I’m currently out of town for a family wedding taking place this weekend. While here, I had coffee with an Africa-focused investor who lives in this area. We talked, amongst other things, a bit about rising valuations in the tech space, and discussed the difference between investing in a good company and making a good investment.
As a novice angel investor, I shared with my coffee counterpart that I don’t think I have the experience to know the difference. While I may have a strong conviction about the types of companies that will win or what the future will look like, it’s another thing to make bets in that direction, and yet another thing altogether to make bets on the people who I believe can execute on a bet in that direction.
It’s no wonder that investors, particularly at the earliest stage, say venture capital is a people business, and talk about writing checks as an investment in the founder as much as an investment in the business or the idea. Entrepreneurship can be a brutal, exhausting, unrelenting journey, and sometimes requires as much (if not more) mental fortitude as it does product or engineering skill. How many promising businesses have failed to prosper simply because the founders got tired?
I say this as I reflect on my own entrepreneurship journey, and as I work to add resources and build The Flip into something that’s more than just me. I also say this as I reflect on the type of business I want to build.
I started The Flip because I wasn’t learning as much as I wished to from traditional media outlets and the fundraising announcements they published. I chose a narrative-style podcast as a format explicitly so I could go in-depth on topics, and share a diversity of perspectives from across markets and sectors.
Then when COVID hit last year, I wasn’t sure how readily I would be able to schedule podcast interviews, and I started publishing a newsletter. This is The Flip Notes edition number 62 – I have published a weekly newsletter for 62 straight weeks! And it’s been a grind at times.
Last year, we published the podcast episode Much Ado About The Media, which was co-produced with The Subtext’s Osarumen Osamuyi. In our retrospective discussion, I asked if it would be possible to build a Stratechery1 for Africa. Here is how Osarumen responded,
…beyond Ben Thompson’s fantastic analysis and incredible discipline, one of the biggest assets that Stratechery has is high-quality sources of information. I would love to wake up every morning, scan through the news headlines, and write 1,800 words of commentary about what’s happened. But I just can’t do that today because lots of the information that I need to inform my analysis I have to gather originally. …it’s really, really difficult to make this work at scale because you’re both doing the job of the journalist and the analyst.
Ben Thompson benefits from a media industry that provides robust, primary coverage on top of which Ben writes his analysis. It also helps that many big tech companies are publicly listed, compelling them to share information in their quarterly earnings and annual reports that the public would not otherwise have access to if the companies in question were private. Meanwhile, the African tech ecosystem generates less news and has almost no public companies.
That makes it hard, at times, to write a weekly newsletter. Even more so when you’re a media company that aims to produce particularly in-depth content. Though perhaps it’s not just an African tech thing…
Meanwhile, we tend to favor recent events over historic ones – it’s called recency bias. Investors, for example, tend to give more weight to the recent, short-term performance of a stock compared to the long-term performance. When it comes to content consumption, we forgo reading old books for the new ones (that often cite or are inspired by the old ones). And in content production, we eschew old content in favor of the new, as well.
It’s a lesson I am learning from a content strategy perspective. I endeavor to create content that remains evergreen – to interrogate principles and ask questions that are applicable beyond just the moment in time in which they are being discussed. Do I need to be saying something new and interesting every week?
All of this is a long-winded way of saying I don’t really have anything new and interesting to say this week. So it’s a good time, as ever, to visit or re-visit some episodes and essays from the past. Here are a few I recommend:
- Exploring Sustainable Business Models (season one, episode two). We’ve heard a lot about how a hypergrowth, negative unit economics business model doesn’t work in an environment where there is scarce venture capital and/or a TAM that might not be as deep as it seems. This episode explores that topic. But it’s worth revisiting because, two years later, as the VC dollars continue to increase, and as select fintechs hit their growth stride as they raise $100 million-plus rounds, I wonder to what extent that which was discussed in this episode still applies.
- Telcos, PalmPay, and the Future of Mobile Financial Services (season two, episode seven). This episode explores the outsize opportunity that telcos and handset manufacturers like Transsion have because of the customers they already have. They have a steep acquisition advantage compared to their fintech counterparts. However, I don’t think we talked enough about agent networks, and the critical importance of physical cash-in/out infrastructure. And likewise, the strategic advantage those with the agents have too. It’s a topic we’ll explore further next season.
- Haven’t we been building? This essay was published back in April 2020, at the earliest days of the COVID pandemic, and in resonse to Marc Andreessen’s It’s Time to Build, and Ben Thompson’s follow up How Tech Can Build. Andreessen’s piece was a call to arms for the Silicon Valley innovators to work on real problems in the physical world. I don’t know how much Silicon Valley has changed, if at all. But in the African context, it’s widely apparent the vital role that physical infrastructure plays in ensuring the success of a fintech, for example. And whether or not COVID was a reinforcement of that reality for entrepreneurs in Africa, the ecosystem will continue to benefit and develop from continued investment in physical as well as digital infrastructure.
Thanks, as always, for reading 🙏
- Stratechery is the seminal blog on tech strategy, by Ben Thompson. A one-man show (as far as I know), Ben publishes three daily updates for members and one weekly article free to all readers.