Reaction to the NYTimes Profile on African Startups

The mainstream media often has a hard time highlighting the good going on in Africa because there’s so much perceived and actual tragedy here to draw their attention. The problem with their covering only the bad (which should always have a place in the media) is that it definitively shapes public opinion. No matter what we do as African entrepreneurs, we’ll be perceived as being at some sort of disadvantage. Subsequently, anytime you’re recognized for achieving anything, it’s often perceived as ‘looking for a handout’ even if that’s not the case.

Eventually this shapes opinions on our capabilities in general so I’m grateful for reporters like Dwyer Gunn who go out of their way to shine some light on the people who spend their days trying to change the reality of Africa as much as the perceptions about it. If nothing else, it offers another side to the story that everyone in the world knows all too well.

Recently Appfrica Labs, some of our own entrepreneurs and two other African startups were profiled on the Freakonomics Blog of the New York Times. Here are a few reactions to the article that Dwyer wrote.

One commenter writes:

Amazing, truly. It warms my heart as I’m sure it would anybody’s to read these stories which possess an ‘underdog-movie feel’ to them. Africa as a continent is seen as the pit of the world when it comes to economics and it seems that the only way to climb out of that metaphorical pit and begin the upwards construction of their economy is by the works of role-models like those mentioned here.

The main setback for any given economy in the world has to be the corruption that lies within their very government. The abolishment of this corruption per se may be out of the question in the immediate future, but it is steps like those taken by these entrepreneurs which will begin to open new possibilities for the African continent. They seek humbly and sincerely the well being of the African economy without the intervention of foreign aid. This concept and idea, if blown up to a larger scale, could enlighten the African people to how foreign aid might be an obstruction to the breakthrough of independent economic prosperity.

The examples demonstrated in this article are merely 3 in a continent that holds over a billion people. The examples shown here might seem insignificant, as a needle in a haystack, when weighted to the immense population and profound corruption found in the continent. The examples shown here though, as the same haystack concealing a needle, but one that’s on fire, are unquestionably the initiatives that have to be taken in order to begin tearing corruption from its root, and get the African economic wheel rolling.

I agree. Corruption is the hardest problem to solve anywhere yet it’s incredibly stunting to growth wherever it exists. Another writes:

We’ve known for a long time what the preconditions are for economic development: (1) physical security (no one will accumulate capital if it will only result in their being murdered) (2) the rule of law (property rights are enforceable and corruption is at a minimum) (3) the right to trade more or less freely.

These pre-conditions of economic development have not changed in thousands of years.

Absolutely, this is another problem, the lack of stability and trust in authority (to police and protect). Another reader completely confuses me with this:

I think that all three of these profiles and some of the comments are indicative of the problems and not of solutions. All three profiles show individuals who are in some way dependent on the West. A French educated entrepreneur, a Ugandan who would probably be just as comfortable in Atlanta as Kampala, and an AIDS worker who is just as dependent on foreigners for support as anyone else.

The first post claims that the first step is that they need to understand “their rich past” and then it will be smooth sailing. Way to simplify a complex problem. I think much of the issues come down to us (the West) not understanding “their rich history.” Much of it involved invasions and subjugation by guess who?

You want to help start a business in an African country? Why not ask someone who lives there what they need and what is stopping them? Then invest like you would in the US or UK.

One of the first steps to starting a business in much of the Continent is moving away. Typically you are expected to help your family and extended family. This can sometimes mean hundreds of people who want something free or on credit. So many of the business owners in Liberia may be from Nigeria or Ghana. Far enough away from pesky relatives. People who come to the US and are successful here don’t have some special gift, they just have an ocean between them and someone looking for a handout.

No matter what you put in front of some people, they often can’t get past their own notions of what’s actually going on. To one we’re the underdogs. To another it’s inevitable. The commenter above, in particular, seems to write his reactions based on some preconceived notions of what one would expect to find occurring in Africa. Maybe it was the presentation or the lack of depth on each company (in what was intended to be a short blog post). Fair enough, this post attempts to address four of his apparent preconceptions…

Preconception #1: Surely, the black guy in an article about African entrepreneurs must be African.

Actually, I’m not African and I don’t fault anyone for making this mistake as there’s no way you could know without doing some research. Just to clarify, I’m 100% red-blodded American. I don’t even like the term African-American, as it means nothing to Africans. (Africa isn’t a country and there are people of all races who live and were born here. It’s like calling an Indian person Asian-American. Partly true, but how does that help classify anyone? I digress.) You’d have to go back more than four generations to connect my family to Africa and even then, you wouldn’t find any relation to Uganda. In some ways I’m just like every well-meaning colonialist, aid worker or expatriate who ever came before me. In some ways I’m not. What I am actually is American-Ugandan. =)

In my case, I have a passion for Africa because I see a lot of opportunity and a lot of unrecognized potential. Recognizing this is as important as recognizing the other two entrepreneurs in the article are indeed Ugandan and Senegalese. Why? Because the African diaspora (with it’s various ethnic groups and races) is working to help itself and it helps us all to recognize why and to support it.

Preconception #2: These African companies are dependent upon the west.

In some ways he’s right. I’m an American investing in African startups, Magatte is indeed French educated, and Ketty does indeed rely upon the Aid/AIDS industry. But here’s another perspective. All of us have started ventures that 1) bring wealth and resources to the region 2) that provide an example for other local entrepreneurs and 3) are in most cases self-sustaining. If we were to look beyond the companies in this article, we’d find a number of examples of local companies only doing business locally. That’s great, but is it really the only way to grow a business? Just like every other country in the world, African countries need to increase trade internationally in order to grow. Doing that does not preclude pan-African trade, in my opinion it absolutely requires it.

It’s basic economics. The ‘first world nations’ of the world have ‘all the money’, Entrepreneurs like us are simply trying to find ways to proactively engage the West so as to build wealth in our respective regions. How is that not un-similar to how China and India have reshaped their societies over the past fifty years? To even think about it “the West” is a misnomer. We live in a global economy where a quarter of the planet has three quarters of all the world’s capital. The startups profiled here are simply trying to engage the world with trade versus aid. Aid = absolute dependancy. Trade = not necessarily.

In fact, Is there even an economy left anywhere on the planet that isn’t dependent on either trade or aid? I think this global meltdown is evidence that such a place doesn’t exist anymore, unless you are indeed looking at ‘the bottom’ economies of the world.

Preconception #3: Surely, nothing I’m thinking of has been tried before in Africa…at least not correctly.

This person makes the statement that people need to simply invest in Africa like they would anywhere else on the planet. I’m not sure if he gets the definition of the term ‘venture capitalist’ as it’s exactly that…investing in startup businesses based on their need. It’s the sole reason I created my company, to help African startups access capital that doesn’t really exist here due to a number of factors. Of course, there are complexities to the market and other models for investment, I’ve chosen to invest in startup entrepreneurs, others invest differently. Appfrica doesn’t rely on external funding, we simply have to earn what we spend. We don’t earn, our business fails…just like every other for-profit business on the planet.

Likewise, I don’t see how the other two companies are dependent on the West in anyway. Is an American educated at Oxford dependent on the British?

Preconception #4: Remittances are a bad thing.

How? This is a trend of the entire planet. A small town American girl moves away to go to college in the big city, if her parents are having a hard time, she sends money back home. An Indian tech enthusiast moves to Silicon Valley to work for a startup and makes a lot of money when it goes public or sells, if his parents are having a hard time, he sends money back home. It’s no different in Africa. Family takes care of family. It also assumes that just because these families are helping each other across oceans, that the only thing the receiver is doing is sitting around waiting for more money.

Now, I don’t mean to make an example out of this commenter, I realize that there was limited information offered in the article. His comments just represent the thoughts of millions of people around the world when it comes to Africa so I wanted to offer my own opinions. It’s all valuable insight and he does indeed offer an interesting perspective.

Whether you agree with my points or disagree with them drop a comment on the Freakonomics thread here.

Photo: Ketty Opoka, courtesy of the NewYorkTimes.