
Ask PG: Why do you think Africa cannot produce global scale start ups? - 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.<p>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.<p>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.<p>So hearing that you think there is no hope for us, is quite deflating.<p>So my question is, why do you believe Africa cannot produce global scale startups?
======
clark-kent
I am Nigerian now living in NY. I used to run a successful Internet Cafe at
Yaba,Lagos. Before Nigeria and most other African countries can join the tech
startup world some big infrastructure issues needs to be addressed.

While I was running the internet cafe, the bigger problems I had to deal with
had nothing to do with my line of business.

I had to bribe employees of the electric company (NEPA) to hook me up to a
more reliable power line where electricity is more stable. Stable electricity
in Lagos means you get it like 6 hours a day. The rest of day, you had to
power your business with Generators. For the Generators, we had to buy drums
of diesel to keep them running. Buying diesel was something else because Lagos
always had a fuel shortage going on. We had to buy tank loads of water to keep
the business location clean because otherwise we had no running tap water. I
had to deal with thugs showing up every now and then, asking me to pay for
street protection. With all these problems how do you focus on your startup
and grow your business.

My wishlist for Nigeria will be a wireless internet solution that is cheap and
can reach the whole country, the type that the company Teledesic tried to
provide. Also an Energy solution that will free us from evil Oil companies and
evil electric company. Something you could just plug in and get cheap, clean,
efficient enegry to run your entire business. But thats just what my wishful
thinking. When we can have that, we will see more startups from Africa.

------
johnnyg
Every third order my company receives from Nigeria is a scam. The cheap,
effective and over reaching solution to this issue is to simply stop shipping
to Nigeria. This is the path I chose and the one that most small business
owners will choose.

Perhaps we're missing out on some money but the cost in time and effort to
capture that little bit of money isn't worth it relative to other projects.
I'm in business to ship product to those who will reliably pay, not to figure
out which of my customers will actually pay ahead of shipment. If I can't
know, I won't risk it.

I don't think my experience is unique. I think this situation has repeated
itself in most small businesses in America. I think this group of individual
experiences has been generalized as "It costs too much to do business with
Africa". Unfair? Sure. Poor Logic? Absolutely. Am I going to change this? No.
Its not worth my time and effort.

I'm also going to be very skeptical of business deals or services originating
from Nigeria. Do you see a mint.com or inDinero taking off in Africa? Would
you personally trust your financial data to such a service and if so, what are
your reasons given your lack of recourse through rule of law?

I believe what I'm saying here is what most are thinking, but won't say. I
want to lay out what it looks like in the trenches on this side. I fully
realize that I am half of the reason that this situation exists. Until I need
your money more than you need my services, I do not see it changing. I know
that is harsh, but I sincerely believe it to be the case.

I hope things improve. I hope bad experiences are replaced with good ones and
Nigeria specifically and Africa generally are looked at as reliable business
partners. I hope you create a ridiculously successful business. Most
importantly, I hope you'll take this post in the spirit in which its offered.

~~~
seldo
Very interesting, but a few questions:

1\. Really one in three orders was a scam? How big is the sample -- how many
times did you ship to Nigeria? How long ago did you stop?

2\. You list two problems: determining if a customer really can pay, or as a
startup, having customers trust you with financial data.

In both cases, the problem is trust & reputation. Foreign customers do not
trust Nigerian businesses or customers. So the missing piece of the puzzle is
either better police enforcement and government regulation, or some kind of
third-party who can engender trust and verify identity to and from African
businesses and customers.

~~~
johnnyg
1\. Before we stopped completely, we would get two kinds of orders:

a. Orders over $1000 to Fancy Sounding Expediters Co XYZ Address Nigeria

b. Smaller orders to <Big Oil Co> <Some Compound> Nigeria

I shipped one and only one of type a. This happened in ~2001. I took this hit
as a business 101 tuition fee and stopped shipping this kind of order.

I continued to ship to people on compounds working for Shell/BP/etc. During
this time, I got my rough sample size. For every 3 of this kind we would get,
we'd get one of type a. It was years ago and it could have been 2:1 or 5:1. It
was not 10:1.

After a few months of this, the "type a fraudsters" figured out the pattern
and we started seeing smaller dollar orders to "compounds" come back fraud. At
this point, I just shut the whole thing down.

The way this works now is that someone in Nigeria in a big oil compound will
order to their home and have someone forward it. No USA address, no shipment
over.

2\. Exactly so. If government won't fill the trust gap, perhaps a private
enterprise can. They would face a steep challenge. There has to be enough
money in Nigeria seeking to buy goods internationally but unable to because of
people like me for it to work. Is there enough "domestic pull" to make it
viable?

~~~
notahacker
I believe some international freight forwarders and delivery services offer
part of the service described in (2) - a US address that pays for and receives
goods and an African facility to forward them onto and collect payment from
the end user.

~~~
johnnyg
We've tried some of these services out, though not specifically to solve this
issue. When you add the cost of they add, the legit customers balk, driving
volume down to the point where its not worth doing for our business.

As a result of this, what we do and what I suspect others do is ship to areas
with low fraud rates direct, eat any losses and call it good. Anywhere that
you eat more than you make, you simply stop.

The margin on something that would provide the security and keep small
businesses interest would have to be razor thin. It would be a challenging or
impossible business to run.

------
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...](http://aidwatchers.com/2010/07/was-the-poverty-of-
africa-determined-in-1000-bc/) . You might be running up against not just
decades of difference in development, but _centuries_.

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

~~~
jseliger
I think some of the other commenters addressed this well, but as for Russia,
it's a terrible example and has a lot of the same problems that Nigeria
appears to; Newsweek just ran an article on the subject:
[http://www.newsweek.com/2010/08/14/putin-s-russia-exile-
busi...](http://www.newsweek.com/2010/08/14/putin-s-russia-exile-
businessmen.html) .

As for China and India, both countries have GDPs that have been growing at 10%
per year for more than two decades, and not purely from oil or other natural
resource profits, which appears true of what growth Russia and Nigeria have
experienced.

That's not to say India and China will continue their incredible growth
forever, or that either country is ideal for startups, but my impression (once
again: might be wrong) is that despite the problems startups face, those
problems are not as tremendous as they are in Nigeria or Russia.

In addition, as far as I know neither India nor China has produced any global
Internet software product companies along the lines of Microsoft, Yahoo,
Google, or Facebook.

~~~
sedachv
"I think some of the other commenters addressed this well, but as for Russia,
it's a terrible example and has a lot of the same problems that Nigeria
appears to; Newsweek just ran an article on the subject:
<http://www.newsweek.com/2010/08/14/putin-s-russia-exile-busi...>

You can continue to read placed PR Newsweek articles and be an idiot (the part
about the "has a lot of the same problems that Nigeria appears to" is sort of
the point of using it as an example), or you can do a quick google search:

<http://www.centernetworks.com/top-russian-web-sites>

[http://royal.pingdom.com/2010/07/27/top-20-countries-on-
the-...](http://royal.pingdom.com/2010/07/27/top-20-countries-on-the-
internet/)

------
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.

------
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-...](http://aitoehigie.wordpress.com/2009/05/15/building-a-world-class-
startup-the-nigerian-story/)), Africa doesn't need clones of facebook or
twitter when there are other fundamental problems that technology can be used
to solve.

~~~
byoung2
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.

~~~
nprincigalli
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..

~~~
byoung2
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.

~~~
Devilboy
Especially startups in foreign countries.

------
nl
I think the main reasons Africa hasn't produced global scale startups is that
they (global scale startups) are _so_ rare you really need _everything_ to be
in your favor AND to have a lot of luck for a startup to become a global
success.

What unique advantage does being from Africa give you? I'm assuming you are
clever and lucky - but there are a lot of clever, lucky people around who also
have access to friends with huge amounts of capital (eg, Silicon Valley) or
cheap programming talent (Bangalore) or a positive start-up culture (Israel)
or government backing (endless incubators around the world).

Some advantages I could see being in Africa (and I'm hardly an expert!):

There appear to be a large number of state-run monopoly businesses that could
be undercut by a cheaper, faster startup. My understanding is that this is how
a lot of the successful African telecom businesses got their start. That's a
good advantage, because state monopolies are very slow to react.

Cheap natural resources. I'm from Australia, and a large amount of custom
software development here is related to what is essentially counting rocks
being pulled out of the ground or wool of sheep (etc etc) and making sure it
does to the correct places. I'd expect it is the same in Africa, and there
maybe local opportunities there that give you a big advantage.

Anyway - I don't know, but I am really interested. Why would PG be interested
in African startups? What advantage do they have that would make them worth
investing in?

~~~
jorangreef
Re: "What unique advantage does being from Africa give you?"

I am in Cape Town, South Africa and let me tell you it is one of the most
beautiful cities in the world, with a university producing decent CS graduates
(Mark Shuttleworth), beautiful weather, vineyards on our doorstep, plenty of
African color and positive energy, terrific advertising talent, and the
typical South African work ethic. South Africans love work.

To answer your question, what unique advantage does being from Africa give
you?

Objectivity.

~~~
Terretta
Cape Town has very little to do with the Africa most of the world is thinking
of. OP's question is about Nigeria. Not so long ago, Nigeria wouldn't even let
you in if your passport had a South African stamp.

The problems and opportunities in Cape Town for startups have, in my
experience, no relevance to Lagos, Kinshasa, Abidjan, Accra ...

As you're from Cape Town, you know this is the real problem:

[http://sewayoleme.wordpress.com/2008/07/08/africa-in-
perspec...](http://sewayoleme.wordpress.com/2008/07/08/africa-in-perspective/)

Most people have no idea Africa is larger than US, Europe, India, and China
_combined_ , but without infrastructure on most of the continent and so tribal
that even greed takes a back seat to boosting a friend from the village.

These aren't bad things, they're just different--and Kaapstad, Africa's first
permanent European settlement and now considered the most entrepreneurial city
in South Africa, may not offer the best model for addressing the OP's problem.

~~~
jorangreef
Thanks for the interesting link. The world may have a "huts and lions" view of
Africa and may find it convenient to classify Cape Town as no longer "African"
because it's more developed. But I would question that sort of definition of
Africa as necessarily implying "third world". As you say, people must regard
Africa as a whole, from North to South, East to West. What's needed is more
definition, more detail, more brush strokes within the outlines. Talking about
all kinds of African cities (including Cape Town) will help in that respect.

------
aitoehigie
Another thing oo, PG doesn't know Africa like you and I do, so I don't think
his statement is the final word on African startups. Lets prove him wrong.
(rolling up sleeves....)

~~~
nkassis
Warren Buffet once said, invest in what you know.

~~~
mkramlich
Exactly. And the more African entrepreneurs come up with innovations and
reforms and new products/services to try to reduce Africa's problems -- while
hopefully making a profit and building a big business out of it -- the better
off Africa is going to be. Use foreign resources where useful, but the more
that Africans drive it and control it the more long-term benefits it's going
to yield especially in terms of role models and morale and self-respect and
making sure things are done in a way that's consistent with the values of
local culture and traditions.

------
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.

------
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.

~~~
notahacker
There's the pricing factor too... a population with a median income of between
2 and 10% of US median income simply isn't going to buy SaaS subscriptions in
comparable volumes at comparable prices to US companies. For much the same
reason, these consumers are also worth less in raw money terms to advertisers.
which means a lot less revenue for typical Y-combinator startups in African
domestic markets even before transaction costs (quite possibly higher?) are
taken into account.

------
metamemetics
Economic Evolution:

Agrarian -> Manufacturing -> Service

Web-apps are Service sector. African countries need to start displacing Asian
ones as manufacturing centers before we can even start talking about foreign
venture capitalists wanting to invest in African tech-service startups. If the
company targets a global audience because there is not enough local demand for
web services, then why is it based in Africa?

------
fun2have
There are some success stories like <http://softtribe.com> from Ghana. This
story gives some of the <http://spectrum.ieee.org/computing/it/the-african-
hacker> background. The opportunity that SoftTribe went for was unique. In
Africa every country has different pay roll taxes, and it is too expensive for
the likes of the multi nationals to keep up with each country, SoftTribe fills
this niche.

I worked with them for a year. I was the only non African. There where
challenges like fending off kind hearted westerners who had less skills then
the Ghanains and wanted to come over and be boss. Competing against NGO for
staff (Western NGO's have the highest salaries).

------
ericd
Well, my one datapoint on this whole matter is that the overwhelming majority
of scams on my sites come from that region of the world, so I'm about ready to
write off the whole continent in terms of doing business. If I were to write a
bayesian scam filter, "Comes from Africa" would be one of the most important
positive signals.

I would assume that many other businesses have shared this experience and come
to the same conclusion. Things are getting better, I'm sure, but they're not
near the "worth my time" threshold yet.

------
OoTheNigerian
First of all I would apologise for not responding since. I foolishly forgot to
remove my noprocast setting so I was essentially locked out of hacker news
while this has been up.

I would like to point out that I worded my question poorly. I do not agree
Nigeria/Africa cannot create world class startups. I meant to say like RobFitz
pointed out below: Why does PG and others like him capable of change write off
a whole continent without trying.

Nevertheless, you guys as usual have got an amazing discussion going. Thank
you!

I fully understand the points a lot of you have raised and it boils down to
two things.

1: Lack of Trust 2: Lack of infrastructure (Legal, Human resources, Power,
e.t.c)

In my book, I thought an identifiable problem breeds opportunity. We have a
market western countries are unwilling to serve because the perceived risk
outweighs the perceived opportunity. America had the highest fraud but is not
blacklisted because the opportunity outweighs the risk and I believe it is the
same for Nigeria/Africa. I believe there is an opportunity for our local
companies to act as local representatives of existing global companies and
combine local knowledge with international skill to create businesses back in
Nigeria/Africa.

I do not think location matters in creating a product that has potential as
anyone can launch a Rapportive from anywhere in the world. Of course it
matters when scaling it.

From what I have seen, our greatest challenge stems from the fact that our
people are trying to succeed against the odds. We do not have access to
mentors or education that will help us tackle these problems so we are left at
a very bad advantage. We struggle to have belief on ourselves because people
we look up to have written us off. We have a long rough road ahead and we will
trudge on. one day we will succeed. All I ask is for people like PG (who still
hasn't responded) and HN'ers to have a little faith in us. Believe me, it
helps.

~~~
plinkplonk
" We have a long rough road ahead and we will trudge on. one day we will
succeed. All I ask is for people like PG (who still hasn't responded) and
HN'ers to have a little faith in us. "

Sorry if this is harsh but this is honestly what I think.

"Faith" in you by other people should be _earned_. I deal with many people who
think all Indian developers are cheap and incompetent and can't speak English
(There _are_ plenty of those around :-P) . Arguing why they shouldn't be
thinking like that (or asking them to act opposite to what they believe) is
(imo) futile.

 _Show_ what you can do (against the odds if required). _Then_ people will
support you. That's just the way the world is.

" 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"

If you believe this why don't you do this? Why do you need PG?

I am not being sarcastic or snarky. I live in India and hear . "If only PG &
co would start a YC branch in India ..." all the time.

I think something like YC in India (or China or ...) would be great, I also
suspect that people who plan to build "global scale startups" wouldn't wait
for PG and co to come around to their pov first.

------
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.

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

~~~
dtegart
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.

~~~
jonknee
It may have been founded there, but only because that's where the rocks are
and they can get away with running a cartel. It was founded by a Englishman
and even then it was 120 years ago. Terrible example of an African startup.

------
trustfundbaby
Simple. Shitty Governments/Leadership -> Inadequate infrastructure -> End of
story.

------
temphn
There is one very widely held theory that no one is voicing here.

<http://lagriffedulion.f2s.com/sft.htm>

~~~
endlessvoid94
I can't find any professional or academic links to or from this paper. Do you
have any more resources?

Specifically, I'm interested in the sources for their data. This was a
fascinating paper.

------
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.

~~~
robfitz
I see Oo around London pretty often, so I don't imagine the question is about
his personal location. I suspect it's more about why a continent is being
written off.

~~~
byrneseyeview
Probably for the same reason that Kansas is being written off, only more so,
perhaps even to the same degree.

Keep in mind that a large group of people with a low average income means that
your a larger portion of any marketing budget is wasted.

------
jonallanharper
A lack of objective rule of law defending property rights.

------
jorangreef
Did you know?

Mark Shuttleworth and Elon Musk come from South Africa.

~~~
blackswan
Elon Musk left SA when he was 17.

~~~
jorangreef
The point is that he is of South African origin.

~~~
Kliment
Indeed, but his startup was not. And that's the critical point. It's unlikely
the company would have had a chance at the global market when based in Africa.
It's somewhat of a self-fulfilling prophecy, as people aware of the lack of
chances pursue them elsewhere, spreading the gap even more.

~~~
jorangreef
Yes, he did move to Canada and then the States. He may not have looked back.
At the same time, as a South African myself, I would find it hard to discount
my South African heritage, or say that I was not at all influenced for the
better by it: the diverse melting pot of people, the rhythmic languages, the
sports, the myriad of cultures, people like Raymond Ackerman and Anton Rupert
and Nelson Mandela, children dancing in the dusty township streets, vast
natural beauty, the tension and miracle of pre and post 94 Elections, Rugby
World Cup 95, FIFA 2010. South Africa lives and breathes hope.

Regarding not having "a chance at the global market":

Mark Shuttleworth's Thawte was based in Cape Town, South Africa yet captured
almost 50% of the world's SSL certificate market, in the 90s, at a time when
South Africa barely had dial-up. In South Africa we have a saying "'n boer
maak 'n plan" (a hard-working man makes a plan).

But that was then. Today, I can read Hacker News from my desk in Cape Town,
South Africa while looking out at Robben Island or Table Mountain. I can SSH
into Amazon EC2. I can PayPal. I can send an email. I can be connected. I can
ignore the hype of the Valley when I need to. I can use the distance to think.
I can focus on my work and put the hours in. Sometimes, the "disadvantaged"
are in fact advantaged.

------
dsulli
I think culture plays a big role. When I was in China for a while, it seemed
like the government wants to build a Chinese copy of other things. Whatever
technology exists elsewhere, they seem to want to have their own version of it
that's Chinese.

Philippines is another country with a lot of smart people, but I don't feel
that the people in power there really have a building culture. Even with their
last round of elections, they bought their voting machines from a Venezuelan.

If technology and startups really are in the culture of a country, there are
lots of opportunities everywhere, to try and make a difference.

I guess it's better if things can come from the top down, like in the case of
China - to jump start things a bit.

The other thing, with Nigeria. It's economy has been growing steadily over the
past decade. But, it seems to be primarily driven by foreign oil companies.

Is there any room for doing start ups related to this? Oil exploration
definitely requires a lot of capital. It would be hard to imagine what kinds
of contributions a lowly Nigerian hacker could make in this area. Lastly, I
know that India benefited quite a bit by having a large community of overseas
Indians. People who came to USA for school, and later stayed on and worked
here after graduating. As I understand it, these people provided some of the
key contacts as the outsourcing boon started.

------
heresy
I think it's an opportunity, but not for expanding to the West - I don't know
how many ideas that can "make it" in Africa are readily translatable.

Rather, since isn't even on investment radar at the moment, as a local startup
you can expand across the continent and have a big head start on foreign
companies that try to enter the market when you're already established (viz.
QQ, Taobao, Baidu in China), if the African market starts heating up.

Whether your startup will be an internet startup or not, is probably the
question.

In nominal terms, the GDP and number of people on the African continent is
roughly equivalent to India (numbers from Wikipedia), though it is true that
it is spread across numerous countries.

I find it hard to believe that it will not become the "next frontier" at some
point, if nations across the continent start electing technocrats.

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bbuffone
I don't think africa is alone in being behind the 8-ball in the creating a
global scale company (which I take it you mean world-wide adoption and not
just huge locally). Even with the greatest talent and product, it would still
be hard.

No one is looking to africa for the next big thing - this is a huge problem
for any company - how can you get to critical mass if no one is paying
attention to you.

I am sitting in a beijing starbucks writing this and thinking about the global
brands; there aren't that many of them.

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

He didn't say "there is no hope of successful startups in Africa"; he just
said "African startups aren't high on my priority list".

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whichdokta
If we want to routinely produce global scale startups in Africa we need to
concentrate first on gaining sufficient skill to routinely produce continental
scale startups.

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littleidea
It's not question of can or can't. The probability is just low, at least for
the near future.

The dynamics of the economies and governments are just not aligned with that
outcome.

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OoTheNigerian
120 points and 67 comments later, I am still waiting to hear PG's point of
view. :(

~~~
jtheory
Well... do you think PG will have something to say that isn't already within
these comments? Or do you just want to force him into responding with no other
goal in mind?

HN isn't his inbox, after all. The discussion here is pretty interesting, and
worth talking about -- that's why the topic has been voted up. But if PG (one
of very many participants in HN) personally wants to write an updated
statement about his views on investing in Kenya or other African countries
that is primarily based on what's already being said here, that might be more
appropriate for an essay (which takes time).

If he doesn't have any insight that _adds to the discussion_ , I don't see why
he should feel obliged to comment.

------
known
"A country is not made of land; a country is made of its people." -- Unknown

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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 ...?

~~~
AjJi
The problem is that most of them can't even if they want to especially if
we're talking international payment.

My view is based on my own experience (Morocco, here), and it's almost
impossible to get an international credit/debit card from your bank unless
you're building and import/export company.

Online payments (in a national scale) are, sure, evolving but the ignorance is
killing the online market, nobody is willing to pay for something that they
can't touch.

~~~
zackattack
thanks. do you know anything about moneybookers or paypal in morocco?

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mkramlich
I think the asker is making the classic error of "the exception does not
invalidate the rule". Is it possible to do such a thing out of Africa/Nigeria?
Probably. Would it be much harder to do so than in many other more
developed/western countries? Most definitely. But this doesn't mean an
entrepreneur or investor should be dissuaded from doing such a thing,
especially if you are a native of such a country. Instead, probably the more
that native residents of any country try to build something new and innovative
and bootstrap a new empire, the better -- for everybody concerned.

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noverloop
I certainly think it is possible, but I wouldn't trust their government at
all. I would suggest building a prototype ,demonstrate some traction and then
move out of the area to grow the business if that would be possible. You don't
really need to incorporate until you have paying customers, so you wouldn't
have to deal with any government before that point.

------
itiztv
hmm?

