I grew up in New York – my dad reads the New York Times regularly and often emails me articles he thinks I’d find interesting. They used to be about sports and my alma mater, the University of Michigan, but they more prevalently became about South Africa after I moved here in 2017. These articles, predictably, were about one of two things – corruption and crime.
While I’m not African, as a South African resident I started getting frustrated, in particular, with how the western media talks about Africa – something that I’m sure has been going on forever, but that I’ve only recently become acutely aware of while living on the continent.
This has informed much of The Flip’s core objective – to tell more contextually relevant and representative stories from entrepreneurs building in Africa. There are amazing stories to tell, and I, for one, am constantly impressed and inspired by those who are solving really hard problems in really difficult environments and demonstrating an unparalleled level of resolve and resiliency.
Last week, the issue of narrative came even further to the fore for me. I had two incredibly invigorating and informative experiences – first, an interview with the one and only Victor Asemota for a future episode of The Flip, and second, I moderated a panel on “Building Global Products” as part of the African Renaissance Conference.
During both experiences, the same theme emerged – the importance of narrative and the intangible considerations of building products, companies, and ecosystems. In both instances, my intention was to steer the conversation towards the tactical – to unearth high utility insights – and in both cases, the conversation defaulting to the importance of narrative and the intangible.
After the conference, I had a conversation with my good friend and The Flip’s b-mic and Executive Producer Sayo – I told him that I felt the conversation was very intangible and I was expecting it to be more tactical and centered on the specifics of building products in Africa. He told me that a few people in the comments during the panel wanted us to “talk more about product”, but that Sayo thought it was perfectly on topic – he felt it was a conversation about product.
All of that is to say that narrative matters. Context matters. These elements are inextricably linked and cannot be unwound from the practical, tactical, instructive content we try to create for The Flip, and that some people wanted to hear more of during the conference panel discussion.
So, let’s talk more about narrative.
What is success?
This week, OPay announced that they are shutting down all of their business units in Nigeria, save for their mobile money business. This, of course, after Andela’s layoffs and Jumia’s pullout from several African markets. The punditry has been quick to discuss OPay’s failures, as has been discussed with Andela and Jumia.
In our discussion, Victor and I talked about Andela, Jumia, and OPay (and this was before OPay’s recent announcement). And in particular, we talked bout the perception that they are failures. We wholeheartedly disagree.
Yes, these companies themselves aren’t or haven’t been as successful as expected, but what cannot be overlooked is the impact on the ecosystem and consumer markets that they have created.
Victor told me a story about an experience he had at the conference InfoSec World in the US. After a 30 minute conversation with someone, in which there was mutual interest in working together, Victor gave that person his business card. That person, upon seeing Lagos, Nigeria printed on the card, promptly walked away. It wasn’t the only time the stigma of Nigerians in tech has caused him to miss out on opportunities.
As Victor argues, perhaps the most valuable thing about Andela is that they have reduced the stigma of Nigerian developers – some of whom, through Andela, have been hired as full-time, remote employees for leading Silicon Valley tech firms.
Though I’m sure many people could have told OPay in advance that their strategy was doomed to fail, in any case, falsified hypotheses are successes because they tell us what not to do.
While OPay surely could have wasted their money in more productive ways for the benefit of the ecosystem, are we nonetheless grateful for what positive impact they have had while wasting their money? (Also, isn’t this more of an indictment on OPay’s strategy than on the Nigerian market in particular?)
This raises another question – what does and should success look like in nascent ecosystems, and where there is still so much to build?
In our global products discussion, the panelists and I talked about the perception of the quality of products built in Africa. Would more tangible, quantifiable successes like exits help?, it was asked. Of course it would, but until then?
All weekend, the panelists talked about how there are many extremely difficult problems being solved by entrepreneurs who are up to the task. Other entrepreneurs lauded about how Paystack, for example, has made it so much easier for them to launch and scale their business.
And in immensely difficult and complex environments, doesn’t the mere fact that companies are building workable solutions to problems mean, in and of itself, that these are high-quality products? Aren’t these the kind of success stories1 worth sharing? In fact, aren’t these successes the requisite success for this stage of the African tech ecosystem?
I think so.
On tech hype
A couple of weeks ago I interviewed another Victor – Victor Basta, the Founding Partner of Magister Advisors, an M&A advisory firm that’s worked with the likes of Cellulant, Twiga Foods, and CloudFactory on their $30 million-plus fundraising rounds.
In these later-stage deals, investors are looking at performance, not potential. To that end, there’s no faking potential, but for Victor, much of the work becomes how to package the deal. Here’s what he told me in our interview, in the context of pan-African expansion –
There’s an equation that somebody taught me years ago – very complicated equation. It’s called perception minus reality equals value. The point about that equation is perception is not spin, but you can amplify your capability, credibility to be Pan-African without quite having done it. And there are plenty of examples of African companies that have raised more money than they “deserve” to raise at their stage of development because they got on people’s radar screens. They were well known and people buy and pay more for companies that they feel they know.
Inside of that perception is storytelling. But we’re not advocating for unfettered tech hype – that won’t work at this stage of investment, nor will it with sophisticated investors, in general.
Perhaps there’s a requisite amount of pragmatism required in any discussion about African tech. Yet pragmatism isn’t pessimism. And inside of any pragmatic discussion on the ecosystem are still successes and stories worth telling. Which raises a final question – whose role is it to tell them?
The role of narrative and the avant-garde
I recently read a great piece on the avant-garde in the context of entrepreneurship, innovation and ambition. The author, Bryan Kam, writes,
In artistic movements, the pattern of ambition is clear enough: the avant-garde literally advances art. Wikipedia notes that the avant-garde, which is French for “advance guard” or “vanguard,” is “frequently characterized by aesthetic innovation and initial unacceptability.”
The avant-garde, by definition, advances the guard. This means that the mainstream, almost by definition, is not interested in most of its experiments, but only in its successes.
We can similarly see this dynamic at play in technology within the law of diffusion of innovation. Most of you reading, I presume, are in the first 16% – the innovators and visionaries. The challenge for us is getting what we’re building to “cross the chasm” to adoption by the mainstream market.
In art, Bryan argues that this work is done by critics,
In order for society to comprehend and assimilate the innovations of the vanguard, a group that is larger than the avant-garde, but smaller than the public, must engage with (and hence judge) the art… they act as an intermediary between the bleeding edge of a movement and the broader public.
There’s something to be said about the often adverse relationship between the artists and critics, and the comparable relationship between the “old guard” in startup ecosystems and their resentment of the “tourists”. Perhaps the same can be said about the Nigerian tech ecosystem and their view of the Chinese-backed fintechs who have come in and spent a ton of money on customer acquisition.
But as artistic movements are bigger than any one artist, so too is the impact on markets or ecosystems bigger than any one successful or failed business.
Yes, OPay’s strategy was bad business and, evidently, wasn’t sustainable for them in the long run. But hasn’t OPay – and other failed startups – brought technology further into the mainstream? And isn’t the participation of startup “tourists” a sign of success, in and of itself?
Overall, I’m arguing that for art (or any movement) to thrive, you need a small group of people iterating and performing a large number of experiments. Under the right circumstances this can lead to a kind of creative explosion…
To the extent that this combination produces successful experiments, those successes will enter the mainstream. Together, these two things can actually provide sufficient momentum to overcome the mainstream’s inertia. In conjunction, as successful experiments attract newcomers, a virtuous cycle will lead to a Golden Age, after which the mainstream will be moved in some small way toward the direction of where the avant-garde was.
As we seek to build virtuous cycles within our ecosystems, it underscores the value of more experiments (and failures) and the role that narrative plays in defining success and in attracting more innovators and visionaries to participate in “advancing the guard”.
So, is OPay a failure? Is that even the right question to ask?
Notes from around the ecosystem
Perhaps there’s no better time than during this week’s newsletter discussing narrative and success to celebrate an unequivocal success – the acquisition of Beyonic by MFS Africa! Read about the journey from Beyonic’s Co-founder Dan Kleinbaum.
In the spirit of openness, Nigerian fintech Carbon also shared their 2019 Annual Report publicly. Check it out!
The Visual Capitalist published a chart of the cost of 1 GB of mobile data in every country. See where African countries fall on a global scale. Meanwhile, India leads the pack at $0.09 (!) per 1 GB.