The Hype Economy: Lessons For African Entrepreneurs

 

Some made good returns but the many who bought and held their tokens have so far lost and are continuing to lose their invested money as the hype fades and Web3 startups come tumbling down.

“The gap between what publicity actually offers and the future it promises, corresponds with the gap between what the spectator-buyer feels himself to be and what he would like to be.” John Berger-

In 2021, almost out of nowhere, the World started using Web3 and the Metaverse as though these were already practically obvious concepts to mankind with the proponents of these technologies defining Web3 as a decentralized web underpinned by blockchain technology and the Metaverse as the combination of virtual and augmented reality and the internet as we know it today.

At the core of Web3, at least going by the promises of its proponents, is the internet dominated by a number of decentralized platforms owned by their users through tokens (both fungible and non-fungible).

Web3 is premised on users having control of a part of the internet (platforms) they use, unlike Web2.0 in which power resides in giant internet companies which control user data and determine the use of the internet with minimal or no user inputs at all.

The unique selling proposition, if I may go by business language, is to replace the entire internet infrastructure thereby reducing Big Tech’s grip on user data and the internet as a whole. Even with all the buzz going around, not a single Web3 platform has emerged which decentralized ownership of the web challenging Big Tech’s stronghold thereon.

With Non Fungible Tokens (NFTs) and crypto currencies, some high net worth individuals have popularized and greatly hyped Web3 as a valuable re-imagination of the internet.

However, except for the buzz, Web3 has minimal practical use cases- the common use case so far being the buying and selling of NFTs using crypto currencies and peer to peer transfers of these currencies, some of which are, in fact, dollar-pegged.

Because of the promise of wealth created by the hype from early high net worth investors, a lot of people bought and sold NFTs and crypto currencies generating good returns on their investments (of course as early adopters) while others bought and held with hope to sell at appreciated value in later times.

What is true for Web3, unfortunately, particular to NFTs and crypto currencies, it has, contrary to its earlier promises of decentralizing the web, become a means for transfer of wealth from a generation of young financially unstable people who speculated their savings and incomes with hope to generate voluminous returns in the future (as promised by Web3 proponent marketing campaigns) to old high net worth individuals who were early investors into the modern technologies.

For more clarity, the old and high net worth individuals piled their money into crypto currencies and NFTs, ran marketing campaigns to lure others into buying, then sold and exited with huge profits. Others followed suit with hopes of making as much as the early investors.

Some made good returns but the many who bought and held their tokens have so far lost and are continuing to lose their invested money as the hype fades and Web3 startups come tumbling down.

It is also important to note that most Web3 companies were Ponzi schemes with technical jargon and hype holding them before they tanked and investors lost their money.

With current public market patterns and unrealized promises of Web3, what are lessons for the African entrepreneur whose aim is to create lasting impact through market creating innovations?

First and foremost, the African still faces life-threatening and inconveniencing problems like poor medical care, poor sanitation, limited access to electricity, limited clean and adequate water supply, poor education, transport, communication and nutrition, difficulty in transactions, a challenging cross border trade environment, limited access to capital and multitude others.

To build lasting positive change for this community of people, the African entrepreneur will have to develop innovative solutions which address dire situations lived by them.

The African entrepreneur should not be driven by hype and the desire to get rich quickly with little hustle but should instead commit their efforts to building business solutions that help make lives of Africans less threatened by avoidable situations and bring more convenience.

Secondly, the African entrepreneur must strive to create prosperity for his/her community and the larger African and global society. Instead of going by the hype aiming to make huge returns in the shortest time and live lavishly thereafter, the bold entrepreneur should realize that impact rests in building systems that enable people to create wealth for themselves and, as a reward for their labor, the entrepreneur will be properly positioned to generate limitless prosperity for themselves too.

The entrepreneur’s project undertaking must seek to create wealth for the many Africans at the bottom of the economic pyramid or at least alleviate situations that limit those at the bottom of the pyramid from creating wealth instead of transferring wealth from the bottom and middle of the pyramid to the top/upper as the [Web3] hype economy commonly does.

More so, the African entrepreneur should be a politically savvy person who understands political dynamics within which their business will operate.

Holding a bigger picture understanding of the political environment in which the entrepreneur has to operate will inform the entrepreneur’s decisions pertinent to their relationship with public administration. Unlike the Web3 hype which promises to end government involvement in the affairs of the entrepreneur and consumers of their products, reality shows that even Web3 companies have had to bow to the decisions of public policy makers.

So, the African entrepreneur should understand they are not in competition with the state but rather acting in complementary with the state in the quest to solve society’s problems. Because of this, the African entrepreneur will seek to build necessary rapport with public policy makers to avoid the brunt of a bitter political environment.

In light of the aforementioned facts, it is imperative for the African entrepreneur to be determined to solve Africa’s and the World’s gravest problems, an undertaking that will require them to not shy away from navigating complex political environments, pursuing innovations in tough tech like in robotics, advanced manufacturing, biotechnology, micro-electronics, materials science, energy and many others which converge to offer useful solutions to human problems which is contrary to the ease of acquiring wealth promised by the Web3 hype.

By Steven Caleb Katurebe

e-mail: stevencaleb680@gmail.com