Is the “cult” of Y Combinator good or bad for Africa’s startup ecosystem?

There are investors from sectors like gambling and construction, and the expectations are entirely different. Money might be released in waterfall-like tranches, meaning that a seed fund needs about 4 pitches to the same investor. Someone from say, a plantation background, also doesn't understand the challenges of doing blue ocean businesses - the market might not fully be there yet. They often undervalue customer understanding and product market fit, while overvaluing things like exit strategy and marketing.

A lot of the pitching becomes very investor oriented. I've worked on many apps that never have any users - I literally get more revenue as a two-member team than most companies I've work at does with a dedicated international marketing team. A lot of those users are also the investors; very often an app sells their product to the family owned corporations run by the investors. And because of the need for marketing, there's a lot of $1 products sold at 80 cents, where the 20 cents are written off as a marketing cost.

All these things are cardinal sins by the YC playbook. I'd say if any accelerator can match YC's record, they'd do very well, but few do, and many former colonies still don't have that "trust the entrepreneur" mindset.

I have mixed feelings about this article. On one hand, yes, YC gives startups in these markets a stamp that creates a sort of cult. Most of the startups/founders they pick are awesome, but YC invests without a ton of local context or diligence and so they definitely can get it wrong. But, they also get it wrong here in the US, and that's the nature of early-stage startups, but because the volume in the US is so high, it's not that big a deal.

Anyway the most important benefit I see is that local startups get access to YC knowledge and network. That's way more important than any amount of credits. The YC-alumni email list (Bookface) is especially valuable. There's just so much tactical knowledge in there. What email provider to people use? What should you use for mobile ads attribution? If you're based in the US ecosystem, you just ask your entrepreneur friends or your investors. If you're abroad, there aren't people to ask. There just aren't a lot of startups around, and even fewer that are further along to learn from.

YC is facilitating a huge transfer of knowledge to new ecosystems.

EDIT: another massive facilitator is 500 StartUps

Definition of Gatekeeping: the activity of controlling, and usually limiting, general access to something.

The internet tells me there isn't really an antonym for this word, which makes me feel better about failing to think up any myself. But I would imagine YC is serving to open a way for foreign money to flow in, not serving to control, limit and decide whom to let in or keep out.

If that is accurate, they really should do some research and write about that to educate people that "We absolutely aren't gatekeeping anything here. If people are using our activities as a proxy metric for what to throw money at themselves without doing a lot of research on their own, that's not us gatekeeping anything whatsoever."

I'm short of sleep and not heavily invested in creating some free PR resources for a multi-billion dollar company, but I imagine it would take a bit of research to come up with a good concept or metaphor to do this justice. However, it would likely be well worth the time spent on it in terms of making people in foreign countries feel more at ease with their activities.

I'm sure there are legitimate concerns on the ground in Africa about (things like) the potential impact of foreign money and foreign expertise flowing in without a lot of context and local knowledge to inform those choices. But this idea that YC is gatekeeping something is probably flat out wrong in a way that essentially drags their name through the mud baselessly.

Hyper cynically, SV/Valley VC funds investing in Africa's startup ecosystem is about the best thing that could happen in it -- they are the least ruthless of the sharks (as far as I can see) out there, and the business ocean ocean is full of lots of kinds of sharks.

Is that really true ? My gut says no.

So in effect, YC is expanding the pool of potential investment dollars flowing into Africa.

The author would prefer that YC stay out of africa . Yet the article never refutes if YC leaving means other VCs depart africa too.

The forgotten companies would remain forgotten. Doesn't seem to be a good argument to stand on.

I am a South African. I studied African political history, public policy, and political philosophy at a number of South African universities. At most institutions as an undergraduate I was taught about the peril of IMF and World Bank loans etc.

So I’m not surprised that this kind of thinking is being applied to private investment via bodies like YC.

One of the biggest problems with startup ecosystems outside of SV is the perception that funding is a necessary step to start a disruptive high-growth company.

Talent and time are the only two things that founders really need and it's the main thing that early-stage investment buys anyway. There are lots of ways to collect and organize these two resources - heavy capital investment is just one of them.

In places where the cost of living is low and where there are talented people the investment models should look different to SV.

The very nature of innovation and disruption require new perspectives and ways of thinking. Global entrepreneurial communities could rise above and beyond SV if they stepped out of its shadow.

I'd wager good money that if you picked a dozen random AFRINIC members and talked to their neteng people most if not all of them would have never even heard of ycombinator.

Maybe if the context is in some new software-as-a-service startup, sure...