Three takeaways from the hierarchy of venture opportunities in Africa and other emerging markets
Analyzing and categorizing unmet needs across African markets bestows a powerful framework for entrepreneurs and investors to understand and assess the relative attractiveness of various opportunities
Afridigest provides ideas, insights, & analysis for startup founders, operators, and investors across Africa and beyond.
Today, I revisit a previously published essay that introduced a novel framework for entrepreneurs & investors to use to evaluate opportunities. This post contains a brief introduction and actionable insights for founders, operators, and investors.
If you’re new, welcome 🙌 — you’ll receive a weekly digest every Monday and, generally (but not always), an original essay/article on Saturdays. For past essays and digests, visit the archive.
On Thursday, Afridigest received what we believe is our first major media mention in a Quartz article on influential Africa-focused tech media. In it, I was quoted as saying, “The most influential content goes beyond fundraising or launch announcements to showcase innovative or pioneering thinking that offers new insights to readers.”
One example of such pioneering thinking that new Afridigest readers might have missed is the now almost two-year-old essay, ‘The hierarchy of venture opportunities in emerging markets.’ The piece draws inspiration from Maslow’s hierarchy of needs to develop a framework for entrepreneurs & investors to use in evaluating opportunities across sub-Saharan Africa.
After publishing, the article drew quite a bit of interest from founders, VCs, and angel investors worldwide as gauged by follow-up emails and WhatsApp messages received — so much so that weeks later I published a subsequent clarifying piece, ‘Demystifying venture opportunities in African markets.’ Ultimately, to quote from the original essay:
“Entrepreneurs & investors in sub-Saharan African (and similar) markets are most likely to find success if they concentrate on ventures that: build basic or alternative infrastructure; organize and integrate fragmented markets; minimize transaction costs & friction; enable entrepreneurship & economic empowerment; or create entirely new markets.”
Actionable insights from the article
If you don't have time to read the full piece, here’s what founders, operators, and investors can learn from the hierarchy of venture opportunities in emerging markets:
• 𝗜𝗱𝗲𝗮𝘀 𝗳𝗿𝗼𝗺 𝗼𝘁𝗵𝗲𝗿 𝗳𝗶𝗲𝗹𝗱𝘀 𝗰𝗮𝗻 𝗼𝗳𝗳𝗲𝗿 𝘂𝗻𝗶𝗾𝘂𝗲 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝘁𝗼 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗼𝗿𝘀 & 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀. It's not often that investors and entrepreneurs look to the field of pyschology for answers in their professional lives, but sometimes the best ideas come from outside one's industry. And, according to renowned psychologist Abraham Maslow, analyzing and categorizing unmet needs provides the best insight into and understanding of human behavior. One can extend his work to the context of entrepreneurship across African markets — analyzing and categorizing unmet market needs bestows a powerful framework for entrepreneurs and investors to understand and assess the relative attractiveness of various opportunities. • 𝗧𝗶𝗺𝗶𝗻𝗴 𝗶𝘀 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴. Timing may well be the single most important factor in a startup's success or failure. So then, it behooves founders and funders to evaluate the African startup ecosystem critically and develop a defensible, personal viewpoint on which business models, sectors, and general archetypes are well-timed considering the current stage of development of markets across the African continent. • 𝗕𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗯𝗮𝘀𝗶𝗰 𝗼𝗿 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲, 𝗯𝗿𝗼𝗮𝗱𝗹𝘆 𝘀𝗽𝗲𝗮𝗸𝗶𝗻𝗴, 𝗺𝗮𝘆 𝗯𝗲 𝗮𝗺𝗼𝗻𝗴 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝗶𝘃𝗲 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗮𝗰𝗿𝗼𝘀𝘀 𝗔𝗳𝗿𝗶𝗰𝗮 𝘁𝗼𝗱𝗮𝘆. Investment theses and startup ideas should reflect the realities of the markets they target. And today, considering the realities of African markets, the biggest opportunities may lie in the aggregation of supply or demand or both, the connection of disjointed markets, and the development of platforms that act as infrastructure or operating systems for others to leverage, plug into, and build/layer on top of.
As always, I’m very interested in your thoughts. Contact me via Whatsapp, Twitter DMs, or email or leave a comment here. And take a look at our friends at intellence for your thought leadership needs.
Thanks for reading ✌🏽