#Pause: What game were you following?

#Pause: What game were you following?

__Choose well!

The last 10 days were frantic, if you are a soccer fan. There were those dramatic semi-final games for the Champions League final. Then there was the final weekend of English Premier League. I actually did not see any of them. Not that I wasn’t interested but I just couldn’t because of my business and philanthropy commitments around the world.

Although I was extremely busy, having travelled to Botswana, South Africa, Europe, and the US (twice) in those two weeks… all the spare time I had to watch anything on TV was taken up by one particular game…the Uber IPO!

I read every newspaper report I could lay my hands on and listened to endless experts (“talking heads”) on TV shows on CNBC, CNN, and Bloomberg. As the moment of the listing grew close, I was just so excited!

“Wow, wow,” I kept thinking to myself. This is as exciting as when we listed Cassava last year, do you remember?

When Uber was started in 2009, 10 years ago, it did a funding round at a valuation of only $5m, and now it is worth a whopping $70bn.

__But just imagine: If Uber was an African country, it would be ranked #10, just after Kenya. It would be larger than Sudan ($58bn), Tanzania ($51bn), Ghana ($47bn), and DRC ($41bn)…

It provides income to almost 4m drivers in 65 countries!

If it was a mining company, it would be worth almost 3x the value of Anglo American corporation ($25bn), the biggest, and most famous mining group to come out of Africa! Anglo American owns De Beers, the world’s largest diamond company!

Uber had 23 funding rounds since 2010, raising a staggering $24,7bn, during that time.

Here is another thing: In 2018 Uber made a loss of $1,8bn, and $2,2bn, the previous year! Actually, it has never made a profit, and yet it is worth $70bn…

So, how was it possible that a company could make losses year after year, for 10 years, and yet investors can still pour in nearly $25bn?

Who are these investors, who kept faith with this start up, and have now been so handsomely rewarded? They were certainly not banks!

Now those of you who followed Uber’s opening day know that it was not quite as expected according to many. Some say otherwise. Who remembers the first day of Facebook’s listing back in 2012?

__What are some lessons learned as you study what happens this week?

Let’s talk… This is serious business, especially for you aspiring Unicorns, waiting in the wings.

Another question closer to home: How do we in Africa develop a venture capital industry of visionary investors, who could believe in our own startups, and stay the course for such a long time?

One thing that interested me was: What role did the government of the United States have in launching companies like Uber, Twitter, Facebook, Lyft—all which emerged in the same time window?

Did they provide startup capital?

How do you see it?

Watching something like this is your game as an entrepreneur. I need you to become as passionate about it, as a sports fan would watching soccer or basketball.

I want you to discuss it during lunch breaks, and to share articles with your entrepreneurial friends. Debate the issues constantly. This is how you will ensure that when it comes time for you to play, you know how the game is played.

Do your homework vigilantly not just this week but continually. What is happening on the markets and with your favorite companies? What’s your own analysis?

Sports fans, I know you analyze the moves of coaches and players all the time, don’t you?

If you are a serious entrepreneur, Uber is an excellent case study for you.

As Warren Buffet once said: “The more you learn, the more you earn…”


Author:Strive Masiyiwa

Strive Masiyiwa is the founder and Executive Chairman of the Econet Group. He serves on several international boards including Unilever, and the Global Advisory boards of the Council on Foreign Relations and Stanford University. A board member of the Rockefeller Foundation for 15 years, he also serves as Chairman of the Alliance for a Green Revolution in Africa (AGRA). He is a co-founder of the Carbon War Room, Pathways for Prosperity, and the Global Business Coalition on Education. He and his wife, Tsitsi, co-founded the Higherlife Foundation and are signators of the Giving Pledge.

20 Replies to “#Pause: What game were you following?”

  1. # It’s a matter of economics…
    The key role for a government, in creating an environment for entrepreneurs to scale their ventures into large companies, is to ensure a stable economic system, and then stay out of the way from a regulatory perspective. Currency weaknesses, inflation and high interest rates, would make it almost impossible for most African countries to nurture high growth fast-paced businesses like Uber.

  2. Afterthought 1.
    There is more to it than “profits”. So Uber does not make a profit, but how are investors who put money being so “handsomely rewarded”? Well, if you invested when the company was worth $5m and it’s now worth $70bn… What a profit!!!

  3. Afterthought 2.
    Every week I come across African entrepreneurs, who are working on ventures that could easily be scaled into Africa’s own “Uber”, “WhatsApp”, “SnapChat” …

    We just need to see a couple of them really take off, and become truly global, so that we can change mindsets.

    Watch this space. I know many of you are quietly working away…

  4. Afterthought 4.

    “I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business.” Warren Buffett

  5. Tinei Hozheri writes,

    Come to think of it i have been watching closely the pre market perfomance and the post uber’s IPO and wonderd why are people so keen in investing in a company that is still to make a profit!,,,but now i will dig deep into it and sent you my findings sir.

    My reply,
    Applying your mind [through proper study] to understand this question will be extremely profitable to you one day.

    I’m not going to do your work for you.
    It is something you must do for yourself.

  6. Tammy writes,

    One of the greatest posts of all time…highly intriguing and makes one think seriously

    My reply,
    It was in my spirit to write this for more than a week.
    It carries a deep message for someone.
    If just one person gets that message then I would have done my job to an entire generation.

  7. #Pause:

    Dr AR Bernard, one of my own mentors, would always say:
    “Eat the meat and throw away the bones..”

    Some people are so easily sidetracked.
    To avoid being sidetracked, I will always ask myself the question:
    “What is the core message here?”

    For instance, I used a picture of a football player, but that does not mean I’m interested in discussing football!

  8. Biodun writes,

    While companies like Uber started small, investors understand and believed in the business process. They understand Uber’s business model, the challenges and they could see that Uber was getting its numbers right (Process), even though it wasn’t turning in profit yet. Investors don’t invest in ideas. They put their money on proven idea, that is, clear number – revenue! You only got to show you are making (or can make) money, even if no profit yet. This made Uber successful to attract investors at those funding rounds. It can only grow and turn profitable.

    Back to Africa now, government wouldn’t need to provide start-up fund for such Uber initiative IF the leadership could provide conducive business environment. The first instrument of conducive business environment is the Rule of Law – not just what is written but what is practised/implemented. We need to get our policies right, reduce red tape, and provide genuine platforms for start up like this, as was made possible for Uber in USA for example. Investors need some sense of confidence that the country will do all it takes to promote, guarantee, and protect their investment. We can make it happen in Africa, never stop trying!

    My reply,

    [my player rating of you today!]

    This is a truly extraordinary company. It is a transformative business model. It is like Amazon, Facebook or Google.
    It was also one of the most difficult business plans to execute.
    I have deep respect for them because I know how hard this has been.

    I have met the current CEO.

    Some of the smartest investors in the world have put money in this company.

  9. Afterthought:

    When I listed Econet Wireless Zimbabwe, it was loss making, and had never made any profit!
    When it listed the share price fell below listing price, and remained there for almost a year!
    We did not pay Dividend for more than 5 years!

    #1. We became the most valuable company on the exchange during those five years!
    #2. The investors who did not sell were handsomely rewarded, more than any investor in the history of the exchange!

    Why buy shares in a company that is making losses?
    How do you make so much money from a company that is loss making?
    Why do investors sometimes ignore a well established business making lots of profits in favor of a new company making lots of losses?

    What are they “seeing”?

    Can you train yourself to “see” like a world class investor?

    #you start by “training” yourself to be interested!

  10. Bright Chiranzi writes,

    Basically Uber is and has simply been the future of transportation and Revenue mine for all sorts of entrepreneurs, Built on a strong GPs and Navigator client locator system for easy of access for the client base,the Driver and the Partners(vehicle owners). I also celebrated their IPO and that itself is an eye opener that UBer is a business created to stay…

    My reply,
    The investors were “seeing” a business model which as you say had the potential to completely “transform transportation”.

    The #Process required to execute this business was remarkably complex. Not least because such businesses will always face massive resistance from entrenched interests. And yet they managed to push through to over 60 countries in just 10 short years!
    In places like New York, many people simply stopped buying or owning cars, once Uber came along!

    Now they are at the forefront of building “driverless cars”.

    This is a remarkable, remarkable business model. You need to be an entrepreneur [senior class] to see it!

    I’m going to make a lot of money from this!
    But don’t cry in a few years, if you did not “see” the opportunity that I saw!

    8/10 [player rating for you today!]

  11. #Pause:

    One of the biggest investors in Africa called me today:
    We chatted about different transactions that are happening. Uber of course was right up there. Discussed the things we are both doing. Next big deals happening in Africa.

    “My big Oga, I loved what you did on that deal…”
    He always calls me “Oga”.
    We both laughed.

    At the end of the call, he said to me:
    “I know that you did not get a chance to see any big soccer games this season, but I have some tickets to one of the finals. Can I give them to you, as s present?”

    “Why not. I will go with one of my kids. Thank you for very much.” I replied.

  12. Ivan writes,

    As many of us love soccer, this depicts that we as young Africans we must develop such passion in entrepreneurship and solving Africa’s problems. We can only achieve this by being passionate in making research and learn what is happening outside Africa and within in relation with entrepreneurship. Passion is a strong motive in making things happen.

    My reply,
    Player rating 9/10!

    I came close to giving you a 10/10!

    I love soccer too, and I will go to one of the finals, BUT I NEVER lose sight of where my primary passion should be.
    Just studying the Uber story, helped me to start three new businesses:
    #Vaya Mobility and Logistics;
    #Clean City Africa;
    #Technites Africa.

    It helped me to revamp some of our business models in other areas.

    I have also learnt new techniques of raising capital!

    I have even been able to engage some of the investors who put money into Uber!

  13. Thomas Louis Munthali writes,

    Wonderful writeup of encouragement for young and upcoming entrepreneurs. Africa really need to change the mindset and focus on things which can change our destiny.
    We have a team with wonderful projects in the renewable energy, which we believe would revolutionize some of the Africa’s poorest countries like Malawi, but access to funding has been a headache. However, we have managed to raise some startup capital from private individuals who have believed in us, but unfortunately it has taken us 4 years. What advice or pointers would you give us in order to now access growth capital??

    My reply,
    I’m glad to learn that you have persevered for 4 years. Well done.
    It is difficult to give you specific advice as I do not know which country you are in or what stage you are in with respect to your business.
    The renewable energy sector is attracting a lot of investors at the moment, except in countries with weak economic fundamentals, or perceived political risk.
    There are however some “impact investors”, including some of the big international donors who work through Friday organizations like the Africa Enterprise Challenge Fund [AECF] which I helped to set up, that do provide funding for projects without the stringent requirements of a normal investor.
    The AECF has raised over US$400m for projects, since it started. I’m very proud of its achievements. It is focused on agritech, and renewable energy entrepreneurs. Do your research on them.

    Meanwhile focus on a business model that helps you to start with as little as possible whilst you scale.

  14. Goodluck Ojusin writes,

    Over a year and two months being a Franchisee I have made pretty much so cash yet it’s all go back to investing on the same business by opening more shops in oil rich rural communities. Whilst the company provides the #process, I provide #people and #product.
    This is a self training process and it’s will help me build a global multi-million $$ global venture.

    8/10 player rating!
    You are a joy to teach. I have watched you grow. You were once a very rough diamond, but each time I read something from you I see the polish coming through, which means you are reading and putting things into practice.

    Continue to study things I have said in the past.

  15. Siphiwo Mkhwanazi writes,

    Investing in Uber is the worst thing your money. The whole valuation is based on ‘Mr Market’ , the irrational market is causing the surge in the valuation. I think its better to value a business based on the profits or positive cash flows it generates.

    My reply,
    There is an expression, which says “if in doubt, follow the smart money”.
    The smartest money in the tech world including SoftBank [the most respected tech investor in the world], Microsoft, Alphabet [Google’s parent] are amongst the big investors in Uber.
    Ahead of making their investments they had access to the company’s most intimate financial, business systems and technology information, and used hundreds of the most experienced analysts and advisers.
    Now it is possible that they have all made a mistake, but without access to the kind of information they had, wisdom dictates caution with respect to what I would personally say.
    I do not know enough to make a public statement like “investing in Uber is the worst thing you can do with your money..”. If I had been given an opportunity to invest $1m five years ago, I would have retired last week!

  16. Austin writes,

    Strive Masiyiwa this is very interesting.

    Africa Enterprise Challenge Fund (AEFC)
    The AECF is a development institution which supports businesses to innovate, create jobs, leverage investments.
    The AECF is a development institution which supports businesses to innovate, create jobs, leverage investments and markets in an effort to create resilience and sustainable incomes in rural and marginalized communities in Africa.

    Launched in 2008, the AECF has mobilized over US $310 million to date, leveraging more than US $580 million in matching capital and improving the lives of more than 13 million people in 2016 alone through jobs and increased household incomes. AECF has so far supported 257 companies in 24 countries in sub-Saharan Africa across 40 value chains in our focal sectors of agribusiness and renewable energy.

    In the new 2018-2020 strategy, our goal is to “double our impact in half the time”. To achieve this, we will continue to focus on the agribusiness and renewable energy sectors, increase support to climate smart technologies, refine our challenge model, expand regional presence, deepen focus on gender, youth and employment by expanding our products and partnership approach to better meet our investees’ current needs; and ensure they rapidly scale and transition to external financing and sustainability thereby attaining our vision of ‘A Prosperous and Enterprising Rural Africa’

    Source Google quick search

  17. #Venture Capital:

    Don’t read this if you are not senior class!

    Uber had 23 rounds of venture capital funding, which raised US$24,7bn, to help them build an $80bn business.

    The people who invested are called Venture Capital investors.

    Entrepreneurs in economies where companies like Uber [US] and Alibaba [China] emerged have access to an ecosystem where Venture Capitalists are able to listen to their pitches, at different stages of development and decide whether or not to invest.

    #African entrepreneurs need “Venture” Capital, not just Capital!
    You cannot develop modern entrepreneurs with bank loans. It is the wrong type of Capital!

    Now here is the challenge:

    #Venture Capital investors need access to capital, which they can invest.
    They have to approach institutional investors like Pension Funds, and sometimes Family Offices [wealthy investors].
    For these institutional investors to invest in Venture Capital, they need financial incentives, because it is a higher level of risk than most investments.
    Governments like the State Government of California in the United States, and New York, were very shrewd to creating the type of environment necessary to attract venture capital investors.
    They also kept stable macroeconomic environments of low inflation.

    If you have inflation above 10%, there will be almost no Venture Capital!

    When the Venture Capital players invest, they want the company to eventually list on the Stock Exchange, this is when they make a handsome profit!

    Now if your stock exchange does not really work [most African stock exchanges don’t work properly—don’t ask me to give you a list, because someone will get offended!]

    There are currently only about 5 countries in Africa, showing signs of a venture capital ecosystem emerging.
    We have work to do my friends.

    #It took us 5 years for us to have this talk.
    Tammy said it was my most important Post on the subject of entrepreneurship…
    Probably right!

    Joshua said “pay attention because we have not been this way before..”
    Anyone can follow a cloud, but only those paying attention can follow an Ark!

  18. Rashid Phiri writes (edited)

    We went to school for 13 years and its only now we are getting free business lessons….

    My reply,
    I hear a lot of people blame schools for not teaching them about entrepreneurship and other things that could benefit them in life.
    Whilst I agree that there is a lot that could be done to improve entrepreneurial education, and I have written about it in the past, I must however sound a caution:
    Most successful entrepreneurs did not learn what they know in school, certainly not in primary or high school.
    They learnt what they know by looking for what they needed to know, after they left school. There is so much material out there for you to study and learn, and much of it is free.
    This platform is a good example of what I mean:
    If you focus on studying my material, and what other entrepreneurs say, right here, and supplement that with reading constantly about what is going on in the world of business, you will be on your way!
    Forget the past, focus on the future.

  19. Ihegazie Chukwu writes,


    It was actually in 2007 as a manager of a hotel in Owerri, Imo state that I was taught the meaning of work by the hotel’s car wash staff!

    This particular staff Nnamdi, was the only applicant that applied with a First School leaving certificate as his highest qualification & specifically for the job of a car wash!

    It was a 65 rooms hotel including single & double suits. On average 40 cars pack in the car park daily on weekdays & about 60 on weekends.
    We weren’t charging fees for car washing. It was purely complementary.

    In about a month of his resuming, I was getting excellent reports from guests & supervisors on the good conduct, attitude & professionalism being displayed by the car washer in his work. Within that period, there was an opening for a supervisor in the cleaning department. The number one candidate for the position that came to my mind was the car washer. I called him into my office & informed him that he will be resuming as a supervisor in the cleaning department with effect from the next Monday & that a new car washer will be resuming with him the next day for him to train in our ways of washing cars.

    To my surprise & shock he declined the offer begging me to allow him remain as the car washer & citing his deficiency in education & good communication skills as inhibitions!

    I allowed him to remain as the car washer but it raised my curiosity. I started to study his work as a car washer. What I discovered shocked me to the marrow & changed my orientation & definition of what work is & who actually is working!

    On average he washes 60 cars a day including those of suppliers, contractors & customers that came to the hotel in the day time! Since the hotel complementary only covers washing the exteriors of cars, he collects a personal special fee of not less than 1k to wash the interiors of cars for customers that request for it. He gets an average of #500 per car as tips from appreciative customers & guests. All this translates to the car washer making on average 35k per day. If he shares 15k to his 2 assistants, he still makes 20k per day which translates to 600k per month where as my own salary as manager then was a little above 100k.

    Another shocker I discovered was that this guy was actually a graduate but decided to apply with FSLC & specifically for the position of a car washer! What this means is that he knows exactly what he is doing, what he wants & what he was going to get from the beginning!

    Why this story?

    Because we have a wrong idea of what work is in this country & that’s why so many graduates & young men are roaming the streets jobless with ear phones in their ears, rucksacks on their backs & sagged trousers blaming the government for unemployment when millions of high paying jobs are staring them in the face at every turn! I know of roadside tailors that charge 20k to make a ‘senator’ caftan & could make 5 of them a day. I know of roadside seamstresses that charge 100k to make a simple wedding gown & could collect up to 300k if they are baking the wedding cake as well. Jobs everywhere but we give excuses with lack of power, government grants & loans as if those who are making millions everyday from these skills & trades got preferential treatment from government.

    We don’t believe we are working unless we wear tie & suit or customs, immigration etc uniforms & go to offices every morning & swell the ranks of those agitating for 30k a month minimum wage even when the opportunities to do legitimate jobs that will pay us that in a day is staring us in the face at every corner!

    These jobs & enterprises produce goods & services that grow the GDP, the economy generally & provide employment.

    We need a change in orientation!

    We need a new progressive way of thinking!

    My reply,
    Player rating 9/10!

    This is exactly what I discovered in 1986:
    Working as an electrician and fixing people’s broken lights earned me more money than working as a graduate engineer:
    I knew exactly what I was doing too!
    When I get to Nigeria, with Clean City, this guy is the type of guy I want as Franchisee!!!

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