Being in Africa Makes You Untrustworthy(whiteafrican.com)
whiteafrican.com
Being in Africa Makes You Untrustworthy
http://whiteafrican.com/2010/07/05/being-in-africa-makes-you-untrustworthy/
9 comments
I wrote the article, so will just respond to a couple items here. If you read it you'll note that most of what you said I agree with.
I'll start by saying that I wish I had the time to work on a solution for this. There is a lot of money to be made in Africa, as products like Mpesa show us. I'm currently up to my eyeballs at Ushahidi (www.ushahidi.com), the iHub (www.ihub.co.ke) and AfriGadget (www.afrigadget.com).
You'll note that I was specifically saying that it does not appear to make business sense for some of these web organizations to pay attention to Africa. There is lower hanging fruit elsewhere, so why should they?
Most shouldn't. Probably. However, it's interesting to note who is paying attention and who is putting money into figuring out how to monetize the web and mobile space in Africa. A couple:
Google - Google Kenya was the first independent office (sales, engineering and product development) that they had in the world.
Facebook - I didn't see this coming at all, but they were the first to zero-rate their site.
Nokia - Nokia runs a couple research labs on the continent and spends a good amount of resources figuring out customer needs.
Though there are startling opportunities, and the chance to make real (big) money in Africa, it isn't where you want to put your money first to turn a quick buck. It's where things will be happening in the future, and that's why those with the deeper pockets are taking advantage of.
Outsiders need deep pockets and a long-term strategy when working here. This is why the space is ripe for local entrepreneurs to move and make headway in users and market share while there is still a gap.
I'll start by saying that I wish I had the time to work on a solution for this. There is a lot of money to be made in Africa, as products like Mpesa show us. I'm currently up to my eyeballs at Ushahidi (www.ushahidi.com), the iHub (www.ihub.co.ke) and AfriGadget (www.afrigadget.com).
You'll note that I was specifically saying that it does not appear to make business sense for some of these web organizations to pay attention to Africa. There is lower hanging fruit elsewhere, so why should they?
Most shouldn't. Probably. However, it's interesting to note who is paying attention and who is putting money into figuring out how to monetize the web and mobile space in Africa. A couple:
Google - Google Kenya was the first independent office (sales, engineering and product development) that they had in the world.
Facebook - I didn't see this coming at all, but they were the first to zero-rate their site.
Nokia - Nokia runs a couple research labs on the continent and spends a good amount of resources figuring out customer needs.
Though there are startling opportunities, and the chance to make real (big) money in Africa, it isn't where you want to put your money first to turn a quick buck. It's where things will be happening in the future, and that's why those with the deeper pockets are taking advantage of.
Outsiders need deep pockets and a long-term strategy when working here. This is why the space is ripe for local entrepreneurs to move and make headway in users and market share while there is still a gap.
I think the relevant statistic to track would be ($ in attempted fraudulent transactions) / ($ in attempted legitimate transactions). I think that would answer the question of why a country like Cameroon shows up on the black list while Australia does not.
I agree. I would be interested to see some sort of analysis of quantity of fraud per thousand transactions on a country by country basis. I think it would be much more useful than the percentage of global fraud that each country is responsible for.
With the obvious caveat that you can't generalize about people, there's still a problem you have to deal with when operating in a lot of third-world countries.
I'll use Lebanon, since I happen to know it somewhat well and am spending a month there now. Corruption and dysfunction in government and private industry are rampant, as are smaller-scale violations (most of the drivers are horrible and dangerous, lots of people butt in line, etc). Basically, it's easy to get screwed.
Why? I don't think it's because the people are inherently mean, because when you meet them, they're wonderful. I think it's actually pretty simple. In plain old evolutionary terms, the society selects for screw-you behavior and against cooperation. If you're the best, nicest driver, your reward is that you never get where you're going. If you always refuse to bribe government employees, your prize for your integrity is watching someone without such scruples get more of what they want, faster.
(I'm making it sound like a backwater. Despite all of the above, it's actually a wonderful place to visit.)
I'll use Lebanon, since I happen to know it somewhat well and am spending a month there now. Corruption and dysfunction in government and private industry are rampant, as are smaller-scale violations (most of the drivers are horrible and dangerous, lots of people butt in line, etc). Basically, it's easy to get screwed.
Why? I don't think it's because the people are inherently mean, because when you meet them, they're wonderful. I think it's actually pretty simple. In plain old evolutionary terms, the society selects for screw-you behavior and against cooperation. If you're the best, nicest driver, your reward is that you never get where you're going. If you always refuse to bribe government employees, your prize for your integrity is watching someone without such scruples get more of what they want, faster.
(I'm making it sound like a backwater. Despite all of the above, it's actually a wonderful place to visit.)
This is why china is making quick inroads into Africa. They don't have this blanket perception of Africa, they rather work those spots that actually make them money.
I betya in some strategy meeting in paypal, it was decided to shut down all African countries. Someone clicked some buttons and that's the end of access from Africa.
The Chinese would work differently - they'd still try to squeeze whatever juice can still be got out that. Africa is increasingly becoming Dubai/China focused, and at some point the west will realise that a huge market does not recognize them as viable business partners anymore.
Consider Dubai as a pivoting point for India/China and Africa. That's a new center of the world that is developing independently of the west.
I betya in some strategy meeting in paypal, it was decided to shut down all African countries. Someone clicked some buttons and that's the end of access from Africa.
The Chinese would work differently - they'd still try to squeeze whatever juice can still be got out that. Africa is increasingly becoming Dubai/China focused, and at some point the west will realise that a huge market does not recognize them as viable business partners anymore.
Consider Dubai as a pivoting point for India/China and Africa. That's a new center of the world that is developing independently of the west.
> This is why china is making quick inroads into Africa. They don't have this blanket perception of Africa.
I disagree. After all, Africa in Mandarin is feizhou, literally "wrong continent". (USA in the other hand is meiguo, or "beautiful country")
China is going to Africa for resources because that's the only place they can trade peacefully, without relying on the military, like the US does.
I disagree. After all, Africa in Mandarin is feizhou, literally "wrong continent". (USA in the other hand is meiguo, or "beautiful country")
China is going to Africa for resources because that's the only place they can trade peacefully, without relying on the military, like the US does.
Those names for Africa and the U.S are not modern inventions. See my reply below about China resources.
China is making inroads into Africa as part of their plans for resource security. They're aiming for minerals rather than revenue.
You're wrong. That's what the west wanted in Africa, and that's why the west would send machines and one or two foremen there to simply extract the stuff and ship it back.
China is shipping a lot of people to Africa, building a lot of infrastructure. The contracts they are signing are not as exploitive as the contracts the western countries signed. They are not doing the same back-hand deals with dictators.
China is playing a much different game, and it's easy to say that they want to exploit, but it's not quite as simple as that.
For example, the chinese are building refineries. The west had little interest in building refineries, they wanted to only extract.
Basically, let's put it this way: The west had more than 40 years of exclusive access to the African mineral industry. It resulted in little development in Africa, and a lot of wars. Whatever china does, it can't be worse.
China is shipping a lot of people to Africa, building a lot of infrastructure. The contracts they are signing are not as exploitive as the contracts the western countries signed. They are not doing the same back-hand deals with dictators.
China is playing a much different game, and it's easy to say that they want to exploit, but it's not quite as simple as that.
For example, the chinese are building refineries. The west had little interest in building refineries, they wanted to only extract.
Basically, let's put it this way: The west had more than 40 years of exclusive access to the African mineral industry. It resulted in little development in Africa, and a lot of wars. Whatever china does, it can't be worse.
Whatever china does, it can't be worse
The Chinese, due to their domestic policies over the last few decades have a huge surplus of young males, in the sense that the male:female balance is badly skewed. Something like 50M young men who can never get married. That's a powderkeg situation. China is shipping these young males to Africa hoping that they'll meet nice local girls, settle down, and effectively found Chinese colonies.
Now I'm not saying there's anything right or wrong about this. But if you want to understand why China is going about resource extraction so differently, you have to look deeper. In other words, minerals aren't the only resources...
The Chinese, due to their domestic policies over the last few decades have a huge surplus of young males, in the sense that the male:female balance is badly skewed. Something like 50M young men who can never get married. That's a powderkeg situation. China is shipping these young males to Africa hoping that they'll meet nice local girls, settle down, and effectively found Chinese colonies.
Now I'm not saying there's anything right or wrong about this. But if you want to understand why China is going about resource extraction so differently, you have to look deeper. In other words, minerals aren't the only resources...
When chinese travel to other countries, they tend to create chinatowns. They don't mix with the local population so much - look at Indonesia, Thailand, South Africa, etc.
Thailand is actually a bit of a counter example of this, a lot of chinese immigrants married local, and often some people of chinese origin only still speak thai... It's very different from Indonesia, Malaysia and Singapore
I never said the Chinese were there to exploit Africa.
I said they were there for resources, and I'm not sure how you can take issue with that given that China is currently scouring the globe for resources to fuel their manufacturing and ensure stability. You'll also notice that China's investments are all geared towards resources.
I actually happen to think that the Chinese model of "buying/investing to get stuff they want" is much better for all involved than the Western model of "political meddling and misplaced aid" and so I'm slightly confused by why you've ignored the fairly reasonable statement I've made and given me a lecture on something I already believe.
I said they were there for resources, and I'm not sure how you can take issue with that given that China is currently scouring the globe for resources to fuel their manufacturing and ensure stability. You'll also notice that China's investments are all geared towards resources.
I actually happen to think that the Chinese model of "buying/investing to get stuff they want" is much better for all involved than the Western model of "political meddling and misplaced aid" and so I'm slightly confused by why you've ignored the fairly reasonable statement I've made and given me a lecture on something I already believe.
> They don't have this blanket perception of Africa
They never have in 600 years of trading with Africa, starting with the spice routes and, even before, silk road.
> at some point the west will realise that a huge market does not recognize them as viable business partners anymore.
That was probably the history of slavery, colonization, and then Apartheid that was going on before that precluded the viability.
> Consider Dubai as a pivoting point for India/China and Africa. That's a new center of the world that is developing independently of the west.
Interesting, because I see the center being much further east. Think Hong Kong, Singapore, or Shanghai.
They never have in 600 years of trading with Africa, starting with the spice routes and, even before, silk road.
> at some point the west will realise that a huge market does not recognize them as viable business partners anymore.
That was probably the history of slavery, colonization, and then Apartheid that was going on before that precluded the viability.
> Consider Dubai as a pivoting point for India/China and Africa. That's a new center of the world that is developing independently of the west.
Interesting, because I see the center being much further east. Think Hong Kong, Singapore, or Shanghai.
Regarding the center: It's not further east. Dubai is setting itself up as the place for the rich from that axis to come and chill out. Hong Kong is just a sea port, Singapore has no wish to have 3rd world citizens in there and Shanghai is just a playground for young french men.
The new center of the 3rd world is in the UAE.
The new center of the 3rd world is in the UAE.
> Hong Kong is just a sea port
... with one of the highest concentration of major banks and biggest financial management hubs outside of NYC.
I thought the center is where the money is, always has been. From Rome to Florence, then London, then to the New World and NYC, and now switching over to Asia.
> Shanghai is just a playground for young french men.
And, Dubai is a place where celebs can go slumming as the streets rise with unpaid mortgages and backed-up sewage systems.
I'm sure the places we've named are more than just their rumor and stereotype.
... with one of the highest concentration of major banks and biggest financial management hubs outside of NYC.
I thought the center is where the money is, always has been. From Rome to Florence, then London, then to the New World and NYC, and now switching over to Asia.
> Shanghai is just a playground for young french men.
And, Dubai is a place where celebs can go slumming as the streets rise with unpaid mortgages and backed-up sewage systems.
I'm sure the places we've named are more than just their rumor and stereotype.
What I mean is that these far east places are more focused on the west, and less on the 3rd world. Go to shanghai or hong kong - there are very few Africans. But go to Dubai...
The money is in Dubai.
The money is in Dubai.
This is what I learned in biz school. Africa is the place to be -an emerging market.
When it became tight for Western investors and companies in non web related businesses, they turned their attention to the emerging economies in Asia.
Now they are beginning to move to Africa as China and India are becoming saturated for non web businesses. What does this tell us in the hacker community especially as the web space in the West is becoming really saturated. Simple, just make your startup to be Africa friendly, if you can't make it your main strategy and you stand a better chance of not entering Techcrunch's deadpool.
So what are the advantages of doing this:
1. You will own the largest market share by the time the established web companies choose to come into that market. Eg Baidu controls 70% of the search market in China. Google and others share 30%. Facebook had to play catch up to Studivz in Germany and ofcourse sued them, http://tcrn.ch/cfpc9Y.
2. Based on the above, when the big boys like paypal etc are ready to enter the market, they will be forced to partner with you or buy you outrightly. see http://bit.ly/cESeqo.
3. The IPO's that have been so elusive in the US and europe are more easily attainable over there. After your IPO, you can come back and buy the biased established but struggling web based companies in the West. Remember how Asian companies were cherry picking US companies during the global crises, that will be your game.
So make sure you have a strategy for Africa and other emerging economies as you build your web app. Good luck.
Now they are beginning to move to Africa as China and India are becoming saturated for non web businesses. What does this tell us in the hacker community especially as the web space in the West is becoming really saturated. Simple, just make your startup to be Africa friendly, if you can't make it your main strategy and you stand a better chance of not entering Techcrunch's deadpool.
So what are the advantages of doing this:
1. You will own the largest market share by the time the established web companies choose to come into that market. Eg Baidu controls 70% of the search market in China. Google and others share 30%. Facebook had to play catch up to Studivz in Germany and ofcourse sued them, http://tcrn.ch/cfpc9Y.
2. Based on the above, when the big boys like paypal etc are ready to enter the market, they will be forced to partner with you or buy you outrightly. see http://bit.ly/cESeqo.
3. The IPO's that have been so elusive in the US and europe are more easily attainable over there. After your IPO, you can come back and buy the biased established but struggling web based companies in the West. Remember how Asian companies were cherry picking US companies during the global crises, that will be your game.
So make sure you have a strategy for Africa and other emerging economies as you build your web app. Good luck.
More interesting would be looking at the ratio of customers or online spending to cybercrime. When making a business decision, you have to look at the reward as well as the risk.
Online stores and payment providers have profiled countries for a long time now. It wasn't long ago that logging into your PayPal account with a Russian IP would instantly block it. Yes, this kind of treatment is discriminatory. But this is also a business decision that had to be made considering the potential cost of fraud and profits.
This is the ugly side of bayes rule. In some situations, it isn't possible to gather enough evidence to overcome the prior.
a) Comparing Nigeria at 8% with the US at 65.1% is not a particularly fair comparison as the US economy is ~83 times the size, and the average citizen is much richer meaning more discretionary income.
b) It's worth noting that the amount of fraud coming from Africa, while smaller than the United States, is still happening despite all of the additional security measures.
c) Africa isn't particularly attractive as a business destination. It's fragmented into 53 separate nations (many of which are poor; his country, Kenya, has an economy one five hundredth the size of the US) and is frequently corrupt. This means there isn't much competition, if Paypal made security particularly onerous for US customers competitors would move in and take advantage, in Africa clearly this isn't happening.
d) I can't help but wonder why this chap isn't attempting to take advantage of the gap being left by the distrustful foreign companies if there really is such a great opportunity for business over there.
e) Complaining about the fact that no one wants to do business with you is understandable but doesn't do anything to make your life better.