Monday, March 10, 2008

Selling stuff online to Kenyans

You might not know this but my love of entrepreneurship is fuelled majorly by my love of computer programming. My first exposure to computers was in 1988 when I played shuffleboard on an Atari. Having been raised in the boondocks I was utterly spellbound with the concept of a video game. In 'shags' we hardly ever got toys from the shops; instead we would create our own toys using locally available material. For toy cars we twisted and shaped wire coat hangers and cut out rubber tires from old (and sometimes mom's new) bathroom slippers. For planes, we stuck a stalk of grass through a dried maize leaf and made our 'propellers' rotate by holding them out in front and running into the wind (incidentally this was my all-time favourite). For marbles we hunted for used and discarded bottle-tops (beer bottle-tops were coveted). In fact we had so many toys that our game time never felt inadequate. That was until I discovered video games.

Hard as I thought I didn't see how I could recreate the video game using local material. My wait however was not to be long. One year later I started my first computer class on an Apple Macintosh; and in barely less than one year I was already into BASIC programming. It didn't take long to discover that with BASIC I had the material to create video games. It was like a door had been opened to a whole new world for me. I stepped into this world and saw endless opportunity to create. Even at that age, I realised that the only thing that could hold me back was my creativity.

BRAKES....Now I'm getting excited so allow me to stop here and save 'My Life with a Computer' (soon to be written post) for another day; let me get back to topic. I find my love for start-ups and programming intricately linked; in fact most of the new products I have come up with involve some level of computer programming i.e. SoftLaw Citator,, Genius Executive Centre.

One area of netpreneurship however has always eluded me and that is selling stuff over the Internet to Kenyans. The problem as I've seen it as been two-fold: settlement and delivery. However with the abundant variety of courier firms that have sprung up recently and with a new and easy way to transfer money I see a light at the end of the tunnel.

At the risk of giving away a perfectly good business idea let me say now that online purchases/settlement (Kenyanised for mobile phone use) is the next big thing. The next E-bay or Amazon or even Google is just waiting to be launched; and the platform will be driven by M-PESA, Safaricom's rapidly growing money-transfer service (note to self: remember to write post on how Safaricom is transforming into a financial services company).

I tried Sambaza for online purchases on with some moderate success but its problem was always convertibility of airtime into cash. With M-PESA however, this is not a problem and I've already started experimenting by selling an e-book online. The response so far has been encouraging and I'm now working on tweaks to improve the buyers experience.

M-PESA is a runaway hit, and when a smart entrepreneur starts selling a basic commodity through M-PESA it will be the beginning of a revolution. So popular is M-PESA that it has totally eclipsed its rivals from Celtel and Telkom ($1,000 for anyone who knows what the competing products are called!) and I plan to be in smack in the middle of the gravy train.

Tuesday, March 04, 2008

A solution for hawkers in Nairobi

Congratulations to the new Nairobi mayor and deputy mayor whoever they are. Let's hope they make something of their office over the next two or so years. However unless there is a radical overhaul of the Local Government Act, the man(woman) with the power to change the face of Nairobi remains the Town Clerk, currently one John Gakuo.

Today I have some unsolicited advice for Mr. Gakuo. I'm sure he is quite excited about the new Muthurwa market for hawkers recently setup by the Government at a cost of Sh. 1 billion plus ($14.3M). But I doubt that the market will achieve its primary goal, removing hawkers from the street. There are many reasons for this:

  1. Hawkers go where the market goes, and many buyers who give life to the street hawkers will not go to Muthurwa market
  2. Muthurwa market with its limited spaces is already grossly insufficient for the swelling numbers of hawkers
  3. The KSh. 100 daily entrance fee will appear prohibitively high for some hawkers vis-a-vis the expected fall in sales from relocating.
My solution came to me while considering new ways on marketing some training CDs for one of my companies Genius Forex. I considered whether hawking on the streets of CBD would be a viable distribution model. After studying hawkers and their buyers I saw that my K.Shs. 1,000 CDs might not make it in such a market which is dominated by fast moving 'luxury' items of between K.Shs. 20 and K.Shs 200.

These fast moving 'luxury' items (hereinafter FMLIs) are things bought on the whim which the buyer doesn't really need but buys because they are cheap enough. If the item bought does not satisfy the wants of the buyer there is a low risk of buyer disappointment since the item was relatively cheap. Such things include: clothes and shoes(almost entirely of the female kind), bootleg DVDs and CDs, beauty accessories and mobile phone accessories. Of course in addition to the FMLIs we have the fruits and vegetable hawkers, but I'll consider these separately.

The FMLIs are bought mainly by: the working class leaving their offices starting from 5 pm; and by evening students in the several Nairobi colleges/campuses leaving their classrooms around the same times. Most of these buyers will make impulse purchases from the hawkers as they walk towards their bus stages, which are concentrated between Globe Cinema Roundabout, River Road, Railways, and Tom Mboya Street or Kencom Bus Station. This explains why the most coveted hawking streets are Kimathi Street and Moi Avenue: still in the 'respectable' side of CBD yet near enough to the bus stages (so less opportunities for muggers and less distance to walk with luggage); and away from the hustle and bustle of matatus and their conductors.

Based on these observations I present the following solution. Instead of chasing hawkers to where they do not want to go, why can't Gakuo and co. regulate hawkers to where they want to be. This can be done in the following way.
  1. Designate as hawking zones, those streets with highest pedestrian traffic and lowest vehicular traffic. e.g. Kimathi Street.
  2. Designate 6 pm and 10 pm as operational times for the hawking zones
  3. Ban vehicular traffic in the hawking zones during operational times.
  4. Have foldable stalls available for daily rent from the city council by interested hawkers
  5. Ban any hawkers who do not have a city council stall.
  6. Require food vendors to get health certificates
  7. Install sufficient lighting in the hawking zones
  8. Use rent fees to make sure there are adequate facilities for waste disposal.
  9. Have a tourist corner where items targeted at tourists can be sold
I'm sure my rough solution could do with a lot of polishing up. Would be glad to hear your ideas, and perhaps we can forward it to Gakuo and see whether he takes a fancy in it.