## Kenya Web3 exploration notes
June 2022
Yoseph Ayele

### Talent base:
1. **Most African countries want to build a tech talent base**. Governments willing to develop digital skills, but focused on Web2, and little understanding and initiative around Web3/crypto.
* Tech startup [investments growing](https://thebigdeal.substack.com/p/tick-tick-boom-q1-results-are-in?s=w). Foreign founders in Africa attract majority of startup funding.
* E.g. of initiatives: Rwanda creating a new visa program to attract experienced tech talent to work remotely and mentor locals, Madagascar positioning itself as an outsourcing center for Europe, Kenya attracting big-tech to build dev shops, etc.

3. **Huge talent shortage in tech** (Web2 and Web3). Web3 Devs are in high demand across the continent, and generally hard to get senior devs/managers, product managers.
* Big tech is coming in waves and sucking up talent (Amazon, Google, Microsoft, Alibaba, etc) are opening dev shops in Africa (hundreds - thousands hires each).
* Upside: the ecosystem sees it as a good sign to attract such companies, significant investments, higher salaries for devs and access to mentors.
* Downside: quickly dries up talent for local startups (short-medium term supply shock), big tech not investing as much for intensive & quality education to increase the talent pipeline for the whole ecosystem, instead focusing more on online self-learning (headline numbers of trained Africans looks good as a result).
* IFC / Google research 2020 indicate around 700,000 developers in the whole of Africa. 1/3 self-taught, 1/3 bootcamps + on the job training.
4. **A few programs in Kenya working to train new tech talent, and it's all preparing new talent for gated work.**
* Main education observations:
* Nothing in the education landscape in Kenya the Web3 sweet spot yet. Web3 not top of mind for the biggest educators in Kenya. The best version of this so far is https://www.web3bridge.com/ based in West Africa.
* Hard to find good Web3 educators, skills and pedagogy. I'm still on the hunt!
* Most training programs in tech are less intensive (average 1:25 trainer:student ratio), struggle to build sustainable financing, and struggle to do work placement (they produce junior devs, global Web2 companies want experienced devs).
* Online alone and self-driven learning hasn't had big success. Local mentors are critical to ask questions. Lots of tech/crypto terminologies.
* Most educators are responding to market demand (vs market creation). Driven by employer industry.
* There is a new DAO (still in infancy) in the making to train women community managers for Web3, led by Yvonne Kagondu, an early crypto adopter/ecosystem builder in Kenya.
* High signal of greater concentration of Web3 talent in Nigeria. But tougher place to live (kenya preferred place on the continent for a number of Nigerian builders).

* The main players in Kenya (and operating across Africa) are:
* **The Room/ALX**: On a mission to train 40k+ devs across Africa in the coming years (prob the biggest tech education player in the continent). Founded by Fred Swaniker (15+ years experience in education, incl Africa Leadership Academy & university), and focused on talent dev across the continent. Received US$350M grant from Mastercard Foundation (one of the largest talent dev funders in the continent). Responding to industry demands, and more aligned to corporates. Run into issues of training people but not enough placements. Not thinking about Web3 at all (I am speaking with him in July). Exploring scalable business models.
* **Moringa Schools**: Bootcamp style 6-month program to train software engineers and Data scientists and place them into junior roles. HQ in Kenya and expanding to Nigeria + Ghana. 4000 students trained so far, and pace is 600 grads a quarter. Take people with zeo skills and turn them into junior devs. Charge $1,500 per student, and optimized on reduced cost and local placement Mastercard foundation gave them $9m for scholarships (5k a student, including for tech equipment). 1:25 trainer-student ratio. Older school approach. Almost nothing about Web3 education.
* **[Ngeni](https://linktr.ee/ngeni?utm_source=linktree_profile_share&ltsid=cd28c202-f4ec-4598-9657-2d04fd67ca1a):** Crypto native education + developer studio venture studio company. Funded and run by an ex-CEFI trader. They are building a campus where developers live and work together. ~30+ devs, and train new ones 3/quarter. ~20% of projects are building trading bots and DeFi smart contracts, and ~80% building their own projects. Sharp team, potential future collaborators for education initiatives.

### What to build on Web3:

4. The main areas where the ecosystem players I spoke to see web3 value creation for African economies are:
* **Remittance and cross border payments**. "Easier to get stablecoins than USD fiat" according to several Web3 remittance startups. Huge currency devaluations, shortage of forex (very acute in certain countries), and gated banking makes crypto ideal for cross border transactions.
* **Digital identity**. A huge need in multiple countries, and requires collaboration with gvts. Cardano recently signed a deal with Ethiopian gvt to build digital identity protocol for 4 million students.
* **Land titles, student records, and other important public/private records**. Low hanging fruit for onchain records. Requires collaboration with gvts. A new CEX working on this.
* **NFTs for art/music/cultural expression**. Growing number of local artists able to experiment with new art medium, grow a global communities, earn for their work, and preserve/promote local culture and identity. Vibrant communities growing here.
* **Other market needs highlighted**:
* Access to liquidity (e.g. loans) to small businesses, students. Banks don't lend to small players.
* Mass employment, including micro-jobs. A massive need for creating more jobs on the continent, esp with a young population. Web3 projects that embed simple micro-work and micro-income can be a source of ongoing income (e.g. proof of humanity, https://logos.xyz/ building something)

11. **Less obvious to the current market but high value opportunities to explore**:

* **African validators / stakers**: very little activity on the continent ATM. Huge space for growth. Needs 3 things however: consistent internet, consistent energy, access to cloud servers or physical servers. Cloud service has proven challenging for small players (AWS does B2B and with bigger companies only, and based in South Africa).
* **Carbon credits verification and biodiversity incentives**: African (and generally emerging economy) carbon credits are priced lower due to little consistent veritication. Satellite + on the ground data on chain to provide verification systems, and price carbon credits in par with global markets? Includes for biodiversity management incentives.
* More...

### Community & ecosystem development

6. Ecosystem building at a grassroots level is happening in small ways in Kenya, fueled by labor of love and inconsistently. There is a hunger for more IRL community building, and that is where retail users are coming to ask questions/learn.
7. Different parts of the Web3 ecosystem don't interact (e.g. NFT community and DeFi/infra builders). Borderless Africa meetup drew over 100 people, and was rare for the DeFi, NFTs, DAO, devs, and individual investors to be in the same room. Huge hunger for this.
8. ETH Safari can add a ton of value and add to momentum. One of the main organizers seems sharp, aligned with Ethereum ethos, and in it for the right reasons. There are concerns from local startups about the organizing team's ability to execute on all the parts of the event, especially running a hackathon (could use help here). I'm still a yes even if it just servers as a convening power for the Ethereum ecosystem.
9. There is a new CEX coming online soon, Mara, which is playing a role in the development of the ecosystem + a front-facing player for regulatory education/adoption. Some of these things are easier with a central entity interface for gvt than decentralized protocols, and the Mara team seems to have vast connections with political circles.
10. Out of 100+ people at the Web3 event, only 2 knew what Gitcoin was!! Still lots to do in education and exposing people to the wider Ethereum ecosystem. I guess not many go to the big ETH events around the world, and not well linked with global Web3 networks (solvable). Also shows not a lot of efforts from major ETH protocols to prioritize Africa.
11. The new entrants to Web3 I met are very fast learners who absorbed so much in a short period of time and are deep in the local crypto ecosystem, and African communities. They are less plugged in the global Ethereum communities.

### DAOs

12. Genuine fascination and curiosity about DAOs amongst certain circles, but not many accessible examples of DAOs to best practices/tooling, and fewer people I spoke to are plugged in bigger DAOs. There is an experiment to build an investment DAO, but more leveraging DAO structure to achieve something closer to Web2.
13. The Kenya NFT Club operates as a DAO (off-chain) but they aren't calling it one, and it was great to see that culture of operating in practice.

### Startup Funding

14. A big gap of funding for Web3 startups/protocols getting off the ground. There are a very few startup founders that are well networked globally (diaspora or foreign founders) and can raise well from global VCs. But locally bred startups tend to struggle a lot.

## Ideas for supporting Web3 growth in Africa:

* **Jobs** for Africans that are not gated, and access to global income (not benchmarked to local markets). Low hanging fruits include: building a database of existing micro-jobs that provide income (e.g. proof of humanity, Logos.xyz, etc), getting new protocols to bake in micro-jobs and target African talent base. Long-term solutions include: experimenting with service DAOs to plug African talent into global Web3 economy, supporting education initiatives that bring talent to the Web3 space.

* **More ecosystem development initiatives** will go a long way, even when some of it early on won't succeed. Events, meetups, grassroots initiatives, summits, content, education initiatives, etc. Supporting grassroots community builders is the fastest way to grow the ecosystem.
* A vehicle to fund grassroots ecosystem building initiatives? The cost of such initiatives is relatively small, and can create an impact (it cost us $350 to run a decent Web3 meet-up for 100 people). Funding small summits, community events, education/awareness activities, etc can accelerate the development of the ecosystem.

* EF can consider **supporting ETHSafari** - my sense is this event will create the most impact by merely convening the regional ecosystem and bringing in a few global players. It can still create lots of value despite its short-comings as an event (new team, a bit disorganized, trying to do too many things, haven't ran a hackathon before, etc).
* A **physical space for Web3 builders** can create network effects for more local projects to sprout, and the ecosystem to grow faster. Inspiration from the Nonce co-working/co-living space in Seoul (300+ Web3 builders living together now) that accelerated Web3 growth in Korea. Will require an established local player (e.g. a CEX or a big regional protocol) to fund this in African markets, hard to build this completely from the grassroots. EF
* Create **incentives for new validators** to be set-up, if the core infrastructure conditions can be met. One challenge is access to cloud servers. Group bargaining can be one option of creating value for multiple interested parties. ETH staking incentives / initial risk taker roles is another way. More to think through with infrastructure teams on best ways to drive this.
* Drive **project funding** towards newer startups being built on the continent.