Years ago, Y Combinator’s Paul Graham wrote about a phenomenon that he called “schlep blindness”. He said,
Schlep was originally a Yiddish word but has passed into general use in the US. It means a tedious, unpleasant task.… The most dangerous thing about our dislike of schleps is that much of it is unconscious. Your unconscious won’t even let you see ideas that involve painful schleps. That’s schlep blindness.
He goes on to give an example – Stripe.
For over a decade, every hacker who’d ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem… Why work on problems few care much about and no one will pay for, when you could fix one of the most important components of the world’s infrastructure? Because schlep blindness prevented people from even considering the idea of fixing payments.
The point being, there are large, fragmented, informal, and/or legacy businesses that are schleps to improve, organize and/or build for. But for those who do, like Stripe, there is not only tremendous value to capture, but the company may also stand alone in capturing it.
I wonder what sorts of problems are seemingly so insurmountable that they’ve engendered schlep blindness. And, at the same time, what companies have or are overcoming schlep blindness to tackle hard problems in unsexy industries using technology.
I would go as far as to say the most successful – and valuable – startups on the continent are those that are making the unsexy sexy, using technology. Though schlep blindness may not necessarily apply here – after all, some of the subsequent companies mentioned are well-funded and valued – it’s nonetheless useful as a framework to explore and celebrate those solving this category of problems.
While many of these tech-enabled companies are “more enabled than tech” – their value is derived not only from their use of technology to better organize markets, or solve problems more efficiently or affordably – their use of technology also enables additional digital products or services to be built on top of their core value proposition and offered at a low/no marginal cost basis (remember, every company is a fintech company).
Let’s take a look at a non-exclusive list of examples that are top of mind.
Helium Health is digitizing medical records in West Africa and across the continent – an especially challenging task given the fragmentation of healthcare systems in these countries. As Helium’s founder Goke Olubusi told me, in a podcast interview for a future episode of The Flip, the company started when he and his co-founders asked a simple question: “Who can give me any kind of insight [about healthcare]? I want to know how we make those decisions.” It was the lack of data – and data-driven decision making – that compelled the founding team to go city-by-city across Nigeria, knocking on the door of hospitals and clinics to solve this problem.
PayGo Energy has widened the addressable market of liquified petroleum gas (LPG) through their gas cylinder smart metering, enabling customers to use LPG on a pay-as-you-go basis. In a heavily commodotized market, PayGo has an astounding 90% plus customer retention rate, and in better tracking utilization has enabled LPG retailers to reduce cylinders in circulation, thereby improving margins.
Komaza is a microforestry company working with small-holder farmers across Kenya to improve the country’s commercial wood production. Industrial wood demand will grow 500% over the next two decades, yet Africa will import over 75% of industrial wood needs. Their distributed model yields an 80% cost disruption versus traditional plantations for every acre planted, and the company leverages AI and satellite data to map existing tree growth plus on the ground software to track progress.
Lori is reducing the cost of goods in Africa by better coordinating cargo owners and transporters using software. In Kenya, 25-40% of a product’s price goes to logistics cost. In Rwanda, 75% of Rwandan export price goes to logistics costs, compared to 6% and 8% in the US and Europe, respectively.
I think it’s interesting to consider, in the context of Stripe, that perhaps no one solved payments prior to Stripe and in the way Stripe has because hackers, invariably, hacked together solutions. But Stripe and the aforementioned examples in Africa are not hacks, but are products built at the foundation to solve root causes and that, in many cases, allow and enable much to be built on top of that foundation.
The opportunities for these types of businesses certainly exist where there are highly informal and fragmented markets and/or a (severe) lack of data in a given sector – logistics, manufacturing, agriculture, healthcare, energy, retail, cross-border commerce, mining, and much more. Using these frameworks as a proxy, we can see schleps all around us, and surely, there are plenty more that we are blind to, as well.