Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask PG: Why do you think Africa cannot produce global scale start ups?

news.ycombinator.com

Post reply on HN
Print view View original

1–10 of 90 posts

Ask PG: Why do you think Africa cannot produce global scale start ups?

#1

Post by OoTheNigerian »

Hi PG. As a Nigerian Internet start up founder, I was quite disheartened to read Leila Janah, post (http://tcrn.ch/aE4UqK) where you were quoted as saying you would "rather fund an incubator for less glamorous businesses, like gas stations and plumbers." than start a Y combinator in Kenya.

A continent with 1 billion people and, 110 million connected online (growing in triple digits) I would like to believe we can produce companies that can have product market fit before deciding to scale up and probably open offices in the west. .e.g US.

When I wrote my blog post "A cure for Nigerian Internet Scams (http://bit.ly/ayCTUX), I counted you as one of the people that we would seek support from to become relevant in the world of startups.

So hearing that you think there is no hope for us, is quite deflating.

So my question is, why do you believe Africa cannot produce global scale startups?

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#2

Post by aitoehigie »

I think we already know the answer to this question. taking you O_O as an example, your new startup called Lotaar, do you think it can become a global scale startup? The problem with us Nigerians/Africans is that we do not like to scratch our own itches, 2008 here in Nigeria, social networking sites were the rave, all because facebook was just becoming huge here then. Kenya's startup scene is light years ahead of Nigeria because they are creating "local" startups which are relevant there and also meet needs in other places, e.g. ushahidi (which I might not be right to call a startup) was created in kenya to monitor their elections but has been used in places like haiti to monitor disaster response during her earthquake. If african's can create startups that would be useful here in Africa and meet local needs, I think such a startup can grow to a global scale because the continent has an estimated 1 billion people. Like I have always said ( http://aitoehigie.wordpress.com/2009/05/15/building-a-world-...), Africa doesn't need clones of facebook or twitter when there are other fundamental problems that technology can be used to solve.

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#4

Post by xg »

Don't you think it's something like the following: think of a country's economy as a technology stack. You need to have the base levels of the stack in place before you can make more abstract things.

In places like Africa and India, there's a lot of access via mobile phones. But there's also a lot of missing pieces: transporation goods and services, smartphones, etc.

It seems to me like there's a lot of opportunity for media startups in both places, but that actual monetization is difficult because there isn't much in the way of ecommerce (due to logistical issues) and there isn't much in the way of advertising (because there's a lack of a base level of businesses to support it).

As for going global from a place like Africa: totally possible. But most startups follow a plan of succeeding at something small first.

I also think that Africa is going to leapfrog certain stages of technology / development and not others. For example, mobile banking in Africa is more widespread than it is in the US. My guess is that the first huge ecommerce company in Africa will be some weird hybrid of mobile, local, and banking infrastructure that people already trust.

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#5

Post by byoung2 »

aitoehigie wrote: post #2

I think we already know the answer to this question. taking you O_O as an example, your new startup called Lotaar, do you think it can become a global scale startup? The problem with us Nigerians/Africans is that we do not like to scratch our own itches, 2008 here in Nigeria, social networking sites were the rave, all because facebook was just becoming huge here then. Kenya's startup scene is light years ahead of Nig…

I think the contradiction is that what makes for a successful startup within Africa (scratch our own itches) doesn't necessarily translate well to the developed world. The examples you mentioned, such as monitoring elections and disaster response would do very well in developing countries, but they aren't necessary in countries like the US or UK. I think that's what PG was suggesting.

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#6

Post by zackattack »

I am actually very excited by opportunities in Africa, but I know nothing about marketing to Africans. For example, out of the 110 million connected online, what percentage of them are willing to pay for goods and services online? How do you accept payment from an African user? How do most people access the Internet? What sort of social media sharing is most popular - Twitter, Facebook, texting, Skype ...?

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#7

Post by AlexMuir »

Part of the problem might be that solutions that work for US startups (and therefore are assumed to be defacto global solutions) might not work in Africa. The usual promotional tools for a website are to get a blog up, build your followers on Twitter, try to get covered by Techcrunch etc. None of this is going to be anywhere near as effective in Africa. It's probably not cool - but perhaps African (and all developing world) entrepreneurs should look back to see how Web 1.0 sites built audiences - ebay, paypal, god forbid... even Yahoo.

Edit: I think it's taken as a given that this extends to the technical too. While we're all bitching about IE6 and drinking our Ajax goodness from the cup of rails, it's easy to forget that there are guys who should be banging out sites in 800 x 600 optimized for dialup.

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#8

Post by nprincigalli »

byoung2 wrote: post #5
aitoehigie wrote: post #2

I think we already know the answer to this question. taking you O_O as an example, your new startup called Lotaar, do you think it can become a global scale startup? The problem with us Nigerians/Africans is that we do not like to scratch our own itches, 2008 here in Nigeria, social networking sites were the rave, all because facebook was just becoming huge here then. Kenya's startup scene is light years ahead of Nig…

I think the contradiction is that what makes for a successful startup within Africa ( scratch our own itches ) doesn't necessarily translate well to the developed world. The examples you mentioned, such as monitoring elections and disaster response would do very well in developing countries, but they aren't necessary in countries like the US or UK. I think that's what PG was suggesting.

As someone watching from outside, it seems to me there is a need for better solutions in the "monitoring elections" and "disaster response" spaces in the US, too..

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#9

Post by hx »

Africa has produced a number of insanely successful start-ups, though mostly not in the tech area. e.g. De Beers is dominating the diamond market worldwide & was founded in South Africa. Same for Anglo American PLC.

On the tech side there is Dimension data. They are in talks regarding a take-over for 2bn pounds. MTN Group is operating in 21 countries. Then there is Mark Shuttleworth's startup Thawte consulting. Sure, none of those are on the scale of Google, but given the circumstances its not bad.

I'd also like to point out that this part is deceptive "110 million connected online (growing in triple digits)". Being connected in Africa does not mean that the connection is really usable. Its expensive & slow and has only been really improving in the last year or so.

Re: Ask PG: Why do you think Africa cannot produce global scale start ups?

#10

Post by byrneseyeview »

If you're anxious to start a startup, you should probably move to the US, Europe, or East Asia. There is simply too much infrastructure to replicate. That's also true of starting a startup in Oskaloosa, Iowa, too.

If that's a problem, it would be interesting to know why.

Post reply on HN