2017 in Review: As Trump became President and Money Stopped Working
2017 is over. I’m eagerly awaiting the New Year, but grateful for how much this one taught me. I rolled into 2017 fresh off a trip to visit friends in India during which Trump cruised to a troubling victory and the Government of India slammed demonetization on its people, all in the same morning. Both came seemingly without warning. As I watched the BBC live election results (CNN international kept crashing), tears streaming down my face, my friends forgot it was a work day and our rupees were rendered useless. It was a real mind f*ck.
Both events highlighted the chasm between rich and poor in 2017. US coast dwellers were caught unaware of the suffering wrought by changing industry, mechanization, offshoring, upskilling. India’s elites were unfazed by a total reboot of monetary supply, credit cards and Uber creating a seamless experience. Meanwhile, the vast majority of Indians stood in hours-long queues to exchange banknotes, unable to pay for basic necessities. In both places, I felt like I was losing grip on humanity.
As a proud participant in the Women’s March in Washington in January, I was still shocked that by the end of the year, the patriarchy had fallen…maybe. #Metoo upended tech, venture capital, media and government. A victim of minor to major sexual harassment throughout my career, I am still turning over my place (/complicity?) in industries that thrived on the belittling of me and my peers. How many more women would have changed the world if we’d called this out sooner?
At Blue Haven, we pride ourselves on constant learning, both in and out of the office. The personal lessons above came alongside awesome professional upheaval (in a good way). In 2017, we backed three new teams at Twiga Foods, Paystack and Zoona. We made two follow-on investments in PEG Africa and Spire, merging Spire with Shortlist, to create the first comprehensive tech-enabled human capital platform in east Africa. We financed the construction of a 400kW commercial solar project in Ghana with CrossBoundary Energy. Since I and my team joined BHI in late 2014, we have invested in ten startups operating in 12 African countries, employing nearly 5,000 people directly and indirectly and earning almost $100 million in revenue. Along the way, we earned a few lessons worth sharing.
1) This Isht is HARD. Anyone who tells you different is either lying or bad at it. I cannot imagine the emotional toll on our entrepreneurs as they manage unpredictable sales cycles, multi-geography product roll-outs, mass hiring, managing all the wins and losses that shift from one to the other in an instant. We get a muted version of the emotions, but across our 10 portfolio companies the feelings whiplash comes with less control. Weeks when a regulation came out against us, competition crushed pricing, or an annulled election prolonged slow sales, I was convinced we were going to lose all our money and I’d be run out of Nairobi on a trail of tears. Days later, a big contract, a healthy sales month or an up-round, and I was sure we’d be recorded as some of the greatest investors in the history of time. In my less manic moments, the truth is somewhere in the middle. We are doing our best to find great entrepreneurs who persevere through the highs and lows. To manage our investor heartburn, we try to create a culture of shared outcomes from the start, being supportive when events break against our portfolios companies, offering help if we can and words of encouragement if we cannot. The worst thing that can happen is that an entrepreneur tries to go it alone. It’s on us to make sure they know we are all in it together. Watching our teams perform through the chaos is a study in the best parts of humanity.
2) EVERYONE is Learning. The markets in which we work lack the white haired veterans with the scars of battle that could help followers avoid mistakes. There’s a moment where you look around a board room and realize that literally EVERYONE is making it up. I guess it wouldn’t be venture if that were not true? In 12 years working across the continent, I’ve seen a handful of things in a handful of industries in a handful of countries — enough to formulate working theories, but far from enough to formulate best practices that will outlast even the next flight between Lagos and Nairobi, no less my career. The only answer to this is my favorite, “strong opinions loosely held”. Go boldly into problems with a view, but be ready to be wrong, learn, and course correct. Having strong co-investors, thought partners with a similar attitude, but different areas of expertise to support entrepreneurs, is critical to sanity and future success.
3) We Need to Do Better Investing in, Hiring and Promoting Women and Locals. Our companies have diverse customers and should reflect that in management. We seek gender balance in teams, but our portfolio is heavily weighted white and male. We spend a lot of time trying to sort why that is, whether it’s internal bias, our access and sourcing habits or if it’s supply. As best we can tell, it’s a bit of all three. We are doing our best to help uncover talent through technology and training, eliminating the bias so inherent in hiring. We seek out locally managed accelerators and organizations to get out of the “white guy bubble” that sometimes envelops investors on the continent, save Nigeria. We will continue to back the best entrepreneurs we find, but I’m hoping there is an increasingly diverse make up as we push to get out of our own expat comfort zones in 2018.
4) Culture Matters. Some of our companies had tough stretches during 2017. The problems were diverse. Four of our ten portfolio companies hired and lost at least one CFO. Currencies, government policy or taxes, sometimes all three, moved against us. Roads washed out, 25 ton lorries full of bananas fell into ditches and droughts limited disposable income. Working capital cycles got too long, costs too far afield, customers too slow to pay. Each setback tests the mettle of the ranks up and down an organization. Companies with the strongest shared values weathered storms far better than those that had de-prioritized culture while they grew. Hiring and indoctrinating tens or hundreds of people is hard; fires burn and growth requires 24/7 attention. Prioritizing openness and shared purpose matters most when the chips are down yet is easiest to do when they are not. Finding the best culture builders and supporting the already great ones will be high priority for BHI in 2018.
As we all reflect on the events of 2017, I’m alternately fearful that the ‘end is nigh’ (for my time as an investor and/or humanity), but in the same breath, remarkably hopeful. Someone fighting to keep the US political system afloat recently said, “Optimism is a passive quality. Hope belies the work required to get there.” Here’s to hoping in 2018.
