Latest / Talk Commerce / Africa's Investment Future Depends on Its Diaspora with Kanessa Muluneh
Transcript
- Brent Peterson (00:01.464) Welcome to this episode of Talk Commerce. Today I have Kanessa Muluneh Kanessa go ahead, do an introduction for yourself. Tell us your day-to-day role and one of your passions. Kanessa (00:12.226) My name is Kanessa. I'm Ethiopian born, raised in the Netherlands, now live in Dubai, mom of three. And I'm going to say something contradicting here. I always dreamed, well I dream, but now I dream of being a stay at home mom, but I'm everything but. Because the moment I sit still, my brain starts to work, come up with ideas. And before I know it, I invest in something or build a business. So I said. I might as well build a career out of it. That's what I did. I have an investment company now. Brent Peterson (00:45.87) That's awesome. And what about passions outside of that? Kanessa (00:51.54) Yeah, well, as an African, if you come from an African family, there wasn't always room and space for hobbies and passions. There was just this school for you, this path laid out for you. And I followed that, went to medical school, which I hated, by the way. But I never discovered, I'm still in the process of discovering hobbies. But I must also admit that I try and every time I feel like I get bored and then switch to the next one. Brent Peterson (01:24.59) It sounds pretty familiar to me. All right, so before we're going to talk a little about business and let's talk about some of the businesses that you have going. Maybe even talk about investments in other countries and something like around that. But I'm going to tell you, before we do that, I do this thing called the Freak Joke Project. I'll tell you a joke. You just give me a rating, eight through 13. So here we go. The inventor of the Ferris wheel and the inventor of the merry-go-round. Kanessa (01:48.246) Great. Brent Peterson (01:53.898) never crossed paths. They just traveled in different circles. Kanessa (02:02.712) Well, it depends. Are you a dad? Because this goes down as a dad joke. Okay, then 13. If you wouldn't be a dad, then I would go closer to eight. Oh, yes. 18 plus. Oh, six. No, 13 plus. Brent Peterson (02:06.903) Yes. Yes, I'm a granddad, in fact. Yes. Okay, good. you. All right. Good. So give us kind of just you gave me some of your life story in the green room, which is super interesting. Tell us how you got to where you're going and how you got to where you are. Kanessa (02:35.33) So right now I have an investment firm and a diaspora investment firm. I decided initially to invest myself, my own money. I wanted to go back to Africa and reconnect because I grew up outside of Africa. And I went back. I kind of enjoyed the whole process of me finding myself. And I also noticed how the economy was quite cheap there. And I saw people struggle with things that were very natural to me. for example, marketing, I'm into marketing and PR and people in Africa have no idea when it comes to marketing, how to, you know, make yourself visible basically. And I saw this little shop, it was like a little plumbing company and I was like, you know, I could do your PR and marketing and you could just give me, they didn't have the money. So I said, well, give me like a stake in your company. And I made it quite a big company after that, just by doing PR and making videos and talking about it and using it as an example, like a user case for myself. And I was like, if this is what I can do to the market or have an influence on the market, why not do it on a bigger scale? Eventually I made some investments in Kenya, South Africa, West Africa. So it became... a hobby, more of, well, it actually became a career at some point because I was actually making money out of it. And then I was documenting the whole process and telling other diaspora like, this is so fun. You should also do it, blah, blah. But at the same time, I wasn't aware that I was also promoting something quite dangerous, I should say, because Africa is not the kind of market where you just go call the first lawyer that you see on Google or LinkedIn. and hope for the best. You really need to build your network. And I happen to be a good networker, but most people just call their families, send money and think it will all go well, but you're not dealing with professionals. So that's when I thought, okay, maybe instead of putting these people in dangerous situations, I might as well combine and put everything in one place, provide information, share my journey, share my experience, and also help them invest. Brent Peterson (05:00.238) Okay, my experience when I opened an office in Bolivia and we talked a little bit about your first investment in my first office. We opened it there because of talent and costs and things like that, but I would never do it again. So tell us some of the things that you've done that maybe turned out okay, but you wouldn't do again. Kanessa (05:25.25) Well, I don't think this whole journey, I would not do it again with the information I have today. If I would have known, I think no sane person would go for it. And I think that's also a good thing. I was quite naive and sometimes I'm still naive because I'm looking for that adventure, fun, we'll see mentality. But that's because I had a... The money was like I had a little play money, as I call it. Like I'll try. It wasn't that much money. And in the early stages, was expertise as well. So nothing would happen to me if I'd lose that money. But here I am promoting it to others as if it's a once in a lifetime opportunity, not realizing that, but Africa is not a straightforward market. Different laws, sometimes laws don't even exist. I think, and I have to say this carefully, but Africa is not for the weak. If you know what I know, I'm sure you wouldn't do it. But then again, the ROI's are insane. We're talking about huge ROI's. They are full of resources. Everything you need is in Africa. And what I personally target is like getting the resources or like to build, should say, getting the resources from Africa and sell it to Asia because the population size of Asia is immense. I mean, they have two countries that are the population size of the whole continent Africa, each China and India. I mean, I could retire from that. Find a great resource, whether it's coffee, anything agricultural, gold, diamond, we have it all in Africa, export it to Asia, which is a similar market, so I don't have to adjust too much. And I could literally retire my whole family from that. So that's what keeps me going. Brent Peterson (07:18.776) Have you found that if you tried to sell into India and I know you talked about Pakistan earlier, for me in India has been a hard to sell into. They're always just trying to sell to you. Kanessa (07:33.73) Yes, no, you can't. So you have to play with the psychology a little here. For me, some African countries and India are very similar. So they have both growing economies, middle class. People have more and more money to spend on luxury. And the mentality is really, the more you help them stand out, the more they will spend on you. It's more of a West Africa mentality. So because we're... thought like Nigerians, for example, it's the same thing. Like, because they have such a big population size, people are just there fighting to be seen. So you just have to make that process easier for them. If you do that, they pay, they pay. You just have to understand what they spend their money on, but they always negotiate. have to understand that there's always the, you know, they don't pay full price. just feels like, I don't think they can sleep at night. if they pay full price for something. Brent Peterson (08:35.246) Yeah, my friend is Gujarati and they're known for being very, very much traders and trying to get the best bargain. And I remember saying he was, he was arguing over 25 cents. And I said, just let's just get it because you're spending more time in the, he said, no, this is like, this is our, have to do this. We don't feel good if we leave without doing the barter part. Kanessa (08:42.54) Yes. Kanessa (08:46.839) Yep. Kanessa (08:54.839) Yes. So you calculate the price, you adjust it to the market and you just basically see the negotiation, the whole thing coming. yeah, it's really interesting. Selling to the Indian market, I think the hardest part is selling to the Chinese market. That is quite a difficult one because they are completely different mentality-wise. They speak less English. Indians are native English. So. And they're not the so the government can can change a regulation or rule literally overnight. Whereas India is quite stable. They have it's a democratic system. So I feel safer and better in India. Pakistan, I already have some investments going there, going on there. But it's a clothing manufacturing company that I run there. but I haven't tried selling to Pakistanis yet. There's going to be an interesting topic. I might need to dive into that, but I expect it to be similar to Africa as well. Brent Peterson (10:10.53) Yeah, I was just on a call earlier that we talked about the trying to sell into South America and that there's a lot of downward price pressure. And I think all of these developing countries have a lot of downward price pressure. And if you're selling an American product or a product that has licensing costs that would be for Europe or for the US, those type of things are always very difficult to sell a service, especially into a country. Kanessa (10:24.183) Yes. Brent Peterson (10:38.618) where they have other choices and they may not value whatever that product licensing fee is for. And I've noticed that there's a certain level of business that then values that when you get to enterprise level, let's say. Do you find that it's easier to sell? then the other, I guess as a caveat to that, the other thing that we really found was having local talent. that would then help sell into the market was sort of the two ways to open the door to get into that market. Kanessa (11:14.358) Yes, local representation helps. So it works two ways. Local representation can help, but it can also work against you because we have this mentality in Africa, most African countries, I should say, that they don't trust local products or local people. There is a huge trust issue. I mean, I can explain why, it will be a long story. So if there is a trust issue, meaning that whatever I create or make in Africa is by default bad quality or lower quality than whatever I import. So right now we are working on establishing a vitamin brand. It's a passion project of mine because there are no vitamins on the African continent, at least not there is no industry, I should say. I'm sure people import here and there and then sell it. It's not tested. It's not up to the country standard. We don't know the actual shelf life. They just import it. I don't know how you imported it. Did it go through a desert for days, which means that Basically, you don't know if that product is still up to the quality according to the label. I'm trying to establish that. I import knowledge mostly. Same thing I do with the gaming that I mentioned earlier. We invested in a game. We import the knowledge from Silicon Valley. In this case, I also imported the knowledge from Europe because I want it to be up to European standards. somehow already assume that my quality will be bad. We invest in testing. This whole testing thing cost me over like a year because you have to test the actual shelf life. If I want it to be up, you know, a year, the shelf life to be a year, I have to actually test it a whole year. And that's more testing than the Americans do for the Africans or the Europeans. So I have to fight against this narrative. And for some reason, I know I'm not going to win. Kanessa (13:21.804) But it is what it is. Eventually, if they want to have access to vitamins, they don't have much options at the end of the day. But it's just so frustrating. I'm doing more work. I'm building a product for the people. And just to give you an example, we are lowering the iron, the... like the percent that's let's say the vitamin has lower iron because iron exposes you to malaria and malaria is quite active, you know, in most African countries. It's just these little things that we make it for the African. Yet here I am fighting against some random brand that is imported from the US in somebody's handbag that is considered higher quality. So it's a mentality issue. Brent Peterson (13:48.173) Mm-hmm. Brent Peterson (14:15.552) Yeah, it's education. It's probably gonna take some time to get that over the hurdle to try to make it more prevalent or whatever. Tell us a little bit about some of the other things you do. I saw you have Rise of Fearless. Tell us, what is that? Kanessa (14:27.832) Yeah. Kanessa (14:34.39) Yeah, that is a game. It's actually a funny story because I know nothing about gaming. think the only game I ever was affiliated with was Tetris, maybe. And I'm very good at Tetris. That is one thing. But I said, you know, I saw how the industry works from afar. So I saw this Fortnite, Call of Duty. I don't know what all these big games. Brent Peterson (14:48.834) Yeah Kanessa (15:02.904) were a thing out there. And I was like, if this industry became so big on the American market, because the Americans are by far the biggest when it comes to the gaming industry, if they can make it happen with half of the population, or actually one third of the population, why does Africa not have an industry like that? Or Asia? This was the idea that came to me. And I said, you know, let me see how far I can take this. Eventually we did research, I hired a team, I got investors on board and we just started doing research. And before I knew it, we actually had a game, like a beta version. And I was like, now what? You know that point where you've gotten too far to go back? That's how I felt. I felt stuck with the product, which was very good. But obviously to get to Fortnite level, you need huge amounts of money for marketing. You know, I still don't know if I want to take that responsibility upon me. So then I went to San Francisco last November, attended a gaming event. That's when I actually realized that I had no idea what I was doing. I met the CEOs of these big giant companies, Xbox, PlayStation, Call of Duty. I saw them all and I met them all and they were talking to me and I was like, have no idea what you're talking about. And I expressed that. I told them that like I'm an investor. have access to the African market, but it doesn't mean I know anything about gaming. but that opened doors because some came back to me and said, we were going to help you, you know, get this to the African market. So now we're actually building a team and American team that is willing to, to import or export in their case, the knowledge to, to Africa. And they're super smart for seeing that vision because. Xbox, EA Sports, they're trying to enter the African market for a while now, and they haven't conquered it yet because it's also like there's a major mentality difference. But it doesn't mean that Africans don't game. They actually game a lot. Everybody games eventually. think entertainment's everywhere. With that difference that we have a huge young population that is looking for things to do. Kanessa (17:27.734) actual things to do. So yeah, we're going to onboard a team of Americans who currently work with Epic Games, is Fortnite. Some of them worked with other AAA games. And I'm super happy that they see the vision and they just said, well, we'll make it happen. Brent Peterson (17:50.819) talk a little bit about the mental, you said a mentality difference and I, we have a company that writes content and we have US based English writers that write it. And it's very unique where we have humans writing for humans. And I always struggle with, with content that may be written by a non-English speaker that they're trying to sell into the US and they don't see any value in having a US person write content for the right, for the US. And I feel like there's a similarity in what you talked about in the mentality of how the US thinks about the market or how the local market thinks about the US. Is there any similarity in that? Kanessa (18:36.6) think it's more of a cultural difference. I think sometimes people don't understand that the American culture, they have a culture. And I'm saying that because I lived in Europe, I'm married to a European. And even with them, there's like a big difference between Europeans and Americans. Americans have this, which we love by the way, but you have very much of a show persona, especially if you don't know the person, you're very nice compared to Europeans. That's one thing. You're very friendly. But that's also like, you get to know a person and that's when you have like deeper conversations. It's mostly surface level of outside of that where Europeans just go head on and basically tell you what they think. And here you are being offended, but that's just the European culture. Africans, on the other hand, know nothing or have nothing to do with like the American culture. It's a completely different world. And I think if an American lands on the African soil and brings their African mentality, they will have a very hard time because of course people will just accommodate you for the time being, but they don't understand you. And also there's this big thing, not just for Americans, but also for UK or Australians, your native speakers. not everybody in Africa is a native speaker. So sometimes it's easier for a non-native, just like me, to understand another non-native who speaks kind of broken English, to understand them than native English speakers. UK being the worst, by the way. Brent Peterson (20:21.356) Yeah, maybe Scotland and Northern Ireland. Kanessa (20:23.306) yes, that's Ireland. I mean, you need a course to understand what they're saying, but it's very hard sometimes to pick up. So you hear their words, but understanding is another layer. Brent Peterson (20:40.652) Yeah, so do you feel like one of your skills is that sort of being able to bridge between some of those cultural gaps and maybe even learning about the local culture sooner than later and helping them to understand how the business has to happen in this area? Kanessa (20:56.088) Maybe, maybe. There's also this thing called, my husband calls it, so him being a European, just, he says it out, he flaps it out. He calls it white disadvantage and it's there, you know. I know this is a topic or a sensitive topic maybe to the West, but we talk about it openly on this side of the world. There's a, they call it, so you have white advantage. That's what they say or mention in the West. We have white disadvantage in Africa. If you have a lighter skin color, things are more expensive and you are being treated differently. You might feel like it's better, but it's actually the opposite because you're being treated as an alien basically. So things are more expensive. You don't get the same opportunities as locals. Especially if you don't speak the language and even if you speak the language, we just think it's cute and you know, we go on with our lives. don't, people don't count you in. So I think it's going to be hard to navigate as a Western. Even for diaspora, by the way, the ones that lived out of the country for a while and come back with this Western mentality, they have a hard time to navigate it. And that's what I've been through for the last five years. And yeah, maybe you could call it a bridge because it's not an easy market to just step into and, you know, just go with the flow. Brent Peterson (22:30.294) And talk, my nephew is Ethiopian, so talk a little bit about Ethiopia. How has, have you been to that market recently and is it a market that you see growing? Kanessa (22:42.41) Yes. So for long time, I didn't want to invest in Ethiopia because I wanted to keep my country clean. So it's a clean holiday destination for me where I could just go and rest. doing business in Africa is not as straightforward. If one politician doesn't like you, you could get arrested for no reason. I was like, I don't want that. I'm not into that. But then you keep going back, you see opportunities and you start maybe considering an investment here and there. It's not in my name, so maybe I can just try this. So it's very tempting. But that's also because you see it's growing and you see things where you'd be like, but wait, the answer is simple. Just do this. And instead of teaching others, sometimes it's better to just do it yourself and then show others. Ethiopia is an interesting market. It's very interesting because they have no, they're the only country that have or use no foreign language, which is English, French or Arabic. They never were colonized. They have their own calendar. So it's 2018 right now in Ethiopia instead of 2026. They have their own way of counting time. So Seven o'clock in the morning is the first hour the sun is up. So we say it's one o'clock, meaning one o'clock means the first hour the sun is up. And then after 12 hours, you count the hours the sun is down. So you have one, if I tell you it's, let's say three o'clock, that means it's nine in the morning. So the opposite, because the sun has been up for three hours. It's a very indigenous way of. Brent Peterson (24:24.663) Okay. Kanessa (24:32.841) living with the modern standard. And I love that they never changed that for any other influence. Brent Peterson (24:40.768) Yeah, that's awesome. Canessa, we have a few minutes left. I'd love to talk to you all day. But before we close out, I give everybody a to do a shameless plug about anything they'd like. What would you like to plug today? Kanessa (24:48.023) future. Kanessa (24:56.79) meaning that I could say anything or I think my last thing, the last thing I want to say after everything I talked about today is that Africa is not as scary as people think, but you need the courage to go and see it for yourself. And if you ever want to invest, please, please involve the right professionals. Don't, you know, go. Brent Peterson (24:58.686) Anything you want to promote, yes. Kanessa (25:24.984) into business with the first best random person you meet because everybody will tell you, yes, I can do it, of course, no problem. But that's actually a huge problem. So make sure that if you visit, go to network events, go to events where others from other countries also visit because if they made that investment to come there, they probably are serious. But still, you need to run your due diligence. So be careful, but it's the future. It's growing as we speak, so. Brent Peterson (26:00.655) Perfect, and how do people get in touch with you? Kanessa (26:03.928) I'm mostly active on LinkedIn, so Kanessa Mouloune, or Instagram. I'm surprisingly active on Instagram. So you can find me there. also share, I have two accounts. One where I share business information and one is more of a personal diary. But the business account, kind of share a lot of information about how to do business in Africa. How you set up structures also, like we have our own tax havens and everything. How you set up structures. in Africa to prevent government seizing and such. So if you'd like to hear more about that, can follow me there. Brent Peterson (26:42.498) That's perfect and we'll make sure we get all that in the show notes. Kanessa, it's been such a great conversation. Thank you so much for being here. Kanessa (26:49.677) Thank you for having me.