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The World’s Greatest Venture-Capital Investment Ever, is Africa’s

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Naspers

It is not news that one company in South Africa has market valuation that is bigger than the whole stock markets in sub-Saharan Africa excluding South Africa (you expect that). The company’s market cap is at least 4x the size of the Nigerian Stock Exchange (I write this with pains). That company is Naspers – Africa’s largest entity by market capitalization.

Few weeks ago, it sold 2% of its stake in Chinese tech giant Tencent for $9.8 billion. It has invested $32 million in 2001. That $32 million was worth $175 billion (yes with B) before the 2% exit.

South African internet and entertainment group Naspers on Friday raised $9.8 billion (7.8 billion euros) selling two percent of its hugely-profitable stake in Chinese technology giant Tencent.

Naspers’ investment in Tencent has been “one of the greatest venture-capital investments ever”, according to Bloomberg News.

It said the stake in Tencent that Naspers bought for $32 million in 2001 was valued at $175 billion on Thursday.

Naspers, Tencent’s biggest investor, vowed to not sell any more shares for three years.

“These funds will be utilized to reinforce Naspers’ balance sheet and invested over time in Naspers’ development businesses,” the Cape Town-based company said in a statement.

Shenzhen-based Tencent has risen rapidly as China embraced the internet, with the company’s fortunes boosted by its WeChat social media platform.

WeChat crossed the one-billion users mark after the Chinese New Year in February.

In these two pieces (here and here), I have made a case why Nigeria needs to fix our venture capital ecosystem.

To create such enablers in Nigeria, I propose the following specifically for the VC sector:

  • Government should offer new VC (venture capital) firms in Nigeria a ten year tax incentive on profits if they have asset base of at least $50 million and will deploy the capital in Nigerian startups within 10 years.
  • Offer new VC firms in Nigeria the opportunity to repatriate 100% of profit within ten years. That will help the country to attract foreign investors to make Nigeria home.

If we have this type of incentive, we will see many VC funds making Nigeria home to explore opportunities in Nigeria and continental Africa. That influx of capital will have many multiples of benefits to our economy, our people, and the Nigerian technology space. Most especially our tech firms will stay home.

As Naspers shifts its massive profit home to South Africa, there is no way the South African treasury will not get at least $30 billion if you have around 20% tax rate. That is a national budget for Nigeria if this had happened in our country. We need to pay more attention to venture funding to stimulate our economy.

Why That Contract Disappeared

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Today, I am predicting that before May 13th 2020, LinkedIn will have a feature that makes it possible for some Updates/Posts here to self-destruct. We are entering a new age on online privacy since Facebook tested UNSENT which makes it possible to retrieve (and delete) past messages in recipients’ accounts. Yahoo and Gmail will surely give us emails that self-destruct after say hours, days, weeks, months, and years.

As we move into this new territory, the implications will be massive for business contracts. Yes, you have agreed via email only for the emails to permanently disappear after say two months. And you cannot recover them. Simply, now is the time to think how to secure your business digital assets and plan ahead the kind of contracts you execute via electronic systems.

Personally, I am a tech guy but I am very suspicious of digital systems to preserve anything. I have this habit of printing things I want to preserve and secure. In 2009, I had written a book and the publisher sent me a PDF file to proof-read before publication. I did. When I woke up, the file had disappeared in my laptop. I was stunned on that possibility largely because the file I received was a simple PDF document [nothing esoteric]. Imagine if that was an important contract and your partner had withdrawn all elements to destroy it, magically.

Before you think this is science fiction, Techcrunch reports that Gmail is testing that feature already. Yes, it is coming to Gmail possibly in weeks.

Based on those screenshots, expiring emails work pretty much like expiring emails in ProtonMail. After some time, the email becomes unreadable.

In the compose screen, there’s a tiny lock icon called “confidential mode”. It says that the recipient won’t be able to forward email content, copy and paste, download or print the email.

You can configure the expiration date so that your email disappears after 1 week, 1 month, multiple years, etc. You can also ask your recipient to confirm their identity with a passcode sent via text message. This sounds like a great way to associate email addresses with phone numbers and improve Google’s ads.

As I have noted, we will break the web because we want super-privacy. When you cannot trust that the email you have archived would be available when you need it [the other person wants the ability to control distribution] it means no one would use email for anything serious. I am happy we have trees in Nigeria. So, we would go back to papers. Yes, everyone will just ask for paper contracts as I am going to be suspicious agreeing on anything on emails when the emails have the possibilities to disappear.

Mark Zuckerberg poisoned the web when people woke up and saw that all messages he had sent them had disappeared. Essentially, he had proven why we should not take his platforms as credible ecosystems for something serious. You cannot make these things up – they are playing in real scenes all in the name of user privacy.

To recap, now six sources confirm that Facebook messages they had received from Mark Zuckerberg had disappeared from their inboxes. When we told Facebook we had an email receipt proving the retractions

 

Building Firms That TRANSFORM

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Competition is one of the vehicles markets renew and refresh themselves. We have all come to learn about the need to innovate as without innovation, it would be hard to compete. Innovation improves productivity even when (usually) reducing the cost of the products and services. That happens because innovation engineers a new level of competition which means a new trajectory to achieve the purpose of reducing market frictions – the very essence why companies exist. When you innovate, you transform your business and your market.

There are fundamental constructs which define companies that run and then TRANSFORM their sectors. The reality is that succeeding as a business requires reinvention as customers needs evolve with time. Companies that transform are good at staying ahead of customer needs and perceptions: no matter what comes, they tend to be ready.

But transformation can also come via many ways and many firms have invented ways to transform. I have liked how Intuit has become a category-king company in its sector. For decades, the U.S. company continues to swallow competitors without buying them. I have called its model: Fish Bait Acquisition Construct. It is a model where you give things free to competitors. As they come to enjoy the freebies, you trap them, and over time, they become weak. The end game is that over time, they beg you to take over their assets.

You want to build companies that can transform sectors. Enjoy the video.

Towards Nigeria’s “National Cybersecurity and Cyberwarfare Command”, NGCYBERCOM

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In this piece, I had written a whitepaper for Nigeria’s “National Cybersecurity and Cyberwarfare Command, NGCYBERCOM”. Yes, you imagine a future and you just write even when no one is paying attention. Provided it is written you have your peace back. Here is the video but the whitepaper is a tome of academic scholarship.

The world has nuclear non- proliferation treaty, but none exists for cyberwar despite the potential economic dangers the latter poses to world commerce. Accordingly, many nations have started to deploy strategic commands to protect, defend and necessarily retaliate when their systems are attacked through cyber-means. The United States Pentagon has the Cyber Command inside the National Security Agency, the British has a similar unit inside the GCHQ. China, Iran, Russia, Israel, and many other nations have developed cyber-army to protect their economies.

For the complete Whitepaper, contact tekedia@fasmicro.com if you a paid subscriber to Tekedia with your subscription email.

Buhari’s Planned Second Term – The Agriculture Progress Thesis

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Many have commented after I noted that farmers are doing (paywall) well under Buhari. Sure, the disagreements are welcome provided they are not personal.  I have problems with the government but on agriculture, it has made progress. These are some of the comments:

  1. “His first 3 years have made many farmers richer [I know this because I work with them]”…Now, this is a very interesting irony – Rich Farmers in a Country where people can barely feed. Hmm! However, I know a Network Engineer, who put all his savings into starting a farm. He is financially challenged today and has had to abandon his farm because of herdsmen! Not just him alone, I know at least one other farmer that has now abandoned his farm for fear of terror. These guys did plan but in Nigeria, planning is challenged. Seriously, I am at a loss as to where this system is leading to. Please note, not Buhari as a person, but the system we have all conspired too put in place! I said this in 2015, even with so much optimism about the Buhari administration: “That the failure of the PMB administration would not be the blame of man Mohammadu Buhari, but the failure of the Nigerian state. This is because a people deserve the leader it gets. At 75 years old, do we all as Nigerians think PMB in this mould and stock is the kind of leader we need in the year 2019.
  2. If agriculture is the sole yardstick, has the President done better than Dr. Akinwumi – the agric minister in the last government? Besides who should do well? Farmers or the citizenry? It’s even contradictory to talk of doing well in agric when farmers across the land are being disturbed by herdsmen more than ever before. Or is agric all about animal husbandry where herdsmen are riding rough shod on other farmers’ shoulders? Please, even in educational systems globally, brilliance in just one subject is not enough for you to progress academically and in real life. So, for a holistic picture, assess him on the entire economy and security.
  3. Quite frankly, Buhari’s administration has been good for business in agriculture and also in terms of economic recovery. However, the only reason why we should settle for a discussion that assumes he will secure a second term is if we all conclude that there can be no better alternatives in the 2019 elections. In essence, if Nigerians are generally dreadful of another 4 years of the current administration, then it might be worthwhile to widen the scope to include other scenarios of business-oriented potentials under the leadership of other candidates that have emerged. My 2kobo opinion.

Some have noted how they started farming and have to fold because they could not make money. This is the point: I am not saying that a software engineer that wakes up and starts farming might have done well. Yes, there were teachers that started investing in stocks that lost money but that does not mean stock pickers have not made money [UBA has moved from N2.73 to N11 within 2 years].

If you are a farmer, and in a cooperative, government is providing support. The supports are coming from new seeds, fertilizers, mapping etc. But you must belong to a COOPERATIVE because government has to use scale to provide these supports. If you are a banker in Lagos running a farm by the side, and not in a cooperative, you may not get this help.

Also, the briefcase farmers [those invisible farms] are gone because government requires a FARM SURVEY from farmers before they provide funds. Suddenly, the big farmer cannot give a location of his farm. When government gives you money now, it knows the exact spot on earth that farm is located. And it tracks progress through technology.

Because the funds are tied to BVN, there is no hiding place for a crook.

The software engineer that runs a farm but is not part of a cooperative is like running a bank and not in the banker’s committee. Government cannot meet all farmers. It works through cooperatives. This is one way of bringing scale and professionalizing agriculture.

I am big on this. I do talk to people in the southern part of Nigeria to ask their governors to tap into the CBN agro fund. But most do not. But in the North, the governors commit to these funds. Most in the south do not bother [agriculture has never been a priority to most southern leaders]. You do not blame the President; you blame your governors. That is why in your village in Cross River, Abia, Oyo, etc, you see none of these programs. Your governors have shown no interest to agriculture.

Finally, the greatest favor Buhari did to farmers was restricting importation of many food items. That has helped many farmers to get loans since the demand is there. That is the basis of my point as I noted in the video where I noted that Buhari has done well to farmers. But that does not mean that he has been stellar in many other areas. Sure, being a president requires a broad vision. That is valid but on agriculture, they have a plan unlike other areas where I have not seen any clear execution strategy as I noted in the video.