No. 203: Tackling Gentrification | Fourth Industrial Revolution and Africa | Kathryn Gould – OG VC

Chris Tyson Is Smart About Cities (Protege Podcasts)

Protege Podcasts host Rory Verrett and East Baton Rouge Redevelopment Authority CEO Chris Tyson had a fantastic conversation that eventually moved to focus on gentrification and what to do about it. Tyson argued that the “buy the block” efforts pushed by the late Nipsey Hussle, Jay-Z and others is not going to move the needle in keeping neighborhoods affordable for folks. His position is that policies that have boxes poor people and minorities out are what need to be dealt with in order to move the needle on housing avoiding the bad effects of gentrification.

I agree that we have to deal with policy and believe that the “buy the block” mantra is a key part of pushing policy. Policies going back to redlining and other discriminatory policies did not emerge in a vacuum. Certain powerful individuals lived and invested in certain neighborhoods they wanted to keep a certain way for themselves and their friends. This reality shaped the policies they wrote or influenced. Similarly, while folks like Nipsey invest in neighborhoods leading the charge for other black folks to invest in their neighborhoods policymakers like Randall Woodfin can shift policies to ensure folks don’t found themselves boxed out of the neighborhood they grew up in. Moving the needle on keeping neighborhoods inclusive and affordable for folks requires massive effort at the individual or group and policy-level.

Artificial Intelligence, at Africa’s Door (UNESCO)

Tshilidzi Marwala, Vice Chancellor at University of Johannesburg, discusses what the rise of the fourth industrial revolution means for Africa. The fourth industrial revolution is essentially where we will see major breakthroughs in technologies like artificial intelligence, quantum computing, and biotechnology.

Marwala points out the importance of the private sector and policymakers in Africa paying attention to developments with industrial robots and data gathering. He also pushes the importance of African countries participating in the development of technology and figuring out how to develop their manufacturing capacity.

Two of the many realities of the future face African policymakers. Industrial robots will shift the appetite manufacturers have for labor costs. African countries need to craft environments for enormous job creation for their ballooning populations. These are only a sampling of the factors that have opened an opportunity for African business leaders and policymakers to take a creative approach to handling these issues.

While Marwala suggests leaders create plans like China’s Made in China plan or AI strategy, and I think it’s key leaders avoid copying and pasting while pushing themselves to really think outside the box to find the levers that might swing Africa from trying to catch up to being in the thick of the global competition to shape the future.

The Kingmaker in the Background: Kathryn Gould (Strictly VC)

I stumbled across this fascinating interview with the late Kathryn Gould, clearly a rockstar in the venture capital world for decades beginning in the 1980s. A great quote from the interview:

You also hear VCs talk about how one company in their portfolio will be a huge winner, two or three will be also-rans, and the rest will be write-offs. Well, that’s bullsh_t. I didn’t go into a deal unless I thought it was going to be a winner. All 10 had to win, that was my attitude. A lot of VCs run and hide, but I worked hard, I was a good fixer, and I earned my money.

No. 38: Sovereign Wealth, IPOs, Cool Jobs, and Cities

Cherae and I had a great time on New Rules Africa this week, covering:

  1. Zimbabwe established sovereign wealth fund
  2. Rocket Internet filed for IPO in Germany
  3. African Development Bank opened Young Professionals Program

Read the summary below to get up to speed on what we covered, and check out the show.

Zimbabwe Establishes Sovereign Wealth Fund

Last Tuesday, Zimbabwe’s Senate passed a bill that lays the groundwork for the country to establish a sovereign wealth fund – a tool used by countries around the world to maintain long term wealth and resist economic shocks. The African countries using the tool include Angola, Botswana, Senegal, Nigeria, Libya, Algeria, and Ghana. Countries like Uganda and Kenya are considering establishing their own funds with their new found oil resources. Let’s keep an eye on Zimbabwe’s fund as it is unclear what the structure of the fund will be and who will manage it. Countries like Nigeria and Senegal announced the managers of the funds pretty close to the establishment of the fund, and had a detailed governance structure.

Rocket Internet Files for IPO in Germany

Rocket Internet, the emerging market, uber-startup launcher is filing for an IPO on Germany’s stock exchange that would raise around $1.8B. For the past six years, Rocket Internet has launched emerging market copycats of some of the top internet brands in the US and Europe – Amazon, Paypal, and Zappos to name a few. In Africa, these include Jumia, Zando, HelloFood, and EasyTaxi among others. Rocket has absorbed a lot of criticism for just copying other business models, but is unapologetic about its business model and has raised more than $2B in venture capital since its founding in 2008. Jumia, Rocket’s flagship brand in Africa recently went under a management shift and has been relatively quiet after raising several millions in venture capital and building a 90,000 square foot warehouse in Lagos. Keep an eye out on the IPO and future Africa activity from the company.

African Development Bank Announces Young Professionals Program

The African Development Bank is recruiting young professionals, particularly women, to apply for its two or three-year rotational young professionals program. The bank will select 15-20 candidates who will be based in the bank’s headquarters in Cote d’Ivoire. The bank has been a critical part of the continent’s development, ensuring the contract negotiation skills of African countries, committing dollars to the combatting of threats like Ebola, setting up an infrastructure fund, among many other things. Apply. The folks that work there are talented and its a nice alternative to working at a place like the World Bank or IMF, if you are looking to work at an international development agency.

Preparing Cities for the Future

The Corporate Council on Africa is holding its annual infrastructure conference in the lead up to the World Bank/IMF Annual Meetings, and the focus is on building resilient cities on the continent as rapid urbanization continues to take place.

As cities continue their rise, Africa’s cities will increasingly have to figure out where these people will live, how to provide them with services, make sure they are able to move around, and the list goes on. Investors are paying more and more attention to the threat/opportunity in these cities. If these cities develop well, they could be hubs of consumerism, new ideas, innovation, you name it. If these cities do not develop well, we could see the failure of institutions, increased political unrest, and the list goes on here as well.

What else? What are some other interesting things that happened in business in Africa this past week?