Report - iHub Research

*iHub_Model
Understanding the Key
Factors of the iHub Model
Author: HILDA MORAA
*iHub_Research, PO Box 58275, Nairobi, 00200, Kenya
Email: [email protected]
Graphic Designer: Patrick Munyi
Contents
1. Abstract
3
2. Introduction
4
3. Methodology
6
Concept of Open Innovation
9
Internet Connectivity
10
Core Values
10
Culture
11
Events
11
The Community
12
The Advisors
12
The Funders
13
The Design
14
Partnerships
15
The Sustainability Strategy
16
4. Startups / Entrepreneurs
17
5. Conclusion
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5. References
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That have Emerged fro the iHub
Abstract
iHub Research is currently conducting an in-house research project dis-aggregating the
unique factors that make up the ICT Hubs model in Africa. Little study has been done to
understand the various factors that make up an ICT hub model and how these are useful to
the entrepreneurs in the spaces. iHub research is on a mission to find and document this
information. The first ICT Hub of the 15 hubs to be profiled within this study is iHub,
Nairobi’s Innovation Hub for the Technology Community. The first section of this report
gives an overview of Kenya as a potential ICT Hub. The second part shows the origin and the
factors that constitute the iHub model. And finally, a list of some of the startups that drive
the collaboration model and concluding remarks from the study.
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Introduction
iHub is located in Nairobi, Kenya and was opened in March 2010. The iHub boasts of more
than 6,000+ virtual members who interact via the web platform, 240 green members who
physically access the space, 9 red members who pay for a semi-permanent desk space for a
period of 6 to 12 months, as depicted in this infographic as at February 2012.
Kenya’s GDP has increased by 5 per cent from 2007 to 2010 with the ICT sector alone contributing to an impressive 23 per cent of this growth (Kenya Economic Report 2010). In a
recent CCK report (2012), Kenya’s mobile subscribers increased to 28.08 million from 26.49
million subscriptions as recorded during the previous quarter. This number represents a total
country penetration of over 71 per cent. Should this rate continue undeterred, Kenya could
reach South Africa’s mobile penetration of 100 per cent sooner than 2016.
According to the same report, over 98 per cent of Internet subscription is via
3G/EDGE/GPRS. This represents an estimated number of 17.38 million Internet users in the
country, leading to an Internet penetration of 36 per cent, an incredible 95 per cent increase
from the previous year.
Kenya is positioning itself as Africa’s ICT Hub with both Government and private sector
investing in ICT-related infrastructure. As a show of confidence in Kenya's potential, Google,
Microsoft, IBM, Qualcomm among other international firms now have fully fledged offices in
Kenya. Recently the Nokia CEO, Stephen Elop was on tour in Nairobi to meet Kenyan developers. He said Nokia had made a conscious strategic decision to increase investments in
Kenya and Eastern Africa region by 25 per cent. Those investments are in the form of
investing in the Nokia research center based in Nairobi, helping developers build applications
and investing in marketing activities to ensure success in the region.
Barely a month after Nokia announced investment on a research centre in Nairobi, Kenya will
yet again benefit from similar initiative announced by International Business Machines
(IBM). Steve Mills, the IBM Senior Vice President and Group Executive, Software Group said
Nairobi will receive a state-of-the-art innovation centre before end of the year to support its
rapidly growing software industry.
Kenya has set up a robust telecommunications infrastructure and high capacity International
gateways. The country has also made remarkable progress putting in place an ICT policy
framework and implementation strategy, complete with measurable outcomes and time
frames. The Kenya ICT Board has been at the front line pushing for this progress. For the last
three years, the Kenya ICT Board has been acting on their mission of making the country one
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of the top 10 global technology centers.
In conjunction with this rapid growing number of mobile and Internet users, supporting government policy and infrastructure, the number of computer science and IT students graduating each year continues to increase in both public and private universities. ICT Hub, a space
where tech community congregate to bounce ideas around, network, work, learn, program, and design to make their ideas into actions, seem to offer an ideal environment to
nurture such Kenyan graduates and encourage open innovation and entrepreneurship spirit.
This seems to indicate great potential in ICT not only for current growth in the country but
sustained future growth as well.
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Methodology
Mixed methods were used to understand how the iHub model works: IDIs (In-Depth Interviews) with 4 management team members, 1 Focus group with 3 iHub employees, 5 profiled
case studies on the iHub, and available secondary information on the iHub website. The data
collection took a period of one month, followed by one month of analyzing and reporting. All
interviews took place within the iHub space .The respondents chosen carry out varied roles
and responsibilities in managing the iHub, therefore iHub research was able to obtain a wider
perspective of how the iHub works: ie 1 advisory, 1 Network manager, 1 community manager, 1 general manager, 3 employees as shown in the table 1.0 below.
In-Depth Interviews
(IDIs)
Focus Group
Case Studies
4 Management
Team Members
1 Focus Group with
3 iHub employees
5 profiled case
studies on the iHub
Table 1.0 Methods used
6
The Genesis
Figure1.0: Factors that make up the *iHub_ Model
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iHub centre is the first of its kind to operate in Africa. It allows technologies to progress from
the ideas stage to becoming real products. The key to iHub’s effectiveness is open innovation — the process of combining internal and external ideas, as well as internal and external
paths to market and advance the development of new technologies.
“iHub is a network and meeting place
that enables Kenya's innovators to bring
their ideas to life”
Tosh, the community manager of iHub.
The structure is made up of three membership tiers:
‘Green members’, membership is open and free to work from the physical space.
‘Red’ members’, offers a semi-permanent desk for a monthly fee.
White’ members’, virtual members who do not physically access the space and constitute the largest population of iHub membership structure.
Together, the members strive to share in the iHub principles and goals to make it a better
place. The iHub offers several opportunities to their members, based on various factors that
continue to make the space function. Analysis of the factors that make ICT Hubs work was
done on the data collected from the operators of iHub space and advisors that help in
running the space. These factors as depicted in figure 1.0 above include:
Concept of
Open Innovation
iHub has embraced the principles of open innovation by nurturing an enabling environment
and a collaborative space where a community of technology entrepreneurs can grow and
share ideas. Through iHub, the technology community, industry, academia, investors and
venture capitalists can meet, share ideas and collaborate. In turn they transform their ideas
into actions: they build a vivid vision, a team and a business plan, with help from an in-house
business unit. Through a culture of open innovation a paradigm of discovery of new knowledge and dissemination of work that can be used to develop new innovations is created. The
dynamic synergy created by these interactions is what fuels the community as a whole.
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Internet
Connectivity
Internet connectivity is often a core part in accelerating start-ups communications and
share digital information. The Wananchi brand, Zuku, has provided iHub with free, high-speed
Internet, helping to accelerate collaborations among members. Safaricom has provided
backup Internet for added redundancy when traffic spikes, or Internet outages occur in the
main undersea cable hence achieving a continuous connectivity and information flow in digital formats.
Core Values
A key ingredient of consistently successful organizations or individuals is the value system.
The Hubs can be shaped to be an environment that nurtures forward-thinking business
leaders and learning through commitment to the core values in the hub. iHub’s institutional
values of integrity and transparency have created a rich environment, giving credibility and
visibility of the activities and information that is channeled from the space.
Quality and continual improvement have also built the iHub value system. iHub offers a welcoming, open and fun environment where members can share experience, skills and friendship. Through commitment to these core values, a collaborative model is created that facilitates open discussions among young entrepreneurs, investors, potential business partners,
mentors and other members experienced in working with telecommunication companies
such as Google, Samsung and Nokia.
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Culture
Culture creates active collaboration and continuous innovation in a hub. Sharing knowledge
is vital; an isolated community of people in a hub looked after by a privileged few will not
survive long. A knowledge-sharing culture built up through collaboration, start-ups helping
each other, skill sharing, networking, capacity building through skill set sharing and mentorship are the key features of the iHub community that build iHub’s brand identity, benefiting
its individual members.
Events
At an individual level, iHub members strive to improve their skills and knowledge about
relevant issues or current trends by engaging with the resources available through the open
innovation space. These include educative events, fireside chats with CEOs and thought
leaders in the tech industry and workshops within the community. Each of these events has
a different objective to the members and is geared to promote ICT culture.
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The
Community
iHub Members drive the space based on common interests. The community’s knowledge and
social collaborations are a valuable contribution to the success of the space. The community
is at the centre of every decision as shown in figure 1.0. It is this community atmosphere in
the hub that strengthens knowledge transfer, expertise and growth and fosters innovation
in areas that matter most to the open space. In order to sustain and attract new members,
communities must provide ongoing value.
The Advisors
The iHub Advisory Boards is made up of 5 people who come from the Nairobi tech community and represent the community when important or difficult decisions have to be made.
These advisors also act as mentors. Their experience and diverse skills enables them to strategically provide the support that is necessary to entrepreneurs in each stage of their business. The iHub advisory board includes:
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The
Funders
To ensure future sustainable success, Hubs are required to secure more funding and support
as most are non-profitable. iHub receives considerable financial and non-financial support
from different organizations to strengthen the Hub’s future. iHub’s funding has come from
the following private foundations that support Ushahidi:
OMIDYAR NETWORK
TM
Omidyar Network, a philanthropic investment firm dedicated to
harnessing the power of markets to create opportunity for people
to improve their lives.
Hivos, a Dutch non-governmental organization that aims to contribute to a fair, free and sustainable world. In 2011, Hivos agreed
to cover a good portion of the iHub’s running costs. The fixed costs
were covered while the management team worked towards generating enough revenue to make the iHub sustainable on its own in
2012.
With this funding, Ushahidi established a physical hub (iHub) in Kenya, the country where the
idea of Ushahidi was born. With arrival of the undersea cable and the already buzzing tech
scene in Kenya, the iHub is giving rise to a rich pool of talent and start-ups in the tech scene
causing a paradigm shift in the technology world.
Recently, Google also provided financial funding of USD 150,000 (Ksh. 12M) to support the
iHub community. This funding will help accelerate iHub’s mission in catalyzing technology
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innovations within the iHub community by providing them with the infrastructure and skillsets to fuel their innovations to the next level. With this funding, iHub management seeks
to:
Expand their infrastructure (network and server technology) to provide the tech
community with a “sandbox” to host and test their applications
Set up a UX testing lab to provide training on design thinking and carry out UX
research in the tech world
Setup the “ExchangeBoard Project” to support high-quality G+ hangouts and display
the latest newsfeeds within the tech community
Set up an experimental super-computer cluster environment (“rackspace”) to host
data intensive applications with require high performance computing
Google has also provided non-financial support through initiatives in the community like
crowd mapping, trainings and office hours. These sessions have strengthened members’
collaboration and through them the iHub community have identified areas to work together
and strengthen their networks through effective partnership.
The
Design
The design of the space was key to give a feeling of openness, fun and community flair.
Fady Rostom from Ark Kenya and Kwame Nyongo were the lead designers from the community who led the design team. They spent a lot of time listening to ideas and thoughts of the
advisory team before they started drawing - and it shows - in what was built.
We needed a place that was open, and
could be flexibly turned from community
commons to events space. We wanted a
subsection of the space to be rentable
desks, for pre-incubation and co-working
activities”
The coffee shop forms the core for
networking within the community
and the secure server room is the
heart-beat of the network and
Internet.
Jesssica Colaco, the founding manager of iHub.
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“It was important for the iHub to
The good design of the iHub has positively have the feel of being a highimpacted on the brand and user experience, tech community space in the
inviting more members and guests in the
world, with a Kenyan flavor”
space.
Joshua Musau, iHub designer.
Partnerships
In any business model, having partners is an ingredient to success. Most important is building effective partnerships and structures of collaboration within the community. However,
bringing partners to the table is only the first step in the collaborative process. Equally
important is how the partnership will be structured once it is formed. In partnerships among
organizations and institutions, lack of formal structure undermines mutual accountability
and limits the potential for meaningful cooperation. Without enforceable rules of interaction,
organizational partnerships often take the form of loose networks rather than functional
collaborations.
iHub has worked hard to create these partnerships with individuals and corporates. Before
the first brush of paint was dry in the iHub, iHub had started talking to big technology corporates. The iHub advisory team also happened to know a number of them personally, which
sped up the discussions and interactions considerably. The advisory team did not want to
just have corporate partners who were sponsors, but corporate sponsors who could add
value to the space that would help the tech community.
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The Sustainability
Strategy
The iHub has different channels of generating revenue to remain sustainable and competitive through an effective action plan. When factoring in the things that should feature in a
sustainability strategy it is crucial to factor in all aspects of the business or operations and
this is where sustainability management comes into effect.
Ways in which the iHub generates its revenue include:
Red Membership – desk rentals to individuals at USD 120 per month
Events - The community members can run free events, but corporate partners and
other organizations pay a fee to run an event on at the iHub.
Jobs Board – posting of jobs on the website at a monthly fee of Ksh1,000 per post
Corporate Membership - large organizations can contribute to the iHub’s operating
costs and in return they have greater access to the iHub community through their
initiatives.
The iHub Research arm - this started in March 2011 as an experiment. Made up of
a team of researchers who focus on tech research in Kenya and Africa. The team
already foresees that 50 per cent+ of future income will be coming from this initiative. For more information about iHub Research, visit research.ihub.co.ke.
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Start-ups/Entrepreneurs that have
emerged from the iHub model
Several innovations have arisen out of the iHub model of collaboration.
M-Farm: is a mobile Information Resource Center that focuses on
delivering real time information to the farmers on current market
prices,weather alerts and agro-supplies within the location, bringing farmers together in a collaborative forum.
Elimu: Designed to make not only an educational, but also a social
impact, to educate a generation of conscientious citizens who will
be armed and ready to take their places in the economies of the
21st century; a generation of problem solvers, astute voters and
reliable leaders for Kenya.
Uhasibu: is the award-winning online (cloud-based) accounting
system for SMEs, build specifically for the legislation and workflow present in Kenya today. All features that for the first time
enables SMEs to move to fully digital accounting. Increasing
efficiency by removing overhead due to manual paper processing.
One can view all the other 72 startups housed within the iHub space on the iHub rolodex at: http://ihub.co.ke/pages/companies.php
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Conclusion
Community managers play a pivotal role in keeping communities viable and helping them
grow. They engage subject matter experts like the advisors and mentors who can provide
the right answers to questions of their members while they work within or virtually from the
space. And importantly, generate transfer knowledge and best practices to help community
members evolve their skill sets.
The operators of the iHub space need to motivate members to share and engage with each
other through community initiatives and meetups, online tools such as whiteboard and the
interactive website. This way, they will promote the exchange of ideas and harvest and
repurpose valuable knowledge and the spirit of open innovation. They should also capture
metrics to measure community growth and effectiveness in the space.
Finally, communities cannot be successful without the employees to manage the space who
are enthusiastic, engaged and willing to share and communicate. This is where culture
transformation comes into play. For the Hubs model to be successful in implementation,
they have to clearly define and illustrate how community involvement delivers value to its
members as well as to their businesses. Then the community managers capture and repurpose these success stories of their members to drive more membership, increase adoption
and validate business value.
ICT Hubs that are strategically well-planned, infrastructure enabled and effectively managed can significantly impact the success of social collaboration efforts within the hub
space playing a big role in making the hubs model become successful in implementation
harnessing Kenya ICT potential.
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References
CCK (April 2012). Sector Statistics Report Q2 2011/12. Retrieved from
http://goo.gl/7YNuY
Kenya government (2010). Kenya Economic report 2010
ICT Board (March 2010). Press Room. Retrieved from http://goo.gl/jtDL4
iHub (2012). Retrieved from http://ihub.co.ke/pages/about.php
MIT (2012). Tech review: ‘Kenya Start up Boom’. Retrieved from http://goo.gl/Hq7Hn
Public ICT (2011). Public ICT Hubs success Factors Retrieved from
http://goo.gl/8aQfV
Paul Ticher & Andrea Eave (April 2008). Final report of the independent evaluators.
Retrieved from http://goo.gl/nSily
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