I offer opinions to global clients. Read this summary on what some hedge funds, private equity firms, etc ask. Despite employing the most brilliant among others, they also look for commoners like us.

Client [2014] – What is your view on the long-term performance of ecommerce companies that syndicate purchases for Africans from developed markets like UK and US? We’re exploring a couple of companies in this sector for investment.

Ndubuisi Ekekwe [I wrote a 4 page document but I will summarize here] –  These companies will outperform in the short-term because of massive information asymmetry,  low penetration of mobile internet and digital payment systems. These companies are valuable because they help people buy things in UK, USA, etc but their core value proportion may not be sustainable. They have no leverageable factors which could compound over time. In short, they are de-leverageable since they will lose positioning in 7-9 years as digital markets mature.

I posit that Africa will improve on payment in 3-4 years and access to the Western digital markets will deepen. If people can buy these things directly, these intermediaries would be disintermediated. So, the biggest risk is how fast Amazon, eBay, JC, etc will begin to accept payments in leading African markets. If those are available and the shops can put logistics to ship to the customers via Fedex, DHL, etc, the aggregation services of these firms will not be necessary. 

In other words, it makes no sense to pay and wait for 3 weeks to receive the items from New York to  Cape Town when you can pay and ask for FedEx international priority to deliver in 3 days. The cost has never been the main factor since those buying can absorb those fees. More so, we have looked at the fees and when all the aggregator fees are included, the saving is marginal.

Furthermore, this market cannot grow faster than the rate the middle class grows. So, the long-time playbook would be anchored on the premise that the middle class can grow really fast in the African markets. Historically, during economic turbulence, exchange rate perturbations emerge, with ancillary inflations which could depress the category growth, as most users will focus on local substitutes.

Summary: if investing, you must look at the time horizon when to exit.

Comment on LinkedIn Feed

Comment: Your time bound view and analysis on the aggregators’ market space for investment is profound.

Customers’ switching costs from the aggregators to direct purchase from the likes of Amazon for now is high.

However, looking at the Africa’s very slow economic development and middle class growth trajectories, I like to slightly posit that your clients’ ROI can still be guaranteed for the next 10 years.

This is because the middle class growth level will always determine the level of improvement on the payment infrastructure investment by potential players in that market.

Thank you Prof. Ndubuisi Ekekwe.

My Response: “However, looking at the Africa’s very slow economic development and middle class growth trajectories, ” – I do not see this as pure Africa ecommerce. I see this as simply trading across borders and the factors are not wholly endogenous. If payment and markets improve in Africa, why do you think Amazon, JC, ebay etc will not open shops in Africa directly? If that happens, how do do see the aggregators thriving?

Tekedia Startup Masterclass: from Start-Up to Unicorn is designed to help founders, entrepreneurs, and those generally working in the startup and SME ecosystems, to master the mechanics of building category-king companies.

The program runs for 8 weeks and it includes an hour-long one-on-one private Zoom session every week, with Tekedia Institute’s Lead Faculty, Prof Ndubuisi Ekekwe. We help you solve the innovation equation and unlock leverageable factors that compound.

Pricing: $400 or N180,000 naira; click for many payment options. Go here and register.

It is on-demand which means you start immediately you pay.  As you plan the Zoom, you will go through 8 weeks of pre-recorded videos I have created. Those explain innovation, valuations, markets, co-founder agreement, being a CEO with high intensity, etc from the angle of SME/startup leaders.

It’s all about solving this equation: Innovation = Invention + Commercialization. We’ll help crack it for that mission.

Innovators and startups, it is that time of the year again. Tekedia Capital has started the process of looking at startups for the next edition of Tekedia Capital Syndicate. If you are building something amazing in any sector or industry,  anchored and powered by technology, we will like to explore with you.

Our members collectively invest $millions yearly in leading global startups.

Go here and learn how we work.

There is a lot of conversations ongoing about mental health, and somehow, I feel the need to talk about entrepreneurs and their mental health. A recent study by the National Institute of Mental Health suggests that 72% of entrepreneurs are directly or indirectly affected by mental health issues compared to just 48% of non-entrepreneurs.

Why is this?

Despite the glamourous part of entrepreneurship (which is all we mostly see on the Media), Entrepreneurs have to deal with more challenges, failures, betrayals from trusted staff, abandonment, disappointment, depressions, burnout, insomnia, and other related stuff which affect their mental health.

Even for those that will not have to deal with most of the negatives, growing a business from scratch and running it every single day can be likened to a constant attempt to keep a madhouse in order. Things get hectic. Deadlines not met. Contracts get breached. Productivity has to be kept on the high. Sometimes, there are also irate customers or clients to handle. It can get overwhelming.

Studies say entrepreneurs are twice as likely to suffer from depression, and six times more likely to suffer from Attention Deficit Hyperactivity Disorder (ADHD). Without mentioning names, some of you may (or may not) remember the story of a certain 29-year-old startup founder who jumped from a rooftop bar and died in 2015 and another who died in 2020 from a combination of drugs and mental illness. Clearly, entrepreneurs have to deal with a lot of bad days than they let on.

One way to protect your mental health is to make it a ritual to take time off work/business. I talked more about this in another post, so I should probably not say more. You need to spend a few hours out of the madness, to regain your sanity, socialize with people, renew your energy and then go back ready to smash more goals. Develop more personal and family relationships. You will need them as much as they need you.

Another tip for you as a founder or entrepreneur is to understand the difference between healthy striving and perfectionism. Often it is the drive towards perfectionism that keeps people away from happiness and contentment, and this could lead to anxiety and depression. Celebrate small victories and learn to bask in the euphoria, and give yourself a pat on the back. Don’t place unrealistic expectations of yourself and your business.

Learn to talk about bad days as much as you talk about the good days. You don’t always have to keep up a face that everything is going fine when it is not. Every entrepreneur should have that friend, partner, or confidante that you tell everything that might be going wrong. It is a good way to let out steam and bad vibes. Be honest about your struggles and share them with others. It is the need to escape the reality of bad days that may lead some people to depression or even drugs.

This last tip may not seem like one, but it is. Fix your finances. Financial problems account for some anxiety and depression cases, even among entrepreneurs. If your finances are well-sorted and your books are in order, you should have fewer worries. Have a stable financial plan for yourself and for your startup.

In the past, the mantra was this: I will just go and execute, and the numbers will do the talking. Interestingly, you can execute, but the numbers will not talk to markets in ways that help you. Simply, how you make money and where you make money are more important than the actual numbers on the balance sheet.

Tesla is a car company which sells “software subscription” and emission credits, and makes all its competitors look lost, even though most are delivering “better automobile numbers”; Toyota sells more than 6.5 million cars than Tesla, but Tesla is valued at close to 4x. 

Go beyond the Needs and Expectations of customers to their Perceptions. When you do that, you create a fandom. Apple has one today as it crossed $3 trillion.

Apple briefly hit a market cap of $3 trillion during intraday trading on Monday, before dropping back under the mark shortly afterwards. Apple broke the barrier when its share price hit $182.86.

The milestone is mostly symbolic but it shows investors remain bullish on Apple stock and its ability to grow. Apple was up over 2.5% during intraday trading on Monday to a price per share over $182 after briefly hitting the $3 trillion mark.