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Nigerian Power: Hindsight, Insight & Foresight

My last post on the Nigeria power industry was a reaction to a Vanguard article by the Minister of Power. It was an article I read while at Murtala Mohammed Airport in the midst of what turned out to be a brief power outage. It was a reactionary post and its been on my mind for a few weeks to write a more structured article about where we went wrong, why we are where we are now, and what we need to do to ensure a future of economic development borne out of the provision of a critical element of the fuel that drives the engine of growth in most developed countries; electricity.

Hindsight: “Cause and effect are not closely related in time and space”

So what happened? How did the power sector in Nigeria get so decrepit? Hindsight says we all lacked foresight and didn’t invest in power industry infrastructure development and maintenance. There were no power stations built in Nigeria throughout the 1990’s (the worst period for the industry, in my opinion), we failed at long term systems and needs planning because we were too busy just trying to survive. I grew up in Nigeria during this period and that’s when all day and week-long power outages (without explanations) began. No surprises that it coincided with a period of bad government, but that’s a story that has been told time and time again so I won’t repeat that here. I will focus on the systems failings; in my opinion, that was the period shortly after the 90’s when Electric Power Reforms started in Nigeria without recognizing the immediate need to increase generation. There’s a systems saying, ‘the easy way out usually leads back in.’ It fully captures the mistake made in trying to solve the lack of generation issue by focusing the 2005 National Power Sector Reform Act (EPRSA) on privatizing the sector i.e. transferring the burden of making up the generation shortfall without fully transferring the benefits/money to be made from the privatization to the private sector. The Niger Delta Power Holding Company Limited (NDPHC) was formed to take best practices from the private sector without fully privatizing the sector. Here’s an analogy; imagine having a run-down home and, while holding on to the keys, you ask your new neighbor who is building his own home to help you fix your home, after which you will finally hand over the keys. Very few neighbors would actually fall for such a trick, so it was no surprise that this NDPCH arrangement did not work. The government tried to take the easy way out but we still did not have enough power to meet the needs of the people from current generation capacity or new build. That situation has continued till today…

Insight: “Today’s Problems Come from Yesterday’s Solutions”

So where are we? Citizens and consumers require 3 things from their power provider; electricity delivered safely, reliably and affordably. On all three expectations, the current power system fails Nigerians. Every citizen or business that can afford it is his/her/its own government when it comes to utility service provision, salving their needs by buying a generator, building a borehole in their compound and providing their own personal security. And for every citizen who cannot afford to be their own government? They live without electricity. According to the government ‘Today, in March 2016, we have just about 5,000 MW of power on the National Grid for about 180 million people.’ For some context (and this is a rough but apt calculation),

I worked at a power station which generated 1000 MW of electricity for approximately 400k homes, assuming every home in London uses the same amount of electricity as a home in Nigeria. Assuming there are 36M homes in Nigeria (with 5 people per household), it means we as a country are generating just 5X the amount of electricity from one power station in London for 90X the number of people!

Put another way, according to the World Bank, our per capita electric consumption is 142 kWh. What does that mean? It means we are in the league of countries like Nepal (128kWh per capita), Sudan (159kWh), Togo (148kWh) and the Democratic Republic of Congo (110kWh). These are countries with much smaller populations and smaller requirements than Nigeria. With all due respect to these countries, that is not a league we want or deserve to be in. Contrast this with the countries that have similar size populations (and less natural resources to draw on) to Nigeria, countries like Bangladesh (156M pop.) with per capita of 293 kWh and Pakistan (182M pop.) with per capita of 450 kWh. My point? We are falling extremely short of the expectations we have of ourselves and the possibilities…

There are very few things that we all do which don’t require that electricity be delivered safely, reliably and affordably. Electricity is the engine of growth in every developed country in the world. It is also the single most impactful element in personal comfort (an oft ignored element of the value electricity provides).The similarities between Nigeria and the low electricity consumption per capita countries I listed above extend from poor electricity provision to lower life expectancy and health expectations for citizens. Provision of electricity ranks very closely in importance to good governance because it is a big input into productivity growth, especially in the long run, which, in itself, is a strong driver of economic growth. If we increase the productivity of the average Nigerian (and heaven knows our productivity is at a low right now), we increase the growth of the economy. Increased productivity = greater money earned = greater money spent and improved credit flow within the economy. Let’s chalk up the last few years in the Nigerian power industry, two full economic cycles, as the lost decades. Current policies are structured to rebuild or improve old infrastructure and maintain less relevant business models. The good-governance experiment is currently ongoing in Nigeria; it’s time to begin the provision-of-electricity experiment with a clear view of the industry’s future.

Foresight: “The areas of highest leverage are often the least obvious”

If we agree with the premise that all consumers, regardless of class, deserve to have stable, affordable and secure electricity, then it’s time to embrace the change currently going on in the electricity industry globally. There is a chance to start afresh in Nigeria, as the way electricity is generated, produced, stored and marketed is changing. There is a wider array of choices for generation (solar, geothermal, wind etc), there are storage options which serve the needs of average Nigerian homes at less cost than the current diesel alternatives, and smaller companies can get into the business of producing electricity for different segments of the market. The change we have to embrace in Nigeria, with an opportunity to even leapfrog countries like the USA in adoption, is inevitable and is as a result of several global trends that are currently playing out. These trends are climate change, reducing costs of renewables like solar, the convergence of internet technology and operational technology, bringing more efficient methods of electricity consumption to consumers and businesses alike. What does this look like for the average Nigerian?

It means Kayode, a small business owner with an office in Ikeja and a family of five living in Ogudu, Lagos, can buy solar panels (his primary source of electricity) for his home/business from Powerseller Co. PowerSeller Co also provides a small diesel generator (as backup) for Kayode. Powerseller Co manages the solar panel and diesel generator and manages the interaction between Kayode and the PHCN. It means the PHCN plays the role most government agencies play; providing oversight, so Powerseller Co does not cheat Kayode. It means Kayode might pay a little more money for Power at the start of the month, but he is assured that throughout the month, his electricity will be on and keep the food in his freezer from rotting. It means even though Kayode is now spending more on electricity, his productivity has increased, and so has that of his family and employees. Since productivity growth and credit leads to economic growth, it means Kayode’s business generates more money, and the cost of electricity stays at the current percentage of his expenses, but he now gets reliable and safe electricity. It also means Kayode and his neighbors in Ogudu can band together and form a mini electricity grid of their own.

The scenario above clearly demarcates the value elements and who is providing it. The generation comes from any business which can afford to generate power from any safe source. The distribution and transmission is provided by an asset owner who only collects rent on the usage of transmission lines. The oversight is provided by government entities, who, based on a clear understanding of where value lies and where things are going, ensure that all parties play fair. The service provider, or marketer, ensures that the average consumer receives the optimal customer service because anything less means the customer can move to a competing business. This new business model solves the real problems facing the Nigeria power sector; generation and a focus on solving the problems of the past. It’s happening fast; in 2012, Vivint,a home security services provider in the US, decided to start selling solar panels to Americans in a market where the price of solar was well above current customer prices. In just two years, Vivint had put solar panels on twenty two thousand homes, generating 274MW (5.6% of total generated in Nigeria), the size of a power station! It takes 5-6 years to build a power plant, but recognizing the future of power generation, Vivint built a virtual/future power plant in 2 years. It can be done, and the time to start is now. And by the way, taking the future virtual utility approach also solves the problem that continues to plague the Nigerian economic mindset. It places the convenience and productivity of the consumer as the priority, because that is really the point of this whole industry; to provide electricity to consumers safely, securely and affordably. It isn’t rocket science, we just need to start taking our citizens seriously.
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Five Unexpected Startup Lessons from a Movie about Sushi

A few years ago, I decided to join the holiday masses in their grand tradition of eating lots of food, getting some exercise, catching up with family and friends, reading some books, and watching a movie or two. Put more simply, I decided to take a break.

I ended up watching the documentary Jiro Dreams of Sushi, and I attempted to read David Foster Wallace’s magnum opus, Infinite Jest. I still haven’t finished the thousand-plus-page novel, but I got so much from the documentary that I feel like I have to share some applicable business lessons that came to mind as I watched. So here are five specific lessons that I’m keeping in mind today (and will try to keep in mind for the rest of the year):

Love One Thing & Learn Everything About It

Jiro Ono, the main character in Jiro Dreams of Sushi, is a master sushi chef and has even received the highest commendation in the cooking world—three Michelin stars. He dedicated his life to perfecting how sushi is prepared. He’s far exceeded his 10,000 hours of practice, and it pays off in the form of guests who are willing to wait months for a seat at his 10-stool restaurant.

When you put it in perspective, 10,000 hours doesn’t feel so long if you’re spending those hours pursuing what matters to you. I’ve been in the energy industry for over 10,000 active learning hours, but it doesn’t feel like that much time has passed because I still love it. When you find something you love, the hours you’ll put in becoming an expert at it won’t feel like much work at all.

Surround Yourself with Other Experts

While you’re working towards your 10,000 hours, there’s nothing wrong with apprenticing yourself to some experts for awhile. Jiro, and his son after him, would go to the fish market every morning for raw materials. Jiro was the sushi expert, but there was the octopus expert, the tuna expert, the squid expert, and others. Jiro knew he was a novice with these other foods, so he chose to trust and learn from these experts instead of trying to pass himself off as knowing enough.

When you respect other people’s expertise, they will usually help you along your own way as you work towards becoming an expert.

Never Stop Learning

Don’t stop practicing. There will always be new things to learn. As the world continues to change and long-held beliefs fall, you must continue to nurture your own expertise. If you don’t, you’ll run the risk of quickly becoming irrelevant. In the movie, the chef whose expertise is tuna says, “I am always learning.” He’s already an expert, but he has an insatiable drive to keep learning. And if he needs to keep learning about tuna, then you need to keep learning about your area of passion.

Open New Doors Through Innovation

When Jiro came back from his time in the war, his sushi master told him, “There is no new way to make sushi.” That could have been the end of Jiro’s journey. Instead, he chose to keep innovating. His desire to make new things (or make things in new ways) earned him three Michelin stars in 2008.

It’s all the more incredible when you consider that his restaurant only seated ten customers at a time, and their seats were next to an outdoor toilet! Jiro could have easily found himself ignored, but his commitment to innovative cooking methods and continued growth in his particular area of expertise kept those 10 seats filled. The lesson here? Innovate, innovate, innovate. You never know where a creative idea will take you.

It’s Always About People

Apprenticeship, expertise, lifelong learning, and innovation all have one thing in common: people. It may sound cliché, but people make the world go round.

As you go through each day, focus your energy on learning something from every person you meet. Reach out to people who think differently than you. There’s a good chance they’ll help you see life in a whole new way. And when you start to see life in new ways, you’ll only be giving yourself the opportunity to grow in your expertise beyond what you could have previously imaged.

If you only take away one thing from this post, make it this single idea: whether in your everyday life or in your business, it’s all about loving, learning from, and growing with people. Now I have to get over my aversion to sushi so I can find a way to become friends with Jiro!
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In a World of Short-Term Players, Be Prepared for the Long Game

Let’s face it: businesses are easy to start. All you need is an idea, a laptop, and an internet connection.

But as David Lee notes in this post, the real test comes when you have to run and build that business. People don’t write about that part because it’s just not that glamorous. Most advice tends to focus on developing your MVP, finding your early team, and raising seed funding. Those topics feel cool and sexy.

But building a business and then running it take a ton of hard work, and all of that grit and resolve is critical to your long-term success. So in the spirit of the openness that underlies VestedWorld’s core values, I’d like to share some things we’ve learned as we continue to grow into the next ‘stage’ of what it means to become a business.  

Hiring a Team and Building a Healthy Culture Are Insanely Hard

Your team and your culture will make or break your dream of building the next Google. But as an extension of yourself, your business will reflect the things that matter to you as a human being. The values you establish for your business will mirror your personal values. Always keep this in mind as you hire and build your culture. You shouldn’t hire people that are the same as you. Instead, take the more difficult path by challenging yourself and your cofounders to hire a team that builds on your weaknesses. Fill in your blind spots. Augment your skill sets. Be willing to be hire people who aren’t afraid to challenge your perspective.

Give Me Systems or Give Me Death

You know that startup proverb that says, “It’s better to get it done now and clean it up later”? Well, that momentary convenience has a way of becoming very inconvenient as you build your business. Monthly reports to investors. Government and tax filings. Contract reviews for partnerships. These things have to be done well or you’ll put your business at extreme risk. You know those metrics you haven’t set up because you’re trying to get customers? Not the vanity metrics like pageviews or free app downloads. I’m talking about real metrics like customer acquisition costs, conversion rates, COG’s, and more. Those metrics indicate that health of your business. Take them off the back-burner. Set them up now. Start to learn and act on what’s actually going on with your business.

Your Best Marketing Is Your Best Product

As the founder of a startup, you never actually work for yourself. Any great business owner knows that, investors and corporate boards aside, they are always first and foremost working for their customers. So build them the best product you possibly can. They are the ones who will determine whether or not your business will succeed. Deliver on the value you promise them, and they will tell everyone they know. At the end of the day, no amount of marketing dollars can sell a bad product.

Raising Funds Never Ends

If you take money from venture capitalists once, count on having to come back for more. Fueling success costs money. If you’ve taken venture funding and your business succeeds, you’ll most likely either get acquired (a liquidity event for your investors) or you’ll IPO (a liquidity event for your investors and another fundraising event for the business). If you don’t succeed, your business will die. There is little middle ground when you’ve taken VC money. There’s only one way to reduce funding pressure: build your business and get out of the startup stage. Raising funding after your seed round is a completely different ball game. If you haven’t yet done this, search Google for seed or Series A funding. You’ll get loads of tips, tricks, and tactics from a diverse set of sources. Now search for Series B funding. What do you see? Probably just a handful of news stories reporting on companies that have managed to raise their Series B. All of the lessons have disappeared. Rare is the blog post that talks about the grueling work of the next stage of fundraising on the path to building your business. Learn as much as you possibly can from your current investors and advisors, because once you move past Series A, you’re not going to get advice from anywhere else.

Don’t Lose Your Vision

As you build and run your business, you’ll constantly be faced with people and situations that will test how much you actually believe in your original vision. You’ll be tested by your investors, by your customers, and even by yourself when things get tough. A clear, defined vision should be your true north. It should keep you fighting through the fog of business model questions and the constant fluctuations of market circumstances. Once in a while, it’ll even be the ignition you’ll need to restart things on your path to building your business. At the end of the day, never forget that running and building your business is a journey. Regardless of where you’re at on that path, never stop enjoying the adventure.
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A Hedgehog and a Fox Walk into a Startup

Let’s start with a simple principle: Culture is what holds an organization’s team, vision, and processes together.

While literature on organizational culture has traditionally focused on big business, there’s been an appreciable uptick in the number of people paying attention to how entrepreneurs build culture in a startup or a small business. For this post, I want to focus on one particularly important factor in building a healthy startup culture: mindset.

There’s a concept that’s been gaining traction lately called “Hedgehog vs. Fox”. I first stumbled onto this idea while reading Gerald De Jaager & James Ericson’s nifty book on breakthrough mindsets, The Million Dollar Parrot, but the analogy actually dates back to the 1950’s when a philosopher named Isaiah Berlin wrote an essay that divided writers and thinkers into two categories: Hedgehogs and Foxes.

Simply explained, Hedgehogs are those who view the world through a single, defining idea while Foxes are those who draw on a wide variety of experiences and cannot boil their world down to one single, overarching idea. It’s not that one is better or worse than the other. They are just different. When you apply the categories to entrepreneurs, Steve Wozniak (Apple) and Warren Buffett (Berkshire Hathaway) would be Hedgehogs while Jack Dorsey (Square/Twitter) and Richard Branson (Virgin Group Ltd.) would be considered Foxes. In an Op-Ed piece for the New York Times in 2009, columnist Nicholas Kristof applied this hedgehog/fox analogy to financial experts. He argued that the prevailing mindset of experts in an industry drives how things get done in that industry. So if most of the experts in an industry are hedgehogs, then most up-and-coming non-experts in that industry will begin thinking and interacting in that same, hedgehog-like way. If this principle is true, it’s not a big leap to see how the framework functions in the startup space. First-time entrepreneurs (like any new-comer in any industry) listen to the leading industry experts who know more than they do. Then, these first-time entrepreneurs proceed to frame their own decisions within the experts’ preferred mindset. They even start making their own plans based on the experts’ particular guidelines and frameworks. For better or worse—and usually unconsciously—the new-comers become students of a particular ideology or perspective. It should be clear by now that this tendency, when left unaddressed, can lead to an unintentional atmosphere of groupthink. Of course, no one wants to get caught-up in a “startups are supposed to be a certain way” groupthink. So how can a founder avoid this pitfall while maximizing his own particular mindset? Here are my suggestions:
  • Dig to the core of who you are as a founder and clarify what your value systems are. Ignore the experts at this stage. You must not lie to yourself.
  • Communicate your value system to your co-founders and team. I can assure you that those who don’t share your values won’t stay with you on the journey.
  • Do a regular “value check” to help you stay the course. Startup events and major milestones make it all too easy to lose sight of what type of company you are trying to build.
Whatever you do, don’t do it because you feel like the expert startup folks are telling you to be or think a certain way. The experts won’t help you run your startup, nor will they clean up your mistakes. Be your own hedgehog. Or your own fox. At the end of the day, be you. It’s the biggest strength that you have. PS: One more point for startups. In the early days of any venture, the most likely way for your startup to succeed is for you to focus on one thing and look at the world through the lenses of that one problem you are trying to solve with your startup. In a sense, you become a hedgehog. It’s the only way that you completely understand the need that your customers have and thus solve their issue. Only when you get a critical mass of customers can start to play around with additional ways to provide value outside of the initial premise, and that’s when you start to play the part of a fox. At that point, you can look at the world through the many lenses through which your customers can be viewed.  
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The Most Important Fundraising Element No One Is Talking About

Some time ago, I read two interesting posts about fundraising and finding partners for startups. Mark Suster, an entrepreneur-turned-VC/Knowledge Evangelist, wrote the post on fundraising. The CEC’s very own Kevin Miller wrote the post on startups.

As with much of the literature on fundraising, these posts explore how to develop a compelling business case while convincing people to work with you and give you money. The principles are universal, even if they might need some translation for entrepreneurs in emerging markets—Kinshasha, for example—who lack access to the type of venture funding available in the US.

But there’s one key element of fundraising that doesn’t get as much press, even though it’s the only element over which the entrepreneur actually has total control. That element is attitude. So here are my top four attitudes that I promote to every founder as they’re working with me to get funding:

Maintain a POSITIVE Attitude

One of my go-to mantras throughout the fundraising process (whether I’m the entrepreneur or the investor) is the simple, positive phrase: “it always works out”. Even if an investor wasn’t interested in giving me money, these four positive words have helped me believe that the investor’s rejection wasn’t necessarily because I had a bad business idea. The next pitch would go better.

Keeping a positive attitude gives an entrepreneur more than just the boost needed to make it through those weeks when the customer sign-up numbers aren’t showing the kind of traction investors want to see. It gives him resolve—the ability to keep his chin up in even the lowest of moments.

Keep LEARNING

When I was raising money for my startup just five years ago, I pitched several investors from September to November of 2011. It was grueling, time-consuming, and emotionally draining. But pitch after pitch, I listened to and learned from all the feedback I received.

Whenever I heard the same feedback from more than two potential investors, I was quick to adjust and let them know I’d incorporated their feedback into my pitch deck. And it helped. So whether it’s your first pitch or your five-hundredth, maintain a learning attitude throughout the entire fundraising process.

Stay OPEN

Phil Nevels, co-founder & COO of Power2Switch, is one of the smartest chaps I know. (His pedigree speaks for itself—he’s a graduate of both Princeton University and the Booth School of Business at the University of Chicago.) Now Phil and I are both pretty good at spreadsheet modeling, but we had metrics in our projections that were esoteric (very few people think in kilowatts/hour, the metric that mattered for sign-up’s in the electricity space). We needed to change the metrics to make them more accessible. So we made the change.

We could have easily been headstrong by trying to make our investors see things our way. But changing our metrics actually made it easier to communicate the value in our business in terms that investors actually understood. Even though we were the experts in our industry, our investors appreciated that we were open to suggestions about how we could best “sell our story”.

Be CONFIDENT in Your Idea (and TENACIOUS in Bringing It to Life)

No one will believe in your business as much as you do. Never forget this.

Investors will throw questions at you that will make you doubt your own vision or idea. Don’t be surprised when they do. After all, investors are out to mitigate risk, and your idea (whether you think so or not) is a risky investment. I’ll repeat this: investors are risk-mitigators.

The only way you can mitigate the risks inherent in your idea is to confidently provide answers to all the questions investors are going to have. Overcome the inevitable information gap. Allay the investors’ fears. By anticipating questions, you’ll learn more about your own space, and you’ll be better prepared to carry on with implementation.

Don’t misread me: attitude alone won’t get you funded. But practicing right attitudes will help you develop strong relationships. And relationships are what you need to sell your promising business idea to the willing ears of the right investors.
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Of Megacities and Developing Countries: Upsurge in Migration and Insecurity

As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.

In our 6th and final post in the series, we discuss the increasing migration into emerging megacities and the challenge that poses.

As immigrants from war torn countries flee into the European Union, so to do residents of developing countries swarm into nearby cities where there are more opportunities due to economic development. And as we've seen play out across the EU and the world in reaction to the surge of Syrian refugees, long-time residents of those areas are increasingly worried that their homes are being taken away from them. But where others see concern, we see opportunity, especially in developing megacities. This can be a defining moment to improve services and redefine the identities of these areas. Migrants and immigrants bring with them their native cultures and cuisines, which are embedded into the very fabric of these cities, making them truly home to more people. Only when newcomers believe that their new environment is home do they proactively attempt to become a part of their communities. This assimilation of many cultures is a vital and necessary part of development, because it is in our human nature to take care of the things that belong to us. With shared accountability for our cities, we distribute responsibility for building and patronizing local businesses, providing quality services and investing in our communities, even those we do not belong to, but recognize parts of ourselves among. When we increase a shared sense of security, we collectively thrive as global citizens connected across an immense, fast-changing world.
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Of Megacities and Developing Countries: Exclusion and Rising Inequality

As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.

So far we’ve considered a wide range of economic and social challenges—from the dearth of efficient housing and professional services to adverse environmental consequences—that accompany rapid urban growth. In part five of our series, we explore an issue common to every economy, no matter the level of development: the stark divide between the haves and the have nots.

Social and economic inequality exists everywhere. It is particularly troubling in societies where opportunities for wealth creation are increasingly available, but only to those who already have the tools and resources to utilize them. Think Silicon Valley. Here is a region where the wealthy are exponentially wealthier than the average resident. It's not uncommon to spot a rudimentary shelter made from delivery boxes bearing the labels of San Francisco's most prosperous companies, run by its wealthiest citizens. The city is in a major housing crisis—there simply aren't enough homes that the average resident can afford on their income. This crisis exists throughout the developing world as well, especially in rapidly growing urban centers. Solutions that we've already mentioned include modular, space-efficient homes like the Kasita, technologies that enable telecommuting and improved infrastructure. And if you've kept up with this series, you'll probably have noticed that all of these issues are related in a systemic way. Solving the problems of growth in emerging market cities will require a systems thinking approach. This means recognizing that to address infrastructure issues is to address energy issues is to address transportation issues is to address social structure issues, ad infinitum. The only way to address all of these issues is to do creatively and inclusively as possible, with input, insight and effort from all stakeholders and community members from the local farmer and community organizers to business leaders and government officials. One example of such an inclusive approach: the 100 Resilient Cities initiative. The goal: to help each member develop a resilience plan for solving the emotional, social and economic challenges of the 21st century. It is no coincidence that many emerging megacities are involved—as these cities continue to develop at projected rates, their residents must collaborate to manage the strains of growth. And as history has shown us again and again, the most effective way for residents to weather such stress is through economic empowerment.
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Of Megacities and Developing Countries: Climate Change

As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.

Previously we’ve discussed housing, as well as personal and professional services. For our fourth post in the series, we’re turning our attention to the negative impact of rapid urban growth on the climate and environment.

Sea levels are rising in places like Bar Beach in Lagos Nigeria. Before the government stepped in to fill huge swathes of land with sand, Lagos island suffered from constant flooding—a temporary and potentially dangerous solution, and a post for another day. So what are the solutions to the challenge of adverse climate change in developing cities? Climate change, like all cycles, cannot be solved. The only way to break a cycle is to adopt a new one, in this case a distributed and renewable energy system. The utility industry is made up of three layers:
  1. Infrastructure: generation plants, wires and lines, transformers, meters
  2. Technology: the software that runs the operations of all the infrastructure and customer interactions
  3. Consumer: metering, billing and payments
In the future, electricity will be generated far more locally to the individual customer, in the form of solar panels on their homes, for example. Another example would be wind farms, which are far less damaging to the environment than coal plants, and well-functioning hydrogenation plants. More developed countries across the world have already made inroads to improving the function and delivery of utilities. Many have provided consumer incentives to purchase and install solar panels, making geothermal generation a far more affordable long-term option than obtaining power from the grid. One of our portfolio companies, Beacon Power Services, is already bringing this reality to hundreds of customers in Nigeria. But we need to do more. Megacity governments will have to play a critical role, creating and passing policy measures designed to increase the adoption of renewable energy. It's the only way to ensure that as urban growth continues, we can avert future climate catastrophes.
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Of Megacities and Developing Countries: Challenges in Providing Urban Services

As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.

In our previous posts, we thought about the need for affordable, economic housing and accessible care services in developing megacities. For the our third post in the series, we’re considering how rapid urban growth has presented a challenge to the availability of urban services.

Similar to the infrastructure requirements previously highlighted, these cities and their governments will be under increased pressure to provide residents with improved urban services. But as mentioned before, weak and unwilling civic bodies may not be able to meet that need at the pace of growth. This is where entrepreneurship and the private sector can fill a critical role, particularly toward job creation. As more entrepreneurs step up to provide urban services like economic housing, on-demand transportation and accessible, high quality childcare, they'll need reliable, professional services themselves, such as accounting and IT support to better manage their businesses, or credit facilities, something our portfolio company Umati Capital, provides. Successful entrepreneurs not only fulfill consumer needs, they create more opportunities for other enterprises and small businesses and spur greater job creation for residents, all while relieving the burden on local governments. Valet services may seem like a luxury good, but they're another mechanism for economic development. They provide the fuel that will improve the quality of life in developing megacities for all people.
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Of Megacities and Developing Countries: Changes in Family Patterns

As part of our series in response to the UN’s 2016 World Cities Report, we’re exploring the opportunities and challenges presented by the rapid growth of developing countries.

In our first post, we explored the challenge of affordable housing in large urban areas with poor infrastructure. In this post, we’ll explore the anticipated changes to the traditional “nuclear” family structure, which typically includes father, mother and children.

Of course, this structure has evolved and changed across the world, not just in megacities or developing countries, but everywhere. Plenty of research over the last few decades has shown a drop in marriages and couples having children, as well as a rise in single parents. Regardless of the part of the world you're in, this is a social change that inevitably affects the culture of a city. What does this mean in terms of business opportunities? For one the traditional structure, whereby family members provide childcare and palliative care, no longer applies in these markets. Families have dispersed more widely, leading to a surge in the need for hired nannies and caretakers. The U.S. has seen an uptick in mobile apps and services that make it easy to find and hire a professional caretaker with just a swipe. The same need that drove this innovation in the U.S. also exists in emerging markets–but the need has yet to be fulfilled. This is a great opportunity with tremendous potential. But first, emerging markets require stronger credit structures and easier mechanisms for performing background checks. In part three of this series, we'll further discuss the need for improved government services in developing urban areas.  
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