4 ms·

Wheels, I adore your enthusiasm but I don't share it. Companies (not just startups, but any businesses in general) need markets, financial system, basic infrast

by tx 18y ago

Wheels, I adore your enthusiasm but I don't share it. Companies (not just startups, but any businesses in general) need markets, financial system, basic infrastructure and favorable legal environment just like fish needs water: they are living organisms and certain conditions must be met for them to exist. Preaching for more VC capital in Africa is like protecting human rights on the moon.

wumi 18y ago
where does Wheels mention more VC capital in Africa? creating a service like Google must one create a market for that service in Africa? surely, certain areas the infrastructure does not exist, but to paint 56 nations and territories with one big brush that says "you have no markets, financial system, infrastructure or legal environment needed to do a startup" is a bit overreaching.
wheels 18y ago
I think the thing that this article, and a lot of rhetoric in general assumes, is that Africa is Africa. There are some amazingly developed parts of Africa with stable economies, legal systems and technology infrastructures. I would expect any outside investment to start in those countries and radiate to the surrounding ones. So while I wouldn't bet on a startup scene popping up in Somalia, it could happen in Botswana. The factor that I think what you're saying misses is: cheap labor. Combined with a high-prevalence of spoken English among the educated, I think it's possible that businesses would be willing to consider operations in Africa.
- tx 18y ago
  You don't get it because you haven't lived there. How can you "consider operations" in places that don't have a reliable banking system? Just imagine how it's like (i've seen it first hand: natural exchange + cash in envelopes). How can you run a business, pay salaries and expect some work to be done, if electricity randomly gets shut off several times a day, when there are no banks that people trust and inflation can jump 100% at any moment? How can you do technology in countries where Internet access is 5 to 10 times more expensive than in the West (even with their standards of living)? How can you explain to your investors that 30% of your capital was spent bribing the officials (you don't have a choice). Again, I admire your thinking but that's more like dreaming. I worked in ex-USSR and have friends from Nigeria (one of the most developed nations there) and believe me, dealing with all that shit makes you so inefficient, that even cheap labor won't help. Things will improve of course, and rather quickly -- nearly all soviet block contries are great places for doing business now (compared to what they were 15 years ago), but that's another matter.
  - wheels 18y ago
    I spent about a month in Africa last year, split between four countries. I believe what you're saying for, say, Nigeria, but you're wrong in believing that it's on the high end of the spectrum. It's in fact in the bottom third (HDI, GDPpC). It's a different world in the more developed African nations. Countries like South Africa and Botswana have stable currencies, functional democracies, reliable banking and readily available cheap broadband. Edit: Just checked, broadband prices are a little higher (about 30%) than I pay in Germany at the first couple sites I hit. Edit 2: The gap between the rated HDI (Human Development Index) between Nigeria and South Africa is about double the gap between the US and Mexico.

by tx 18y ago

wumi 18y ago

where does Wheels mention more VC capital in Africa? creating a service like Google must one create a market for that service in Africa? surely, certain areas the infrastructure does not exist, but to paint 56 nations and territories with one big brush that says "you have no markets, financial system, infrastructure or legal environment needed to do a startup" is a bit overreaching.

wheels 18y ago

I think the thing that this article, and a lot of rhetoric in general assumes, is that Africa is Africa. There are some amazingly developed parts of Africa with stable economies, legal systems and technology infrastructures. I would expect any outside investment to start in those countries and radiate to the surrounding ones. So while I wouldn't bet on a startup scene popping up in Somalia, it could happen in Botswana. The factor that I think what you're saying misses is: cheap labor. Combined with a high-prevalence of spoken English among the educated, I think it's possible that businesses would be willing to consider operations in Africa.

tx 18y ago
You don't get it because you haven't lived there. How can you "consider operations" in places that don't have a reliable banking system? Just imagine how it's like (i've seen it first hand: natural exchange + cash in envelopes). How can you run a business, pay salaries and expect some work to be done, if electricity randomly gets shut off several times a day, when there are no banks that people trust and inflation can jump 100% at any moment? How can you do technology in countries where Internet access is 5 to 10 times more expensive than in the West (even with their standards of living)? How can you explain to your investors that 30% of your capital was spent bribing the officials (you don't have a choice). Again, I admire your thinking but that's more like dreaming. I worked in ex-USSR and have friends from Nigeria (one of the most developed nations there) and believe me, dealing with all that shit makes you so inefficient, that even cheap labor won't help. Things will improve of course, and rather quickly -- nearly all soviet block contries are great places for doing business now (compared to what they were 15 years ago), but that's another matter.
- wheels 18y ago
  I spent about a month in Africa last year, split between four countries. I believe what you're saying for, say, Nigeria, but you're wrong in believing that it's on the high end of the spectrum. It's in fact in the bottom third (HDI, GDPpC). It's a different world in the more developed African nations. Countries like South Africa and Botswana have stable currencies, functional democracies, reliable banking and readily available cheap broadband. Edit: Just checked, broadband prices are a little higher (about 30%) than I pay in Germany at the first couple sites I hit. Edit 2: The gap between the rated HDI (Human Development Index) between Nigeria and South Africa is about double the gap between the US and Mexico.