Giving innovation room to breathe

Dustyn Winder
Jul 24, 2017 · 3 min read

This weekend, I found myself in a lively debate on Twitter, and in a pleasantly surprising change of pace, it had nothing to do with the wretched state of US politics and civil life.


Disrupt Africa wrote about a report by VC4Africa that stated 71% of African start-ups are generating revenue. In response to this fact, Sam Musariri, co-founder and CEO of Zambian digital health start-up iVitalz mentioned that revenue is nothing more than a vanity statistic. And while I often agree with Sam’s assertion, I instinctively disagree when it comes to emerging markets. This debate led me to take a step back and really think about why this is the case. Thanks to Sam’s pushback, I think I’ve settled on what’s at least a personal conclusion.


I first asserted that cash flow and profit can only come after revenue, and revenue serves as an early stage indicator of product market fit. While this is true, Sam’s not wrong. While all successful start-ups bring in revenue, it takes far more to turn the corner into sustainability that wins or builds markets. If you’re a founder, it’s not all that hard to underprice your product to generate early revenue, leading to higher valuation, but high valuation and sustainable business are far from inextricably linked.

So if it’s not my initial assertion, why do I feel this way?


The conclusion I ultimately came to was this:

So often we think of emerging markets as something separate and apart from more mature start-up environments like Silicon Valley, New York, or Tel Aviv, but is that fair, and more to the point, is that the best way to develop those markets and win our share of the rewards that come from that development?

Uber rakes in revenue giant hand over enormous fist, yet they lose money every quarter, and we don’t see investors running away or the larger narrative shifting to Uber not being sustainable in the long term. Sure there are debates over strategy and expansion, corporate make-up, M&A, and certainly culture, but we all pretty much agree that Uber has built and dominated a market and their success is granted, regardless of their current balance sheet. Why? Because we allow them to run the gamut of Silicon Valley truisms — They’re audacious. They break things. They ask forgiveness, rather than permission. They see a problem and an opportunity and charge headlong into capitalizing on its solution.

Why don’t we offer this same leniency to emerging market innovators? Why must we see a path to positive cash flow from day one? Why don’t founder and product matter as much as dollars and cents? What good do early positive unit economics do for investors if businesses aren’t optimized for growth or capitalized to scale?

Listen, I get it, emerging markets come with far more risk. Customers don’t have as much disposable income. Infrastructure isn’t always built out. There’s often a vast customer education needed. Governments get in the way, and there are a host of other reasons. But who are we to think we can enter into a de-risked frontier market? Since when is the frontier without peril. If we seek reward, we must be prepared to give the runway needed for world-changing innovation.


There isn’t a shortage of insanely smart, driven entrepreneurs in emerging markets around the world, and there’s just as much, if not more hustle to be found in places where bootstrapping is often necessary, even when it’s not particularly viable.

Sam is an example of this. His company, iVitalz, has audacious goals that can change the very nature of healthcare around the world and make for a sustainable, growable business.

Luckily for me, Twitter debates can be productive, and I’m excited to take the conversation with Sam offline to further explore how the venture community and African start-up communities can better work together to support innovation and change the world.


To keep up with the goings on of akili.vc and our community, follow us on Twitter.

updates on Africa’s varied and numerous start-up communities, follow Disrupt Africa on Twitter.

For the latest news on the VC and angel communities across Africa, follow VC4Africa.

And for my sometimes coherent ramblings on everything from blockchain to European football, start-ups to the NBA, follow me!

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