iHub: The Next Chapter

By Erik Hersman
  Published 11 Mar 2016
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Almost six years ago to the day, we had a grand opening of the space for the tech community in Nairobi to gather, to call home and build connections to each other and work on ideas from. What started off as a couple dozen of us quickly grew into a couple hundred, and then to the 16,000+ members we have today. We’ve seen 170+ tech companies grow and connect here, 28 companies have been incubated, and we run 20 events per month.

Today we’re excited to announce some fairly significant changes at the iHub. A group of people are investing in the iHub in order to help us grow, to tighten up our service offerings and make them more profitable, and to help us figure out how not to just find startups but to grow the ones that are getting traction. The people involved are Prof Ndemo, Becky Wanjiku, Ken Mwenda and Miguel Granier.

iHub Growth over the years iHub Growth over the years

Like a lot of organizations then, we weren’t quite sure what our business model would look like back in 2010. There weren’t a lot of examples around the world to compare what we envisioned the iHub to be: part coworking, part community space. Fortunately, through Ushahidi and the funding from our partners, the Omidyar Network, we had enough runway to not worry about that problem up front. Instead we focused on building a space that brought us together.

The next year (2011) we built the m:lab incubator and also started iHub Research. It became apparent that providing services around our brand, in areas where there were gaps in the market, brought in enough revenue to offset a large part of our expenses. These services grew with the subsequent kickoff of iHub Consulting (2012) and then the UX Lab (2013).

Since 2012, the iHub has hovered around 70% self-funded operations through our consulting arms (Research, Consulting, UX Lab), and then the remaining 30% was brought in through our corporate partnerships and events. The community space, the team who runs it, and community initiatives we run can be seen as cost centres, alongside operations - these cost real money and need a consistent source of capital to make them work.

The iHub’s mission is to catalyze the growth of the Kenyan tech ecosystem, and so it remains. However, the Kenyan tech ecosystem of today is not the one we had in 2010. We have more tech spaces that have grown up, including Startup Garage, Nailab, Growth Hub, The Nest, Pawa 254, Swahili Box, Lake Hub and others. There are more options for co-working, many more investors at all levels, and multiple incubation opportunities around just Nairobi, and more across the country.

So, what’s Changing?

What then should the iHub do? What should it be if it is still to fulfill its mission? First and foremost we recognize the need to make sure that we are 100% self-funded, which means running a productive and more efficient set of consulting services. Many of the current staff will be the same, though we will also add more talent to the team (so, we are hiring), however we’ll likely need to reorganize the services to more efficiently work together. We will ramp up our software, user experience, research, data science and design consultancy offering and position iHub as a preferred global provider for these services.

Second, is the need to focus on where we’re going as a technology ecosystem, not just where we’ve been. As mentioned earlier, there are a lot more services, people, funds and organizations working with the early stage companies. While we’ll continue our work with these companies, we’re also going to build up a set of services for the companies that are getting real traction, have revenue and which we can help grow faster. The next phase in the tech ecosystem is about building sustainable and profitable tech businesses that can scale regionally and globally. We strongly believe that iHub can play a key role in this phase.

Final thoughts

I’m continually amazed at the difference I see in Nairobi’s tech community when I look back over the years. Last year at the “5 Year Tech Bash” put on by the iHub, I wrote about it. It’s truly staggering to see the evolution and growth of the people and companies that have left their mark on not just Kenya, but have set us up to be a global tech node, recognized around the world.

We’re all excited about the resources that the new investors are bringing to bear. The iHub Advisory Board came to a unanimous decision to move forward with outside investment as it would invigorate and help the iHub pivot towards where it needed to go. As we go through these changes, Josiah Mugambi continues as Executive Director and Juliana Rotich and myself will continue as iHub Directors for stability and continuity. Over time, we will rotate off and others will take our places. The goal is for iHub to evolve and grow with the ecosystem it has engendered. I couldn’t be more proud of what we have all built together, or more excited about where it will go next.

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