Why and how to start a startup serving emerging markets
benkuhn.net
benkuhn.net
>> more altruists with experience working in the developed world should try this approach.
This post should have been called "the Western man's digital burden"
P.S. - Bonus points if you befriend some locals, show them this post and the service discussed, explain your position about how it is wrong and regale them with your politics. I'd love to see a video of that.
Just curious how a place like Liberia would be considered 'emerging'? Not to slam Liberia, but even most Liberians would readily admit that there is an enormous difference between Monrovia and Accra. It's just reality. I mean, Liberians are trying to get settled in Ghana, not the other way around.
Emerging markets are emerging because they’re doing something right no need to offer them something “better”
Calling a person who is dedicating his life and actually spending time in Africa a "digital colonist who is doing it wrong" based on some vague gut feeling is somewhat unhinged.
Not providing even a whiff of a suggestion as to "the right way" is not constructive. And doing all this whilst likely contributing absolutely diddlqysquat of value yourself is, to use your parlance, problematic.
Topping it off with pointing out his alleged western origins is flat out bigoted.
As for yourself, Star Trek-esque non interference is the morally superior path? You've tried nothing and you're all out of ideas? Certainly an interesting approach. Perhaps more of a peanut gallery ethos than a hacker one.
You could explain how on earth cryptobros factor into all this or offer any shred of specific concerns and criticisms you have with regards to the OP but that would involve actually reading the article and making an effort and that's not in keeping with your moral philosophy of doing nothing.
I guess some people live for the sigma but die from the ligma.
Pretty much every entrepreneur I know establishing shop in Africa from the west has come with the “this is what’s left, also cheap labor” attitude so yeah, I’m totally for the Star Trek method.
I don't have a special insight into OP, perhaps he too is an asshole with a bad attitude like the people you happen to know. But suppose not? There are always exceptions.
It would be one thing to put up specific criticism of his efforts, it is quite another to just assume the worst because he happens to be from "the west" and automatically dismiss him as part of the very real issue that you mention.
To me, in my opinion, it is absolutely incredible to just throw up your hands in exasperation and argue with a straight face that it is somehow better to not even tackle the problem and that nobody else should either.
Rome wasn't built in a day.
- Providing things Nigeria excels at to Western markets (e.g. the same types of call center models India started out with a few decades back).
- Launch services in Nigeria common in Western markets but not yet there.
- Integrate Western and African models
Those sorts of things tend to benefit everyone involved on both sides of the pond. Compared to, for example, making web frameworks, there is a lot more low-hanging fruit. Silicon Valley has an almost unlimited supply of people wanting to do startups for people like themselves. This leaves many other markets under-tapped.
In terms of fostering local entrepreneurs, that happens naturally. Look at China, Taiwan, Korea, or Japan. They started with this model, at which point locals noticed they could do the same better and cheaper themselves, while retaining more profit. India is about half-way there now. It's very hard to foster entrepreneurship by telling. It's very easy by modeling.
China, Korea, Taiwan, India, and Japan never turned into Western colonies, as you're predicting.
My impression is the guy in the OP is genuinely trying and isn't incompetent. If these guys are capitalizing on the very phenomenon you are lampooning by getting large VC sums injected into an emerging economy robinhood style... wouldn't that be... a good thing?
That's what the blog post is flat out intimating. Perhaps I'm naive.
It would demonstrate that venture capitalists aren't as smart as they think they are and it would prove that they're playing a losing game.
But it would be nice to see some suggestion of what the "proper" way to try to help out in the developing world if you're an altruism-minded tech person.
Off the top of my head...
You could completely avoid going there and stay at home, because anything you do is inherently corrupt and colonialist. Let's call this the Catholic option (original sin and all). OK, but "emerging" can stay that way for decades or just never emerge; whatever knowledge you have stays locked in your head. Maybe eventually, some Western corporation comes in with the product you would have built there, except it's all made overseas and only takes from the local economy.
You could go there and teach coding and entrepreneurship. Great idea! Hope someone is paying your bills to do so (they're going to be higher than you think). But there's another issue here: there is a local environment. You can't just import your knowledge, it's kind of specific to where you're from and won't work. Everything from -- how do you interact with employees? (Believe me, Silicon Valley BS does not fly in the international workforce.) What are the buying habits and needs of your local customers? How do you deal with governments that range from inefficient to massively corrupt? At best, with no local experience, you're teaching skills that are not really as great as you think they are.
You could join an existing local company. Whoops, nobody can hire you and/or there are none and/or you don't speak the language. Also, you don't have a work permit. Nobody is particularly interested in this weirdo with no local experience going around offering their knowledge.
Honestly, I'm trying to give you a fair reading. I have traveled, I've started a (very small, still exists but isn't growing) startup in an emerging country, and it is just really difficult. Everything is different, and trying to adapt what you know is not a cakewalk. The capitalist model works because you have to get hands-on, figure out how to actually build something, and work through the very difficult puzzle of how knowledge actually is transferred.
And in my personal experience, the big successes really aren't "Westerner barges into and takes over local market" anyway. There's usually some connection -- off the top of my head, look at Canva, with a second-generation Filipina-Australian building a massive business in the Philippines (with help from US and Aus investors / execs).
The cool thing is that these companies are usually very region-focused and if they hire/open offices outside their HQ, it's in other LatAm country. I think the region is on the right track to become a player in the tech world.
"Our investors are venture capitalists trying to make a high return"
"saving our users over $100 million so far [in Senegal alone]."
Am I missing something? What's to stop your VCs from leaning on you to suddenly hike your rates up in favor of more profits once you are a de facto monopoly on payment services? If the answer isn't "They don't and will never hold voting shares and board seats", then why did they invest in your company at all ...?
They don’t hold a majority of votes is one possible answer. Another is that they’re much more invested in growth than profitability. Why try to make as much money as you can in Senegal when the rest of Africa is right there? Also “Your margin is my opportunity.” If you’re the first company to provide a good service and you’re cheap and good what exactly are wannabe competitors going to do to oust you?
> If the answer isn't "They don't and will never hold voting shares and board seats", then why did they invest in your company at all ...?
To make lots of money. If founding team is really important and VC returns are power law distributed then investing in a much better team that is a lot less greedy can be a great bet.
Because the rest of Africa is more likely to settle on mpesa. Not trying to be snarky, genuinely looking for a reason for a Kenyan or Ghanaian to switch to Wave for example? Off the top of my head, I can't think of one? This is particularly true for anyone in the EAC.
In short, maybe your investors will begin to see they have little chance of winning over all of Africa. Fundamentally, you're really no different than mpesa in terms of structure. (I can't determine much of a difference in terms of fundamental functionality either?)
I'd genuinely like to hear how you guys view things like mpesa? Along with a good answer to the neo colonial criticism? If you have good stories for those two issues, I think you have a chance. (Where 'good' means 'resonates with young Africans who are much more likely to be Pan Africanist these days'.)
And there is evidence of this opportunity focused mindset in the US. Last I checked the highest earning demographic segment in the US was Nigerian immigrants. Being ready to work hard and conscious of the risk of failure makes a huge difference in how pay, work, and business operations are evaluated.
That has more to do with the fact that only the most highly skilled and educated Nigerians manage to emigrate to the US. You see something similar with Indian immigrants, also a very high earning demographic.
Question for an economist: what effect does this have on an emerging economy? If scaled up to half of the population, does that cause inflation?
AFAIK most of the difference is from measuring total comp vs. wages.