Accelerating Trust
This morning I came across a super insightful blog post by one David Ventzel titled; “Why most European startup accelerators are dead,…..” which for the life of me I now can’t find to link back to :(
The main takeaway from David’s post was that any accelerator must have atomic level specificity into what they do to collapse space and time for startups.
I arrived in Nairobi a year ago on a mission to duplicate the value and wealth creation I had known in the Bay Area as a path to our societies economic development.
While the vision remains solidly the same, I have had to iterate my strategy a couple of times. Initially, my thesis to unlocking the pent up entrepreneurial energy on the continent was was funding, plain and simple. A problem that a seed stage venture capital fund investing $250-$500K would handily solve.
I learned the hard way while working my ass off trying to execute seed stage investments into a couple of promising local startups. Turns out the core prerequisite for an effective investor-entrepreneur company building partner model is a baseline level of societal trust, which, is ostensibly non-existent or at best extremely rare in Kenya.
Without this baseline level of overarching trust, which is is only buttressed after the fact by an enforceable legal framework, startup investments don’t happen. This is a key reason why Western capital continues to find it’s way to expat founders in Kenya. Beyond the surface level cultural familiarity that lubricates such interactions, practitioners on both sides of these engagements speak the same unspoken, high-trust language which is in general, the fabric that binds their homogenous societies.
Interestingly, the Somali community are Africans blessed with a high-trust, communal mindset that lubricates their commercial endeavours. It is hardly surprising that this community has in a very short period of time appropriated large swaths of a number of commercial sectors in Kenya. Way to go Warriah!
In contrast, when Kenyans engage in a business transaction (without a pre-existing, long standing personal relationship) it is taken as a given by both parties that they are engaged in zero-sum, win-loose, prisoners dilemma type game. And, all long term, positive sum relationship aspects are entirely subordinate to winning this turn!
The downward pressure of such a dysfunctional mindset on economic development is mind boggling high. After all, GDP is nothing more than the sum total of all the individual business transactions that take place in a country. Transaction speed is clearly a critical element here. How much wealth are we losing due to transaction friction, missed long term opportunities, and BS?
From a first principles perspective the fuel that powers the most productive economic engines in the world is trust amongst individuals and of institutions.
“All returns in life come from compound interest over many turns of long-term games and they usually come at the end” Naval
My experience working with local business people in Nairobi can be charazterized as one where you should expect to get less than promised across all dimensions including quality, communication, timeliness etc. The notion of a recurrent revenue generating, long term business relationship is in the main highly undervalued. The mentality is you eat what you kill.
“Long-term players make each other rich” Nivi
Life in Sub-Saharan Africa is hard. Social safety nets are entirely non-existent. Wealth is extremely unevenly distributed. People acquire status via conspicuous consumption and titles. Bwana Mkubwaism.
These conditions imbue an extreme survivalist mindset on the individual. Its as if we are all painstakingly making our way up a precarious cliff face, one wrong move and you are doomed. The deep, dark abyss of poverty and ignominy yawns beneath. The desperation is real!
Under such circumstances how can anything less than a short-term, survival mindset be expected from Homo Sapiens? To thrive, human beings need both physical and psychological safety. All transformative human possibilities; creativity, empathy, stamina, collaboration dissipate in unsafe environments. This is yet another contributing factor to why foreigners tend to thrive in Africa and even America for that matter. Aliens form high-trust networks by necessity. Humans, perhaps anachronistically, still feel most comfortable amongst those who look like themselves.
In truth, the African entrepreneur is faced with some extremely challenging conditions. However, what is most heartening is there are signs of intrepid humans hacking their way around and through this daunting landscape.
One inspired play I am seeing repeatedly is software developers banding together to form a software consultancy as a means of earning daily bread while they at the same time work on developing IP, which, they intend to roll out as a revenue generating product.
What is still lacking is the critical high-trust factor which is vital to accelerating ideas, projects and for generating that most irrepressive of forces, momentum!
Trust is the jet fuel of commerce. High trust is especially vital for the viability of innovation ecosystems. This is simply because innovation is chiefly a collaborative human endeavour that works by humans throwing the lots in together and partnering over long periods of time.
It takes 10–15 years for most innovations to achieve scale, become commercially successful and return value to stakeholders. They invariably always require outside capital from investors willing to bet on ephemeral, intangible, embryonic ideas in the early stages. While these notions are obvious to Silicon Valley, which has been doing it’s things for 70 years, it is an entirely foreign language for Silicon Savanna. But, there are signs of “dada, mama, gaga” in these streets.
At Impact Africa Network we are hacking our way to a culture of high performance, high integrity, high collaboration. We are a trust accelerator. Watch this space. Onwards and upwards!
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