Destination - Letter from Hector

Hector

@hectoryokeru

I write about how innovation is developing the world. If you enjoyed this letter, and think others might too, please do forward it on. Received this but not yet subscribed? Click here. My essays & reading list can be found at hector.ltd, and you can tweet me at @hectoryokeru.

A writing destination

Today marks a new direction for these Sunday letters. Here’s how and why.

Exactly half a year ago, I started sending you emails. At the time, my home was Turkey, and my commute was floating between the banks of the Bosporus. Since then, Mont and I have continued our chance migration. On the journey I’ve maintained the habit of writing.

Today I’m sitting in Village Dishes in Kilifi, on the sweaty Kenyan cost. Above me electric fans wobble, as if nervous. The stiff orange seats aren’t comfortable at all, and a marching band walks by, out of tune, step, and time, commiserating the death of the Tanzanian president. I pause between each paragraph, removingthe skin from the top of my chai. There’s a police officer sitting opposite wearing a gold Rolex.

Today’s six-month milestone conveniently comes at the end of the On Deck Writing Fellowship. The course exposed me to the world’s most successful online writers, who explained how they’ve done it.

Many who write online measure their success by the number of subscribers. Or from Substack revenue. These metrics are suitable for the professional—but I am not a professional. My profession is growing Yokeru. Writing is an aid to everything, but it’s not the main thing.

Nevertheless, I’m shamelessly ambitious about using my writing to make an impact. My essays, therefore, need to be readable, and then actually be read. I’ve learned that having a solid distribution strategy is essential. This means picking a niche: a reason for you to open these emails.

Qualifications

So, what am I uniquely qualified (or positioned) to think about? First, I’m a cofounder of an impactful startup in a challenging market. Also, I’m being exposed to life and startups in the developing world every day. Finally, I have a keen (compulsive) interest in systems that are broken: my essays on prosperity, the environment, competition in culture are incidental evidence [iv] of this.

Therefore, it’s logical to write about how innovation is developing the world. I am well positioned to do so.

Innovation is developing the world

The world is not yet perfect. There’s the impending environmental crisis [i]. Extreme poverty survives, as if entrenched, in sub-Saharan Africa [ii]. The recent US election showed us that two sides of the same coin could fall-out (to the detriment of democracy). And, of course, covid. I could fill a book of examples, but it’s a book I wouldn’t want anyone to read.

The solution to each one of these global problems is innovation. Whether it’s cultural, political, policy or technological, the creative destruction of broken systems though innovation is the solution.

However, innovation is no panacea: it’s changing our relationships with the state and each other. It’s making it easier to go on a date but harder to fall in love. I can see a doctor instantly, but they can’t put that wooden paddle down my throat. For the first time, running a company from abroad is not only possible but preferable, but it can be isolating.

Notably, the impact of innovation varies by region. TikTok isn’t a cultural phenomenon in Kenya (fortunately), but Mpesa is. It’s here, in developing countries, where innovation is making drastic changes, that I’ll focus the lens of future essays.

The following graph says a lot about the scope of the upcoming transformation.

Gross Domestic Production Nominal Per Capita [iii]

Why is innovation important?

Mark Andreesen pointed out that software is eating the world. While this is true, from what I’ve seen, it’s clear that it’s the entrepreneurs on the ground, who are building businesses, that are making the change.

It’s implementation rather than invention. Pariti is getting startups funded, Kune delivers high-quality, affordable food to the masses, and Safaricom has given 70% of the unbanked population bank accounts [v]. Tech is relied upon, but today tech is not yet fully deployed. As an example, Airbnb is one of the great market-creating companies of our generation. Technically, anyone could have built a similar platform at the time. Their business model innovation did the legwork.

In The Prosperity Paradox, Clayton Christensen says that market creation by entrepreneurs brings about prosperity.

Prosperity, it turns out, is a relatively recent phenomenon for most countries. Most wealthy nations have not always been prosperous [we can see this in the above graph]. Consider, for example, the United States. We may forget just how far America has come. Not too long ago, America, too, was desperately poor, rife with corruption, and chaotically governed. By almost any measure, America in the 1850s was more impoverished than present-day Angola, Mongolia, or Sri Lanka. Infant mortality at the time was roughly 150 deaths per 1,000 childbirths—three times worse than sub-Saharan Africa’s infant mortality rate in 2016.

…

[Mancur] Olson … highlight[s] the virtues and importance of entrepreneurship, due to the unpredictable nature of society. He writes, “Because uncertainties are so pervasive and unfathomable, the most dynamic and prosperous societies are those that try many, many different things. They are societies with countless thousands of entrepreneurs who have relatively good access to credit and venture capital. There is no way a society can predict the future, but if it has a wide enough span of entrepreneurs able to make a broad enough array of mutually advantageous transactions, including those for credit and venture capital, it can cover a lot of the options—more than any single person or agency [or government] could ever think of.” In effect, if we harness the power of entrepreneurs to develop more and more market-creating innovations, this can—and indeed does—lead to better and better governance. … Corruption is the better way, a workaround, a utility in a place where there are few better options.

A legitimate and prosperous state is pulled into existence by entrepreneurs’ activity rather than the other way round. Christensen’s message is that the highest leverage way to improve lives is, therefore, to fund an enterprise or be an entrepreneur. I’m going to write about the innovations of these individuals and the impact of said innovations.

As the world changes, no doubt this blog will do. But the next phase will be one of immersion in big problems and understanding the dynamics within them.

I hope you enjoy it as much as I surely will.

-hector

End notes

[i] https://www.getrevue.co/profile/hector/issues/systems-letter-from-hector-440248

[ii] https://ourworldindata.org/extreme-poverty

[iii] https://datacommons.org/tools/timeline#place=country%2FKEN%2Ccountry%2FUSA&statsVar=Amount_EconomicActivity_GrossDomesticProduction_Nominal_PerCapita&chart=%7B%22amount%22%3A%7B%22pc%22%3Afalse%7D%7D

[iv] https://www.hector.ltd/

[v] https://www.vox.com/future-perfect/21420357/kenya-mobile-banking-unbanked-cellphone-money

If you enjoyed this letter, and think others might too, please do forward it on. Received this but not yet subscribed? Click here. My essays & reading list can be found at hector.ltd, and you can tweet me at @hectoryokeru.

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