#3 — How (not) to partner with a startup + a conversation with FFA

Startup-Corporate Partnerships in Africa: Beyond The Deal

This is the third and final essay in The Subtext’s three-part series on startup-corporate partnerships. Published in partnership with Founders Factory Africa.

I. A Tale Of Two Partnerships

It was the best of times, it was the worst of times. Through eight months of discussions, a retail-tech startup in Africa — let’s call them DukaShap — finally landed a partnership with AcmeCorp, a multi-national FMCG conglomerate. DukaShap provides in-store & online commerce tools for small businesses; they also monetize the sales data generated by sharing aggregated insights with brands. AcmeCorp had some ideas about how to leverage DukaShap to sample new products: the startup would have to build out new capabilities including managing inventory. But if successful, the partnership would expand the addressable market and earn DukaShap revenue for each SKU successfully sampled via their merchant network.

After signing the agreement, DukaShap met an unexpected roadblock: they had already committed resources to transport product for the pilot, but a standard system compliance audit by the security team in India required them to be ISO-certified before deploying the project. It ultimately didn’t matter that they were not informed before, or that a temporary waiver could have been secured for the pilot phase, requiring them to be compliant ahead of the full rollout. In essay #1, we said that compliance is the biggest killer of partnerships — this project ended up as one more casualty.

It’s easy to see how this happened. From inside the mothership, an early-stage ‘high-growth startup’ is often just another software vendor who has to play by the rules. While the partnership represented a major potential inflection point for DukaShap, AcmeCorp was merely testing out a hypothesis. So, even though there was excitement about the project internally, it ultimately failed because the corporate was not prepared to support it institutionally — or make the necessary adaptations to give it a fair chance.

It is not enough to simply recognize the opportunity for innovation. If the startup does not develop the right 🔌 plug (e.g. compliance), or the corporate does not expose the right socket, then the partnership usually ends up a poor use of everyone’s time. There must be a better way to approach things:

..

In bank-led South Africa, EFTs (electronic funds transfers) are an increasingly popular payment method, comparable to bank transfers in Nigeria. For 🇿🇦 Capitec Bank, the existing business model for EFTs is 1/ a standard transfer priced around 2 Rand ($0.1) which usually clears within 24 hours, and 2/ a real-time transfer priced at 50 Rand ($2.6) and settled immediately.

Tumi on Twitter: "Capitec instant comes through while you're pressing confirm https://t.co/WCBYR7Yq9Z / Twitter"

Capitec instant comes through while you're pressing confirm https://t.co/WCBYR7Yq9Z

Ozow, an open banking company launched in 2014, started out by reverse engineering bank login screens to orchestrate transactions on behalf of the customer making a payment. This enabled them confirm transactions for merchants without needing them to be settled immediately. As an example, Ozow checks that “John Doe” has the 500 Rand required to pay for a shirt, and that the money has been sent; meanwhile, the merchant can release the goods knowing that they will receive the money the following day.

Naturally, this cannibalized the more lucrative 50 Rand transfers, but Capitec responded by working with Ozow and other open banking companies to build an API with permissioned access — customers now only need to enter their cell phone numbers for a transaction. This is a win-win for everyone involved: the user gets a better, more secure experience; the startup gets more reliable access; and the bank can layer on value-added services like recurring payments which it charges a fee for.

The net effect of Ozow & similar companies entering the market is that transactions are now cheaper for the marginal consumer. In this example, Capitec responded constructively to the ‘threat’/innovation, and as a result, the addressable market has expanded for both the bank and the startups involved. (Lower transaction fees mean that more people can now transact)

..

II. How to partner with a startup

African startups and corporates mostly don’t compete amongst themselves; if you zoom out, they compete against non-consumption. For the heft of the Nigerian banking industry, the primary effect of fintechs like OPay, Moniepoint, Paystack, PiggyVest, Carbon has been an expansion in the addressable market for financial services (not merely a shift in market share). It’s always worth considering a positive-sum approach.

Still, a running theme in this series is that startups and corporates are hopelessly misaligned — no two companies can work together productively without deliberate effort to keep them aligned.

The corporate largely determines the mode of engagement, so the onus is usually on them to create this enabling environment. Accelerators and other cohort-based programs are a step in this direction, but there are a few general principles to keep in mind:

A — Empathy for Entrepreneurs

Bruno Akpaka, Director of Strategic Partnerships at Migo, put it best:

“On the corporate side, I would say when partnering with startups, they must have realistic expectations in terms of the ultimate goals. […] While working for a bank, I once partnered with a startup that was brilliant. I had a big team. And we had say, ‘X, Y, and Z’ expectations. I didn’t consider that on the other side, it’s the same guy that will try to deliver X, try to deliver Y, and also try to deliver Z. It created a lot of frustration because I oversold the outcomes of that partnership to my internal stakeholders.”

While corporates tend to value stability, startups are by definition more dynamic. And that unpredictability, that high variance in outcomes is exactly what makes the startup valuable to the corporate in the first place. A company in search of a scalable, repeatable business model is hardly able to provide the scale or predictability that a multinational is used to getting from its peers. Corporates are often tempted to manage this risk by exacting onerous terms on their startup partners. Wiza Jalakasi:

“Corporates could sometimes use their leverage excessively in the beginning and set startups up for contracts that are unfavorable from the word go. When this happens, I think it’s because the corporate has been too aggressive in trying to get a lot of value up front. This makes it difficult for startups to stay committed sometimes because it’s like, ‘okay, these guys are making us jump through all these hoops for 10% revenue share’. To innovate in high risk areas, there really needs to be a balance of incentives and an adequate sharing of risk[…]”

I pressed Wiza on this a little during our conversation — aren’t the corporates right to try to protect their downside? His response:

“Absolutely. And that’s, that’s fair enough, right? Then the price that you have to pay for that is lower commitment from the startups. There’s a trade off here. There is obviously value that the corporate is bringing, and that value is easily quantified. But at the end of the day, startups are very unpredictable structures in general. And that’s a trade off that you make knowing that things could go either way. It’s often useful for corporates to hedge against this risk by pursuing multiple partnerships simultaneously, and seeing which ones really hold out.”

B — You Get What You Incentivise

Wiza, again:

“If the incentive structure is not appealing for the startup, it is likely that priorities will shift over time. But like, if [the commercial opportunity] is something that can change the trajectory of the startup entirely, it’s very unlikely that that thing is going to change.

C — Create An Interface (An Interview with Founders Factory Africa)

To conclude, I had a conversation with Ayotunde Aladejana, Global Partnerships Lead at Founders Factory Africa. Ayotunde started his career in banking, working on education and healthcare financing before transitioning to partnerships at FFA over the past two and a half years.

This journey led him to build relationships with SMEs, startups, DFIs (developmental finance institutions), and large corporates across FMCG and financial services. He’s bringing that experience to bear for startups in FFA’s portfolio, and as you’ll see below, I found him especially insightful about how corporates can build a bridge to enable them get the best out of the startup relationship.

The conversation has been lightly edited for clarity.

Osarumen Osamuyi:

“Thank you so much Ayotunde for taking the time. I’m gonna jump right in. The first thing I want to know is: why does FFA have a partnerships function in the first place? It’s not every day you see an investment firm also doing partnerships work.

Ayotunde Aladejana:

“Okay. So, partnerships exists at FFA to create value for our portfolio businesses. And how do we create value for them?

It’s by creating opportunities to engage with large corporates that they may otherwise not have had access to. Because what we’ve seen is that startups don’t necessarily have the capacity to do a lot of things at the same time. The ethos of FFA is providing the right resources at the right time to founders. We know that an early stage startup can’t hire a 10-man team or a 3-man team for partnerships. Which is why we have the team that we have, to create those opportunities for them through pilots.

After validation, we’re able to introduce them to potential partners so that they can distribute their product; partners to help them learn; also partners for revenue, for assets and debt, and so on. The idea is to create opportunities that lead to commercial value, revenue distribution, customers, and assets that they would otherwise not have access to. That’s why we have a partnership system and that’s why we do what we do.”

Osarumen Osamuyi:

“Excellent, thank you. What should startups know about partnering with large corporates, or what learnings do you have to share from the past two and a half years driving this at FFA?

Ayotunde Aladejana:

“I think what people don’t realize is at the end of the day, you’re pitching to a corporate, but you’re also pitching to an individual within that corporate who has their performance goals, who has their own KPIs. You should both be focused on how your solution adds value to the strategic goals of the organization, but also how it adds value to the person you are presenting to. That’s what I call identifying a champion within an organization. Who in the organization looks good from working with us and how does my solution help them achieve their own goals? Otherwise, it just goes really cold very quickly. Even with that champion, you’re still going to come up against blocks and delays. And so, that’s always the first step.

The other part is also making it easy for the corporate to say yes or no to you. And what that means you need to provide them with the minimum viable partnership. What is the easiest way to start this out? So that they can say, ‘all right, we can do this’, or ‘no, we can’t do this’. What is even worse than a ‘no’ is a really long maybe, where you’re just having meetings and meetings for nine months. And so ensuring that you have a minimum viable partnership to prescribe to them saves everyone time.

Obviously the last part is just ensuring that your solution provides quantifiable value to the organization and to your champion. At the end of the day, corporates want a solution that helps them either reduce costs, get more customers, generate more revenue, generate more fees. You have to show how your solution helps achieve that goal in a quantifiable way.”

Osarumen Osamuyi:

In a similar vein, what advice do you have for corporates who want to partner effectively with startups?

Ayotunde Aladejana:

I think it’s important to have a culture of innovation in the organization as well as a team that understands how its different parts work. So that when startups come, they’re able to plug the startup easily into the org and say, ‘this is how we partner’.

Within that culture of innovation is allowing your people to experiment with different solutions so that you learn something at the end of the day. Which is why, again, the startups need to help them by describing that minimum viable partnership and clearly defining the value if they get it right. It’s creating a team that can guide the startups through that process because a corporate is so large, it can be a challenge to even identify whom a startup should be speaking to.

It also means having processes that ensure that you can test and integrate with startup really quickly. One of the frustrations we have had is how long it can take to engage a corporate from sign off to integration. If there is an existing process and team in place, there’s that culture of innovation, then that makes it easier to get value out of the relationship.

Acknowledgements

This series would not have been possible without the editorial team at FFA; they provided the inspiration, resources, and a hard deadline. Thank you to 1/ Andile Masuku, 2/ Adam Wakefield, and 3/ PAWA Africa, who wrote the initial partnerships playbook that served as the jump off point.

I’d like to thank you all for taking the time. I hope you have learned a thing or two in the process — I certainly have.

With love in my heart, and satisfaction from completion in my belly,

-Osarumen

Startup-Corporate Partnerships in Africa: Beyond The Deal

This is the second essay in a three-part series on startup-corporate partnerships in Africa. Published by The Subtext in partnership with Founders Factory Africa.

I tried to approach this piece as a list of reasons partnerships could fail. As mentioned in essay #1, failure largely comes from the many misalignments between startups and corporates. Identifying and closing these gaps should, in theory, improve the failure rate. Very quickly, though, I exhausted the available space — there are at least as many reasons a partnership could fail as there are companies in partnerships. Perhaps the question should be, “What makes a partnership more likely to succeed?”

To help with the answer, I had conversations with three former colleagues with deep experience in partnerships on the continent, and from whom I’ve learned a lot over the years.

• Bruno Akpaka is a full-time dad with 15+ years digital financial services experience across Europe, Africa, and the Caribbean; ex-MTN & Wari, currently Director of Strategic Partnerships at Migo.
• Patricia Ndikumana led partnerships at Wasoko, and was responsible for their expansion drives to Senegal, Cote D’Ivoire, and the DRC; she is currently Head of Customer Insights.
• Wiza Jalakasi is a technology operator with experience across 20 African markets; he was responsible for Chipper Cash’s Twitter tips integration and currently serves as Africa Market Development Director at Brazilian fintech, EBANX.

Let’s unpack the learnings below.

How to partner with a corporate

..

A — Stay Informed, Stay Connected

Your corporate partner probably has more opportunities than they can address or even respond to. Pitches from startups big and small promising to help them drive innovation. So, the depth and quality of your network significantly influences your ability to close the partnership or even get things done. If the founding team does not have the required network internally, then recruiting someone who does should be a priority.

i./ Bruno Akpaka, Director of Strategic Partnerships at Migo:

“From the startup point of view, I would say it requires a lot of time and energy. While some startups believe that it’s a waste of time, it is absolutely necessary that they embed themselves into the enterprise culture [of the corporate]. There’s no business that will bring any kind of value, if, beyond the signature, they don’t also cross the bridge and try to better understand the people inside the corporate.”

ii./ Why does this matter? The reality is that companies are made up of people. And at the scale of a multinational, accomplishing anything is less about the direct effort you put in, and more about your ability to get the organisation to work for you — your ability to get people to want to work for you. Patricia Ndikumana, Head of Customer Insights at Wasoko:

“So it is about trying to understand what the environment is, where everyone is situated, what they’re trying to achieve. Also understanding the people. What’s the hierarchy? What’s the structure within the company? Who really holds power? You know, you’ve got the regional managers or the directors who you think have decision making [authority], but the reality is you also have to work very closely with the teams that are going to execute. If you don’t have their buy-in, as much as you’ll have signed a document, there’s a lot of blockers that could still happen. You need to unlock that level as well.”

iii./ In a closely regulated sector like financial services, access to government and an awareness of the market’s socio-economic context can have real implications for your business. Meanwhile, in high-velocity sectors like FMCG, the market context could inform a startup’s approach to dealing with manufacturers, importers, and other players in the value chain. Patricia:

“You have to understand what are people consuming, how are they buying, what do they prefer?You’ve got certain countries that have a wide variety of products for consumers to choose from. So it’ll be tougher for you to push products. There, the relationship with the manufacturer is going to be one where they have a little more power. In other countries where there’s less choice, you have a bit more to play with.”

iv./ Within every corporate, there are usually people who have a similar drive to develop innovation, and/or whose work would benefit from the success of your project. You should find them and recruit them to join your cause. (Hint: they are not always the Head of Digital or Innovation.)

..

B — Be Dependable: Deliver on Your Commitments

Large corporates operate with complex, interdependent systems — it is not easy for them to change direction quickly. If a corporate team is missing a critical input, then that function grinds to a halt, often with several knock-on effects across the organization. This is why predictability and dependability are highly rewarded by the corporate system. There’s an established ‘rhythm of business’ and it does not easily accommodate disruptions.

i./ Wiza Jalakasi puts it perfectly:

“The most important thing is to ensure you deliver on your commitments and the factors within your control. So if you sign a deal to say, okay, ‘MVP goes live in six months’, the corporate is a lot more rigid in the meaning of that six months. You know startup life, nothing ever happens the way you expect, and delays are common; but with corporates, there are very tangible consequences. It means there was a budget with resources allocated to that initiative. If you don’t deliver on what you’re meant to deliver, somebody, somewhere is going to look stupid in front of their boss. And that creates a strong incentive for them to not take any additional risk going forward.”

ii./ Even if an experiment fails, that is still a better outcome than missed deadlines or missing deliverables. While not ideal, an unsuccessful pilot is not the end of the world in a partnership. But failure to execute can often be. Wiza:

“So you say, ‘okay, we tried this thing with XYZ startup, they built everything, we deployed it, but then we haven’t seen the results and you know, this is why.’ That’s a much better story to tell a group of corporate executives than, ‘oh, we signed this partnership with this startup, but they haven’t been able to deliver. […]’ For the latter, your corporate counterpart will have to answer tough questions about the lack of progress.”

..

C — Grow, Grow, Grow

i./ Failed experiments are useful because they teach you something about the world. That information has value to the corporate with wide ranging business interests. But you know what’s even better? Success. Partners who succeed get rewarded with more opportunities for success, including bigger business problems and better deal terms. When I worked in big tech, pilot programs, beta API access, and other partnership opportunities often went first to companies visibly performing well and driving impact for the business.

ii./ A startup partner that enables, say, $50M in revenue for a large corporate is not the same as one enabling $5M, is not the same as one enabling $750K over the same period. Such is life.

..

D — Always Be Communicating

Effective communication is perhaps the most important skill to cultivate when working with people. In the context of a partnership, it enables you to stay aligned with your partner, properly manage expectations, and to learn valuable information.

i./ Wiza Jalakasi:

“Once you’ve delivered and the partnership is up and running, I think transparency around challenges is very key. Oftentimes, when startups sign these deals, they only want to report good news and what’s going well; it’s similar to that investor-founder dynamic. You just need to be very transparent about where the challenges are so that your counterpart can mitigate and manage expectations further upstream. No one wants to be the bag holder in the corporate explaining why they lost this thing that they shouldn’t have lost.”

ii./ For obvious reasons, the startup tends to adopt the communication methods of the corporate partner. But it’s also important to establish several informal points of contact across the organization. (The quality of information you have directly affects the quality of your decisions). Patricia Ndikumana:

“You can’t just be like, ‘oh, we’re meeting once a month and then I find out what’s happening in the business’ — no, no, no. There’s a WhatsApp group with most of the suppliers that we had. […] There’s emails, conversations happening all the time, and it’s someone that you have to be comfortable enough to pick up the phone and call right now and ask what’s happening?’”

iii./ To build that level of trust with your with your corporate counterparts, you have to act explicitly in their interest sometimes, without compromising your own goals. Patricia:

“It goes back to the relationship that you create with your person. They’re your informant and you’re their informant. If anything is happening internally, you need to be the one to tell them. ‘Okay. Something is gonna happen or we have to pivot, and it might impact your business like this.’ Of course, you’re not gonna go divulge your company strategy, but you need to be able to give them a heads up if you’re that close because you understand that it’s gonna impact the relationship moving forward.”

..

E — Exception Handling, A Primer

When things go wrong in a partnership — and they will — it’s important that they are handled properly and with care. This is where you earn the majority of your reputation.

In computer science, an exception is an unexpected condition the computer encounters while executing a program. Because they rely on strict instructions from the programmer, computers don’t know what to do by default when they, for example, try to open a missing or corrupted file. To avoid a fatal crash, programmers try to anticipate exceptions, writing code that can handle errors gracefully. Their software would be perceived as poor quality otherwise.

i./ The first step is to anticipate challenges before they occur. Wiza Jalakasi:

“From the word go, contracts must speak to failure scenarios more comprehensively than they speak to success scenarios. Sometimes, I see these partnership agreements, and they always explore the happy path. Like, ‘oh, you know, party A is going to do this. Party B is going to do this. And then we’re all going to make money and sing la la la la.’ And they don’t speak about contingency. They don’t speak about failure to deliver. What are the paths to remediation? What are the acceptable delays?

All of those things are important for founders, especially because like they have uncapped downside when things go wrong. Messing up a partnership with the wrong partner can literally end your business. Whereas you’re just like, one division from their perspective. So even if your thing fails, it’s not going to kill the broader business.”

ii./ In a similar vein, you should research, anticipate, address, and monitor potential regulatory concerns about your project — especially in sensitive sectors like healthcare, education, or financial services.

iii./ In execution, start conversations early; use your understanding of the corporate organization to make sure things happen at the appropriate time. This includes managing expectations internally with your team. Patricia Ndikumana:

“Corporates also move slower, you know; there’s a gap in our growth expectations on both sides. So […] If you know that the turnaround time is, say, three months or four months, and you need this closed internally by this time, then you need to account for that […] What we usually do is we have joint business plans with our partners. The first one might be the most challenging, but after that it’s just renewal every year, and adjusting a few terms.”

iv. Stay aware of local cultural norms, including attitudes towards authority, younger people or women. Use strategic escalation to resolve challenges and align individuals to your shared goals — and don’t be afraid to re-evaluate the relationship if it is ultimately not driving the net value expected.

v. Offer an alternative path if priorities change; this shows consideration for the corporate partner’s investment and protects the relationship going forward. A startup providing automated QA (quality assurance) testing to a major telco in Africa once needed to pivot to an entirely new business line. While they had some traction with the existing business, it was increasingly clear that the model was not scalable long-term. Instead of leaving the telco in the lurch, this startup spun out a custom version of its SDK that worked offline; this enabled the telco continue to use and pay for the tool annually — even though it was no longer officially supported by the company. If the founder had handled that conversation carelessly, it would have impacted his reputation and made it more challenging to do any future business with the telco.

..

F — Stay Flexible; Don’t Be a Pretzel

In the ideal partnership scenario, the startup is able to distribute its innovative solution while the corporate leverages [the startup’s] technologies, talent, processes, or customers to create new business value. Find a win-win and everyone’s happy. Right? Well, reality is surprisingly complicated.

i./ For startups and corporates in African markets, the aforementioned misalignments are exacerbated by the usual challenges of doing business on the continent — infrastructure gaps[1], mercurial regulation, shallow consumer markets, and so on. As Adia Sowho, Chief Marketing Officer at MTN Nigeria once put it, “in Africa, [the telco] builds a $50 ARPU (Average Revenue Per User) network for a $5 ARPU customer.” This means that empathy and flexiblity are required from the startup to find a partnership/commercial model that works for both parties in the long term. The initial engagement is just as much about discovering what’s valuable to build as it is about executing your plan flawlessly.

ii./ At the same time, especially at the initial stage, corporate partners may not devote the requisite high-level attention or manpower to make the best of a partnership. It would be risky for a startup to abandon its mission to build overly customized solutions for one partner. You spread the risk by partnering with multiple corporates at the same time — building a solution for the market, rather than being a software vendor. (In my experience, smaller corporates tend to have a higher appetite for risk and are less likely to believe they can build your solution internally.)

— —

Post Script

1. Wiza pointed out in our conversation that one systemic reason partnerships don’t succeed is the high financial and regulatory cost of experimentation. This is especially true with corporates in financial services. For regulators who want to address this, they can reduce the perceived risk of experimentation via sandboxing — relaxing regulatory requirements in a controlled environment. A good example is Union 54 and Mastercard’s initial engagement with the Central Bank of Zambia to enable virtual card issuing; while the project ultimately had issues with the business model and chargeback fraud, it was a success from a regulatory perspective.
2. The tech ecosystem has long advocated for increased corporate participation, both via investments and strategic partnerships. Ventures Platform’s push for a corporate-backed fund in 2018 alongside the US-Nigeria Council comes to mind, as well as several initiatives from CcHub, Catalyst Fund, Founders’ Factory Africa, and others).
3. It wasn’t always obvious that there was much to be gained from partnering with a startup on the continent. When I first arrived on the scene circa 2015, startup-corporate partnership announcements were few and far between, with even fewer success cases. When they did happen, the economics of those deals usually reflected that reality. These days, the ecosystem is taken a bit more seriously as startups grow big enough to exert influence on the market.
4. Like I said in essay #1, I suspect this topic will become more relevant in the future.

Thank you for reading! This was fun to put together and I hope you found it valuable.

Till next time,
Osarumen

Next Up: #3 How (Not) To Partner With A Startup

Foot Notes

1. As an illustration, compare the strategic value of USSD to emerging markets telcos with the value of the App Store to Apple.

Startup-Corporate Partnerships in Africa: Beyond The Deal

This is the first essay in a three-part series reflecting on startup-corporate partnerships in Africa. Published by The Subtext in partnership with Founders Factory Africa.

I. Positive Sum Competition

A popular narrative in the tech industry is that the battle between startups and incumbents comes down to whether the startup gets distribution before the incumbent gets innovation.

Harry Stebbings on Twitter: "The core question all startups grapple with:Will we (the startup) acquire distribution before the incumbent acquires innovation?That is always the race. / Twitter"

The core question all startups grapple with:Will we (the startup) acquire distribution before the incumbent acquires innovation?That is always the race.

In this telling, David (startup) beats Goliath (incumbent) by being nimble, leveraging a technological shift to serve customers in a cheaper, more unique way. Goliath sneers at the obvious inferiority of the new product compared to its own mature offering. But David’s product keeps improving. By the time Goliath recognizes the threat, it is too late: its existing business model, shareholders, regulators, and customer expectations make it impossible for management to respond. Goliath fades into irrelevance as David enjoys the fruits of scale.

While there are multiple examples of this story playing out — Netflix v. Blockbuster comes to mind — it doesn’t always paint the full picture. In reality, startups and corporates co-exist in a complex market environment; just as likely to be collaborators as competitors depending on the context. The interaction can be approached as a positive-sum game.

Partnering with a large corporate could significantly accelerate a startup’s go-to-market. Take Open AI and Microsoft, where Microsoft provided $10B+ in compute and a pre-vetted enterprise client base in exchange for preferential access to OpenAI’s technology. By offering capital, early validation, a business network or regulatory cover, the corporate could also incorporate the results of the startup’s experimentation. There should be no better way to future proof your business.

In Africa especially, where offline distribution is required to sell at scale, large corporates have accumulated all kinds of useful infrastructure: brand equity, physical locations, agent networks, supply chain relationships, “street smarts”, etc. If brought to bear for a startup, these assets could completely change its trajectory — as long as they keep their incentives aligned.

There are not many real world examples yet (more on that shortly), but one worth highlighting is TymeBank. The South African digital bank leveraged MTN’s customer base in 2019 to acquire its initial users, while also providing cash-in, cash-out services via kiosks at Pick ’n’ Pay & Boxer retail outlets. A million customers signed up in the first year. By May 2023, they reported 7 million customers in South Africa, a $100M annual revenue run rate, and a $77.8M pre-Series C round led by Norrsken22 and Blue Earth Capital. Without this sort of acceleration, TymeBank would likely have faced a longer, more arduous path to achieving the same scale.

..

There’s another reason this matters today.

• The Nigerian 🇳🇬 Stock Exchange has a total market cap of $50B
• Egypt’s 🇪🇬 two stock exchanges are worth a combined $44B
• Uber was once privately valued at $76B — a credible expectation of an IPO for $100B+

..an unfair but relevant comparison[1]

The US Fed’s recently ended Zero Interest Rate policy drove investors around the world to make riskier and riskier investments to earn their target returns. Emerging markets companies, usually starved of capital to grow, had a banquet prepared between 2020 and 2022.

In Africa, the capital inflow helped drive broad public awareness of technology products; influencing (and sometimes distorting) market dynamics in banking, transportation, and commerce. Over the next five to seven years, though, the continent will need to make a case for itself as a global investment destination — tens of billions in exit value generated at minimum. Given our shallow capital markets, I suspect large corporates may end up a key source of exit liquidity for African startups.

(At the right prices, of course.)

P.S. The outlier here is South Africa 🇿🇦, thanks to its relatively advanced economy and mature corporate ecosystem:

II. A Taxonomy of African Corporate Innovation?

The David & Goliath story above was adapted from Prof. Clay Christensen and Joseph Bower’s theory of disruptive innovation; their 1995 paper detailed how established companies could lose to new entrants when technologies and markets change.

Nearly three decades on, Christensen and Bower’s ideas have become a staple of modern business literature, from books, blogs to even business school curriculums. As a result, today’s business leaders are much more aware and prepared for the threat of disruption than, say, 20 years ago — even if the same organisational forces still apply to large companies.

In Africa, like the rest of the world, most major traditional banks now have a digital banking play or provide some sort of fintech infrastructure; with the slow but sure decline of voice revenues, telcos have expanded into financial services and incentivized over-the-top applications that drive data consumption; meanwhile, FMCGs, who are flexible by necessity, have incorporated restock technology companies as an additional distribution channel for their products. These are adaptations to the market changes that result from the profileration of the internet. Large corporates, driven by the desire to survive these shifts, have become more open to experimentation and collaboration. Where threatened, though, they have not been afraid to press their advantages.

Let’s attempt to organise this activity into a few broad categories.

Internal Incubation

• … is most feasible for firms with a unique scale, infrastructure, cost structure, or regulatory advantage. The approach is attractive because it gives the corporate the most control. After all, a company that successfully “disrupts itself” gets to continue doing business on its own terms.
• This is also what makes it risky: if the teams responsible for innovation aren’t sufficiently separated and empowered, they could end up being captured by the same organisational logic they were meant to subvert. Kodak famously invented the digital camera in 1972 but failed to capitalise on it for fear that it would cannibalise their ‘fantastically profitable film business’. The company filed for bankruptcy in 2012.

• Even with strong execution, success is still not guaranteed for firms who choose to undergo this sort of organisational transformation. Telcos in Africa, for example, have successfully scaled new products in areas like mobile money where their existing assets and capabilities provide an advantage (see: MTN & Safaricom in Ghana, Uganda, and Kenya). However, this success has largely not yet been replicated with pure OTT (over-the-top) products. These are some of the best-run companies on the continent, but the skills and culture required to offer social networking, e-commerce, or modern app-based financial services are just dramatically different than to maintain network infrastructure.

Strategic Investments & Acquisitions

• A corporate could also acquire or invest resources into a startup or joint venture with the intention to generate long-term benefits beyond dollars and cents. Strategic investments grant the corporate access to an emerging technology/market while keeping the ‘team innovating’ separated from the broader organization.
• This arrangement allows the smaller entity to remain autonomous, and leaves room for both sides to derisk by involving other investors or partners; if it succeeds, the large corporate profits both directly ($$$) and indirectly (improved competitive position) from the investment.
• A few notable examples: MTN’s investment in Jumia, Yamaha’s investment in MAX, Multichoice’s fintech joint venture with Rapyd and General Catalyst, or Orange’s investments in Yoco, Bizao, and Africa’s Talking.
• Strategic investments are typically seen as a precursor of a potential acquisition. The canonical example here is Stripe’s $8M investment in Paystack’s Series A in 2018, and eventual acquisition for $200M in 2020.
• Acquisitions make the most sense where the corporate 1/ is willing and able to invest the resources required, and 2/ needs full control (of technology/IP, operations, talent, etc.) to realize the benefits of the collaboration. Otherwise, it would probably be more prudent to make a strategic investment or simply partner.

Cohort-Based Programs & Ad-Hoc Partnerships

• Large corporates who partner with startups on the continent have generally done so in two ways: cohort-based programs and ad-hoc partnerships.
• In a cohort-based program, a set of startups that share similar characteristics participate in an accelerator, hackathon, or other programmatic initiative over a pre-specified period. The content of the program will ultimately depend on the corporate and their goals, but tactically speaking, the aim is to 1/ enable the startups understand the corporate’s domain and access its resources, 2/ introduce them to key POCs across the company and set them up to ship value quickly.
• Cohort-based programs have the theoretical benefit of establishing a clear interface between each startup and the corporate organization. Because the initiative must have been pre-approved by company leadership, startups who come in through one of these programs can reasonably expect a certain level of engagement from the different departments they need to interact with.
• Cohort-based programs sometimes come with equity capital from the corporate e.g. Honeywell Group’s Itanna Accelerator.
• Meanwhile, ad-hoc partnerships are usually formed on a case-by-case basis, focused on a more specific problem area, and can be initiated by either the corporate or startup. Some examples include Uber x Moove for vehicle financing and fleet management; Wema Bank x Flutterwave for virtual account numbers; and Ukheshe x Mastercard x Telkom x Nedbank for WhatsApp virtual cards.

III. Towards More Productive Partnerships

Even when the parties intend to work together, most partnership conversations do not make it beyond the meeting room table. For the few deals that get closed, even fewer have any meaningful impact beyond the hype from the press release.

This should not be surprising: vast inter-organisational asymmetries between startups and corporates make it tricky for them to collaborate[2].

Startups are less likely to focus on maximising short-term revenue, for example, as they have theoretically unbounded upside; in the search for Product-Market Fit, user adoption, market feedback, regulatory cover are all valid reasons to invest in a partnership.

The corporate partner, meanwhile, must prove the commercial value of the collaboration against multiple viable alternatives. Adopting an innovative new product/service could come with significant costs (e.g. payments to an infrastructure vendor to enable recurring subscription functionality for a mobile money wallet) that the corporate must bear regardless of the success of the project. And if it’s a publicly-traded company, shareholder pressure on revenue generation becomes a real live player in boardroom and leadership discussions.

In a recent qualitative study produced by Founders Factory Africa, Standard Bank, Paystack, and PAWA, corporate interviewees highlighted organisational compliance and strategic alignment as the most critical to determining the value proposition of a partnership. It makes sense: operating at the scale of thousands of employees comes with certain “transaction costs” to getting anything done, with the inertia kept in place (necessarily) by layers of bureaucracy. As a result, even simple actions could require a lot of organisational effort to execute.

Big companies often externalise these costs in the form of longer decision-making cycles, supplier compliance requirements, complex technology integrations, or any number of legal, operational, or regulatory checkpoints. One of the most important factors of success in a partnership, then, is whether the partner can bear these costs in stride. Other big companies, by definition, have the resources (and experience) to manage, but startups by default do not — even if they may have a suitable product.

This is why press release partnerships can be so costly. Time spent jumping through hoops to get the deal done is not spent building the business. The loss of focus could be detrimental to a startup whose biggest asset is its ability to experiment efficiently. Worse still, these costs may continue to accumulate once the deal is signed.

Of course, most people don’t deliberately set out to waste their own time, so getting a bit smarter about this is worth it. There is a lot of good tactical advice online about how to get a deal done; a lot of it is high-signal. But beyond the deal, there are any number of factors that could impact the amount of value created through a partnership: shifting organisational priorities; misaligned expectations; poor execution; politics and personal incentives, to name a few.

Over the next two essays, we will 1/ reflect on why partnerships between startups and corporates fail, and 2/ learn how to approach partnerships from operators with deep experience on the continent. Meet the Avengers:

• Bruno Akpaka, Digital Financial Services expert (15+ years); currently Director of Partnerships at Migo
• Patricia Ndikumana, Head of Customer Insights (ex-Head of Partnerships) at Wasoko
• Wiza Jalakasi, Africa Market Development Director at Brazilian fintech EBANX
• Ayotunde Aladejana, Partnerships Lead at Founders’ Factory Africa

In a previous life, I was privileged to help entrepreneurs in the Middle-East, Africa, and Turkey navigate their partnerships with a big tech corporate — including making some mistakes myself. This is partly a way for me to reflect on what I’ve learned from the experience.

With love,
Osarumen

Next Week: How To Partner With A Corporate

Foot Notes

1. Another unfair but relevant comparison: Remittances to Africa in 2018 alone ($40B) was 5x 🤯 the total amount raised via IPOs on the continent between 2017 and 2021 ($8.1B)
2. It is notable that TymeBank first started as a project between MTN and Deloitte Consulting

I — Kölbigk

“By the leafy wood rode Bovoline,
With him he led the fair Mersewine.
Why are we waiting? Why don’t we go?”[1]

On Christmas eve in 1021, eighteen people were gathered outside a church in Kölbigk, Saxony, a small town in 2nd-century eastern Germany. (Some accounts say twelve [2]). They formed a circle by holding hands, and clapped, and danced, and chanted with ‘wild abandon’. The priest could not perform Mass because of the noise, and so he begged them to hold their peace.

But — the fools — they pressed on until he became cross, and cursed them, that they should keep on dancing for a full year after.

And so, they danced ’til the following Christmas: one year, like the curse said, without rest or sleep (“Why are we waiting?”), without food or drink (“Why don’t we go?”), day and night and day again. When the curse was lifted they fell on the ground, exhausted and repentant, into a deep sleep.

Some of them never awoke[3].

II — Questions

“It is to be hoped you are not ‘intellectual,’ which is an unpardonable trait”
― Mary MacLane, I Await the Devil’s Coming

Early last month, the unstoppable force of the ‘internet / smartphone penetration’ story collided with the immovable object of economic reality. IDC published a press release announcing that smartphone shipments to Africa in Q1 2018 were down 6.3% quarter-on-quarter and 3.9% year-on-year. Slide 6 of Mary Meeker’s 2018 Internet Trends report painted a similar picture:

But in fact, anyone paying attention would have picked up on this trend a while ago (see: this piece from February 2018; this one from March 2017; this chart comparing smartphone vs. feature phone sales in Africa up till 2016).

Smartphone sales in Africa were once increasing rapidly, but since 2015 — three years ago — that stopped being true. The problem, of course, is that the dancers of Kölbigk cannot stop dancing. The intelligentsia — elite founders, investors, developers — are stuck saying and doing the same things (“Hurrah! The people are coming online!” “Smartphone penetration is…penetrating!”). Everybody playing the same game of musical chairs, in the hope that when the music stops, they will have secured a seat.

Osarumen Osamuyi on Twitter

OH: there are two classes of people in the Nigerian tech ecosystem who show wild optimism. i) people who just joined, ii) people whose jobs require them to be optimistic.

Each player is unable to exit the game because nobody else will; nobody else will, because nobody else will. But reality stares us in the face, so now what? What’s the bull case for internet startups in Africa? Why should we be excited to spend our days and nights building products for a market that some say is not ready?

What does it mean that global tech companies have recently taken an interest in African consumer markets? Where will they succeed? Where will they not?

How should local startups with much less funding, access to talent, and little control over their own distribution position themselves to take advantage of the — yes — opportunities this creates?

It has become fashionable to say that African markets are ‘special’, and that ideas imported from Silicon Valley or other more developed tech ecosystems cannot work here. Is that really true? If it is, then what ideas work instead?

W̶H̶O̶ ̶H̶A̶T̶H̶ ̶T̶H̶E̶ ̶B̶E̶S̶T̶ ̶J̶O̶L̶L̶O̶F̶?̶

—

These are the kinds of questions I spend my days considering, and I want you to listen in while I think out loud and try to work them out.

III — Announcement

That’s why I’m pleased to unveil The Subtext: the most compelling tech/media stories from across Africa[7], curated for you, with commentary from me, and published as a newsletter.

Why does this project need to exist? There are many sites chronicling the stories of the people building tech and media companies on the continent — and I’m grateful to be able to rely on their coverage.

But there is little commentary that asks what each piece means, how it affects the next, and why you should care. These times require a unique perspective; a sense for surfacing important patterns in the news, organizing them into collections [see image below], and working out the themes — the subtexts — that lie underneath.

The Subtext is my attempt to lay the foundation for such a perspective.

My aim here is to learn as much as I can about the innovation ecosystems in these emerging markets: the people, the players, companies, and the cultural factors that drive consumer behaviour, and expose that information to people who trust me with their time…and their email addresses.

To be clear: I still have a day job which takes priority, but I’m committing to sending out at least two editions every week.

The first one goes out tomorrow, so sign up here, follow thesbtxt for links to posts, and skweird for a director’s cut. But *most importantly*, sponsor or contribute to The Subtext by emailing me directly: osarumen@thesubtext.io

Onward ✊🏾

With love in my heart and small chops in my belly,

O.O.

Notes

1. Source: Robert Mannyng, The Cursed Dancers of Colbeck (Translated from Middle English by Lee Patterson)
2. “The Cursed Dancers of Colbeck”
3. I find this story is hard to believe, but there’s nothing in it medieval people found improbable[4]. Dancing mania like this one were well-chronicled from Erfurt and Maastricht around 1247, to Aachen in 1374, to Strasbourg in 1518[5], and other documented cases from Switzerland to the Holy Roman Empire, consuming hundreds — thousands — during the 16th and 17th centuries[6].
4. The Lancet, ISSN: 0140–6736, Vol: 373, Issue: 9664, Page: 624–625
5. Midelfort, EHC. A History of Madness in Sixteenth-Century Germany. Stanford University Press, Stanford; 1999
6. Dancing Mania. https://en.wikipedia.org/wiki/Dancing_mania
7. “…across Africa” here is for convenience’ sake. I am still too ignorant about large swathes of the continent to hold strong opinions, so I will first focus on startup ecosystems in Nigeria, Ghana, and Kenya. Each one of those countries is complex / nuanced enough that I do not need to pretend to be “Africa-first”, whatever the phrase means. Where I have something valuable to say, I will cover other countries as well.

We are witnessing a radical transformation in the financial services industry.

Independent startups are picking apart the “jobs” that used to be done by traditional financial institutions — money transfer, savings and investments, financial management, access to credit, insurance, etc. — and building new products around them. Because they are built-for-purpose and operate a lean cost structure, these companies can provide a better user experience, faster, cheaper, and are better able to serve yet unserved consumers. The expectation is that they will ride their trojan horse (product) to scale and build a better bundle of banking services.

But this view is incomplete. Existing financial inclusion efforts too often treat “banking” as an end in itself, and the “unbanked”, as numbers that must be moved to a column labeled “banked”. Not enough consideration is given to the underlying job to be done. As Michael Kimani argues in this essay:

“People in Africa do not sleep and dream of having bank accounts. […] Simply having a bank account gets you nowhere. Simply being cashless gets you nowhere.”

At VP, we see this as an opportunity. Success in developing markets will come from entrepreneurs taking a bottom-up approach to product development; studying behavior that exists offline and applying technology to help users do what they need done. Building bicycles for their minds, instead of trains for them to jump on.

That’s why we’re thrilled to announce that we’re voting with our feet by investing in Piggybank’s $1.1m seed round, alongside Village Capital and a group of HNIs led by Olumide Soyombo.

Founded two years ago, Piggybank helps Nigerian millennials and low-middle income earners save small amounts daily, weekly, monthly, or annually, automatically via their mobile app. The team has proven adept at reading the behavior of their users and using that to inform product direction.

Customers love Piggybank.

They have rewarded them by acting as evangelists, driving growth to 53,000 savers and counting. But it’s still early days. The next step in their evolution is Smart Target, a savings and investment product for groups, based on Esusu or Ajo (West African names for informal group savings clubs common across the continent; also known as Chamas in East Africa).

We’re excited to partner with Odun, Josh, Somto, and the rest of their team as they drive more aggressively towards their goal: making savings and financial management simpler for young people and low-middle income earners across Africa.

Victoria ascerta.

Investing in Piggybank was originally published in Series V on Medium, where people are continuing the conversation by highlighting and responding to this story.

When the number of people rising to the top of a pyramid scheme like MMM (the Mavrodi Mondial Movement) becomes too high for the inflow rate to contain, the house of cards will come crashing down — like in Zimbabwe.

Because I hold the readers of my blog in high regard, I know I don’t need to put any warnings in here about any of that. I cannot say the same for all my compatriots, though. MMM’s web portal now ranks 5th in Nigeria, according to Alexa — higher than Facebook, Jumia and Nairaland. Sigh.

Victor Ekwealor, writing for Techpoint.ng: By Leapfrogging Facebook In Traffic, MMM challenges Nigeria’s Mobile-First status

Last week, MMMOffice, the official portal of the scheme in Nigeria rose to become the 5th most visited website in Nigeria. This statistic is courtesy of popular web ranking portal Alexa. According to Alexa, MMMoffice.com rose 40,385 places through the ranks; surpassing Jumia, Nairaland and even Facebook.

SimilarWeb is another web ranking service that is as popular as Alexa and it has also placed the MMM Portal at 6th with a 5,994 rise. The two analysis shows the dominance of MMM in the country.

These figures have put into perspective how quickly Nigerians are adopting this get-rich-quick-scheme which may be attributed to the downward spiral of the economy. Most importantly, they help to debunk the myth that Nigeria is a mobile first country.

Err…no. Victor got this one horribly wrong in my opinion. His logic appears to be that since there’s allegedly more activity on MMM than Facebook on sites that report mostly desktop traffic, then Nigerians are not mobile first.

Surely, there are not more Nigerians subscribed to MMM as there are on Facebook (mobile). So if the MMM Nigeria portal is more visited than Facebook, we can deduce that this is via desktop web.

Yet…

The data which constitutes Alexa‘s statistics is gotten from Alexa toolbars, and these toolbars can only be installed on desktop computers as there is not yet a mobile version available.

SimilarWeb on the other hand is supposed to be a fly in this oil; a sort of deviation from the premise considering that it tracks mobile and its rankings are generally considered more accurate than Alexa’s.

1. I have no idea why anybody pays any attention to rankings on sites like Alexa and SimilarWeb. That one is marginally more accurate than the other does not mean that they aren’t both bollocks.
2. SimilarWeb tracks visits, as defined “as an entry to a web domain from a different web domain or from the beginning of an empty browsing session”, not unique visitors. If Alexa and SimilarWeb are reporting that there’s more activity on the site than on Facebook, then it means two things: 1) that the few people who are using it are using it aggressively. 2) that most of them are working class people who have access to desktop PCs in their offices. None of this is evidence that the OVERWHELMING MAJORITY of Nigerians do not experience the internet via mobile phones.

This new statistics from Alexa and Similarweb are a call for reevaluation; may be Africa as a whole is a mobile first continent, but could the same be said of Nigeria?

Yes, please. Let’s not speak of this matter again.

O.O.

ST. on Twitter

@Fyrdausi @SkweiRd if he doesn't win, he has to buy the entire office pizza

I think I experienced the longest 10 seconds of my life a few hours ago. Between when Judith announced there was a tie for second place and when she ended up not announcing our name as one of those caught in the tie, I swear I waited an eternity. I tried my best to act aloof (as Mohini will attest to), but I exposed myself by punching the chair in front of me as soon as the announcement came through the speakers to my ears.

Timi fucking jumped on me, man.

So, yeah. Four months and two days after I had my first Virtual Reality experience, Timi, his brother Tade, 3D wizard Olumide “47”, Abdulmalik, and I just won the first-ever VR Hackathon in Nigeria.

Of course, this means that we need to build out our brainchild, LEVRN (pronounced learn) into a full-fledged experience that will live on the Oculus store, but I’m mostly glad to finally be able to get some sleep.

Osarumen Osamuyi on Twitter

@Fyrdausi @MrBankole @seyitaylor NO PIZZA FOR ANYBODY!

(Now, to find the space to stick “VR Hackathon winner” in my resume)

O.O.

Quick one, before I go to bed — it’s 4am, and I’m tired as fuck. I want to thank the relevant gods that I was able to keep my mouth closed when Mohini took this shot. Yes, it’s an actual thing. Doesn’t it bother you that photos of people using Virtual Reality headsets frequently feature them with their mouths wide open? Okay, seriously. I had my first VR experience this week. It was a showcase organised by a nascent VR creation lab/community over here in Lagos called Imisi3D. The experience reminded me of something I read that rings truer now, than ever before.

“You can divide the world into two: people who believe Virtual (and Augmented) Reality will play a part in our future as a race, and people who haven’t had a demo yet.”

Or something like that — I forget. To be honest, I wasn’t sure what to expect when Tola and I walked onto CcHub’s famous 6th floor on Tuesday afternoon. For months, I’d been playing the devil’s advocate — arguing in the Twitter Tech Salon (a close-knit, geek-filled Twitter DM group I belong to) that despite the tech media wankfest, there was no way to tell whether or not Virtual Reality was “the future”. That, and Apple was in no immediate danger because they haven’t joined the pissing contest. So far.

My argument was based on the fact that it’s not the first time everyone’s lost their minds over relatively nascent technology that’s ended up as little more than gum on the tech industry’s shoes. 3D TVs anyone? How about Google Glass? Amazon Fire phone? Holograms nko? But something happened the second Judith showed everyone the Gear VR controls and helped me put one on as her first volunteer. I’d done the research, I know how it all works in theory — but I was in such awe that I had to fight to keep my mouth shut.

Again, thanks be to the pertinent gods.

Osarumen Osamuyi on Twitter

VR & AR = Consensual Hallucination.

I was taken from my seat to multiple places without having to leave the one I was in. Better: I felt like a little baby born into a new, strange world for the first time, trying to make sense of [the disconnect between] my [visual, auditory and somatosensory] senses. I wasn’t swivelling in the chair, mouthing oohs and aahs on account of what I was seeing, no. It’s a terribly limited experience made worse by our Nigerian (snail-speed) internet service provider(s). My brain was whirring along at as many teraflops as I could manage because in that moment, I thought myself a micro-Iron Man. The possibilities, man. THE POSSIBILITIES. THE FUCKING POSSIBILI-

“You’ve got 10 seconds left, Osarumen”

Ugh. I’d swum so deep in my own thoughts about the future applications of VR tech that until Judith reminded me, I forgot I was holding everyone else up. Enthusiasts — many of them smarter than me — with much better ideas.

From that point on, I was at the showcase in the flesh, and in the flesh alone. Conversations with otherwise interesting people were relegated to the background as I soaked in what I’d just experienced. I suddenly understood all the ballyhoo, why Femi, Femi, Marvin and Banky were so convinced that “the future” looked a lot like the image above. I’ve had a few days to think, and here’s why I still don’t agree completely with their points-of-view.

The Uncertainty Of The Future

Generally speaking, the human race has never been able to see beyond its own nostrils (except in a negligible number of cases like Steve Jobs’). That’s because incremental thinking has our brains by the balls. We often only look at what’s obvious, what’s right in front of us and try to take it to its logical conclusion(s). The problem is, the future is typically not made of extensions of existing ideas, but of violent clashes between them.

So, if you’d asked people in 1800 what the future of transportation looked like to them, they’d have been thinking along the lines of training horses to run faster and building sturdier, more beautiful carriages. Fast forward just 100 years, and the masses moved around primarily via Electric trolleys (trams). Another 20 years, after Henry Ford (with the Model T) helped to democratise the automobile and there were 8 million cars in the USA.

In the same vein, if you’d asked many people 10–15 years ago how tech was going to permeate the living room, they’d have told you “better TVs”, “better game consoles” etc. when the correct answer would have been smartphones + mobile internet. Consoles are definitely part of the future, but they just do not have the scale mobile smartphones have amassed in the last 9 years.

VR is still too optional, for too many people, to be referred to as “the future”.

And that’s my point. All the Moore’s law in the world cannot nullify the fact that the amount or processing power you need for any VR (even 360-degree videos) is out of the reach of MOST of the world. Cheap projects like Gear VR, Google Cardboard (which use mobile smartphone displays, CPUs, GPUs, accelerometers and gyroscopes) try to cater to the lower end of the spectrum, but VR is still too optional, for too many people, to be referred to as “the future”. Idk.

So, showing me a VR demo right now, is akin to going back in time to 2002 and showing someone an Xbox One console. They’d get super-excited about it and term it “futuristic”, but it does not paint a wholesome picture of what the future (today) looks like.

Content Everywhere, But Not A Drop To Drink

VR’s in a catch-22. One side of the problem is that expensive VR gear will not go mainstream without the content created for it being [good] enough to satisfy the masses. The other side is that most content developers will not put in the effort required to create great shit without the assurance that people will actually consume any of it. It’s Windows phone all over again.

Osarumen Osamuyi on Twitter

People don't buy Windows Phones cause there are not many apps. There are not many apps because people don't buy Windows Phones.

Part of the problem is we have not yet developed a unified “language” for VR storytelling. What we‘ve got instead, is a lot of repurposing, repackaging, and Brownian motion. Let me unpack that. When faced with a completely new content delivery format, most creators will react by trying to copy, repurpose and paste tricks from the formats they are more familiar with.

“No one has even come close to mastering the medium, but it’s clear that holding on to the traditional rules of storytelling is a surefire way to make disappointing VR.”

— Motherboard

Example. The earliest “films” were only bits of theatre performances caught on tape. Before long, people figured out you could move your camera to change perspective, you could record audio, you could zoom, you could pan, and even cut your film so you’re in control of the timing of each scene. Cinematic “language” as we know it was being written in bits and pieces. Each generation of filmmakers took the work of the previous, picked the parts they wanted to keep, and took them a step further. Repeat till infinity.

Another (from a conversation I once had with Seyi Taylor), is that as “TV” as an experience is moving online, some creators still create videos that pander to the traditional TV paradigm and then come dump them online. At the same time, another set of people (think Instagram, Vine, Snapchat creators) are experimenting with online social platforms, navigating their constraints and are only just discovering HOW to make video for the mobile web.

P.S. That was what killed 3D TVs. Most of the content available for the medium back then [was normal movies that’d been converted to 3D and so the experience] wasn’t great enough to justify the expensive hardware purchase.

Sound familiar?

I’ve been playing around with the Ricoh Theta S, one of the more popular 360-degree cameras on the market. Since Jeremy Kirshbaum from the Institute For The Future gave it to us, one of my favourite things to watch has been the look on people’s faces when I walk into a room holding up this weird thing with fish-eye lenses and blinking lights. Even better: the look on their faces when I show them the captured images.

Using the Theta S — and some of my grey matter— has given me a little insight into some of the kinds of questions VR filmmakers (can we really call it film?) will have to answer, and challenges they will have to surmount to get the party started. It is by no means an extensive list.

1. A lot of Filmmaking today is built on the premise that the director controls WHAT the audience experiences, WHEN they experience it, and HOW they experience it. Are you going to place the audience in the world you’ve created as a character everyone ignores completely (like Bran, when he travels to the past in Game of Thrones)? How do you direct their attention when all they have to do is look away from [what you determine to be] “the action” to ruin the experience? Big neon arrows?
2. How do you perform stunts and use harnesses when the audience can see in 360-degrees? Where do you (and your crew) hide in the space as soon as the cameras start rolling? Do you even have to hide or will VR content creation be more…autobiographic than we’re used to?
3. How do you alter perspective? Do you place multiple 360-degree cameras at key points in the room? How do you prevent each one from capturing the other? WHAT DOES THAT DO TO EDITING? How do you edit all this footage so that it makes sense and you’re not ripping a hole in space-time because you forgot something?
4. Are you going to create multiple storylines such that the audience is free to move as they want and experience whichever but somehow arrive at the conclusion we want them to? How much complexity does that introduce to storytelling? How does one compose music for multiple experiences? Even if you compose multiple scores, how do you switch between them when a user takes a pivotal decision in the middle of an important moment? Crossfading? Sidenote: I suppose an MVP of this last point is video games and like Ben Evans once noted, those (porn) DVD videos with decision trees and a TON of recorded footage. Side-sidenote: Has anyone noticed how much innovation in film has come as a result of porn directors wanting to create more immersive experiences for their audience?
5. If you take this to its logical conclusion, then should audiences be allowed to experience the film (for lack of a better term) from the points of view of whichever of the characters they choose per time? For one, that will force screenplay writers/directors to write more 3-dimensional characters. No more White saviour, Black thug, Asian genius stereotypes. Hallelujah.
6. If we allow for this level of interactivity, what’s the difference between VR film and VR gaming? Is the audience no longer just an audience, but a co-creator? Or will VR “storyscapes” become a whole ‘nother form of entertainment separate from whatever the respective future(s) of film and gaming are?
7. How does this interface with live sports broadcasting? Will we be able to experience games from the points of view of each of the players on a soccer field? P.S. This will mean changing the gear of each sport and even its rules. WATTBA.

If I had good answers to these questions (and the many I haven’t thought up yet), I’d quit my job (sorry, guys) and go start that VR content creation startup I was obviously born to start. I have at least one investor on board already. But I don’t, so meh. This is where the Imisi3D community comes in, why I find it really interesting.

Judith’s thesis (from our conversation) is that because VR as a content format is still in its early days, there’s a window for Africa(ns) to get ahead of the curve and help define what it is and what it will become in the future. To stop being constant consumers and become creators, instead. To stop being lookers-on, as the world rouses & pulls itself into another revolution. To stop sitting on our hands and go build something for a bloody change.

As you can see, everything’s a bit fuzzy right now, and nobody knows what Virtual Reality will become and how big a part it will play in “the future”. What I know though, is that that demo (and the thoughts that have crossed my mind since then) was one of the more exciting things I’ve ever done, and I want to do it again, and give other people opportunities to do it.

So, I’ve decided to throw myself in head first, give it a few hours every week — learn about where VR was, where it is now, and hopefully help chart its course in the future. If you’re thinking along the same lines, or if you have ideas and you’re unsure how to get started, hit me up.

Let’s talk.

O.O.

Cheers to more open minds and open mouths. 🍷

Update 19 November, 2016: my team, LEVRN just won the first Virtual Reality Hackathon in Nigeria (possibly West Africa).

The boy who cried VR! was originally published in TechCabal Africa on Medium, where people are continuing the conversation by highlighting and responding to this story.

Now, do you remember Mime for a Change? It’s the episode of Powerpuff Girls where an accidental bleach spill turned Rainbow the Clown, a garish party entertainer into the evil Mr. Mime who in turn, turned Townsville into a greyscale dystopia.

Blossom and Buttercup went after the villain, but ended up getting themselves de-coloured like everyone else while Bubbles tried (and failed) to restore colour to Townsville using her school crayons. Incredibly naive, in hindsight. She ended up saving Townsville though, by turning the Girls into an ad-hoc rock band, singing Love Makes The World Go Round.

As they played and sang, waves of colour emanated from their big stage and turned everything bright and colourful again. After he noticed his work being undone, Mr. Mime made for the stage in an attempt to turn the Girls black and white again. At this point, Blossom started her guitar solo and shot magic waves at him, effectively turning him back into the colorful, cheerful Rainbow.

As soon as the song ended, he thanked the girls for changing him back, at which point they beat the living bejesus out of him and threw him in jail. That was one of the more…realistic episodes of Powerpuff Girls back then, and even though a much younger me didn’t understand it, that’s probably how most of us would react in that situation. “Y U mek us blak & whyt?”

Something interesting happened at the office this week. By sheer happenstance, I happened upon a collection of Nigerian Hip-Hop musicks from 7–10 years ago. I connected to the office Bluetooth speakers and began to play old song after old song after old song, and what happened next was instructive. A quiet room full of Zikoko and TechCabal writers typing away at their laptops turned to a room full of enthusiastic twenty-somethings, dancing, chanting lyrics from songs they grew up listening to, and sharing funny stories as they worked.

It was just like in Mime for a Change.

Even though I was an active (and in hindsight, a bit too enthusiastic) participant in the shindig, I had an out-of-body experience and I started to think about why we were all excited about a bunch of poorly recorded, low-fidelity songs with positively terrible instrumentation. This train of thought, in turn, led me far away (as my trains of thought usually do) and I started to think about why people like the music they do.

“You young kids don’t know what good music is. Back in the day, we used to listen to…”

Sound familiar? I bet it does. The Silent Generation (1920s — 1940s) thought the music the Baby Boomers (1940s — 1960s) made was trash. The same thing happened between the Baby Boomers and Generation X (1960s — 1980s), between Generation X and The Millennials (1980s — mid-1990s), and so on. It very quickly starts to look like older music is always better music.

But we all know that’s not necessarily the case. My theory? There’s a weird connection between your music taste and the stuff you were exposed to in your formative years. As I type this, I realise that indeed a lot of the music I like now is in a weird way reminiscent of the stuff I liked in the past. Que?

Twitter went mad when Chance the Rapper released his third project, Coloring Book 2 days ago. While typing this, I started to wonder what it is about his sound that appeals so much to so many of us. Then it came to me. His sound is reminiscent of the kind of music my father used to play on the stereo on Sunday mornings, ~15 years ago. He’s taken that Black, Sunday morning sound — Kirk Franklin, Donnie McKlurkin et al — and turned it into Sunday Candy. I absolutely love it, and I know I’m not alone.

Young Queen on Twitter

OMG @chancetherapper you don't understand. I love you. You don't getttttttt.

Young Queen on Twitter

CHANO. CHANO. CHANO. CHANO.

Osarumen Osamuyi on Twitter

I'm 47 seconds into @chancetherapper's album, and I've already given it a 5 star rating. Jesus.

IG: DaOfficialTrell on Twitter

@chancetherapper dropped the greatest mixtape of all time.pic.twitter.com/qOMCRI6BKP

Artemis on Twitter

All We Got is so beautiful @chancetherapper

Pigeons & Planes on Twitter

Twitter went crazy for 'Coloring Book'http://pnps.co/1B0br

R. Kelly on Twitter

Little homie @chancetherapper brought the on #ColoringBook! I would wish you luck but you already won!! #chitownpride

LIFE by Burna Boy is one of the best albums from a Nigerian artist, IMO and lord knows how many times I’ve played (and replayed) it. Thing is, until this week, I didn’t think much about why I like it so much. My thinking was, “Burna Boy isn’t THAT much better than everyone else, so why him?” Then it hit me — I like Burna Boy because in a weird way, his work reminds me of Shabba Ranks, Buju Banton & Daddy Showkey — old guard artistes whose songs I memorised since I was much less than 10 years old.

Same reason I like Diplo’s work for Major Lazer — it’s a modern take on the Dancehall music I grew up listening to, and Damien Marley’s work with Nas in Distant Relatives. I mean. Same reason I love James Blake, who’s very clearly influenced by Stevie Wonder. It’s why The Weeknd’s Can’t Feel My Face resonated with so many people. It’s not an amazing song by itself, it’s just very reminiscent of Rod Temperton’s (and Quincy Jones’) work on Thriller. And as you probably already figured out, it’s the same reason whenever I play a 35-year old Michael Jackson song in 2016, everyone’s eyes lights up and they start chanting lyrics they’ve known their entire lives.

Music is indefensible. You cannot debate someone into liking a song. Trust me, I’ve tried. The listener either has an emotional connection with it, or they do not. It’s possible that what we’re seeing here is that these emotional connections are strongest when they are formed in our earlier years.

Here’s an interesting quote from this article in the New York Times:

“Pubertal growth hormones make everything we’re experiencing, including music, seem very important. We’re just reaching a point in our cognitive development when we’re developing our own tastes. And musical tastes become a badge of identity.” — Daniel J. Levitin, Psychology Prof.

My friend, Davina once told me that as a kid, her father would put her in the car when she cried, and turn on the radio. Daft Punk ruled European radio in the late 1990s, and so it’s no surprise she took a liking to Guy Manuel and Thomas’ work — a liking that has remained till this day.

Don’t get me wrong. Nobody is static. I know we all have musical phases — in the past 6–8 years alone, I’ve run through Electro-Pop, Dubstep, Drum and Bass, Grime, Neo-Metal, Heavy Metal, Indie Rock, Neo-Jazz, Hip Hop, Reggae and a lot more, but the only tropes that have remained constant throughout all that madness were the ones I’ve loved since I was a kid.

Of course, there are exceptions to the rule. If you immerse yourself in enough…musical context, the effects of this conditioning are dampened but I don’t think they’re ever completely eradicated. At least not for most people.

Going by a study conducted by a Yale Sterling professor named Marcia K. Johnson (1985), it’s entirely possible old music sounds better not because it’s old, but because it’s familiar. Marcia played Korean melodies to American participants in a study and discovered that unfamiliar melodies led to lower ratings, a melody heard once before, to higher ratings and melodies heard multiple times, to even higher ratings.

This point of view is supported by the fact that it takes a while for some songs/albums to grow on you. A good example is Rihanna’s Work. Like I said in my ANTI review, when a lot of people heard it as a single the week before, they hated it because it was a departure from the Rihanna they knew — unfamiliar, if you will. But it didn’t take very long for the Peruvian-hair-swinging, emoji-to-cover-darkened-armpits-using, lip-synching demographic to start playing it in the background of every Snapchat story.

A much younger, much more aggressive, much more puristic version of me used to go on these long rants about how much (Nigerian) music has gone to shit, and how it’s all noise these days. Today, it’s easier than ever to write, but it’s also much harder to get read. In the same vein, it’s easier than ever to make music, but much harder to get listened to.

Since computing power has succumbed to Moore’s Law, more and more aspects of the creation process are being taken over by computer algorithms.

In turn, music production has become more and more democratised, and more and more people who have no business producing music are making careers out of arranging drum samples and reusing already used melodies.

The once-revered Art of Song Mastering has been reduced to a $4-a-month subscription service that’s run entirely by a “Mastering” algorithm. The results aren’t amazing, but they are good enough to fool the untrained ear. How long until we only have to push a button to create entire compositions?

At the same time, because instrumentation is getting more complex and it’s getting easier to make complex instrumentation, there’s limited space for lyrical content. And frankly, the audience doesn’t care as much anymore.

The end result is something that looks like this:

Basically, we’ve created a system where artists can get away with singing…

Ah coupe decale ma
Sagasige
Akilibre
Faro de ma
Decale….decale
Krikata, Krikata
Krikata, Krikata
Krikata, Krikata
Krikata, Krikata
Pon pon
Somunto….somunto
Kalopere
Kalopere
Kalopere

…as as long it’s over an entertaining instrumental. Wot dis mean?

If you’d asked me a few months ago, I’d have said that music is getting worse as time goes on, but we do not know that pop music is objectively bad, or that music with more lyrics is objectively good.

What is happening then? Let me explain. Some of biggest chart toppers in the 1960s were Cliff Richards and the 1910 Fruitgum Company. Wait, who?

If you aren’t a music geek, you definitely don’t know who any of those are. Instead, The Beatles come to mind when you think about 1960s music. We hear both good and bad music today, but we’ll find out who’s truly great, in 20 years time. Time will act like a sieve (like it did in the 1960s, and the 70s, and the 80s, and 90s) and separate the Iggys from the Nickis. #NoShade.

Thing is, music made for one generation will never completely resonate with another. The experiences that inspired it, the nuances, the slangs, the culture all become alien to you as soon as you exit that phase. Before you know it, you’ve become an uncool uncle who won’t get with the times.

Maybe the problem isn’t new music in itself, but my inability to like it?

I decided to write about it. I’d promised myself that I wouldn’t write about it. And for good reason too. These are some of the questions I ask myself before commenting on any topic:

1. Do I understand the facts of the case?
2. Is my point of view completely new? Impossible. But, Is it objective?
3. Do I have information about this topic that no one else has, or an angle no one else has brought up? Am I adding value to the conversation, or merely regurgitating opinions I’ve read on the internet? …and finally…
4. Is this the best way to spend my time right now?

In the past few days, I’ve gotten many requests for comment, and seen so many POVs (some of which I think are really, really weird) about this topic, that I decided to write about it. By the way, in case you are wondering, the answer to my filter is YYYN.

So here goes:

Long ago, in a distant land…I, Aku, shapeshifting master of darkness, unleashed an unspeakable evil…

My opinions about “it” are premised on these statements:

1. I do not trust the US government.
2. I trust Apple.
3. I fail to see how insecure iPhones will curb terrorism.

Let’s begin, shall we?

You’d have to be living under a rock not to have heard about the Apple-vs-FBI conundrum. But for the benefit of the more…lithodomous…amongst us, you can read all about it here.

Now, I’ve seen some truly…interesting…points of view.

BeauBelle BelleBeau on Twitter

@FvckBvnky @SHIAMANI see Im all for consumer peace of mind and all that but I firmly believe the government has the right to spy if you will

BeauBelle BelleBeau on Twitter

@FvckBvnky @SHIAMANI or gently watch over all its citizens , if you have nothing to hide why should you fear government scrutiny ?

Haha. In the first place, what does gently watch even mean?

Place cameras in everyone’s homes. But do it gently. Log everyone’s Google search requests. But do it gently. Hell, even censor public opinion about politicians on the internet. As long as you make sure you do it gently.

And in answer to the question: no I don’t fear government scrutiny. I have a right to privacy and I will not relinquish access to my information simply because some government says it will help with security. Heh.

BeauBelle BelleBeau on Twitter

@SHIAMANI hassle ? And then say apple wins and the government doesn't get what it wants how can it defend it citizens!?

Brilliant. Because if the iPhone 5C had not been recovered in the first place or if the terrorist used a Nokia 3310, the FBI would have thrown up its hands and said, “sorry guys, we can’t catch the accomplices, or stop future attacks because we don’t have access to Syed’s fucking iPhone”.

BeauBelle BelleBeau on Twitter

@SHIAMANI but in this age of high information traffic why should data be so protected ?? Especially from the government?

(‘-’ )( ._.)

This is me wondering what information volume has to do with anything.

Even the notion that the “government” is an entity to be trusted absolutely is absurd (let’s all ignore the fact that the FBI director has said before, that the government wants backdoors into our devices). The government is not some incorruptible individual that means well for its well meaning citizens.

It’s made up of individuals. Individuals who are far from incorruptible. And if we’re being honest, we’d admit that more often than not, it’s made up of very corrupt individuals.

Remember that time when we discovered the NSA has an illegal collection of…I don’t know…EVERYONE’S PHONE RECORDS?

Oh my god, why would you even bring that up, Osarumen? That has nothing to do with this. This is about terrorism, & the safety of the good peoples of America.

It gets better…

BeauBelle BelleBeau on Twitter

@SHIAMANI @businessinsider I think he has a point ..amean its national security we're talking about , just one off access ..just one time

OKAY STOP!

EVERYBODY. JUST...STOP.

I should probably state at this point, that there are these little somethings called precedents.

When you concede to one unreasonable demand, the next time it comes (even from a different party), it begins to look a lot less unreasonable.

And if you think for a second that this is about just this San Bernardino case, then read this.

For those of you who didn’t bother clicking on that link, the headline reads: New Court Filing Reveals Apple Faces 12 Other Requests to Break Into Locked iPhones.

Again. This is not about the US government wanting to protect its precious citizens.

If anyone who hasn’t closed this article still doubts me, I should probably let you know that our friends at the MIT (read: really really smart people, who usually know what they are talking about) published a paper in July 2015, titled Keys Under Doormats, holding pretty much the same position I do now.

If a cuntry like China or North Korea (no, I didn’t misspell that) demanded that Apple assist in its censorship efforts today, or install a backdoor so the government could listen in on messages to prevent corruption (see how stupid that sounds?), Apple would decline. And no one would make too much of a fuss about it afterwards.

Now, if the FBI gets its way, and gets Apple to write an alternate (read: insecure) version of iOS to “help them preempt terrorism”. The dynamics of the conversation with the Chinese government have changed completely.

To put it in Nigerian-speak…

“You do am for my guy, why you no go fit do am for me?”

And then, there’s this.

Adeyinka Amurawaiye on Twitter

@SkweiRd Tim Cook should have unlocked those phones in silence. Then nobody knows and no unfounded threats. Instead he opened his big mouth

Here’s the thing. In a vacuum, this would be the smartest thing to do. Roll over like the FBI’s puppy, and not tell anyone about it. But this is not a vacuum, and things are rarely ever that simple.

Imagine Tim Cook kept his big mouth shut, and silently unlocked the iPhone(s), and some unsavory party gained access to people’s information via the same key under the doormat.

Imagine the collossal shitstorm that would ensue soon after.

Now, imagine what your point of view about the subject would be.

My guess is, everyone supporting the FBI now would quickly attempt to throw Apple under the bus. “I always knew they were all about exploiting their customers for profit. I mean, look at how they keep changing their ports to force customers to buy expensive accessories”.

Remember when I said I trusted Apple?

I don’t trust them because they are trustworthy. No. I trust them because they have direct economic interests in keeping my information safe, since one of their major value propositions is the preservation of the end user’s data. They do not provide free services and then mine their customers’ data to serve them targeted ads, like their more…alphabetical counterparts.

It’s not a choice between privacy and security.

My good friend, @Mr_Oyedele was quick to point this one out to me. Americans actually want Apple to open the iPhone(s) for the FBI, according to polls.

Business Insider on Twitter

Even iPhone owners believe Apple should unlock the San Bernardino shooter's iPhone http://read.bi/1XKLybO pic.twitter.com/U6AePIzoYY

Terror cases like this one, bring out an avalanche of emotions in everyone, and so it’s very easy for the FBI to spin the narrative that Apple is the only stumbling block between them and justice for the victims.

If the FBI came and said something much closer to the truth like, “Hey guys, we want Apple to help unlock this iPhone (and 12 others) just this once so in the future we can pressure them to do it again and in the process, access information about you whenever we needed it”, I’m sure the results of that poll would be very different.

Keep in mind that the FBI really isn’t asking Apple to unlock the iPhone. They are essentially trying to force Apple to force Apple engineers to write code to enable them (FBI) to do it. Certain parties argue that that’s a violation of their free speech rights (it’s no secret that information typed on a laptop counts as speech).

In all, remember this:

Security and privacy are not two mutually exclusive concepts.

Terrorists will find ways to commit acts of terror, whether Apple helps the FBI or not. Insecure iPhones do not directly translate to a safer society.

Telegram founder, Pavel Durov put it excellently, when he came under heavy criticism because ISIS operatives were using his secure messaging app to communicate.

“I think that privacy, ultimately, and the right for privacy is more important than our fear of bad things happening, like terrorism. If you look at ISIS — yes, there’s a war going on in the Middle East. It’s a series of tragic events. But ultimately, the ISIS will always find a way to communicate within themselves. And if any means of communication turns out to be not secure for them, they’ll just switch to another one. So I don’t think we are actually taking part in these activities. I don’t think we should be guilty or feel guilty about it. I still think we’re doing the right thing, protecting our users’ privacy.”

Guess what happened when Durov blocked 78 ISIS public channels on Telegram? They went and developed an ad-hoc solution — their own messaging app.

‘Nuff said.

Secure iPhones don’t promote terrorism. Terrorists do.

Who will watch the watchers? was originally published in Alphabe.at on Medium, where people are continuing the conversation by highlighting and responding to this story.