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[Music]
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Eric thank you so much for joining us
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today thank you so much M you know it's
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really apt that we are meeting today to
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talk about your book because this week's
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edition of The Economist as a story
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titled Africa Rising yes and your book
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actually begins with a success story
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from Rwanda I wonder if we could start
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by talking about how did that success
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story come about and what lessons can
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other African countries learn from
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rwanda's experience I think that when
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people think of Ronda they all go back
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to 1994 when the genocide happened and a
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million people actually lost their lives
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I think what's really amazing to note is
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how much Ronda has transformed since you
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talking about a country where uh the GDP
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has more than doubled you're talking
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about growth that is uh every year
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around 7 to 8% you're talking about
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agriculture as a sh of GDP which is
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decreasing which means that sectors like
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tourism and services are growing and all
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of that I believe is because of the type
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of entrepreneurial leadership that Randa
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has managed under President kagam to
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really uh put in place in the country
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which has created the conditions for
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people to want to actually go and invest
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and for entrepreneurs to really
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Thrive so when one one thinks about
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Africa one remembers you know the uh the
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the the book famous book written by the
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late CK prad talking about the bottom of
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the pyramid yes uh which which is also a
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very important theme of your book yeah
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uh the idea being uh that poor people
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around the world are not necessarily
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just problems to solve but opportunities
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for for business people who want to
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build their businesses absolutely how
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how is this bottom of the pyramid Market
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evolving in Africa I think there are
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probably three three main points to
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think about here I think the first one
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is that um we need to stop thinking
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about the base of the pyramid as a
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static as a static market for everyone
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to go and tap into we also have to think
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about ways in which we can empower the
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citizens that live within those
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conditions to do better for themselves
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because everything else being equal the
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better they do for themselves the more
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they will represent by way of an
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opportunity the second thing is that uh
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the image that we have of Africa as
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really being a Zone where there are only
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problems to me is at best wanting I
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think you know as you said earlier it's
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nice to see the economies talking about
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Africa Rising I mean about 10 years ago
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in 2000 they had a cover that said the
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Hopeless continent so I'm glad that they
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were able to edit it but I think that uh
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the West has to realize that it's very
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difficult for a region to pretend to be
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a locomotive and to travel half the
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speed of the cats that it's supposed to
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pull what I mean by that is when you
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look at places in the world today where
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there is growth Africa comes first so
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it's extremely important for any
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business leader or for any investor that
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is looking to really Thrive over the
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next uh generation or so to make sure
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that they have a very clear strategy for
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Africa and they have to think of Africa
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really as it relates to all the
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opportunities that there and finally uh
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to go back to the question that you were
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asking I really believe that uh what is
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really amazing about the base of the
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pyramid in Africa is the amount of uh
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growth that you've seen in different
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sectors let me give you a few statistics
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to illustrate that point if you look at
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the cell phone sectors we've gone from
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about uh 9 million people with
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cellphones in 1997 to about 400 million
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today if you look at a statistic like
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that tells you how much growth there is
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if you look at a company like safaricom
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which has the mobile money platform
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called Mesa they had 900,000 subscribers
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back in 2007 you know as of last year
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2010 that number had gone to almost 12
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million and these are only a few of the
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places where you you see opportunities
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but I could really name you know
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opportunities in agriculture
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infrastructure you know if you look at
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Africa you will have um about 30 cities
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where the total spending power is going
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to be about 1.6 trillion these are all
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opportunities that most of the Business
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Leaders uh operating in the US or in
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Europe are not thinking about and this
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is really why I thought the book was
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important in giving them a map for them
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to really access those markets because I
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think you know economists often give you
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compasses but if you have a compass and
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you don't have a map it's very difficult
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to find your way around so a very
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critical part of your map uh is is is a
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component or or core concept Concept in
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your book that you call the survival
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trap yes can you explain what exactly
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the survival trap is and how is it
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holding Africa back let me give you an
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example you know have you have you
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really had a day when nothing works when
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you wake up in the day and uh lot lots
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of days like that lots of days like that
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how does it feel awful awful right
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imagine if it were two days like that in
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a row what if it were a week what what
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if it were a month I think the survival
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trip is really this idea that when you
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operate in markets like Africa there are
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so many challenges on a day-to-day basis
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that it becomes very difficult to see
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beyond those challenges towards the
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opportunities that are there and as a
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result people develop a reactive mindset
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where they think about ways to alleviate
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the pain as opposed to harvesting growth
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and as a result they get stuck in this
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vicious cycle so the survival trap is
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really about making sure that we
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recognize that the cycle is there and
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the most powerful part of the trap in my
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experience is not the part that we can
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see it's not it's not the fact that the
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phone line doesn't work it's not the
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fact that you know the roads don't work
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well where it's it really hurts us is in
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the mindsets that we develop we stop
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trusting other people we start thinking
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in a zero some mindset which means I'm
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thinking if the investor is getting you
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know $100 I must be losing
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$100 uh it starts you know having an
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impact on people thinking in a very
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shortterm manner people start being
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defensive these are all mindsets which
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are very important for anybody that is
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trying to access you know Bas of the
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pyramid markets not only in Africa but
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beyond Africa to think about wonder if
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we can spend a little more time on this
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issue of mindsets and mental models
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which you you know you you devote a lot
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of time in your book on that I agree
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with you entirely that's very very
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important what reinforces these mindsets
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and mental models and more importantly
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how can they be addressed what what
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reinforces this mindset is really the
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challenges that are in the environment
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so we I mean the the more we Face
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problems the more likely we have to kind
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of go back into those same Cycles so the
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way it works and this is something that
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I really describe in the book is that
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the operating reality has so many
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challenges that that is going to shape
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the way we view the world and the maps
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that we use to navigate the world which
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are our mental models and as a result we
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we are going to take certain actions
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which will fail to give us the results
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that we are really looking for which
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means that the the environment will stay
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St the same and it it will go on and on
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again and to escape it I really believe
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that uh it's important for Business
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Leaders to First realize that those
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mindsets have an impact on business
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performance I mean they have an impact
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on profits on market share on ability to
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sign a contract I mean there can
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something that looks like the best of
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deals can become your worst or deal just
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because you haven't been able to
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appreciate the importance of those
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mindsets and to me that's something
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that's critical now to escape the
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Survivor trap we have to begin with
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having a very clear vision and again uh
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Rwanda is a very good example of a
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nation that was able to have a vision
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and all the entrepreneurs which I
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mentioned in the book I think one of the
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Cross cutting theme they have is this
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Crystal Focus this Sor sorry laser focus
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on the vision where they look very very
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hard at what they're trying to achieve
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and once we have that Vision in place
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start thinking about some of the
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mindsets that we we must uh diagnose and
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if you will disarm in order to actually
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move forward while at the same time
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trying to reinforce the mindsets that
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help us now in addition to you you you
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mentioned Rwanda and how Rwanda has
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tried to come escape the survival trap
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in addition to Rwanda are there other
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African nations that are also trying to
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escape it and how successful have their
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efforts been I think that um if you look
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at the continent today I think there are
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a number of nations that are trying to
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uh escape the Trap but I think think the
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most exciting stories at least in my
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opinion are not the countries I think it
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is the entrepreneurs I think there is
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really uh sort of a new class of
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entrepreneurs that is emerging on the
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continent you know again the The
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Economist article mentions Mr aliko
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dangote who is worth I think 13.5
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billion according to the economist uh
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making him the richest black person but
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I think above and beyond billionaires
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like that you have day-to-day
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entrepreneurs who who are starting a
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business and out of that business
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realizing not only their dreams but
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creating jobs for others and having an
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impact and to me that's really something
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that we have to appreciate when we think
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of the base of the pyramid in in Africa
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which is not being looked at enough so
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for me the most exciting stories are
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stories like that of real entrepreneurs
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who are starting a business and doing
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well and it's it is also stories of
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Corporations such as Walmart you know
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Coca-Cola you know Etc going onto the
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African continent because they realize
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the potential that Africa has and
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managing somehow to make it a very very
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big part of the bottom line know one of
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the things I found Most Fascinating
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about your book is the vignettes of
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different entrepreneurs that you
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mentioned yeah uh for our audience can
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you give us examples of uh two or maybe
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three of such uh most interesting
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entrepreneurs and what can entrepreneurs
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around the world learn from them you you
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basically give me a I guess a big big
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challenge because which one of the three
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should I really pick here fact I I could
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have profiled like 100 of them uh let me
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let me maybe give you a couple of
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example one example that I find
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particularly inspiring is that of a
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woman called Eva morah Eva is actually
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the founder and CEO of a company called
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Bron strategy Limited in Kenya she's
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also the found and CE of another company
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called color Creations uh Eva was
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trained as a journalist her husband was
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the entrepreneur unfortunately her
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husband passed away in a car accident
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overnight she was left with nothing and
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uh when everybody else would have
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thought let me go and look for a secure
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job to take care of my kids she actually
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left the job that she had and invested
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everything that she had into a business
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and what is really unique about the
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story of this woman is really her
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ability in an environment which was set
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against her like one of the things in
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Kenya back in the days was that the laws
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made it very difficult for a woman to
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inherit her husband's asset you know
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above and beyond all those challenges
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lack of Finance Etc you know mean she's
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managed to really build some very strong
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businesses but what is even more
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important is how much she has invested
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in trying to train and shape the next
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generation of
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entrepreneurs uh she's been recognized
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you know by with many many awards and to
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me she she's the kind of person that
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really finds ways to uh go beyond their
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own challenges but above and beyond that
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is also able I would say to create
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opportunities and do business in a way
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where everybody can benefit so I think
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that's to me is a compelling Story
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another one is is an a entrepreneur Mr
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Jean Dieu uh back back in 2008 right
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when uh AIG you know received a massive
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bailout out of your taxpayers money uh
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Jean dieago actually managed to raise
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about 35 million Euros which is about
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$50 million from uh a venture capital
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fund called ECP and he actually managed
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to do this because had built an
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insurance business which was based on
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Integrity while the firm was still
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private he decided that he was going to
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make his financial statements public and
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he decided that they were going to make
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sure that every time somebody had a
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claim they would fulfill the claim very
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very quickly he managed to expand to
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more than 10 countries how because
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everywhere he goes he will find a
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partner give them equ quity into the
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business because he understands that
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they understand the environment very
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well uh this is something that may sound
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normal to most people but uh in
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environments where uh level of trust is
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very low most people want to do business
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just within a very close Circle so these
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are you know a different way of looking
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at opportunities a different way of
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thinking about a business which today
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has really allowed him to build a
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business with over hundred million
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dollars in revenues you know and this is
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somebody that started his career as an
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entrepreneur at the ripe age of 47 years
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old I think I think you know I I could
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go on and give you you know thousands of
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stories like that and to me those are
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the stories that we have to think about
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because uh again uh as we look at the
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challenges that the West is facing I
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believe that you know Africa and other
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Bop markets have a very big role to play
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and they can only play this role if
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indigenous
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entrepreneurs uh do also extremely well
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and are able to grow strong businesses
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now in your book you refer to something
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you call the Dare process yes uh what
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exactly is that and how can that be used
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to uncover opportunities in bottom of
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the pyramid markets so the death process
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is uh is about being able to really
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diagnose what are the mindsets which
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area which are impacting our business
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and then depending on what we find we
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then decide what to do with them so
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there are some that we must reinforce
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there are some that we must emphasize
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others that we must basically find a way
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to uh remove completely from The Firm
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it's a process that uh requires that the
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the the business leader is actually able
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to work with all the stakeholders and
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try and understand how they are seeing
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the challenges that the firm is facing
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and what the problems are uh it's
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actually a process that I I've seen a
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number of business people on the ground
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Ed with quite a bit of success and I
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would really invite the readers to uh go
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to the chapters and uh get the secret
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for themselves you also write about
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something you call the archimedian
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mindset yes what is that and why does it
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matter the archimedian mindset is about
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uh making sure that uh we really create
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businesses where moral
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purpose and profit motive are really
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balanced uh I think aimers tell us that
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told us way back when 200 before Christ
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that if we gave him a forrum and a
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liever that was long enough he could
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single-handedly leave the world well
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today we're in a position where business
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people have all the tools the
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innovativeness the passion and the drive
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to
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lift themselves and the rest of society
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out of poverty but it will require that
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they have a different set of values and
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mindsets and as a matter of fact uh most
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of the entrepreneurs that are profiled
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in the book are entrepreneurs that I
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believe show this uh compassion and this
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disability to really drive for profits
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and generate returns which are very very
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high while at the same time being able
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to demonstrate moral purpose in the way
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they conduct the business now how can
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Africa build the kind of ecosystems that
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are required to generate prosperity for
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entrepreneurs and uh the people at large
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and who should take the lead on this I
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think it's a very good question because
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there are a number of efforts that exist
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out there I mean you think of all the
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indices whether it is the doing business
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the corruption index Etc these are all
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uh tools which are used to think about
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ways in which we can have better
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ecosystems I think what we often uh
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neglect and what most of those indices
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don't capture are the intangibles
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because I think that's that's really
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where things get difficult let me give
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you an example Africa is one of the
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environment where it is very very
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difficult to
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fail so as a business person you know
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God
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forbid you go bankrupt it's going to be
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very very difficult for you to actually
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get another round of financing to start
00:16:55
your next venture because even when you
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haven't you know gotten like
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gotten bankrupt it's difficult to even
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get money to begin with uh I believe
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that it's really important that we
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develop the kind of culture where we
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have reverence for failure what I mean
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by that is we realize that actually
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failure can be an opportunity to learn
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and failure is not necessarily uh a sort
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of
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uh I guess something that is ungrin in
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somebody it's just an experience which
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is a combination of what happens in the
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environment so I really believe that uh
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one of the places where uh we can
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develop a better ecosystem is if if we
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begin to appreciate the role that
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failure can play the second point that I
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would really uh look into is also our
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understanding of what really uh being an
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entrepreneur is you know in Africa it's
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it's often uh very difficult for people
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to tell their parents or to tell their
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friends and family that they want to be
00:17:57
entrepreneurs often the entrepreneurship
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is perceived as the thing that you do
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when you can go to school when you can
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work in government when you can get into
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the army uh yet we need entrepreneurs
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because they are the ones that drive the
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productivity of a society uh so I really
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believe that it's really important that
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we create a kind of ecosystem where
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being an entrepreneur is at least as
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prestigious and as interesting as doing
00:18:23
some other things and I think this is
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where having the role models is a very
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very important and Powerful element and
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then finally I think there is a lot that
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government and development Partners must
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do in creating an environment you know
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where the basics are there for example
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uh out of the 54 countries that you have
00:18:41
in Africa today uh 38 of them since the
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60s have had some sort of a conflict and
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most of those conflict would be entra uh
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entra country conflicts where the
00:18:54
economy is going to shrink by 14% but
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most importantly you're going to pitch
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different part of the society against uh
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the other part so I think that really
00:19:02
creates the kind of environment where
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it's difficult afterwards to do business
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I think these are some of the things
00:19:06
that can be considered to make the
00:19:08
ecosystem
00:19:09
better uh what should Africa mean to
00:19:13
corporate leaders
00:19:15
today well Africa should mean growth
00:19:19
Africa should mean growth I mean if
00:19:21
anyone that is serious about growth has
00:19:24
to think about Africa I mean because as
00:19:26
you as you look at the statistics
00:19:29
uh if you look at the articles that the
00:19:31
economist wrote this week if you if you
00:19:33
read reports such as you know lands on
00:19:35
the move from The mckin Institute there
00:19:39
are a number of Publications even books
00:19:41
like Africa Rising by Professor Mahajan
00:19:44
published by won School publishing these
00:19:46
are all you know uh books and resources
00:19:51
which show that
00:19:54
clearly being serious about growth
00:19:56
requires that one thinks about Africa
00:19:59
and I really think that uh once they've
00:20:01
decided that uh the compass the the
00:20:04
compass as a business must Point towards
00:20:06
Africa what they will need is a map for
00:20:08
them to realize the potential of Africa
00:20:10
and I hope that uh my book can be that
00:20:12
map to help them navigate uh what's
00:20:15
required to turn uh the opportunities
00:20:17
that are there into real profits so Eric
00:20:21
let me ask uh one final question thank
00:20:23
you uh if Africa's business and
00:20:26
political leaders were to come to you
00:20:29
and ask your advice uh on how they can
00:20:32
keep Africa Rising what would you tell
00:20:34
them I would tell them work on the
00:20:37
software what does that mean that means
00:20:40
work on the mindsets that are there make
00:20:43
sure that you build trust make sure that
00:20:46
people start you know being more
00:20:47
comfortable with with risk make sure
00:20:49
that people think longterm make sure
00:20:51
that we startop being defensive make
00:20:53
sure that we really realize that we can
00:20:55
work together and grow something and I
00:20:57
think for them to really work on those
00:20:59
mindset effectively they must go beyond
00:21:02
just telling people what to do they must
00:21:04
then take the reforms that are required
00:21:06
to change the environment where uh th
00:21:10
all those mindsets uh get the basis from
00:21:13
Eric thank you so much for speaking with
00:21:15
us today you are most welcome thank you
00:21:20
[Music]
