Iyinoluwa Aboyeji on Innovation & Investment in Africa

#360Mentor is a continuation of the #40DayMentor series. In this episode, Robert Kabushenga (RK) speaks to Iyinoluwa Aboyeji (E) on Innovation & Investment in Africa.

RK: I am very happy to have you on #360Mentor.

E: Same! The devil did not succeed. I’m super excited to be on the show.

RK: What is your name in full?

E: It is Iyinoluwa Aboyeji. But everyone calls me E. Feel free to call me E, Robert.

RK: Great. There is a question I ask everyone on this show, were you born an innovator?

E: Definitely not. Maybe I was born more of a problem solver not an innovator.There are people who are born innovators but I am one of those people who love to walk my way into problems. I can’t let them go unsolved. 

RK: You’re 30 years old, how do you justify being wealthy at 30?

E: I don’t know. I think the easiest way to respond to that question is to remind everybody that I started doing this in 2010. That would be 11 years now. It has always been technology. I have never taken a job anywhere else. I have never really kept a job but I was not successful. 

I started my work career earlier than most people. My family moved to Canada and it was a big stretch. Education was very important for my father. Because going to Canada was a stretch, we had to support by taking on other jobs and other activities that would support the family. I left for the United Nations as an intern when I was 17. So I have been working for a long time.

When I was in high school, I was in business too. I used to sell valentines gifts, contraband provision and there was nothing illegal that I did.

RK: The experiences you just described, what principles did you learn that you apply in your business life?

E: I learnt a lot from starting to work early. The biggest lesson I learnt was that challenges are opportunities. I walked into university feeling very sorry for myself because my parents did all the best they could and they could afford tuition and that was all. My peers had more but I couldn’t ask my parents to give me which they didn’t have in good conscinece. That helped to find ways to be of help to myself. I had to earn. Over time as I encountered more challenges, they became opportunities for me to have some skills. The fundamental principle of my life is that challenges are really opportunities. 

The other lesson I have learnt is the importance of building a team. And I have been very lucky to do that in the companies where I have succeeded. And also learning how to manage those teams in companies where I did not succeed. I have learnt to build a mission driven business and how to build around that. I have learnt about where social good and entrepreneurship meet. And the fact that they are best buddies not opposing sides. Most technology businesses are social enterprises. Unfortunately most people do not see the world that way. But those are the experiences that have shaped the way I see the world of technology and business today.

RK: There are people who are following us and they are wondering why I am talking to you. I must ask you this. Tell me what is Andela, Flutter wave, Future Cities. Describe these things you are doing the guys in the tech space know about you but that other people don’t.

E: I am just trying to do God’s work. That’s the summary of it. There are so many companies I started that didn’t work out before we got to Andela. And the big vision for Andela was to create world class technologists that could take Nigeria to the future world. The thing was that you could not talk about the future of technology without having a foundation of people who were going to do the work. They needed to have skills to be able to bring about the change. That was our crusade when we built Andela. We had some of the most brilliant people I have ever seen and then we placed them to work with very big successful companies around the world. That’s a successful company. Today, it has raised over 180 million dollars. Today, it’s on its way to becoming a unicorn. It has done extremely well for itself making revenues. Now it has become a renowned international brand. But then I left Andela in 2016. I left it in the hands of very capable management who I am so proud of.

I then moved on to build Flutterwave. And the thing about Flutterwave is we saw this huge gap of Africans playing on the global economy from a point of digital payments. Africans couldn’t pay for Netflix, Uber. Small businesses from Africa could not advertise on facebook and twitter. We were using these tools but could not make an economic benefit out of them because we couldn’t pay or worse, we couldn’t be paid. All this was because you couldn’t pay for these online services. All we had was the monopoly of Western Union and MoneyGram for the longest time. Meanwhile the rest of the world was moving on.

So we decided to build the rails that connect Africa to the global economy. That was our biggest mission. And we wanted Africans to participate as equals not just as vestiges or only as citizens of the world but as equals just like other people.

My specialty Robert is that I try to be there when the company is at ground zero and work with the company to become something significant. Recognizing that that was my strength, I went and built the Future Africa which is a venture capital company. It takes on companies by providing capital from zero to 1 million dollars, coaching and training founders that are building businesses that are derived from Africa’s biggest challenges. We believe that founders can take Africa’s biggest challenges and turn them into global businesses so that they can go from zero to a hundred million. We have been around for two years and we are now working on Talent City, a company being built by Future Africa. So Future Africa is the founder of Talent City.

And the big idea at Talent City, we want to build an innovation city for the skilled people where the smartest and brightest people can come together to build tomorrow. You recognize that there is a need for physical presence. We don’t have that yet in Nigeria.

RK: Since you are  a venture capital guy, allow me to pitch to you an idea of something I have been thinking about.

E: Do you want to do it now? Shoot.

RK: I want us to do a virtual company that delivers online schooling.

E: I love that but what’s going to be the competitive advantage because there are a lot of companies that deliver content online? How is it going to do it differently?

RK: It’s got to do with the content in which Africans grow and experience Africa in a unique context which defines us. Unique elements. We have been stuck in colonial systems and we must work around that by providing information and skills without having to worry that we are going to be ruled over by inspectors and all that. And that maybe those who want alternative education can come to us.

E: I like it.That sounds like a good idea. Where is it now?

RK: I will develop it and share.

E: Fantastic.

RK: Good things come to those who wait.

E: And those who hustle.

RK: Let me start with you something you said sometime back about Ugandan talent that has become the defining phrase of you in Uganda. Can you tell us about that?

E: The more I interact with Ugandans, the more I recognize that you guys are the underrated talent of Africa. It takes me back to Nigerians before Andela. I was telling a friend the other day that I always knew Nigerians were special but we had a lot of negative PR. I feel the same about Uganda. Uganda has a lot of underrated talent. It just needs to be identified, polished and enabled to deliver the future that needs to be delivered. And a lot of that comes from the many issues we share with you, a sense of hunger and achievement we share. I haven’t yet spent as much time as I should in Uganda but am looking forward to doing so. But even with the talent I have engaged I have been blown away.

RK: I am inviting you, when you come, one of the things you are going to do is spend some time with me at my coffee farm.

E: Of course. I have to make time for that. Uganda, like Zimbabwe and Nigeria, have the best talent in Africa.

RK: Talk about fear what I will call self sabotage. There are so many people with great ideas but they say they don’t have the capital. When the capital is provided, they say, they don’t have the time. How do you deal with risk; taking chances? Because business is all about taking risks and taking chances.

E: I think you have to first of all acknowledge that failure is part of progress. And the risk is what will get you there. And t can be painful to recognise that. I mean everyone remembers the story of what worked Andela, Flutterwave, maybe Future Africa will work who knows. Right now, it’s a lot of my money. But, the reality is you won’t know until you try. And there are a lot of reasons not to try. The mindset which has helped me is a childish one; and it is one of proving a point. I am the guy who is willing to show everybody that they are wrong. At some point you have to remind yourself that you are on the right course. At my age, I have run out of opinions to care about. Not many people want to tell you you are wrong when you have been right once or twice.

RK: I have been in that position before where people don’t expect you to go wrong. And you can never go wrong.

E: True.

RK: How do we go about financing patient capital, we have very wealthy people, why is it that it is hard to have them channel their wealth into ventures like you do?

E: We have not yet built a capital stuck as a continent. It has many benefits. People come in with the capital and after take it out. And that has got to every art of the economy even in areas like agriculture. You have the soil, the tools and the skill. I will disregard the intellectual capital as a society

Why am I saying this, the capital gap is more of a mindset issue. Our countries are sitting on all forms of capital in the form of pension funds. We don’t have the confidence to take out a portion of that money and invest it to find solutions for our problem. Post covid, I think we are going to go through an incredible realignment mentally from a general point of view. Covid has forced governments to point money which means they have to increase productivity and justification of spending that money. And all governments in the world are printing  money and the tide is rising. You know what they say about the tide; we’ll see who is swimming naked. At the end of the day, African governments have to get to a point where they are deeply investing their own capital stuck which will include everything from what are we doing with local innovation, exporting information capital, knowledge capital, cultural capital. We are going to have value in very strange places.  This will be the capital that will end up translating into the kind of capital that we will need to be able to do what we need to do.

Let’s look beyond the dollars. The past 5 years have shown that we can get dollars from anywhere. This year we are going to get 2.2 billion dollars across Africa into tech. The problem is not dollars. The problem is capital. And dollars are not capital.

RK: What then is capital?

E: When we were taught about capitalism, we were taught about the factors of production which include land, managers/ entrepreneurs, and others and that is what we call capital. We need to get back to that definition of capital. Capital is not somebody else’s dollars coming into Africa as foreign  direct investment or any other name.

Capital is land of which we still have in tons and tons like your farm. Capital is human capital. What are we doing to improve our human capital? We can call it leadership. That is the idea of managerial. My point is, we need to go back to those principles.

We have foreign reserves across Africa. the biggest being remittances coming back into our countries. And what are remittances? Remittances are translated human capital. We have invested in basic foundation education for our young people and then they are exported to the US and Europe where they earn dollars which they send back. But instead of us investing even a fraction of that money in research and build up intellectual capital, dedicating those resources to replenishing the institutions, we instead use it to chase imports which are not capital. It’s pure consumption. You see how we keep in cycles. That’s what’s going on.

RK: That’s why I was making that pitch to you. The technology bus kind of left Africa behind, there’s lots of Africans participate in all these big innovations but how can we leverage them now so that we can extract maximum benefit and leapfrog into the future world?

E: That’s something I think about a lot. It’s going to revolve around human capital and that’s why I am very excited about the work we are doing around Andela and all the other people working around that model. At the end of the day the world that we are moving towards. The number one requirement of the knowledge economy is human beings not infrastructure. And when you look at the world demographic, most of the world’s largest working demographic is going to live in Africa in the next 15 years. So you’re almost being placed by nature to control the most important element which is human beings. For you to prepare for that, you have to be very strategic in how you design and develop models and skill and that is what we are trying to do at Andela. And now we have a model that scales. And we’re intentional about scaling that model. And India is a good case study, India’s biggest export are human beings.

RK: Nigeria has been doing that. It has been exploring human resources. The quality of the population is key. What then do we ought to do to improve the intellectual capacity of the population of Africa so that they can be completely competent to pursue those interests?

E: I think we are going to have to start with access. People like me who were born in some relative privilege may have one or two things to say but the reality is that it could be any of our stories. And I think about that. I wonder what would happen if we provided access to many other young people across the continent.


Kelvin: What do you think is more important for founders to focus on in the earlier stages? Is it customer validation? Traction? Building for scale across borders? Bootstrapping?

E: I think the best thing to happen in the earlier stages was not mentioned. It is a team. Because the nature of start-ups is very dynamic, you have to scale rather quickly. You have to find the right team that knows what has happened before, what is on the market. Someone who knows the future and doesn’t have inhibitions.

RK: What are the characteristics of someone who sees the future?

E: For me, it is about someone who has a vision of what the challenge could become an opportunity and is desperate to see that world become. We call them vision driven founders. Robert, if I wanted to grow a different kind of coffee that could make you easily scale.

RK: In fact right now, we are looking for climate resilient coffee.

E: Great. Imagine if you found a young person who is out to grow climate resistant coffee regardless of whether he makes money or not. That guy sees the future. Those are the kind of people you want on your team when you are building. That is the most important thing.

After building a team, then you find the customer to validate; to solve a problem for. Who has a problem that you are going to solve? One of the biggest mistakes that founders have is trying to solve everybody’s problem at the same time. And that is when it gets crazy. But if you just focused on building, for example, climate resistant coffee on Robert’s farm, once you have Robert’s farm as a model, you can then go to other farms because you have the know-how. You have a model.

You can see how the line grows from a team, to customer validation to traction which then results into scale.

RK: And I think a lot of our people become impatient and want to go quickly to the money. 

E: Yes to scale, without doing customer validation and traction. Sometimes the person you target as your customer is not even interested in your product.

RK: In my days we used to call it determining your market.

The follow up question is; what is the definition of product market fit in the African context?

E: When we talk about product market fit, what we are really talking about is problem-solution based. Where people find a big problem and sometimes it is easy for people to think about it culturally. For example, in Lagos, we have a 70 million housing deficit. Someone can look at that as a very big problem to solve. But people have not thought through how we can find capital to build, how we can afford it and all these layers of problems that people have not fully and properly thought about. The problem of housing is more of  a symptom than a disease. It is an example of a bigger problem. It is evidence of a broken capital market, evidence of lack of property rights. These other things that can be found and solved.

Product market fit is about creating a solution that is implementable in units such that the solution can scale to perhaps significantly eliminate that problem.

RK: What do you think it takes to build a venture capital culture in Africa?

E: The way venture capital evolved in the US is that the venture capitalists would approach say a pension fund and they give them a fraction of their money in the understanding that it is risk capital that can be lost entirely. But the fraction is so insignificant, it does not matter. But also there is an understanding that if they could do very well, they could get a big bonus for their project portfolio.

I think in Africa we may have to approach it differently, I think people want to carry risk on their own. People are not investing only for profit but they are investing because they want to see problems solved. I think the way to go is to have angels. It’s going to be people opting in. This is something we have implemented at Future Africa. We have a community of 300 investors. They pull together resources which we make available to the individual investments.

We do this because this is how the real estate market developed. Same as the agricultural market. I don’t think that venture capital is going to go in the same direction. I don’t think an investor is going to come and just give you their money. The biggest challenge though is that if you are a Ugandan investor with interest in the US market, you will not get the same treatment as the US investor in the same market. We are trying to see that we change that. We are working towards making sure that investors from all over the world can have the same opportunity.

RK: There was recently a shortage of computer chips on the market. From the Andela experience, how can Africa respond to the limited tech talent available in order to sustain entities like yours?

E: 85% of components used to make chips are in Africa primarily in Congo. Back to the question of capital, we define capital as dollars, meanwhile it is what on the ground is. The minerals that can be transformed into these things. We just lack the ambition to complete such endeavours like African made chips. The beautiful thing about having a resource in abundance is that you can actually  think in terms of abundance not scarcity. Like I said Africa has a lot of people that can be transformed into tech geniuses.

RK: Thank you E for spending your valuable time with us.

E: I love Ugandans. You just need to give me a passport.

RK: We shall even give land and a wife if you want.

What would be your last message?

E: The biggest thing I tell young people is that the future is in your hands- literally. In 15 years, all the problems that you see and worry about will be gone. And the future will be in your hands. Do everything you can to prepare for that moment. Do not be caught up in the mourning and all that. Prepare for the time when leadership is going to be yours and start to dream and do. We can’t afford another unprepared generation. When we got independence I don’t think our grandfathers were prepared for the responsibility of nation building. We defaulted to bad habits. We can’t afford another generation of your people who are going to give up.

RK: Thank you E for joining us for #360Mentor.

E: Thank you so much

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