13 March 2014

Ethiopia: Supporting Start-Ups in Addis Ababa

Photo: Addis Fortune
File photo.

Two aid workers from Germany's GIZ are now nurturing start-ups in the Ethiopian capital - from a text messaging service for job seekers to bamboo ramps for skateboarders.

The offices of start-up hub iceaddis appear lifted from the set of a science fiction film and deposited in the leafy confines of Addis Ababa University.

Despite the futuristically edgy look of rust-red colored transport containers stacked asymmetrically atop each other, iceaddis remains deeply rooted in the surrounding local communities. The prefix "ice" stands for innovation, collaboration and entrepreneurship.

Iceaddis encourages young Ethiopian entrepreneurs to invent and develop affordable and sustainable products and services.

"We provide a space where you can go a little crazy, experiment, play around with that prototype and see if you might actually be able to turn it into a business," said 38-year-old Oliver Petzoldt, one of iceaddis' co-founders.

This is the key to successful product development wherever your location may be, but many products often never get off the ground for lack of experimental opportunity, Petzoldt explained.

Iceaddis runs workshops covering a range of eclectic creative endeavours, from how to build mini skateboard ramps out of bamboo to how to develop mobile apps using the Android system.

The mobile phone as the key to the future?

Telecommunications is still in the hands of a state monopoly in Ethiopia and the country is governed by an authoritarian regime. State-owned Internet and mobile phone networks remain notoriously unreliable. However, apps could play an increasingly bigger role as Internet penetration, currently low by African standards, deepens, and the networks gradually improve.

Ethiopia, which has a population of some 85 million, currently has 20.3 million mobile subscribers. As elsewhere in Africa, many of them sign up and start with smart phones.

Newly created apps could also be marketed to users in other African countries with better established telecommunications networks.

Producing something flashy is not the priority, rather supporting communities by turning ideas into viable businesses.

One business idea nurtured by iceaddis is MoSera, which provides an SMS-based job portal for Addis Ababa's daily laborers.

Many of them do not have Internet access, but they will be able to receive text messages from potential employers via MoSera about offers of work.

MoSera has just finished a successful pilot phase and is about to be launched for use by the general public.

"Hopes are high due to SMS-based businesses being well placed thanks to mobile penetration being on the up," said 29-year-old Markos Lemma, another iceaddis co-founder. Income will come from a tiny fee about one birr (five US cents, four euro cents) added to each normal SMS charge.

Acquiring business acumen

What started out as a hobby for a group of computer graphics and animation enthusiasts turned into a business under mentorship at iceaddis, said 24-year-old Abiy Hailu. He is a co-founder of Mirt Animation, which provides motion graphics for businesses and TV advertisements.

Brainstorming in the iceaddis offices helped the founders identify a niche in the market resulting from a dearth of quality animation drawing on Ethiopian culture, Hailu said.

The young entrepreneur said he also gained a valueable intangible asset from iceaddis - a better understanding of what he is able to achieve.

"Now when I approach media organizations, I am confident about what I am offering," Hailu said.

He did not have that confidence in his vision previously, especially when meeting co-founder Eyoslas Habte in noisy cafes to hash out business plans.

Petzoldt and Lemma initially came to Ethiopia when they were working for Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Germany's international development agency.

Petzoldt worked with eLearning computer centers while Lemma provided efficiency-enhancing software to businesses.

A 2010 visit to Nairobi-based iHub, one of Africa's most established tech hubs, got them thinking they could pool their respective skill sets to build a similar technology community centre in Addis Ababa.

"Iceaddis was the most exciting program we discovered," said Ben White, founder of Nairobi-based Venture Capital for Africa, one of the continent's prominent networks for start-up founders.

White says iceaddis' has a broader approach than many start-up incubators. " It is not all about mobile services - so many transformative solutions can come from a space like this," he said.

White said Ethiopia cannot yet compete with South Africa or other East Africa countries in terms of Internet and mobile opportunities. But change is inevitably coming, he says, illustrated by Ethiopian companies like Dibsr, an online information sharing platform, which was one of 40 from a pool of 300 applicants selected to participate in DEMO Africa 2013, a prestigious start-up conference in Nairobi.

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