Caribou Digital/Vital Wave Digital Economies Whitepaper

In April 2014, Caribou Digital and Vital Wave hosted a one-day symposium on Digital Economies at the EmPac Centre at University of California, San Diego. This symposium convened world-leading experts from the industry and non-profit space in a roundtable to discuss a wide range of issues about the opportunities and barriers to building digital economies in emerging markets.

Caribou Digital and Vital Wave authored this white paper to synthesize this discussion and further explore the concept of a Digital Economy with the aim of sharing valuable insights, and spurring discussion and action. The paper discusses the barriers, and presents the benefits and opportunities of a Digital Economy. Chief among the benefits are higher employment, better incomes, and greater entrepreneurship. The paper concludes with guidance and questions for governments, corporations, and local business leaders on how to foster a Digital Economy.

You can download the white paper here.

We are looking to hold these invite-only symposia every six months or so, and we held the second symposium in December 2014 at MIT Legatum.  This time we looked at issues around local access and content, and we’re writing this up at the moment and will post the white paper soon.

Repairing the ‘institutional voids’ – mobile entrepreneurship report with Vimplecom

We’ve been working with Vimplecom on understanding the role mobile operators play in supporting nascent entrepreneur ecosystems, and the report we wrote with them is published today.  We’re pleased to have been able to partner with them to explore where the ‘institutional voids’ are in some markets that mean it’s hard to support young entrepreneurs.

We discovered some great projects in the course of the research, from Djezzy in Algeria running programmes to support the entrepreneurial activities of the North African ‘youth bulge’ to banglalink in Bangladesh who had unprecedented response to the competition to find the next generation of digital entrepreneurs.

Most of all, it’s the small details and decisions made in some of these projects we found the most compelling.  For instance, WIND in Italy forged a partnership with the LUISS Enlabs to host an incubator in Rome.  The location was chosen above Rome railway station, to make it easier for the many commuters who regularly travel between Milan and Rome to participate in events and access the entrepreneurs – and vice-versa.

It’s these small things – placing entrepreneurs where there is a high chance of engaging with existing businesses – that will make accelerators and incubators successful, more than tech grants or the many other things that people throw at projects.  Subtle, considered, sensible interactions with the local infrastructure and business culture are needed.  There’s no one-size-fits-all approach, and the Silicon Valley approach is not directly exportable as a model.

Research & Team News

Lots and lots of interesting stuff going on at the moment. Some delivery projects we’re working on we’ll be able to talk about publicly early next year, but we’re very excited about them. We’re working with some wonderful clients on projects we feel will genuinely change the markets we’re working in.

What we can talk about is the growth of our research area of work. We ran an excellent symposium on Digitial Economies in partnership with UCSD EMPAC and Vital Wave Consulting last April, and we’re happy to say our plans to make this a bi-annual event have been successful and we’re hosting the next meeting at the MIT Legatum Centre for Development & Entrepreneurship next month with Vital Wave and support from the MasterCard Foundation. This is an invite only, Chatam House rules event but we will publish a paper after that summarizes the discussion. The paper from the first meeting at UCSD we’ll link to in the next couple of days.

Also with MIT, after hosting a workshop on digital content for USAID last March we proposed and conceived of a special edition of the MIT Innovations journal on the topic, and we are delighted to see this now published (PDF download). There’s some fantastic research in there and we’re proud to have played a role in seeing this developed – huge congrats to the USAID team and the herculean editing role managed by Audrey Hyland.

We’re very keen that there is a strong academic rigor to our research profile at Caribou Digital, and we’re therefore also very pleased to have had a paper accepted at the 2015 AAG meeting in sessions managed by the excellent Connectivity, Inclusion, and Inequality group at the Oxford Internet Institute. The paper will be a condensed version of a much larger research project on the shape of emerging market digital economies that we’ll be working on with Jonathan Donner, Emrys Schoemaker and Bryan Pon, funded by some partners we will formally announce next month.  The paper appears on the schedule under Bryan Pon, who will represent us at the AAG event in Chicago next year.

We’re looking at this first major research project as a way of diving deeper into what’s really happening in emerging market digital economies and to set out the themes around equitable share of access, value creation and opportunity that are important to us and, more critically, to the viability of the sustainable growth of these nascent digital economies and societies.  It’s a very exciting piece of work.

And, finally, all of this excellent work needs to be nurtured and well managed, and it’s a huge pleasure to announce that Jonathan Donner has joined us as Senior Director, Research to lead this work and further build out our portfolio of research.  Jonathan has been a leading researcher in M4D and ICT4D for over a decade, and brings a huge amount of experience, knowledge and enthusiasm to Caribou Digital.  It’s personally a delight to have him come on board as I first worked with Jonathan in 2004 when he contributed an excellent chapter to the book I edited on the impact of mobile phones globally.  It was the first paper on M4D that I read, and as a direct consequence of that it has lead to what we’re doing now, so it’s fantastic to have that coda to the story.  Jonathan will be a great asset as we build out Caribou Digital, and he’s someone who fully shares our vision of the way digital economies develop.  We’re going to have a lot of fun.



We’ve had a very busy September, and there’ll be some announcements soon on new projects, interesting stuff we’re working on, and interesting people we’re working with.

In the meantime – Peter Theil’s recent comment that monopolies are a good thing has cropped up constantly in discussions we’ve had with people.  In a digital age when the viability of business models dominated by monetising attention you can be a company with 170 million active users and still pale next to the competition.  Attention economies require network effects, and almost total reach, to monetise the spikes and likes that drive people to content.  That suggests a tendancy towards monopolies.

In the New Republic Franklin Foer has a robust argument against a different new definition of the monopoly, more minded that monopolies are still a problem.  Scale of consumer base does equate to scale of leverage over companies further down the chain.  An unequal digital economy benefits nobody.

Compare Theil’s argument that scale is the only thing that matters with Mike Kubzansky and Paul Breloff’s interesting thesis on field building as an alternative view of scale:

We believe that there are not only direct pathways to scale but also indirect pathways to scale—specifically, scale through the indirect inspiration or motivation of copycats and competitive responses that build on, extend, and sometimes even replace the initial pioneer.

Theil would disagree with the field argument against total scale, but he’d agree with the argument that monopolies are vunerable to disruption themselves, and history would broadly agree with him.  But, I would argue that ultimately most monopolies die not because they get disrupted by competitors, but because they get distracted by battles with another foe that isn’t a direct competitor.  Monopolies are, naturally, catnip for regulators.  And unlike commercial competitors, regulators don’t go out of business.  Microsoft fell into a long drawn out battle with the DOJ and the EU, Google is now falling into the same pattern.  Disruption is not, perhaps, what monopolies should fear most, but distraction should be.

The high capex cost of infrastructure

This from Benedict Evans weekly email:

Mark Zuckerberg says Facebook is willing to spend ‘billions’ to expand internet access in emerging markets. That’ll be interesting. Note that global mobile operator capex is somewhere over $200bn a year, or over double the entire internet advertising market.

It’s his response to the news that Zuckerberg is prepared to spend billions connecting emerging market users to the internet.

I maintain my belief that the quickest way for cash-rich internet service companies to burn through their cash pile is to get into the capex-rich world of providing connectivity.  We need a huge amount of new innovation in the access space, and the competition that goes with it.  We need new access technologies, new hardware, and most importantly new business models that are fit for purpose for rural communities.  We need billions spent, but I doubt we’ll support it on advertising alone.

Smartphone Only Countries

We’re usually a little sceptical of the claim of the rise of smart phones in emerging markets.  Sure, prices are crashing and adoption is growing fast, but is there a similar pace of adoption of the data services that make them more than just a pretty thing to hold in your hand?  Anecdotes abound of the status smart phone, used mainly for non-data.  Smart phone adoption is growing fast but beyond zero-rated services mobile data pricing is stubbornly high.

That’s understandable for operators who are concerned they’ll lose margins on traditional voice and messaging if cheap data drives VOIP adoption.  Whatsapp already dominates data traffic figures in Africa and some operators have dived right in by offering bundles designed for the service.  But not everyone’s going to be happy becoming a data pipe.

The always excellent Wayan Vota writes a great missive here from his recent trip to Myanmar, claiming it will be a smart phone first country.  This seems perfectly plausible.  Where the delta between smart phone and feature phone pricing is negligible, and where fast data networks are being built anew, rather than upgraded from 2G, it’s clear to see how Myanmar, within a world where emerging markets had been leapfrogging wire-line straight to mobile voice, will itself leapfrog the leapfroggers and go straight to mobile data.

Myanmar may be the indicator of the future – where affordable smart phones aligned with affordable data drive a genuine, country-scale digital inclusion via mobile.  It’s going to be phenomenally interesting to track what happens.

If you’re a water company, don’t make soda, and vice-versa

Benedict Evans has long been a favourite analyst, but this piece on unbundling innovation is superb.

He’s incredibly precise and accurate in describing what the early 2000s were like for MNOs, who predicted a lot of the innovation that was to come in mobile tech, but were unable to make it stick and eventually were dis-intermediated from this role as the innovation layer floated up into the world of IP and apps.  It was incredibly hard to try and build innovative services in any MNO outside of Japan in the early part of this century.  You had to carry around a massive per-event pricing model on your back as you tried to build new products, and often lost out to entrenched core revenue products.  Then Apple came along and did everything properly, and the game was up for MNO value added services.

Evans has a great analogy to describe why he thinks this doesn’t work:

The analogy I often use in this case is that for an MNO to get into apps and content is like a municipal water company deciding to get into the soda business – because it knows water, and has trucks, and customers trust its brand. Even if it managed to come up with a great soda, it would still be just another can of soda amongst many. (Continuing the analogy, of course, it also makes little sense for soda companies to think they can get into the municipal water business – nor for tech companies to think they’re going to disrupt mobile operators).

There’s also a wonderful future warning in that final parenthesis amongst all the retrospective truths.  If you’re a soda company, don’t try and become a municipal water company.  There’s a reason Google is quite literally trying to build its access services in the cloud with Loon.  It doesn’t want to become a municipal water company, it doesn’t want regulation and taxation, but it needs the water pipes to be in place.  So it’s trying to innovate its way out of the dilemma.  It mind find this harder to achieve than it would like.

FT/IFC Panel video

Here’s the video of the panel I participated in on how ICT is a game-changer, from the FT/IFC Transformational Business conference earlier this month.  More importantly, one of my fellow panellists was Nick Hughes, and as he as both M-Pesa and M-Kopa in his CV he’s always the most interesting person on any panel.



FT/IFC Transformational Business Awards 2014

It’s that time of year again when I get to spend a couple of days with some fantastic people to judge the Financial Times/IFC Transformational Business Awards.  There’s a name change this year – in recognition of the phenomenal amount of innovation in the space we’ve moved away from ‘Sustainable Finance’ to talk more about transformational businesses that are having a huge impact in markets around the world.

Alongside a day of judging, I’m also very pleased to be speaking on a panel with some great other people, notably the excellent Nick Hughes of MKOPA, who won the main award and the technology award last year.  If you’re attending the event, come and say hello after my panel.  I’ll be the one touting my shiny new business cards with the new Caribou Digital logo on them.


Shhh! We’re working…

It’s got a bit quiet.  Sorry.  Lots and lots going on.

And all of it is exciting.  There’s a few fantastic projects coming together and other stuff we’ve just started on, and we’re expanding.  I’ll update as soon as I can.

In the meantime, if you’re looking for something to read, Mary Meeker’s 2014 report is out.  By the time you’ve finished reading it we’ll have updated some news.  Have a read here:

(tl;dr – mobile big, TV changing, good UI is king, mobile ad still under-indexed, nothing in there about emerging markets or mobile money though…)