There were a number of emerging themes through the conference, and not necessarily the ones you might think– access to finance, more capital, education.

Nope. What came up again and again was:

TIA
This is Africa. Sometimes problems can seem overwhelming. I have talked about this before, but it bears repeating. My take on it: Break the problems down, solve what you can. Innovate around what you can’t.

Open Source/Open Platforms
FrontlineSMS, Android, Ubuntu Linux– these give you the tools and abilities to build cost-effective, replicable platforms that won’t break the bank. For all the thrill of open source technology in Silicon Valley, the true innovation may come in Africa, where stuff like Microsoft’s failing ability to register its software (due, admittedly, to fighting rampant software piracy) may mean that the sotware is unusable.

Open platforms create frameworks and fertile ground for new innovations. Enough said.

Turn up and do something… and listen when you get there.
The power of doing something, getting over your own inhibitions, going, turning up, is far more important than your ability to make a big, great plan.

On the other hand, the developing world works differently than it does in the developed world. Teddy Ruge of Project Diaspora.suggests getting a member of the diaspora on your team. In whatever case, however, listening is critical. Go. Take a risk. See what works. Give yourself permission to fail, early and often, and learn from your mistakes.

Africans have the solutions to African problems.
You know a lot, but you don’t know the context. Africans can solve African problems– this is the difference between Busines Incubation projects around entrepreneurship and NGO projects– Incubators should offer mentorship rather than direction. The essential difference is that mentorship offers assistance to someone to help them do what they want to do, rather than demanding that they do what you think they should do.

The flip side to the TIA problem is that it’s important to believe that things get better, that the creative, innovative entrepreneur inside can find a solution to the problem. The flip side to mentorship is the encouragement, so that when your entrepreneur finds a wall, he figures out how to go under, around, or through it– or to turn that wall to her own advantage.

9th-10th Oct, 2009.

I’ll be speaking about, in general, the challenges that investors and entrepreneurs face in Africa, with a specific focus on my partner organisation Appfrica Labs. Come out if you can.

Details at Africa Gathering and on the EventBrite page.

I’m on at 11 AM on Saturday– and to be quite honest, the lineup of speakers puts me in pretty esteemed company.

Sorry this is late– I’ve just been indundated by the types of things that inundate your life at the end of five months on the road: I hadn’t slept in the same place (and mostly in the same country) for more than three weeks between April and September. A lot of laundry, email management, and general decompressing time needed to happen.

Metrics
MBA-ism is filled with metrics. In fact, there is some research on the impact of metric-heavy MBA thinking on entrepreneurship, and the basic idea is that the two schools of thought are are diametrically opposed.

Dr. Saras Sarasvathy from the Darden School of Business posts her findings at effectuation.org, which broadly suggest that for a certain type of entrepreneur, the whole idea of finding markets, estimating market sizes, and attempting to essentially pre-plan the value of a business is opposite to disruptive models of innovation where marekts are created– i.e., no MBA would have invested in an ice machine because the value of the harvested ice market was too big.

Metrics, Development-style
Monitoring and Evaluation (M&E) is a tricky, hard thing. It’s a nightmare for lots of international NGOs as the data collection is done from far away, sometimes by people who don’t understand the value of the information they are gathering (Appfrica may be on to something with their new approach to this…).

Now, add to the difficulty of collecting metrics the ability to compare several projects:

- A clean water project
- A new ICT training centre
- A new delivery system for vaccines
- A new collective agriculture scheme

All of these may cost the same, and have variable outputs– some will have smaller effects on more people, others might be drastically transformational for the lives of a very few. How do you compare them? How you choose between them? How do you decide which was more successful after they’ve run?

Measurement metrics
There are a few different approaches to this, many of the latest (ish) are in things like Blended Value and SROI. These attempt to monetise the outputs, so if you increase someone’s productivity (training), then their increased productivity can be measured, turned into dollars, and compared against the increased sales prices that the agriculture scheme generates for its members, and then you report them along with your financial statements. You can add them so that you achieve “profit” in “social returns”. It’s crude but it’s something.

(if you have any better ideas, then by all means suggest away– I don’t think anyone’s particularly tied to these, although they do yield some kind of apples-to-apples comparisons, although the methodologies for each monetisation vary so they end up being apples-to-pears all to often…)

Operational metrics
These are, generally, Key Performance Indicators (KPIs). These should be the sorts of things that tell you what’s going on while you’re working– cost per vaccine delivery, cost per avoided pregnancy, cost per trained person. This lets you know if you’re on- or off-target, and then you can start to adjust your thinking and approach based on what’s happening in the field.

My question
The question I had with all of this was “What does it all tell you?”

Here’s the thing: Saying you trained 100 people to use the Internet is almost meaningless when you’re 5000 miles away. Saying that you created $50,000 worth of increased productivity is even worse. What you’re trying to get to is a deeper understanding about the effect thatyouvé had on people’s lives.

You want to get to people’s stories. You need the context to know exactly what it means to increase someone’s effective wage $100 a month.

There’s an important thing happening at and around SoCap about creating better, more comparable metrics, but it’s important to not just be stuck in the Excel sheet, but to also communicate what it is that you’re trying to change. There are too many “successful” projects on the ground that achieved exactly what they set out to on the Excel sheet, but didn’t create lasting change.

Strategy professionals take a different tactic: Profits and the bottom line is oxygen. You can’t live without it. A strategy that chases profits at the expense of all else, however, will likely not produce significant profits in the real world.

Think about it. You don’t walk around saying “Where can I find some oxygen?” You move around pursuing your own needs– taking care of the kids, getting to work, minimising time stuck on the Tube, getting the right diet and exercise, and the oxygen is there.

What happens
Companies that pursue profits kind of die. They are too focussed on the short term. They dilute their core service offering and don’t have a core competitive advantage. Imagine if you had a company that cared for lawns. Your strategy is to pursue profits at the expense of all else, but what you know is lawnmower care, maintenance, grass growing rates, fertiliser application, and the transport and logistics required to care for all of this.

Someone comes along and shows you slot machines. These have higher margins. Your strategy is to make the most money possible. You sell your mowers, fire your people, and buy a bunch of slot machines and try to go round and put them wherever appropriate. You don’t know the licensing, bar owners, etc. This isn’t your business. What do you think your profits will do?

Imagine, now, that you have a different strategy: To make the most beautiful lawns in the city. You do your business well. All of your employees take pride in their work. Customers flock to you.

SoCap09
What I’m hearing at SoCap is a lot of thought about impact along with investment– and most of the most interesting people are, broadly, making this point. Figure out what effects you want to see (beautiful lawns) over profit, and find the best entrepreneurs (or social entrepreneurs) that you can to build these businesses, whether they are for-, non-, or aren’t concerned about profits.

Myself and many of my peers, however, don’t really mind. The average Gen-X-er, it is thought, will have 3-5 careers (not jobs) in his or her lifetime (at last! Somewhere where I’m right on target– my third career in my mid-30s). We were called slackers and told we had ADD in high school and in our 20s, but in all actuality (or at least from my perspective), we are the first wave of constant learning and constantly changing what we do.

The old way
My grandmother was born in 1907. She was one of eighteen children because it was the tail-end of an agrarian economy where children’s lives were often too short. There weren’t cars. If my grandmother were in the UK, she’d have been using shillings and guineas.

The people of my grandmother’s time have had to deal with decimalisation, the shift to the metric system, world wars, an end to protectionism, the rise of a globalised economy (twice), the great depression, the end of banking hours, the introduction of ATMs, credit cards, chip-and-pin systems, push-button phones, mobile phones, computers, the Internet (my grandmother stopped here– mobile phones were enough) and more.

…And now
You may notice on this list that, as these new introductions have come closer to the present day, they have gotten closer and closer. Disruptive innovations are a huge driver in the economy, from google to facebook to email to twitter to openid to SOAP to java, we have to deal with new things all the time– new modes of interaction, new tools that we love to joke how they “simplify” our lives (we have to email, blog, and tweet)

How many things have you had to learn in your job? Word. Excel. Powerpoint. (and the new interfaces) Salesforce. Gmail. SharePoint. Your VPN. Your SecureID fob. IM. Skype. The new phone system. The fiddly expense form. The new reporting system on the Intranet. The TPS report forms.

Not only that, but the rules are changing faster and faster. In accounting, there’s XRBL, new and changing IFRS, and new laws coming in every market due to the financial crisis.

In software development, there are always new frameworks and companies are reinventing themselves so quickly that much software is released as “beta” these days. Gmail has just come out of beta after five years.

Modes of charity, development, and giving are changing constantly– almost too fast for us to keep up.

Your job
You have a single job: this job, if you are broadly a professional, is to learn. Constantly. Not necessarily in school, although we do see more people going to school later in life and schools like the Open University reporting increased enrollment.

Economist subscriptions are up, even as newspaper subscriptions are down. Chart-topping books include social psychology by Malcolm Gladwell, economists like Steven D. Levitt, and statistics books like Nassim Nicholas Taleb.

What opportunities does this open up? How does this change the game? Branding? How you prepare for your career? What you want from life?

The difference in Zimbabwe from the last time I was here six month ago is palpable. And the country is, quite simply, beautiful. It’s not the water world that Uganda is, but it’s well-appointed with water and could quite easily take its place back as the Breadbasket of Africa.

Why on earth was I tempting cholera and fuel shortages in order to go to Harare now, in the middle of winter (without even a proper jacket– it was about 8 degrees Centigrade)? Mobile Transactions has been developing a electronic voucher product that could be of huge use in agricultural subsidies, which can help support and grow markets rather than undercutting local businesses with subsidised imports. The problem with vouchers is the liquidity issue– shops need to purchase inputs and then collect vouchers to get paid for them– which may take months. With an electronic account, distributors can be credited instantly– and the voucher scheme operators get to monitor the usage of their vouchers in real-time, adapting the program as they see fit and as needs are required, including running different types of vouchers in different areas.

The trip
TIA did rear its head, a bit. Our assistant didn’t get the proper paperwork to export our vehicle in time, so we couldn’t drive across the border (we were a bit concerned as the fuel in the tank was *probably* just enough to get us to Harare and back to the border. Loads of people sell fuel– potentially cut with water, cooking oil, or whatever– near the border but we would only risk it if required.

We decided to go ahead and cross “by foot” as they say, and hire a taxi on the Zim side. The only issue– no taxis. Busses would leave from Lusaka but wouldn’t stop at the border. We were advised that hitching was our only option.

The very nice official, however, who issued us our visas told us to talk to his friend the guard at the exit gate, who hooked us up with a truck (labeled of course “no unauthorised passengers”) who took us to Harare for $10US, getting us there just in time for our meeting.

Dollarisation
Zim’s been switched to US Dollars, although South African Rands, British Pounds, Euros, and Botswanan Pula are widely accepted. Prices are quoted in dollars and change (if any) will be given in Rands or Pula.

Prices have actually stabilised a bit– The latest inflation figures I’ve seen put it at -1%.

Things aren’t all rosy, however. Huge settling has happened in the economy which is good, but the outlook is bleak, if tinged with a bit of hope. Just a bit, though. The general sense is that things are going to get better, but not after they get a bit worse.

Stores are closed. Fuel lines are common (though less so a couple of months ago)– Americans who remember the fuel crisis in the 70s may recognise this:

That’s a filling station on the left, and a huge queue for a minibus in front.

What next?
We exited the country after a single 2 hour meeting, twenty-nine and one half hours after entering. Even for me an dmy ridiculous amount of travel, this is a new record (the previous was about 50 hours in Kenya).

Mobile Transactions thinks that there’s huge potential in Zimbabwe: It’s got smart, driven people, and a desperate need for liquidity. It’ll be a while before Mobile Transactions can perform its core business, but MT are keen on and hopeful that they may be able to run their voucher programme and reduce transaction costs rather significantly.

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I’m working with Mike on his pitch for SBSVC. He don’t exactly need capital, but it’d make AEP move faster, further, and achieve profitability sooner.

The early-stage companies that I’m working with, has got me thinking, as I always do, about the market and landscape here in sub-Saharan Africa, most of the same problems and issues that entrepreneurs face back in Silicon Valley, London, New York, or Asia– they are just magnified here.

Venture capital
There are a lot of misconceptions around venture capital and angel investing. Most entrepreneurs go out looking for the largest possible cash flow at the lowest valuation, without considering what else the VC might bring to the table, i.e.

Experience
Contacts
Networks
Advice
Business
Modeling

These are just a few of the things. Most VCs (the only ones I’d want investing in me) have experience as entrepreneurs and at running businesses. Most of what I see as the big failures in VC from the past– I lived & worked through the heart of the dot.com and the Web 2.0 bubbles– have been, broadly, the fault of having the wrong investors. Kozmo.com being the prime example– some guy with an Excel spreadsheet thought they should take this FMCG service company and sell Palm Pilots at a huge markup.

The VC should be the person who, once they’ve picked you as an investee, will do the right things to make the pie bigger. It doens’t matter so much if you give her huge equity slices; she should work to make the pie big enough so that all parties have more actual cash.

Partner
One of the women I’m pre-screening as a p0tential investee is a fascinating woman. She’s lived and worked all over the world, but is here in Uganda and has invested heavily in a fish farm. Fish farming is controversial worldwide, but here in Uganda the fish that are typically farmed are catfish and tilapia– two of the “OK” fish to farm (low resource usage, high tolerance for variable conditions, etc).

She is excited about the opportunity to work together on an equity basis, in partnership.

Mentor
Mike had originally been using the term “Venture Search” for our model, but it has a fairly specific meaning that is tangential to, rather than describing exactly, his business model.

I like the term “Mentor Capitalist”: Provide many of the benefits of a traditional VC, but in a more hands-on fashion. Provide network breadth while the VCs provide depth.

Building markets
The market for angel investing and venture capital has to spring from the fertile ground of entrepreneurship; entrepreneurs, however often need start-up capital. In some cases– in the cases where AEP is trying to work– tilling that entrepreneurial soil to attract interested investment capital and a new network of angel investors, setting up a virtuous cycle.

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Bugolobi trading centre hurts your eyes as you pass

Signs and billboards are everywhere, clogging the streets (though often representing the only street signs) flooding brand awareness of Nissan, Orange, and the MTN sponsorship of the 2010 World Cup (how many Ugandans will be able to attend? Likely not many, but MTN is the sponsor).

Intriguingly, a stove manufacturer who has approached CEIHD (the company I’m seconded to through MBAs Without Borders) for carbon financing is painting his stoves Zain purple, and is calling them Zain stoves. We have now arrived at tag-along branding.

Competing stove manufacturers– tag-along Zain stoves on the left.

African Marketing & distribution
The flip side of this is that Africa’s production capacity is actually pretty good: there is a lot of skilled and semi-skilled labour, engineering expertise, manufacturing skills. One of the biggest things that I see lacking is in marketing and distribution channels.

Entrepreneurs everywhere get marketing mixed up with advertising– but more so in Africa. People know they need to invest in marketing, but it ends up being copycat marketing– trying to flood the airwaves and print media with ads– all of which get lost.

The opportunity
If you can get marketing and distribution right (and almost no one is– certainly not the international mobile telcos) you will make a pile of money in Africa.

Some of the promising work that I’ve seen has been in microfranchising (i.e., the Avon model– in fact, Avon is doing incredibly well in South Africa).

At some level, Gordon Gekko is right: (some) greed is good. That’s why I personally think that the for-profit models of development will ultimately achieve faster, more sustainable development than NGO models. What’s it going to make to make our partner enterprises’ excellent pro-poor products stand out from the crowd? To get people to invest in technologies that save money over the long term and have associated benefits? Leave thoughts. I’m excited to hear them.

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In strategy courses, we talk a lot about sustainable competitive advantage-what it is that makes your company better than others at doing what it is that you do-in some cases, you may have companies that compete in markets but don’t directly compete against each other-Starbuck’s, for instance, doesn’t sell coffee, it sells an experience, the “third place” which is familiar and homelike, where you have music and comfortable seating, you can have a meeting, but you aren’t distracted by either home or work needs (except when your BlackBerry starts flashing and vibrating at you). This is why they haven’t made a competitive response to McDonald’s. People will choose one over the other, but McDonald’s isn’t going after Starbucks’ core business-the experience.

On the other hand, lots of people go to business school to give them new opportunities in their lives. One of my friends had worked extensively in technology (as had I), and we were looking for a change. We went to speak to our strategy lecturer about it, and he advised us that, strategically, if you were throwing away IT and tech skills in this market, you’d be unwise.

This caused us to look back at ourselves and really try to analyse what it was that we were good at.

I’d already been on my second career-I’d shifted from performing arts and nonprofit entrepreneurship to technology work in Silicon Valley-arguably one of the entrepreneurship centres of the world-certainly for IT companies. I turned down very good, very lucrative jobs building and running data centres, and I started thinking of myself as an entrepreneur rather than a technologist-defining myself my who I was rather than what I did.

Whereas most of my colleagues in IT had focused on a sector-biotech, say, or the Internet, I’d worked almost exclusively for small, growing companies in a wide range of fields-biotech, Internet services, advertising, security, chip design, theatre, event management, consulting, government services, transportation. Where my colleagues argued for clean, elegant design and tight, efficient code, I’d try to look at the big picture, to understand why it was that Marketing made seemingly unreasonable demands, why it was that the executive management would ignore profitable centres while focussing on money-losing businesses, and why Finance would drop critical line-items from our budgets. I certainly did make a lot of unreasonable arguments myself, but I ended up often being the person who made the connections between those groups.

My self-searching provided me with a list of things I was good at:

· Making connections

· Seeing the big picture

· Translation between groups (how you talk to engineers versus salespeople)

· Developing and mentoring

· Strategic direction, in product, marketing, sales, or overall.

· Choosing which details to focus on

All of which adds up to entrepreneur. So I shouldn’t have been too surprised when I was knocked back from the big private equity houses and consulting firms-while they’d have a use for someone like me, they couldn’t see it.

This series is all be tagged “Lessons learned” if you want to read all of them.

This one you hopefully learned in undergrad, but it bears some repeating. You take a top international business programme which requires several years’ experience to get in and you’re quite likely to have a lot of talented people who are used to having their way with things. These are (or have been) important people- important to someone, anyway.

Suddenly, these people are in strange bidding wars, having to jump through hoops and submit assignments and not getting any feedback on them and, in some cases, failing.

There were people who, through the complicated elective-choosing system, didn’t get to have lecturers or courses that they came to Oxford for. Some of the lesson here was to make better choices. Some of the lesson is that you can’t do everything. Some of it is to just pick yourself up off the floor and deal with it.

There’s an economic principle called Sunk Cost, the lesson of which is that, once something is in the past, you can’t get hung up on how much it cost-if the right decision is to move on and trash it, you trash it. You move forward. You look at the situation you’re in and move forward from there-not from before you became the King of Bad Decisions.

This series is all be tagged “Lessons learned” if you want to read all of them.

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