[vc_column_text width=”1/1″ el_position=”first last”]
In 2011, Kresten Buch set up the 88mph start-up accelerator in Nairobi. He was there just as the tech scene was starting to kick off, and instrumental in helping to raise awareness of the country’s developers on an international level. Late last year, he launched a spin-off in Cape Town, with backing from Google. The first cohort of South African investments has already begun paying off, and includes Zapacab and Near-a-Builder.
This is an interview I conducted with Kresten earlier this year.
[/vc_column_text] [vc_column_text width=”1/1″ el_position=”first last”]
htxt.africa Tell us a bit about yourself…
Buch I worked at my first startup while I was at university. I was helping an Australian sports betting company get into the Scandinavian market.
They were based in Alice Springs, which is in the middle of nowhere. About 26 000 people live there, and we started out working from a racetrack. Sometimes we had downtime because there were snakes in the server room.
After that I moved back to Europe and set up a stats company, which I sold in 2006 and bought bold.dk, a Danish soccer site.
h Why did you move to Africa?
B I went to Stanford University in 2009, where I met a Kenyan called David Owino (former CEO of Kenya Data Networks).
At the time I was thinking about angel investing, and he convinced me to visit Kenya and see what was happening there.
Africa is so obviously the next big thing. I thought that if I got in now, I had a good chance of positioning myself as a ‘go to guy’ for early-stage investment and building a brand and a business model from the ground up. It’s much more interesting than being another small investor in Silicon Valley.
We invest around $20 000 (R203 000) in each business, which gives them a much longer runway here than in the US. That’s important as there’s not so much available for follow-on funding.
h What is Google’s involvement in 88mph?
B Google helped kick-start the operational office here in Cape Town, with basic stuff like desks and furniture.
They also give us access to their mentor networks and connections from around the world.
It’s important that the decision-making process for investing in young companies is lean and quick, though, so I wasn’t interested in getting corporate money involved with the actual investment side of things. It’s more of a handicap for a startup – in corporations there’s a lot of politics and they have to cover their ass. Even grants have strings attached
h What’s the set-up like in Cape Town?
B We have an entrepreneur in residence program where we bring in talented people from all over the world who want to help build startups here. We have some insanely cool people from all over the world – Germany, Ethiopia, Nicaragua and Hawaii – come to work with us full-time for three months.
They aren’t doing it for the money; we’re only paying them about $1 000 a month. They want to be part of this revolution here in Africa.
h Do you think entrepreneurs and investors are attracted to Africa because they see it as ‘worthy’?
B I think all successful entrepreneurs aren’t in it for the money. They’re driven by some kind of problem they want to solve, or they have an anarchistic streak and react badly to authority.
There are tons of problems to be solved across Africa, so there’s plenty of opportunity for people to go in and try to fix things.
At the same time, there’s a lot of ‘impact investing’ here in Africa, people trying to solve problems for the bottom of the pyramid. But often it can have a detrimental effect. You see people trying to develop inappropriate solutions, like smartphone apps for rural farmers, because that’s where they think [NGO] money is.
A lot of the solutions are at the head of the market. It’s important for tech entrepreneurs to also target the emerging middle classes – they’re the ones who have the devices we can build for.