Local e Business?

Over the last couple of years, we have seen a steady increase in the number of ventures claiming to be businesses based on the web (e businesses). Everytime I attend yet another local techies conference (as an impostor since I’m not a techie), I have high hopes that someone will present a revolutionary, well executed business concept.

I’m not faulting all web based concepts, we all know Ushahidi as one of the best executed ideas in this planet and for a good cause. However, there are two things our local ventures lack and for as long as these aren’t present, we will continue to cry that no one funds technology businesses in Kenya till the kingdom come. Because believe me, even if we presented some of our business ideas to the Silicon Valley venture capitalists pre tech burst in the US, they wouldn’t touch them.

INNOVATION: Something our tech entrepreneurs don’t seem to have understood, quite ironically, is that the world is a global village (quite literally). Unlike the physical market place where I can travel to Nairobi, find a business concept that’s working and replicate it in my village in Meru with measured success, you can’t do the same with e business. We already have a Facebook and a Google.

What value does a Kenyan based ‘Facebook’, ‘Twitter’ or search engine add? If nothing, it is more limiting. I am not discounting businesses targeting Kenyans in Kenya, but when you study the numbers, does it even make business sense to have these businesses in the first place?

E businesses are thin margin businesses and as such capitalise on traffic. That’s where innovation comes in and you have to sell to the world. Paypal for example makes a couple of cents per transaction. How large would it be if it was based only in South Africa or United States for example? Critical mass is key.

EXECUTION: There are a couple of truly good ideas out there. We’re dying for an online house hunting agency that will save us from unscrupulous agents, I would love Bookstop to have an online store saving me time, and saving them floor space and all. Unfortunately the attempts at these have been at best pathetic.

We have websites claiming to be online  house rental agencies and the houses advertised were in the market 2 years ago, we have online bookstores which are more expensive than walking into the store and buying the book, we have online clothing stores selling items imported from Turkey where experience has taught us ladies that size 36 could mean different things (no standard sizing making ordering online quite a risk).

Basically, our tech businesses need to stop playing victim on this one. Sure other businesses get more commercial funding than e businesses, but even a venture capitalist won’t look at you twice, unless you combine innovation with excellent execution.