August 31, 2016
For the past 12 months, I’ve lived a double life between the UK and Africa, embedded in the financial technology ecosystems on both hemispheres.
As an American who’s just spent ten years in Scotland and England, I was very aware of my newcomer status when it came to investing in fintech startups in emerging markets.
I was fully aware of some of my knowledge gaps; other biases and ignorance I would come to realize, and with a curious mind and an open heart I have felt incredibly welcomed and initiated into the fintech ecosystem.
Reflecting back on the past year, on relationships, observations and shared journeys with some amazing entrepreneurs and banking innovators, I’ve distilled five key takeaways from my personal adventures.
African Solutions for African Problems
I quickly realized there is little interest in importing systems from other parts of the world, as people seem to find it highly amusing to watch solutions from overseas startups or corporates fail when deployed in the real African environment.
Whether it’s the absence of physical addresses in many regions, low penetration of credit cards for ecommerce transactions, or trust issues around paying for an item before actually receiving it, the failures of imported approaches serve as great sources of comedy at conferences.
Whenever non-African companies are plagued by oversights on logistics, payments, cultural nuances, or other infrastructure, this only reinforces the spirit that solutions need to come from within.
Look Beyond the Diaspora Entrepreneurs
Great entrepreneurs can be found anywhere. Many VC funds get criticized for finding the African entrepreneurs who are easiest to spot and easiest to relate to – those who have studied at Stanford, Harvard, Oxford, Cambridge, or who have lived in the US or UK prior to founding companies overseas.
While these are certainly compelling entrepreneurs to invest in, having built out their networks and being able to ‘talk the talk’ in a familiar way, there are also many impressive entrepreneurs who are deeply rooted on the African continent.
Investors who build relationships with partners on the ground, who can recognize strong teams in a new context, and who are prepared to do due diligence beyond familiar alumni networks will be able to get in on a wider variety of opportunities.
Early on in my quest, an entrepreneur spoke to me very directly on a Google Hangout between the UK and Kenya: “Don’t sit in your ivory towers in London and Cape Town thinking you can learn about Africa. Marinate yourself in Ghana. Marinate yourself in Kenya.”
This advice wasn’t necessarily surprising as I knew I needed to invest time on the ground, but he stated it more eloquently. The word “marinate” stewed in my head as my travels unfolded.
The first time I landed in Ghana, I agreed to a night out in Accra with someone I met at baggage claim, leading to an interesting debate between Ghanaians and Nigerians about IP protection and insights into childhood pop culture that had inspired their own entrepreneurial journeys (hint: Billionaire Boys Club).
On further stays, I wound up dancing front row in a gigantic church with a Ghanaian family, walked door-to-door shadowing a susu [financial intermediary] collecting people’s daily savings, and seeing the giant signs across multiple African countries advertising: “This Land is NOT for sale”.
Each of these experiences gave me a much deeper appreciation for the role that new financial technologies can have in facilitating church tithing and transparency, managing savings collections without disregarding those trusted relationships, and digitizing land registries to reduce fraudulent sales.
I could have learned these concepts from a pitch deck, but ‘marinating myself’ in them gave me more powerful convictions. I am forever grateful to those who brought me under their wings.
This article is courtesy of Techstars, the best global ecosystem for entrepreneurs to bring new technologies to market. From inspiration to IPO, Techstars empowers the world’s most promising entrepreneurs throughout their lifelong journey by providing a global ecosystem made up of tens of thousands of community leaders, founders, mentors, investors, and corporate partners.
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