No. 194: Zoom | Sony Gets in the Ride-Share Game | Can’t Be a One-Trick Pony

Zoom, Zoom, Zoom! The Exclusive Inside Story Of The New Billionaire Behind Tech’s Hottest IPO

While reading this piece, all I could think about was how different Zoom was from other Silicon Valley unicorns-turned public companies that are more well-known. The company registered to go public with a profit after having already turned a profit. Contrast that with companies like Uber which has had one profitable quarter and is pushing for a $120B valuation at its upcoming IPO.

Apparently, the CEO Eric Yuan reimburses the company even for smaller expenses like swag. Contrast that with Evan Spiegel who recorded $900k in security costs when Snap filed to go public. Yuan recorded no other compensation from Zoom, granted Snap was/is a cultural phenomenon and Zoom is far from that.

Further, there’s so much talk about the mercenary culture in Silicon Valley and how startups need to have all sorts of perks in order to retain talent. I’d be really interested to hear what it was about Zoom that enabled it to grow to 1,700 employees despite not having the flashiest office space.

The startup world has built this calculus around growth trumping profitability. Zoom seems to knock against that. I look forward to seeing how it’s IPO impacts the culture across the valley, particularly with its newly minted set of millionaire employees investing some of their capital in fledgling startups.

Sony becomes Uber’s newest rival in Japan

This can’t be too exciting a development for Japanese e-commerce Rakuten, also the largest investor in newly public Lyft. Rakuten’s CEO Hiroshi Mikitani has talked about his company’s investment in Lyft as more research than competitive move, but with a nearly $3B stake in the company they have got to be itching for Lyft to expand beyond the U.S. and the few Canadian cities where it operates.

It’s time to rethink oil and gas as a funding source for development

The extent to which resource-rich African countries are still placing their bets on oil and gas being the primary driver of their countries’ development induces anxiety. Kurt Davis does an effective job providing cases on Angola, Sudan, South Sudan, Angola, Mozambique, and Tanzania and how they’re probably going to find themselves stuck with their current approach to meeting their budgets and developing their countries. He goes on to map out how the thinking of policymakers needs to shift in order for these sort of countries to begin diversifying their economies. As I think about the rapid changes in technology and how software is driving so much change in how the world works, I really hope policymakers wake up.

No. 188: W.E.B. Du Bois |5G Rollout |Oil’s Future

W.E.B. Du Bois and the American Soul

This is a compilation of three beautiful set of conversations on W.E.B Du Bois’ life and impact on society during and after his life. I first understood that a black American living in Africa was an option when I learned that he finished his life in Ghana.

I had a fantastic conversation with friends that covered a range of topics, including the stories black people tell ourselves about where we come from and the impact of those stories on how we live our day-to-day. I’ve long been of the mind that black folks need to connect with our African story. A friend pointed out the importance of learning the complexity of our story here in the U.S. and wherever else in the Diaspora our people have been.

I look forward to spending more time on that, particularly in thinking about my mother’s family history. I learned details about my grandmother and how she grew up just a few months ago and look forward to gaining a deeper understanding of my heritage on that side of the family.

The 5G revolution is coming to Africa

There has been much conversation about the impact 5G technology will have on the ability for applications of self-driving technology, augmented reality and more due to increased speeds. We’ll have to wait a few years for proof of this and I’m curious to see what 5G deployment looks like across Africa. Will carriers like MTN and Vodacom choose to install a bunch of cell sites across a city or put a bunch more antennas on their existing towers? Helios Towers announced it was building 1,000 towers in South Africa to prepare for 5G, so I imagine they anticipate carriers are going for the latter.

I’d be interested in how carriers who plan to deploy dense networks across cities engage with local governments to plan that type of work out. My understanding of these ultra-dense heterogeneous networks is that you essentially have a bunch of pizza box-sized cells that bring the cellular base stations signal closer to users. A constraint of 5G is that the signal doesn’t travel that far and struggles to get through buildings. This kind of network is supposed to improve that. That requires a lot of planning for right-of-way, where in the city is demand greatest, how do you protect the cells, and more. Apparently, more carriers will be rolling out the technology over the next couple years. We’ll see how they deploy the technology and whether African markets serve as a laboratory for innovations in 5G deployment.

Norway Is Walking Away From Billions of Barrels of Oil

When Ghana learned that it had lots of oil off of its coast, officials pointed to Norway as the model for how they would manage the resource. They would avoid the challenges the resource has brought to other African countries that had grown dependent on the cash cow. Nigerian governments have talked for years about how the country needs to diversify its economy to depend on more than oil to drive the economy.

I wonder how African oil officials are responding to this news that the government is choosing not to explore an area that could have significant oil reserves. In addition to this, the Norway’s sovereign wealth fund announced not too long ago that it was selling off its stakes in oil exploration stocks. I don’t know that this is the path for African oil countries right now, but I’m sure it could be a proxy for laying out hard questions about an economy’s relationship to oil:

  1. When is enough enough?
  2. How do we sequence pulling resources away from oil to invest other sectors?
  3. Whose voice will be most important in making the decision on how long we rely on oil?

These sort of questions are probably a generation away. Let’s see how the conversation plays out if it happens.

No. 136: Atlas Mara Still Trying to Gain Footing

Last year, I brought up Atlas Mara management getting dressed down in an investor conference call due to the lack of confidence the market had in the firm. Well, their Q1 2016 results can’t be too much more encouraging considering the $2M loss the bank posted.

Apparently, management plans to implement some cost reductions and new plans for generating revenue. We’ll see how that goes. One of the early questions about the firm was how much it was paying the management team. Will they take a pay cut?

Further, is the management team still based in Dubai? If so, perhaps they should consider making a move to the continent. Hanging around Jo’burg or Nairobi on a daily basis may strike up new observations for revenue opportunities.

Then again, I’m no expert on these things. I’ll be checking with some bankers to see what they think about Atlas Mara’s performance.

No. 132: Bill Janeway Knows a Lot about Technology and Economics

Barry Ritholtz did a fascinating interview with Bill Janeway, Managing Director at Warburb Pincus, a private equity shop whose name you may have seen when Timothy Geithner joined as President a few years ago.

Side note: Warburg Pincus is the largest shareholder in Kosmos Energy, the exploration company that was part of the discovery of the Jubilee oil field in Ghana nearly a decade ago. Wow. Time flies. Check out Big Men if you’re looking for a movie to watch this weekend. 

Janeway draws on economic theory and the history of the US technology sector over the course of the interview. This is one of those interviews I will listen to a couple more times to be sure I caught all the events, people, and companies I should look up, such as Ferdinand Eberstadt. Check out the interview below.

No. 131: Netflix Delivers on Promise

Netflix went live in 130 countries today.

I wrote something on their shareholder letter from last summer. In the letter, Reed Hastings mentioned that the plan was to go completely global by the end of 2016.

Delivering on that goal 12 months early is amazing, or at least a good move in managing expectations.

No. 99: 3 Tuesday AM Views

1. After highlighting how problematic it is being labeled the first black woman head of South Africa’s Insurance Institute, Delphine Maidu, CEO of Allianz Global Corporate and Specialty for Africa, discussed women leadership styles, what the insurance industry could do to better serve customers, and the low insured rates in South Africa. 

2. Ushahidi executive director Juliana Rotich highlights the importance of building an ecosystem for entrepreneurs across Africa to get traction with their innovations. 

3. Tryphosa Ramano, CFO of PPC (South Africa’s largest cement company) gave her insights on the importance of women landing board seats and pushing for policies that support the development of women leadership in South Africa’s corporate world. 

I’m constantly looking for black women leaders I can reference as my daughter gets older. Leave names of others who come to mind in the comment section below. 

No. 85: Netflix is Taking it Global

One more before bed.

Netflix released its shareholder letter today and had some interesting results. Jake Bright mentioned in his comments during the book launch for The Next Africa, that Netflix is paying attention to what is happening in African markets in the internet TV streaming space. So, when I saw that Netflix released its letter I figured I should take a look. Interesting highlights:

  • 43 million members in the US
  • 23 million members internationally
  • Nearly nine million more paid subscribers year-to-year in Q2 2015
  • 48 percent year-to-year international revenue growth
  • Launching Japan in Q3 2015, and Spain, Italy, and Portugal in Q4 2015
  • Plan to be fully global by the close of 2016

Hopefully, Jason Njoku, CEO of iRoko Partners, posts something about Netflix’s updated figures. iRoko continues to make moves. They went completely mobile a few weeks ago.

Does anything else stand out to you in the letter?

No. 84: I Can’t Wait to Read The Next Africa

When Aubrey Hruby and finance ministers from several African countries waited for the globe at Google headquarters to rotate to the African continent so that they could see how many hits the continent was getting at the time, they were stunned to see just a couple dots compared to completely outlined countries for the rest of the world.

That story from some years ago was just one of the interesting stories Aubrey and Jake Bright shared during their DC launch of their first book, The Next Africa. Since that time, Google hits for terms like “Africa and tech” are up 1000 percent, according to Aubrey. Goes to show how things are changing in terms of the conversation around Africa.

I’m a big fan of Aubrey and Jake, and was thrilled when Aubrey first mentioned that she was working on a book covering business investment in Africa. Their book focuses on the growth the continent is experiencing with a careful eye to some of the risks that could jeopardize this growth.

I love their approach of talking to folks doing interesting things on the continent. Data points have been thrown around for some time now. Seven of the ten fastest growing economies globally. Average five percent GDP growth. $880 billion potential agriculture productivity. The list goes on. Who are the people driving this growth? What is on their mind? What drives them? I think Aubrey and Jake get at this.

With the hundreds of interviews Aubrey and Jake did for this book, we are still just scratching the surface on really interesting people and companies that are killing it across the continent right under everyone’s nose. I look forward to seeing 100 books coming out over the next several years covering various nuances of the business environment across the African continent. At least one other book comes to mind that does a nice job teasing out stories from business leaders across the continent: Success in Africa by Jonathan Berman.

What are some other books that are telling interesting stories about Africa’s growth? Help me grow my backlog of books to read and leave the titles in the comments.

No. 83: Growing Exports to Nigeria Can Be Atlanta’s Secret Sauce

Atlanta is a top-10 exporter amongst US cities to Nigeria. I hope the city puts more energy behind its connection to the country. The city recently completed its Metropolitan Export Plan with support from JP Morgan and the Brookings Institution. Currently, the only African countries an exporter in Atlanta can get information about exporting to are Morocco and South Africa. Yet, the growth of Atlanta’s exports to African markets outstrips exports to other parts of the world.

While the city has seen record export growth, its ranking among US metro areas remained at No. 18. There is a lot more than $178M in sales opportunities in Nigeria. For example, the Dangote Group is in the process of investing $16B in the development of an oil refinery and two fertilizer plants. Machinery and chemicals are two of Atlanta’s top export products.  And that is just talking about one company. I believe that if Atlanta puts energy behind building its export pipelines to African markets, particularly Nigeria, the city will see it’s ranking rise.

No. 74: Corruption: FIFA or Wall Street

A couple of weeks ago, several banks agreed to pay criminal fines close to $9 billion for currency rigging, a felony crime. Around the same time, the corruption deal with FIFA started heating up. 

I get that billions of people love the beautiful game and the corruption in the sport has been ongoing for decades. It was definitely time for something to correct that. A total of nearly $9 billion in fines is enormous. Rate fixing is a serious crime, yet the banks involved got exemptions from criminal charges. 

I often hear Wall Street saying that the markets will take care of themselves, as if we’re talking about some all powerful, all knowing being. Really? Since the beginning of time, people have tried to cheat people when it comes to getting something valuable. 

We just went through several painful years during the Great Recession. Some of the same banks involved there faced fines in this case – J.P. Morgan. Citigroup. Corruption in FIFA will negatively impact people’s lives, but hubris on Wall Street could negatively impact a lot more people.