Minecraft, Startups and Margaret Thatcher.
I recently started playing Minecraft. For those who don’t know Minecraft, it’s a game where the objective is to use the available resources to build things, while avoiding various enemies trying to kill you. You mine resources and combine or craft them into materials, which you use in your construction. What you build and how you choose to do it is entirely up to you. There are essentially two formats to the game: creative and survival.
In creative mode, there are no resource constraints and no enemies. You’re free to simply build the most fantastical structures your mind, and patience, can conjure up. In survival mode however, resources need to be acquired almost on a 1:1 basis and basic survival techniques, shelter and food, need to be adhered to. The obvious choice when starting the game is to play in creative mode and just build away. Some people have come up with truly amazing creations. The problem though is that this very quickly gets boring and most people opt instead to play in survival mode, a fact that confuses me. If, as human beings, we’re at our best when we’re free of our constraints, resources abound and we’re able to focus on the task at hand, why then would we choose the harder survival mode. Is it that we crave challenge and hardship? I don’t think so. My theory is that as humans our greatest skill is problem solving. This is arguably where we are at our most creative. We prefer to work through maximizing available resources to achieve a required objective.
Solutions without problems
To some extent this applies also to general economics, and I think we’re starting to see this more so in the “startup” industry than in any other. Andy Hadfield recently gave a talk at SXSW, which I admittedly dismissed at first. However, I think he may be onto something. In the US, where resources are arguably unlimited (being capital, bandwidth, engineers, programmers, facilities etc) we’re seeing an interesting pattern. I call it the pattern of non-problem solving; Solutions without problems. Scarily, obscene amounts of resources are being ploughed into these “startups” purported to be “the next big thing”. In essence, they’re minecrafting in creative mode. Fun at first, but also a little pointless.
Contrast this with Africa, where resources for startups are severely constrained. Bandwidth, investment, and human capital: all of these are hugely in demand and massively under supplied. We also have one further “advantage”. In Africa, we have big problems, problems looking for solutions. I don’t think it’s coincidental that FNB recently won most innovative bank, or that companies like Snapt are finding alternative was of cost effectively providing the same solutions enterprises typically pay millions for. (Snapt famously sold a $3Billion solution to a massive US agency for $300). MPESA and Ushahidi et al are all solving real world problems, under contained resource environments while still turning a profit and keeping themselves afloat (something US startups are notoriously bad at).
Margaret Thatcher once said of socialism, “it’s great, but eventually you run out of other peoples money”. I think the same can be said for VC.
My prediction: the next big thing is coming out of Africa, the real innovators.