigali Convention Center.

There is so much activity going on here!

Rwanda is not only ready for entrepreneurs, it’s ready for tourists too.

If you have a chance, you must come to Rwanda at some point in your life. It’s a beautiful, dynamic, and friendly country full of “a thousand hills and a million smiles.”

I’m about to board flight one for the trek home from Kigali –> Entebbe –> Istanbul –> New York –> Raleigh. I love long flights as I can read, focus, and plan! I’m back to iContact on Monday morning.

What Are Your Thoughts?

Did you know this was happening in Africa? Why do you think the media so rarely tells this side of the story about what is happening in Africa?

Tell me your thoughts in the comments.

Tour of the iHub Tech Incubator in Nairobi Kenya

Today I visited the iHub, the “innovation hub” in Nairobi. It’s a tech incubator for developers. I met with Jessica Colaco, the iHub Manager. I got in touch with Jessica through Erik Hersman (@whiteafrican) of Ushahidi and Nathaniel Whittemore of AssetMap.

Take a look at this tour of their space I filmed this afternoon.

What is iHub?

iHub is an “open innovation space” with 2000 members. They have three levels of membership, white, green, and red. “White memberships” include virtual community access and are free. Green memberships are also free and include access to the space and events. Red memberships cost 10,000 Kenyan Shillings per month (about $125) and include a dedicated desk and access to conference rooms.

iHub has one of the fastest internet connections in Nairobi. When I visited at 3pm in the afternoon on the day before New Year’s Eve it was pretty busy with about 20 young developers working away, some in relaxing bean bags and other at open desks. I loved the feel of the place with a coffee stand, Matatu route map, high 20 foot ceilings, DJ-like booth for Jessica, programming book library, comfortable seating, and an outdoor terrace overlooking Nairobi.

Jessica says the purpose of iHub is to be a “encourage collaboration and be a physical nexus point between investors, academia, the tech communities, and tech companies.” iHub has fireside chats with tech entrepreneurs once per month. They recently had the CEO of SafariCom Michael Joseph do a chat. They also hold BarCamps, Designer Meetups, Research Meetups, and Hack-a-thons.

iHub recently hosted “Random Hacks of Kindness” which gave developers 36 hours to develop a software solution to problems that were submitted by the community. They also hosted Apps4Africa in conjunction with the U.S. State Department and Ugandan incubators Appfrica and HiveCoLabs.

iHub operates as a non-profit with the support of Erik Hersman’s Ushahidi and earns revenue from memberships, sponsorships, and event space rentals.

iHub reminded me a lot of LaunchBox, BullCity Forward, and JoystickLabs in Durham.

Happy New Year 2011!

-Ryan

The Entrepreneurs I Met in Uganda and Kenya

(If you haven’t yet read my last post on investing in Africa you can read it here)

The Journey to East Africa

I left my parents’ home in Bradenton, Florida on Sunday afternoon and after a 30 hour journey through Tampa, snowy-D.C. and Istanbul, Turkey I arrived at 2:15am Tuesday at Entebbe International Airport in Uganda. I was so happy to be back in Africa for the third time.

I got through immigration and customs and by 3am came out of the arrivals area at Entebbe to meet Roey Rosenblith and Abu Musuzza, two solar lighting entrepreneurs in Uganda who run VillageEnergy. They very graciously picked me up at such an early hour in the morning.

Roey and Abu have been working for a year and a half now on bringing affordable solar lighting to the 80% of homes without electricity in Uganda. They began their sales back in September 2010 after a year of R&D and production and are now rapidly building out their distribution model for their $60 home solar lighting systems.

I had invested in VillageEnergy back in January 2010 through a personal investment fund the Humanity Fund. There was much to discuss!

We jumped in Abu’s Corolla at the airport carpark and began the hour drive back to their apartment in Kampala. On the way I got an update on Village Energy’s operations. We arrived a little after four back at their place. After a quick demonstration of the VillageEnergy solar lighting system and a heated cinnamon bun (definitely not the first thing I expected to eat in Uganda), I crawled under the malaria net and fell asleep by 5am. We had a busy day ahead!

Tuesday – Kampala, Uganda

I rose at 9am and after a shower and some fresh chapatti and Kenyan tea the three of us went to the Kabira Club for a buffet breakfast.

There at the Kabira Club I met with tech entrepreneurs in a series of meetings Roey had set up.

Here’s are the entrepreneurs I met with  in Uganda.

1. Roey Rosenblith and Abu Musuza from VillageEnergy
2. Charles from Wifi Cloud who is starting a wimax phone routers business in Kampala
3. Saidi Bakenya from One2Net is setting up a digital internet connection service over the TV spectrum
4. Peter Kimuli from Carnelian who is building a micro hydro power plan in west Uganda
5. Peter Benhur Nyeko from Benconolly Pess Ltd, who is in the bus and generator business
6. Charles Kalema, who run a garbage and disposal business with 24 employees
7. Dennis from Dmark Mobile, a mobile apps company with 23 employees
8. Revence Kalibwani, a mobile app developer

Around 4:30pm we went to the Village Energy sales center to meet with their employees Aggie, Alex, Alex, and Charles. We then went to dinner at a local hotel to get feedback from the team on how to improve Village Energy.

At eight we visited Olga, a VillageEnergy customer who lives in area without electricity and has 3 VE units installed.

We capped off the night with drinks at 9:30pm at Cayenne in Kampala with Roey and Abu and their friends Simon, Jennifer, and Dennis. Dennis runs Dmark Mobile, a mobile apps company with 23 employees.

Wedneday & Thursday – Nairobi, Kenya

On Wednesday I woke up at 8am. Roey, Abu, and I drove to Entebbe to have breakfast with Revence Kalibwani, a mobile app developer. Then we went to the airport and I was off to Nairobi on Air Uganda.

Yesterday and today In Nairobi I met with:

1. David Kuria from Iko Toilet, has 50 environmentally friendly pay toilets throughout Kenya. Has raised funds from the Acumen Fund and works with my friend Amon Anderson at Acumen.
2. Elizabeth Myyuiyi from EcoBank Kenya to discuss SME loans and credit. Secured loans are going here for 14% per year and group guaranteed microfinance loans are at 25-30%. (Though the annual inflation here is about 9% so the real interest rates on these loans are lower).
3. Gaita Waimuchii of NetBlue Africa, a web marketing agency, and AfricaPoint.com a 21 employee travel booking company in Nairobi
4. Ben Lyon and Dylan Higgins of KopoKopo, mobile money backend integrator, API connector between MFIs and multiple platform mobile money solutions. Ben is from FrontlineSMS and Dylan is from Savetogether.org. They’re received investment from FirstLight Ventures and Presumed Abundance to date.
5. Jessica Colaco from iHub Nairobi, tech incubator
6. Wiclif Otieno from Kito International, non-profit that employs street-youth in Kenya
7. Morgan Simon, founder of Toniic Impact Investors Network

During these discussions a number of other Kenyan and East African tech firms were mentioned that I’ll have to check out.

• Renewable Energy Ventures, providers of the Solatern and run by Joseph Nganga who is on the advisory board of Carolina for Kibera
• PesaPal.com – mobile money provider, run by Agosto Liko
• Squad Digital, Kenyan ad agency
• Craft Silicon, Kenyan financial software firm with 150 employees
• Kalahari.co.ke, the Kenyan Amazon
• Cellulant Kenya, mobile commerce company
• Virtual City – mobile applications provider
• E-Fulusi, mobile money integrator

I’ll be posting next a report and video from my time this afternoon at the iHub, the tech incubator and innovation hub here in Nairobi.

Asante Sana,
Ryan

Why Invest in Africa?

Jambo from Nairobi Kenya!

I’m so energized. I’ve been in East Africa for the past three days visiting tech entrepreneurs and tech investors.

While I spend about 95% of my working energy focusing on building iContact into a high-growth purpose-driven business, I like to take a couple weeks each year to travel and explore what’s going on with tech companies in other parts of the world.

This week I’m in Uganda and Kenya to find investment opportunities for the Humanity Fund, a personal investment fund I have for investing in African and American tech companies.

Why Invest in Africa?

There is so much economic opportunity in Africa, support for IT investment, and entrepreneurial energy. There’s an opportunity to make a lot of money investing in great companies while creating lots of jobs and doing a lot of good at the same time.

Africa is the least developed continent in the world. There are 1.03 billion people in Africa. Of this 1 billion (source) 65% of Africans live on under $2 per day (source) and 59% of African households do not have electricity (source),  and the number increases to 69% if you only look at Sub-Saharan Africa.

But Africa is no longer about famine, poverty, and war. That was the Africa of the 20th century. The 21st century Africa is about opportunity, technology, and entrepreneurship.

You may read about Sudan, Somalia, Zimbabwe, Eastern Congo, and the Ivory Coast in the New York Times and hear about these countries on the nightly news. But these are only five of the 54 countries in Africa.

The real, untold, narrative of Africa is what’s happening in the other 49 countries. Tremendous economic growth, investment, and rapidly rising living standards. What happened in South East Asia from 1950-2000 (rapid growth and poverty reduction) is now happening in Africa from 2000-2050. Most of the world just hasn’t realized it yet.

Why Invest in East Africa?

Here in East Africa (Kenya, Rwanda, Ethiopia, Uganda, and Tanzania) the GDP has grown at an average annual rate of 7.6% the last four years compared to just 0.5% for the USA. Africa will be the economic lion of the 21st century as McKinsey proclaimed in their July Report, “Lions on the Move: The Progress and Potential of African Economies.”

Take a look at these average annual GDP growth rates for 2006-2009 from the World Bank Development Indicators GDP database.

• Uganda: 8.75%
• Rwanda: 7.925%
• Kenya: 4.375%
• Ethiopia: 10.45%
• Tanzania: 6.675%
• USA: 0.5%

Uganda was the first country I came to in Africa back in 2008 and so I decided to start investing here in East Africa and expand later. I hope someday to run a fund making investments in high-growth socially responsible companies all over the developing world.

Investing As a Way of Making a Positive Impact

This is my third time in East Africa. When I came for the first time in 2008, I held the view that the way to best make positive change was to give money away to NGOs and non-profits.

I come now with the perspective that it takes all three sectors of society (government, non-profits, and for-profits) working effectively to create sustainable economic growth and that the private sector has a huge power to make positive change in the world.

The best way I believe I can contribute to positive change is to help high-growth companies that are creating jobs expand and create more jobs. At the end of the day, the cause of poverty is a lack of jobs and productive capital. Low education, low health care, and low nutrition are the symptoms of poverty, not the causes. If you increase someone’s income they can afford better education, health care, and food for their family.

So now, I believe the best way I can use my experience and resources to make an impact in reducing extreme poverty is to invest in high-growth companies that are creating jobs in developing world.

What I’m best at is figuring out how to grow technology and internet companies. Over the next two years I hope to invest in about ten more privately owned high growth African tech companies as part of dipping my feet into the water and beginning to create a model for eventually building a private equity fund some years down the road.

I hope to be able to eventually show that it is very possible to build a microequity investment firm that gets above market returns investing in high growth socially responsible companies in the developing world.

The field of impact investing is developing rapidly and I’m glad to slowly be learning about it. To learn more check out this Impact Investing Primer from the Rockefeller Foundation and this one from the Federal Reserve Bank of San Francisco.

Existing VC Funds in Africa

In my time here and in talking to people at the Skoll World Forum in April I’ve come across the following funds that are actively making venture capital investments in tech companies in Africa.

1. InReturn Capital
2. BusinessPartners Kenya
3. TBL Mirror Fund
4. eVA Fund
5. Flow Equity
6. FirstLight Ventures
7. Humanity Fund
8. Fanisi
9. Grassroots Business Fund (non-profit fund)
10. Acumen Fund (non-profit fund)
11. RootCapital (non-profit fund)

A more extensive list can be found on the African Venture Capital Association (AVCA) web site. Other resources include the VC4Africa and BiD Network

How You Can Invest in Africa

If you want to invest in private African companies, then you could contact the above VC funds and express interest in investing as a limited partner in their next fund. They will likely require you to be an accredited investor and be able to invest $100,000 and up. You can also find private companies yourself and invest in them directly or join an angel network that invests in African start-ups like Toniic.

If you want to dip your toes into the water of investing in African companies without putting tens or hundreds of thousands of dollars at risk, you can invest directly into publicly traded African companies. There are even Exchange Traded Funds (ETFs) that allow you to get index-fund like exposure to African markets. You can invest as little as $75 in these funds through your broker or your TD Ameritrade, E*Trade, or Scottrade account and participate in the growth of the African economy.

You may want to check out:

• AFK – The Market Vectors Africa Index ETF seeks to replicate the performance of the Dow Jones Africa Titans 50 Index. The fund represents a broad range of sectors and African countries, including exposure to some less traditional, frontier markets. Up 23% in 2010.
• GAF – SPDR S&P Emerging Middle East & Africa ETF. Seeks to closely match the returns and characteristics of the total return performance of the S&P/Citigroup BMI Middle East & Africa Index. Up 22% in 2010.
• EZA – South African ETF, up 29% in 2010.

You can also call your broker and ask them to invest directly in publicly listed firms on the Ugandan Securities Exchange or the Nairobi Stock Exchange.

For proper disclosure, as of this writing I do not own any of these ETFs but might in the future. I am definitely not a qualified securities advisor in any way and past performance is not necessarily indicative of future performance.

Thanks for reading. I hope you enjoyed this post! Please share and comment.

Next, I’ll be posting about the entrepreneurs I’ve met in my first three days here in Africa…

- Ryan, Nairobi, 30.12.10

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