incubation
Business Management

Virtual Business Incubation, East African Style

East Africa is a region that features on the global map for many positive technological and business trends. Among the most recent and vibrant venture into this field has been the development of business incubation hubs. These have teamed up to brighten the faces of many upcoming entrepreneurs.

Business incubation is a service and support process extended to entrepreneurs, especially the ones that are just starting out a business idea, and those ones in the early stages of development. The services are geared towards increasing the rates of business implementation, along with speeding up growth, profitability and feasibility.

What is Virtual Business Incubation?

Virtual business incubation services on the other hand include those business support, counseling, assistance and funding services that are accessed by the entrepreneur electronically through ICT. The business may be in a remote area and unable to benefit from on-site incubation. Some may need incubation services but prefer using their own premises. This requires the use of ICT tools to reach out to all these categories of entrepreneurs.

This may provide the answer for many entrepreneurs, the likes of UK-based Simon Schnieders, co-founder of Explore.To, a local business listing and search engine, who observed that: “When you’re an experienced founder and you’ve got a family, being asked to move hundreds of miles away and live in digs is not viable for you.”

 

In many countries, business incubation services are funded by national or regional governments. This is usually in line with the existing national or regional economic development strategies. However, in countries less developed like East Africa, governments are shy of business incubation services let alone virtual business incubation.

This has resulted in the intervention of such organizations as World Bank Group. Currently, the World Bank (through infoDev) and the AfriLabs have teamed up, and through their various members and Nairobi-based business incubator and accelerator, Nailab, provide Virtual Business Incubation Services to reach rural East Africa.

East Africa has many individuals with rich and viable business ideas that if properly harnessed, could make some great entrepreneurial and technological strides. However, according to Nailab, in the past there has been a real need for development training, product development, mentorship and entrepreneur interaction.

What Ideas Have Been Incubated?

Borrowing from Nelson Mandela’s famous quote that: “Education is the most powerful weapon which you can use to change the world”, Steve Nguru the Founder and CEO of Swapkitabu Ltd, provides an inspiring business idea that has been harnessed by Nailab business incubation services.

Nguru’s incubated idea helps parents exchange, share or sell textbooks that their children no longer use. The parent, through the online platform provided, makes a request of what textbooks his or her child needs for the next class, another parent with the books required makes contact. They arrange for a convenient, secure and open place to meet and viola, they swap the books.

The main goal of incubation services is to churn out firms that are viable financially and freestanding. The incubated firms are given more power to create jobs, raise the standards of living, commercialize and use new technologies, while strengthening local and national economies.

The business incubator usually provides financial and funding assistance to the up-coming businesses within the incubation program. This is a notion that Nguru agrees and attests to: “Nailab has successfully helped me to build value, capacity, and strategy. I’d say without the program I would not have taken off,” he states.

Joshua Mutua Nzuki, the Chief Technology Officer of Keja Hunt was also incubated by Nailab. He noticed that more and more people were looking for rental houses in both urban and sub-urban localities and thought it was a perfect chance to chip in and utilize his business idea through technological platforms. He has now developed an online platform that lets individuals in need of rental space access the same in a simple, fast and cost-effective manner.

You only need to key in the location that you want and there you go. You get access to many rental spaces that suit your perfect needs. And the most innovative aspect of Nzuki’s business idea is the fact that you can choose your roommate. You have the opportunity to look for a “Roomie” in the same location to share the house. This may be surprising in other developed states, but this is very common and very economical in East Africa.

 

“We have benefitted greatly by getting mentorship especially from the Nailab CEO Sam Gichuru. We have also learnt business and product development skills, and all these have helped us become perfect at what we do,” Nzuki asserts. In fact, Nzuki cannot see a comparison between what one can learn for six months in an incubator program with what can be learnt in a Business School for four years. The six months is “much better”, as he proudly puts it.

The aim of business incubation is to bring forth businesses that contribute to job creation and improve economies. This has been attested by Nzuki, who posits that: “We have created jobs for at least 10 people so far, have improved peoples’ lives by providing easy access to houses and information on real estate, and yes, we are tax-compliant so the government too must be happy with us.”

How Is this Impacting the Region?

East Africa employs both virtual and on-site business incubation programs. There has however been a paradigm shift that has seen more incubators turning to the online platforms in their incubation processes. It should be remembered that the region is still in need of more incubators to cater for the increasing business talents:

“We only have around eight incubation centers in Kenya. So that would loosely translate to only 80 businesses incubated a year.  Incubation for me is very crucial for startups in the early stages. You get to know so much that you wouldn’t learn elsewhere. They save you like two years of trying to find what works,” says Keja Hunt’s Nzuki.

According to him, business incubation services can be provided virtually and still be consistent with the needs of the business being incubated. He observes: “Yes, it’s a connected world, really, and for instance sessions can be streamed live to participants off-site”. This comes with its own challenges: “An example being if you are working off-site, you would need to have good internet connection”.

The best thing about both virtual and on-site incubation services is: “With the internet, we do not have to meet every other day physically, as we can simply Skype”. Keja Hunt also uses other online tools such as Gtalk to communicate with customers and receive feedback on their services. “We also use ASANA and Dropbox for project collaboration”.

The same sentiments are echoed by Steve Nguru of Swap Kitabu. He observes that the shift from on-site to virtual business incubation processes is both beneficial and disadvantageous. There is therefore the need to use both as the two models complement each other:

“Tech is supposed to enhance our lives, but in an accelerator program there is great value in face to face interactions. So the program allowed for a bit of both because it is important to test the market. Although still in their infancy, they have a lot to show and have potential to grow and assist many more businesses,” says Nguru.

East Africa has a lot of potential in this area. Virtual business incubation processes are just starting and taking root very fast. For those business incubators with limited physical space but with unlimited virtual prowess will stand up and cater for more and more business talents.

An increased number of incubation service seekers will be catered for virtually. “I see both national and local government support growing and therefore more businesses being incubated and scaling beyond Kenya within a short time,” Nguru agrees.

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Daniel Muraga

Daniel Muraga is an experienced online writer and communications professional based in Kenya.

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