Corruption in the Silicon Savannah
The power of technology has been touted as Africa’s saving grace — our magic bean that will grow into a beanstalk to elevate us past all the stages of development we may have missed into the promised land: where we have a shot at being first world nations. Nowhere does this ring true more than in Kenya, which has been called the Silicon Savannah.
This title was assigned to Kenya by the world after the takeoff of mobile money (MPesa), the crowdsourcing application that arose after post election violence (Ushahidi), the uptake of hubs and incubators (such as the iHub and Nailab) as well as government/policy support (spearheaded by Bitange Ndemo while he was still in government). These factors led to the emergence of a great ecosystem, out of which several companies were born. The seeming success of the ecosystem was one of the positive things about Kenya in the aftermath of the 2007/08 violence, and it has remained that way since.
This led to a belief that this ecosystem was somehow safe from the ills that plague the rest of our institutions, such as greed, backstabbing and plain old corruption. Two weeks ago, it became public knowledge that the founders of Angani, a cloud services company, had left the company under what seemed to be hostile conditions, and this sent the online Kenyan world, especially on Twitter, into a frenzy. All manner of speculations flew around, and several articles were written about the situation. However, none seemed to give a satisfactory answer as to why a startup that was on the rise felt the need to have a serious management shakeup just as it was about to take off. Here is the story as it stands.
Angani was started in 2012 by Brian Muita and Phares Kariuki, with the goal of serving the cloud infrastructure needs of Kenya, and Africa, locally. Many thought they were crazy, and that there was no market for what they had in mind. They were determined to prove them wrong. They bootstrapped the business, building it without external capital. After using their life savings to build a foundation, they turned to their network of friends and family for support, borrowing money from them.
They went live in 2013, using second hand hardware and whatever other resources they had sparingly to ensure maximum output. It worked, people were interested, and customers began coming in. Part of the reason this was so was because of the people involved: they were well known in the Kenyan tech community, and they also had credibility.
In April 2014, the founders brought Riyaz Bachani on board because of his operational experience and relationships with network providers. Later in the year, they figured out their product/market fit and all were ready to scale. To do this, they took external capital from Invested Development, Savannah Fund, Africa’s Talking and Africa Angel’s Network. With this, Erik Hersman and Miguel Granier joined the board of directors, joining Phares, Brian and Riyaz.
This seems to be when the problems started. Arguments between the management team started on what the best way forward was. The company suffered as a result as the focus was no longer the customer experience but the interpersonal issues. The infighting never really got resolved, eventually finding its way to the board. A board meeting was called, effectively to terminate Phares as CEO and find new leadership. Given that together, Erik, Miguel and Riyaz were able to exercise control over a majority stake, this was easy. Riyaz Bachani was then installed as CEO as at 19th October 2015. The two founders still wanted to give feedback on how they felt the company should work, and when this was disregarded by the board, Brian resigned. The two founders of the business were now gone.
With the founders gone, the board now effectively consisted of Erik Hersman, Miguel Granier and Riyaz Bachani. Brian and Phares were to stay on until December and have a managed hand over to Riyaz and his team. The attitude towards them changed at some point when they were threatened with legal action over the passwords to the platform.
When asked to hand over the passwords to the system, Brian put it on the record that he wasn’t comfortable doing this until a suitable replacement was found and in absence of a proper formal handover. He would only do so when necessary documentation was in place indicating that he was no longer responsible for the platform. This is not an absurd or difficult ask, in fact, it is magnanimous of a person who just left a company he founded to do this. It was the responsible thing to do given that there was critical customer data in production. The company should have had no issue signing off on this if they thought they knew what they were doing. Instead, what he and Phares got was a lawsuit from the company they founded, claiming that they were being malicious and harming the company and its ability to do business.
The new management at Angani flew in hackers from Shape Blue, a CloudStack Consulting Company, to hack the platform. This did not go according to plan, as the system was a little more secure than they had assumed (it is generally a silent assumption that Kenyan programmers do not build solid systems). The enormity of this breach of contract is almost too much for words. How do you willingly expose customer data to third parties without their consent? How do you hack your own platform? They succeeded in bringing down the portal. This then led to a full outage on the 5th of November. The Angani website is currently hosted on Linode, along with their mail platform. Funny, for a cloud services company. (They have since been telling tall tales to their customers, as shown here, here,here, here, and here). They’ve also been accusing Phares and Brian of sabotage, which is factually untrue.
What makes the Angani situation particularly terrible is that people who were once considered community champions such as Erik Hersman and Riyaz Bachani, people who should know better, are behind the gutting of this start up in an ego battle that goes against the ethos of a healthy tech community.
This is not to say that terrible things have not happened before in this community. They are commonplace, and people are usually afraid to speak up in fear of the consequences. In my research, I heard from sources who opted to remain anonymous about a senior official at a leading telco who participated in blatant fraud, before moving to yet another leading telco, seemingly without paying his dues. I was told about how a community space was practically snatched from its founder by someone he owed money in exchange for his debt, not knowing the creditor had an ace up his sleeve. How a foreign investor’s conglomerate was like a dementor for the souls of the African startups it invested in, tearing them apart from their founders, installing “new management” or outright killing them before understanding the market/local context. Most worrying, perhaps, was a tale of how the sale of a digital media startup with a bright future was stopped by one of the tech community’s champions implicated in the Angani mess and their projects sabotaged because they continued to work with a company he did not approve of.
It is astounding that people once so highly thought of can become so taken by hubris and fail to see the larger picture. Several people who hosted on the Angani platform have been publicly swearing not to host locally again (and Amazon gets to laugh all the way to the bank). They took a risk and were burned because of the egos of a few. The service outage that occurred affected key services, extending the effects of their bad judgement not just to their customers, but their customers’ customers as well. They participated in the destruction of the company image, as well as their own, and added a multiplier effect to boot.
In this information age, one wonders, how was this supposed to play out? Were people meant to stay silent? Was this terrible event going to join the list of terrible things that happen in the tech community that are spoken of in hushed tones? How about the politics of this situation? How does it look when white investors team up with a privileged non-black Kenyan against the black founders of the company? Are there racial politics at play? Are black founders incapable of running startups? Currently, the Angani platform is being run by foreign consultants, which says a lot about the faith of the management team and board in Kenyan tech talent. Bringing in Shape Blue is an admission of lack of technical capacity by the current team at Angani and an admission that they lack faith in the Kenyan ecosystem as a whole. How does a team you invest in (we can assume because of their capability and the integrity/potential of their product) suddenly become incompetent post investment? How does this even make sense?
How are we supposed to trust anything the parties responsible do after this? Did they think about their credibility when they started down this path? Did they think about the doubts this would cast on the state of the Kenyan tech community? If its champions are capable of this, what does it mean? Is this industry what it says it is? Is it all one big lie? I hope not.
All I know is that there needs to be a re-evaluation. We need to be more open; more honest. The reason this happened was because people thought they could get away with it, because many before them have successfully done so. It cannot be that the founders of a startup leave and proceed to be sued by the business they started. It cannot be that the founders of that startup were sued because they insisted on due process to protect customer data. It cannot be that the startup brings in external consultants who proceed to break the platform and the new management watches as customers go down. This cannot be what what this ecosystem is about.
This kind of behaviour mirrors exactly what is wrong with Kenya today: power-drunk individuals who overestimate their importance. People who think only of themselves and their advancement as opposed to thinking of the whole. People who will burn the world so that they can be king of the ashes. It is time we said no. Enough is enough.
P.S. The right of reply is offered on this same platform to the parties mentioned in this story.