In series one you were given an opportunity to hear from young students across the African continent who are obtaining degrees in China and building startups that bridge their home countries with China. If you are new to Rare Birds, I welcome you to listen in to the entire series (Episodes 101- 105) here. In my last piece, I discussed Jakob and Ishmail two young boys who were victims of an educational system that prioritized grades over learning. I narrowed in on culture and the entrepreneurial ecosystem. Culture not being removed from the entrepreneurial ecosystem but seen as a core component. Culture shapes social, political and economic institutions. If the right beliefs, right customs, right attitudes, right behaviours and right mindsets are not aligned with the ecosystem, then building it [ecosystem] is merely an exercise in futility. Some would say, “What do you mean by right?” Right is whatever the people of that country deem it to be! For me the right culture in essence begins with rethinking.
I read Stephen J. Jackson’s Rethinking Repair and did what he suggested: consider maintenance and repair over innovation and disruption. I pondered further about how innovators in emerging markets are constantly taking the old and making it new. Tinkering, rewiring, reconstructing to create new ideas, models, items and the like. This state of perpetual repair acting as a form of innovation. Innovation based on necessity where the driver is not creating the “next big thing” but the actual consequence of things stagnating when nothing gets done. To move from a state of ponder and more importantly to challenge my assumptions I began with three conversations with three specialists. They were all held under the theme of Series 2: Broken World Thinking all with topics relevant to the Rare Birds platform:
- The Investment Landscape for Startups with Hiruy Ephrem Episode 106
- Blockchain Technology: Building a Stable Global Currency with Mathias Abraham Abdissa Episode 107
- Startup Ecosystems Across Emerging Markets with Anteneh Tesfaye Episode 108
The next three newsletters will hone in on these conversations I will offer facts for further analysis on the topic as well as my general intellectual meanderings. The purpose is to go beyond the surface to help me make better use of my initial assumptions as well as to help all of us become better at problem solving. As always I will make jabs at myself and include a hearty laugh (or two). We begin rethinking with Hiruy….
Startup investing is very, very risky business. As Hiruy told us, “It is kinda crazy to be an investor in startups.” Most startups fail, factually speaking 9/10 fail. Therefore, most investors mitigate this risk by investing in 10 or more startups at a time, with the hopes that one will succeed. According to Forbes here are the top five reasons that most startups fail:
- Building products nobody needs
- Running out of cash
- Wrong team/Wrong Expertise
- Beat by the competition
- Product is too expensive
Startups should remember
- Investors are in it to make money it is not a donation.
- Startup investing (VCs) is a financial instrument.
- Your passion and dream is not a business model. Don’t be naïve!
- Two-three cofounders is a good idea.
- Understand the politics of fundraising
- Know Your Competition
- Avoid Team Conflict
This was a really cool term mentioned by Hiruy which he explained. Are you an innovation purist? Based on the subject matter of this blog, I think it may be a relevant question.”
Investing in You vs Investing in the Idea
- 60% person, 40% idea- what I said.
- 70% person 30% idea-what Hiruy said.
What say you?
This is because ideas are actually not worth much. Despite what everyone says, they are not that unique. A good idea does not equate with getting funded. Execution goes further because ultimately you need to prove that you can build a product. You need traction and you need a strong team. Get Both and you may Get Money! #GetCoin
In order to fully apply broken world thinking we must understand this simple fact. Systems are broken not because they operate in isolation but because the architects of the system are also broken. Below are three potential pillars for rethinking investing:
- Knowledge of Startup Investing: We can’t repair something we don’t fully understand.
- Ethics of Care Around Startup Investing: Investing in people may potentially require a human approach based on interconnectedness.
- New Approaches to Startup Investing: Crowds and Unorthodox Networks that amplify disruptive technologies are worth exploring.