Politics · Uncategorized

The Western Fall

We analyzed the Arab Spring…Now let’s talk about the next revolution we all have courtside seats for…. The Western Fall.

Here in the US, we’ve had an unprecedented presidential primary season. We’ve had two anti- establishment candidates, one from each of the major political parties, rise to national acclaim. One of them is the presumptive republican nominee

Political pundits, historians, statisticians, failed in their predictions. Most are blaming miscalculations on changes in the media technology and how celebrities push forecasters further from accuracy.

They’ve brought out segments of the US population that feel disenfranchised, slighted, and that traditional political allegiances have not served their needs. Anti-establishment voter sentiment is not just exclusive to the United States.

Meet Norbert Hofer, former presidential candidate, of the far-right Freedom Party of Austria. The party wanted to provide more referendums, directly elect the federal president, significantly reduce the number of ministries, and devolve power to the federal states and local councils. While Hofer eventually ended up losing, he managed to get 49% of votes during the election.

The far left also has its share of rising political figures. In Greece, for example, Prime Minister Alexis Tsipras’ left-wing Syriza party is leading an unlikely coalition government with the right-wing populist Independent Greek party.

Across the West, we see a rise in conversations around immigration, economic integration, austerity measures , size of government, and a move away from “centrist” candidates and platforms. Why now and most importantly, what are the implications of a more populist West? Are we in a new normal?

Why Now?

There are a couple of major trends play a key role in the Western Fall. I believe the social liberalization is a major driver.

The World Values Survey shows that Western societies have been getting gradually more liberal on many social issues, especially among the younger generation and well-educated middle class. That includes egalitarian attitudes toward sex roles, tolerance of fluid gender identities and LGBT rights, support for same-sex marriage, tolerance of diversity, and more secular values, as well as what political scientists call emancipative values, engagement in directly assertive forms of democratic participation, and cosmopolitan support for agencies of global governance.

This long-term generational shift threatens many traditionalists’ cultural values. Less educated and older citizens fear becoming marginalized and left behind within their own countries.

Another key driver is the rise in income inequality. Western countries, who were greatly impacted by the global financial crisis, have rebounded for the most part, but inequality between the wealthy and the poor has continued to increase. While income inequality has increased amongst populations, there is also a larger discrepancy between richer and poorer countries in the EU.

Globalization and the advent of technology replacing low wage jobs creates some context as well. From retail to finance to healthcare and education, the jobs available particularly for low-skilled workers, are diminishing. One study from the Oxford Martin School published in 2014, estimates the 49% of all jobs are in jeopardy of technological disruption over the next 20 years. Low wage workers are feeling the bern already and it’s translating to isolationist rhetoric.

What are the implications?

What we’ve already started to see is a large shift toward isolationism. #Brexit is a great example of what is to come. Citizens who feel immigration is the cause of their country’s woes will close their borders and make it more difficult for immigrants to visit and and gain residency. They’ll want to block themselves off from their neighbors and go it alone. This is especially worrisome for the European Union as we’ll start to see more right and left leaning parties bring similar referendums to the people.

I also believe we’ll see the demise of the two party System in the United States. At this time, the Democratic and GOP platforms are too centrist for the ultra conservatives and the left liberals. It may not happen this election cycle, but we’ll see a fragmentation of the major parties in the next 5 years.

* I’d be interested in hearing more implications in the comments section. I’m just going to wrap up because I have to start making dinner.

To conclude, I do believe we are in a new normal. We’ve seen this coming for a long time. On the US side, the Tea Party was the predecessor of what we see now. The big question is how political systems will operate as a result of the new norm. I have a feeling that the process will sort itself out but it will take some deliberate steering. We are in an era where we have to deal with global problems collectively. Isolationism will serve as a hinderance to major challenges like climate change, water and food shortages to come. I haven’t even asked what this means for China on the worlds stage. What about emerging countries? Is this a chance for others to step up where other countries will attempt to focus more on internal development?

#MentalNote · business

An Executive Story

A fellow had just been hired as the new CEO of a large high tech corporation. The CEO who was stepping down met with him privately and presented him with three numbered envelopes. “Open these if you run up against a problem you don’t think you can solve,” he said.
Well, things went along pretty smoothly, but six months later, sales took a downturn and he was really catching a lot of heat. About at his wit’s end, he remembered the envelopes. He went to his drawer and took out the first envelope. The message read, “Blame your predecessor.”
The new CEO called a press conference and tactfully laid the blame at the feet of the previous CEO. Satisfied with his comments, the press — and Wall Street – responded positively, sales began to pick up and the problem was soon behind him.
About a year later, the company was again experiencing a slight dip in sales, combined with serious product problems. Having learned from his previous experience, the CEO quickly opened the second envelope. The message read, “Reorganize.” This he did, and the company quickly rebounded.
After several consecutive profitable quarters, the company once again fell on difficult times. The CEO went to his office, closed the door and opened the third envelope.
The message said, “Prepare three envelopes.”
In the process of looking for the author to give credit. I heard it as a story during a network event. 
startups · venture capital

What Does a Deal Memo Look Like?

I originally wrote this as a response to a comment. Long story short, when a vc firm is making a decision on whether to invest or not, and they’ve had meetings with your team. They normally make a deal memo to specify the opportunity and explain the pros and cons of the investment. This document helps partners and others on the investment team communicate clearly about the opportunity. 

  1. Executive Summary

10k view of the opportunity. Something I would read briefly the first time around to get good context but be definitely asking more.

a. Quick business summary: Background on the company, who they are…where they operate, etc

b. Investment analysis: To invest or not to invest… that is the question…more importantly, why on either side?

c. Risks: What are key challenges the company faces? Team…competition… technology risk?

d. Financing: Round, size, amount already invested

e. Post investment: Use of funds, milestones etc

2. Market Opportunity

Goal of this section is to better understand the market and figure out where the opportunity fits in the grand scheme of things.

a. Key Problem: what is the company trying to solve for?

b. UVP: What is the solution to the problem?

c. Market: How large is the market? Where is the market in its maturity?

d. Competition: Identify current competitors and how company fits into the mix.

  • ***I like to add information about current customers here. The positioning depends on which of the points the customer interviews support. Ref calls can also be added in product space as well

3. Product 

Goal here is to paint a picture of the product and the teams ability to defend and improve said product.

a. Product Description: What is the product and who does it serve?

b. Price and scale analysis: What are the cost drivers? What are the margins? How do they reach more customers.

c. Product Roadmap: What features are coming online in the next 18 months? Why?

d. Defense: What are the key deterrents to ward off competitors. (Good opportunity to talk about IP)

e. Challenges: What are some issues with the current product? How is the company dealing with those issues? (customer interviews are good here too)

4. Marketing/Sales Strategy

Goal of this section is to get the hard nums on how they plan to reach their customers.

a. Customer Story: (borrowed from ad world) I want to create representation of who the customer (person making the purchasing decision) so we normally create in depth stories (sometimes ends up being longer than it should but meh..) Who are they? Where does company go to reach them. What are their restraints, and what does the product empower them to do?

a1. What are the similarities of customers? For example, in b2b…Do the customers have the same size company in terms of people/revenue/geographic operation?

b. Nums: Cost of acquisition, variance between channels, sales cycle…etc

c. How do you scale the Sales and Marketing Strategy? (strategic partnerships, bd)

5. Team

a. Who is on the team? (everyone…including board of advisors)

b. What are their key strengths?

c. What are their key gaps?

d. What areas will need to be added as the company expands?

6. Operational Strategy

a.Use of Funds: Where is the investment going to? Which milestones/ goals will the investment be funding?

b. Historical financials (most early stage companies may not have this but still worth identifying.

c. Monthly Burn Rate: Some like quarterly but I like to identify monthly burn pre and post investment.

d. Revenue targets & Margins

7. Deal Structure

a. Current cap table pre investment — ->Cap table post investment

b. type of security

c. Any other information from previous rounds that might be pertinent

8. Exit

Gets into details of who the potential acquires are, what an IPO may look like, and who to compare it to.

9.Le Fin

*****Things normally added to the appendix are other supporting documents, due diligence findings, and full customer interviews.

 Pretty exhaustive, but I feel as if i’m forgetting something. This should get the job done for most seed stage deals.

product · startups · Technology · Why?

Design Thinking in the Nigerian Context

It’s 2 AM and the electricity goes out. Annoyed, you walk outside to turn the generator on. In the process of turning the generator on, you realize there’s no gas in the gen. In the pitch black of night, its not difficult to see the large red canister of gas a couple of steps away. You get the canister and start to attempt to fill the gen. You realize there’s too much gas in the canister and its difficult to control the amount that goes into the gen so you start to think… You go into the kitchen and get a used plastic bottle, cut it in half and now you’ve created a funnel and cup. You head back outside, put the makeshift funnel on the gen and begin to fill the cup with gas and pour it in the funnel. You fill the tank, turn the gen on, and go back to sleep.

That story is design thinking in action. I’d argue with anyone that design thinking is not a process that Nigerians are foreign to. In fact, it’s been at the ethos at most grassroots solutions. There are so many small inventions and quick fixes that I see everyday. Why don’t you see some of these solutions in the market? I believe the challenges are threefold:

  1. How do you get people to see their solution as valuable outside themselves?
  2. How do you provide the platform for people to producttize/ commercialize their already working prototypes?
  3. How do you protect ideas and create incentives for people to continue to create?

How do you get people to see their solution as valuable outside themselves? 

This is consequence of innovating to live vs innovating to thrive. People are brilliant problem solvers in developing markets because they have to in order to survive. Design thinking concepts tend to become a framework that most people operate in without knowing it.  The challenge is being able to think beyond the problem, which is challenging for the problem solvers. I would suggest getting up to the balcony like in this story below:

Let’s say you are dancing in a big ballroom. . . . Most of your attention focuses on your dance partner, and you reserve whatever is left to make sure you don’t collide with dancers close by. . . . When someone asks you later about the dance, you exclaim, “The band played great, and the place surged with dancers.”

But, if you had gone up to the balcony and looked down on the dance floor, you might have seen a very different picture. You would have noticed all sorts of patterns. . . you might have noticed that when slow music played, only some people danced; when the tempo increased, others stepped onto the floor; and some people never seemed to dance at all. . . . the dancers all clustered at one end of the floor, as far away from the band as possible. . . . You might have reported that participation was sporadic, the band played too loud, and you only danced to fast music.

. . .The only way you can gain both a clearer view of reality and some perspective on the bigger picture is by distancing yourself from the fray. . . .

If you want to affect what is happening, you must return to the dance floor.*-Ronald Heifetz

That often the most challenging place for problem solvers to get to but is central to seeing the value in an idea or a new process.

How do you provide the platform for people to producttize/ commercialize their already working prototypes?

This a more systemic and structural problem. With a lack of manufacturing and capital in developing markets, it’s often impossible to scale a new idea. I believe the improvement of technologies like 3D printing hold a tremendous opportunity to decrease the cost and increase the accessibility of manufacturing to the masses.

How do you protect ideas and create incentives for people to continue to create?  

This is an interesting challenge that all countries face now. How do you protect people who create, while encouraging the free exchange of ideas so people can build upon them? Legal spaces like IP and copyright may not be as developed in a place like Nigeria but it presents a great opportunity to re-imagine what IP/Copyright law can look like in the information sharing age.

music · Politics

Flying to Nigeria with my Woes

I’ve been getting a lot of emails, texts, tweets from my friends asking me to explain what’s going on in Nigeria. I don’t really have all the answers but I think I have an okay understanding. Here’s my response to one of my friends about the recent growth adjustment discussed here.

A couple of things…..
  1. It’s bad but it isn’t as bad as this guy makes it sound
  2. It’s a mix of history and current situations biting Nigeria in the butt
  3. This is probably the best situation Nigeria can be in.
It’s bad but it isn’t as bad as this guy makes it sound… A lot of things aren’t happening right now because of the currency restrictions the Nigerian government has put on commerce and consumers. The policy is in place as ant-corruption +  protection driven strategy to prevent rapid inflation. I need to find some articles to better explain it but that’s one major part of whats going on. There are things still happening but the industries that aren’t driven by import and currency arbitrage seem to be doing okay. Totally forgot to mention the fuel scarcity… maybe its pretty bad, but Nigerians always make the pretty bad seem bearable for some reason.
It’s a mix of history and current situations biting Nigeria in the butt.  The major challenge with the Nigerian economy was that it was so dependent on oil revenues as a government. As supply increased, the Nigerian government was over exposed to the decreased prices and it ruined the 2015 and 2016 budget. Now everyone internally is screaming diversification but its a tad late. If you look at Angola, Saudi Arabia, Libya….They all have ridiculous sovereign wealth funds that have been at work to invest oil profit in other industries and other areas of the world. Nigeria has been squandering its oil profits through corruption and living the high life.
This is probably the best situation Nigeria can be in.. I think this is forcing a lot of difficult conversations that should have been had 20 or 30 years ago. It could be severely worst…. Imagine a currency diving into a tail spin. That would suck. Nigeria still has a things going for it… a ton of natural resources, low labor costs, improving infrastructure…. There’s still a lot of work to do but  I think Nigeria is still in a decent position…