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

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

#11

Post by byrneseyeview »

hx wrote: post #9

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,…

I think a company named after "De Beers" or called "Anglo American" is not what people think of when they think of an African startup. It wouldn't be seen as a triumph of African startups if all the big companies were started and run by non-Africans.

But MTN is a good example. There's also Naspers, which is not quite a startup, but which is starting to act like one. (They took a big stake in DST a couple months ago.)

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

#12

Post by squidsoup »

My guess would be that the best and brightest end up overseas. Of all of the African kids I went to high school with in Nairobi, only a handful remain in Kenya. Most, particularly those that went on to complete tertiary education, now live in the US and the UK. I suspect many educated Africans realise early on that they'll need to make a life for themselves elsewhere.

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

#13

Post by jseliger »

As a Nigerian Internet start up founder

Note: I'm an American and not an expert on Nigeria. Still, my impression is that Nigeria doesn't have a very robust legal system or real property rights enforcement; when I think of law in Nigeria, I remember Ken Saro-Wiwa and the innumerable articles I've read about people fighting over oil spoils. (Once again: this could be wrong and Nigeria's legal system might be very good, with the Western press merely gravitating toward sensationalistic stories).

If you don't have a functioning legal system that enforces contracts (and a culture that respects contracts), I don't think you can have tech startup investments. If you have a high level of political risk, coups, and corruption, you're not going to get tech startup investments. Westerners have an unfair but real habit of lumping Africa together; when we read about the Zimbabwe disaster, for example, the possibility of political risk wiping out investment in other countries becomes very real.

One other commenter compared development to the technology stack, which is pretty astute.

It might also help to read William Easterly's paper, "Was the poverty of Africa determined in 1000 BC?": http://aidwatchers.com/2010/07/was-the-poverty-of-africa-det... . You might be running up against not just decades of difference in development, but centuries.

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

#14

Post by nochiel »

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…

"Kenya's startup scene is light years ahead..."

I'd like to know what you're basing that assertion on.

I contend that Kenya's tech scene is woefully primitive. Ushahidi is one example but it is hardly a model for success or sustainable business.

"Startups that would be useful here and meet local needs" is, in my opinion, precisely the wrong approach particularly if we're focusing on technology startups. That kind of thinking is precisely why facebook is the dominant social network in Africa and not some other localised service.

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

#15

Post by mahmud »

hx wrote: post #9

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,…

Awful examples man. De Beers are colonial profiteers, not an African firm. Sheesh.

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

#16

Post by pbhjpbhj »

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.

>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.

Hurricane Katrina, hanging chads ...

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

#17

Post by philwelch »

byrneseyeview wrote: post #10

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.

Well, it's rather challenging to immigrate to the US, for one.

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

#18

Post by byoung2 »

nprincigalli wrote: post #8
byoung2 wrote: post #5

Earlier quoted context omitted.

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..

Of course these services are needed, but in developed nations, they usually fall in the purview of the government, who is unlikely to hand it off to startups.

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

#19

Post by dtegart »

mahmud wrote: post #15
hx wrote: post #9

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,…

Awful examples man. De Beers are colonial profiteers, not an African firm. Sheesh.

The business practices of De Beers have been less than stellar, however De Beers was founded in South Africa, has been headquartered in South Africa and is 15% owned by the Government of Botswana. I agree that they are a poor example though as considering them a start up though would be a bit like calling Ford a startup, both companies are a bit beyond that stage of their lives.

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

#20

Post by sedachv »

jseliger wrote: post #13

As a Nigerian Internet start up founder Note: I'm an American and not an expert on Nigeria. Still, my impression is that Nigeria doesn't have a very robust legal system or real property rights enforcement; when I think of law in Nigeria, I remember Ken Saro-Wiwa and the innumerable articles I've read about people fighting over oil spoils. (Once again: this could be wrong and Nigeria's legal system might be very good,…

Forget causation, there's not even correlation there. What about all the startups in China, India, Russia?
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