Why govtech is a lucrative market for African startups

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African tech startups with solutions that make a difference to people’s lives should look to partner with governments in order to turn their ideas into successful businesses.

That is the view of Alan Knott-Craig, the Project Isizwe founder now heading up HeroTel, who was speaking at last week’s Net Prophet event in Cape Town.

Knott-Craig spoke of his experiences working with Project Isizwe in the City of Tshwane, where the company partnered local government to roll out free Wi-Fi hotspots for citizens. A total of 776 hotspots are now in operation.

He said tech entrepreneurs in Africa face two major problems.

“It is hard to find problems that aren’t being solved by Silicon Valley. And if you come up with an idea that is unique, you can’t find investors,” he said.

Govtech offers a solution to these problems, Knott-Craig said, with African governments tackling major problems in society and also having large enough budgets to do so.

“If you start dealing with govtech, you’re going to start doing things that Silicon Valley doesn’t do, and the government is going to give you money,” he said. “Plus, it is a good business model, because you can scale it to other municipalities and governments.”

Aside from launching the Wi-Fi hotspots, Project Isizwe also built a crime-reporting app for City of Tshwane. Knott-Craig said this was evidence that partnerships with governments could be long and fruitful, and expanded into other areas.

“If you can do it with crime, you can do it for housing and all sorts of other things,” he said.

But how do startups go about working with government?

“The only way you can do a deal with anyone is by building trust. Make promises, and keep those promises. Never over-promise, under-promise. Because you over-deliver, and build trust,” Knott-Craig.

He said there was a preconception that government officials are not in their positions because they care about making lives better, which is usually not the case.

“Most people that are working within government are doing it because they want to make a difference. So if you’re building a product that makes a difference government is your best customer.”

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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