Kobe Bryant launches a $100m VC Fund

LA Lakers legend Kobe Bryant has had enough of kicking his feet around for retirement. He just announced a $100m venture capital fund he’s starting with friend and long time partner Jeff Stibel. 

The two are putting up the money themselves and already have interests in a few startups including LegalZoom. 

I’m proud of Kobe going a different route from the usual and using his money to enter the risk taking arena. I hope it pays off for him. More black athletes should have the boldness to make such moves because that’s one of the best ways to grow the $.

They made the announcement on the floor of the NYSE, which is the kind of splash you make when you’re Kobe F. Bryant. 

Read more about the story at WSJ.

What happens if the government forces banks to charge less Interest?

The usual culprits in the Nigerian political ecosystem, having been emboldened by Buhari’s economic stupidity have decided to mount their own soapboxes and out-stupid the guy. Their pet campaign now? Interest rates.

Some politicians have been making noises about forcing banks to charge interest rates as low as 6% in order to help businesses as well as “teh poors”. They accuse banks and private lenders of trying to scam the people and position themselves as the authoritarian saviors of the masses. Which is exactly how we got here.

I haven’t heard even ONE of them ask WHY the end users of credit in Nigeria borrow at 20+%. I haven’t heard any one of them talk about our savings rate, exchange rate policy or monetary policy. I haven’t heard them ask why our own sovereign credit is priced at around 12.5%. In other words, they don’t have a clue. Yet they want to arbitrarily mandate interest rates of 6% or so. 

So the question is, let’s say they do that. What happens to the country? Well first off, no one is lending money at a lower rate than they themselves obtained it so unless the Federal Govt’s borrowing rate falls to 5% no bank lends money to private businesses, period. Businesses would have to either raise money from outsiders, or from donor/international agencies. Hardly a way to power an economy. So businesses will grind to a halt, across the board. 

And if they decide, well we’ll just force the FG rate down, then most of the capital in the federal bond market is just going to grow wings and fly away. Nigeria is a high credit risk country, from our across the board credit ratings. If you’re going to pay me 5% to lend money to Nigeria given all the political, macro and all other risks, I won’t do it. Not many would do it. There are much better places in the world to earn a 5% return and also sleep well at night. So if they forced that, the resulting capital flight will be like a kid sucking out Capri-Sun from that little packet on a hot afternoon. 

So with banks not lending and FG unable to borrow? How long do you maintain low interest rates on capital you don’t have? Exactly.

If they want to help the poor, tackle political risk. Tackle bad policy. Tackle ease of doing business issues. Copy what worked for other countries so that we can become an attractive destination for capital. Encourage savings across the country. Sign financing and trade agreements that will encourage FDI. Tackle balance of trade issues. Tackle monetary policy. In other words, solve the problem or at least try.

Don’t just order it away. It doesn’t work like that.


20 Scholarships That Can Help You This Semester

The new semester has just kicked off and for a lot of you, every dollar of financial aid counts as you go through the FAFSA and student loan hustle. So as a gift to all the college students and grad students who read this blog, here are twenty scholarships that can help you get money this semester. Follow the links to the applications:

1. Official Coupon Code Future Leaders – $2,000 – for anyone. 

2. My Injury Attorney Scholarship – $500 – requires proof of enrollment.

3. 1,000 Dreams Scholarship – amount varies – specifically for women with financial needs -needs recommendation letters

4. Wag! Creative Video Contest $1,000 – requires you to submit a video made from a dog’s POV.

5. ExpressVPN Future of Privacy Scholarship – amount varies – anyone can apply 

6. Make Me Laugh Scholarship – $1,500 – anyone can apply, you just have to say anything funny in your application. Read up on it

7. RentHop Apartnent Scholarship – $1,000 – anyone can apply, requires an essay.

8. BrokeScholar Giveaway – $1,000 – requires above 2.5 GPA and an essay 

9. Clubs of America – $1,000 

10. Cappex – $1,000

11. Perfect Day – $1,000

12. Niche No Essay Scholarship – $2,000 – runs every month so you can apply over and over 

13 Chegg – $1,000 – runs every month so you can apply over and over.

14. General Scholarship – $1,000 – for anyone. 

15. Jones TShirts – $1,000 – for anyone, requires essay.

16. Xerox Technical Minority Scholarship – amount varies – for minorities in technical programs

17. Don’t Text and Drive – $1,000 

18. Shout it Out – $1,500 – requires short essay 

19. Coffee for Less – $500 

20. Captain U – $2,000 – for student athletes.

So there they are! Go ahead and apply and may the odds be in your favor. 


How Can Nigeria Return to Economic Growth?

The fact that someone like Amaechi, who thinks the previous administration hid a recession  from the people which the President he worked for has now graciously uncovered, runs our Ministry of Transport should tell you that ours is a country that does not take itself seriously, let alone demand seriousness from any one.

Yet nothing creates urgency in even the most unserious person like a very serious hunger. And make no mistake about it–Nigerians are hungry. The Minister of Agriculture thinks its heartwarming that our case is not as bad as Venezuela but that is because the Minister of Agriculture, as incredulous as it sounds, is a worse toad than the Minister of Transport. What does the hungry child in Kafanchan care about Venezuela?

Whatever the case may be at the Presidential villa, the reality on Nigeria’s streets is that we are in the grips of a severe recession. One which has to be not only stopped, but reversed. The question is how? An economy is generally a complex beast, so there is no simple answer. But Nigeria’s economy thankfully, is not as complex as most. 70-75% of the working population is engaged in agriculture, Telecoms, Banking and Oil (this one, barely) are the only other viable sectors for much of our real employment and services that cater in some form to those make up much of the rest. Skills barely exist, and the little available capital in the country is heading for the exits faster than your Fuhrer in Aso Villa can clamp them down (and fueling astonishing levels of dollar demand in the process). That, in my view is a fair estimation of what we consider an economy right about now. 

So where do we begin to fix this mess? 

We go back to beginner economics class: what do we have any sort of comparative advantage on? Our low hanging fruit is agriculture, there’s a reason everyone keeps coming back to it. But it’s not enough to do agriculture as a way to grow food for consumption, we have to think in terms of value chains. We want to do agriculture to supply the world with exports.  Cocoa, which we already do but can always do more of is in high enough demand given the growing popularity of premium chocolate across Europe and the States. The Ivoriens won’t be too happy but despite them being ahead we can catch up pretty quickly. We can get serious about our other old favorites: oil palm, rubber, groundnuts. We can get serious about coffee which has surprising amount of potential in the near North (I have a market research thingy someone sent to me sitting on my desk at the moment), and cotton which while I’m a bit less certain, I still think has good promise. Add crude oil and a few odd metals around the Plateau areas and we have the rudiments of an export based economy. Each of these is a massive undertaking, mind you but it is doable. 

Yet this is just one step. We’ve played the raw materials export game since the 1970s, it’s fun but doesn’t make much money and is also rather dependent on global markets too much. So once we have a basic level of activity going on there, we can start moving up the value chain. 

For instance: we can easily parlay raw rubber exports into tyre manufacturing for cars, bikes, bicycles and trucks geared for the African market. We have the petroleum resources to complement the raw rubber needed for that. With minimal training we can have a low cost labor force to help keep the end products competitive in price compared to non-African options. We can do the same for plastics. We could probably do something similar for chocolate although in that case we’d probably need more FDI than in the other cases. We can get the help of the Indiana to parlay reasonable cotton production into basic level textile processing. Ethiopia is doing it, as is Rwanda. We can juice up our livestock business by embracing ranching and settled husbandry versus the nomadic thing and get meat (within the region) and leather (to Europe) exports kicking, with a real possibility of getting European help in doing dairy properly. 

At this point, our economy should at least be stable. We would need massive continuous investment in skills acquisition and education to ever hope to move further up the ladder but we must do that if we are to truly sustain economic growth long term because we cannot make any more progress from here on out unless we engage in manufacturing. And manufacturing needs skills and power. 

Allow our power grid to be decentralized, and give priority to urban locations. Let coal plants provide electricity to Enugu and environs all the way up to the Middle Belt. All private. Let Kainji, Shiroro and friends power the North, complemented by small scale solar and nuclear activity. 

Let the South all the way up to Lagos and co run on gas. All handled by private companies, of which Dangote Refineries is only the start. 

With power in place, we can make shoes, clothes, logging, furniture, nails, iron fillings, plastics, medical devices, consumer goods, motor parts and even assemble cars at home for both our markets and the countries around us. 

At this point, only our skills and education levels, financial and political capital will determine how high we go. 

At the bedrock of all of this is a financial liberalization and regulatory streamlining of the type we have not seen before. Because truth be told, much of the capital to do all of the above will have to come from outside the country at first. Only when the wealth and institutionalization has kicked in will enough local players have the resources and the fortitude to invest in these things themselves.

Another critical but not entirely mandatory  factor is a return to a federal, mostly regional political arrangement. I get the fear that comes with that, the sub units get powerful and threaten the nation’s unity but you can’t hold people together by force forever. At some point you’ll either let go or be forced to so that they can go their own ways or associate in a more meaningful way. I’m a big believer that the units, if given free choice, will stay. Let’s have a little faith.

Finally, How long will all of this take? Phase 1 , agric exports can be done within 5 years. But all told, this could take almost 30+ years of consistent action to materialize. And in that time, our GDP per capita, if population growth holds steady should have grown from around $3000 today to somewhere closer to $11,000. 

Is it hard? Yes. But it can be done. And if I ever have a chance, I’ll help do it. I’m a better minister of anything in this life, after all, than Messrs. Amaechi and Ogbeh. So are you. 

Trump and American Imperialism

It’s funny watching America these days because one gets the sense we are either witnessing a shadow empire in decline or a shadow empire on the cusp of stepping out of the shadows. One way or the other, something is afoot in November and we can’t take our eyes off the TV.

Trump is offensive to the sensibilities of almost everyone in sight, even to the Republican party of which he is the presidential candidate. Why? He could have been at home in the company of half the Presidents on the US currencies, he has the same boisterous mannerisms, the same parochial tantrum throwing red faced American machismo, and even the near white hair that many of them had in their day before they were dignified by history and the passage of time (who could have denied John Hancock was a rapacious scoundrel or Andrew Jackson was a total a-hole?) But you see, he bothers people now because they believe America moved on from that.

Did they really?

Not even. America didn’t move on, a good percentage of America is Trump or worse. I’ve lived here long enough to know that. It wasn’t America that moved on, it was Harvard (when I use that, I mean all the Ivies and elite universities, with the Crimson H as their prima donna and proxy). You see, the iron clad rule of American power is that whatever is the dominant ideology at Harvard becomes the ideology of the American elite within ten years and the ideology of the global elite within 20 years. That is the center of the American empire. It’s so insidious that you have to pay attention to see it happening. Check the alumni profiles of top American universities, almost all the Presidents and cabinet members, legislators and technocrats of more than 80% of the world’s 200 countries studied in a small patch of Northeastern US. And this is considered a good thing, even by myself. Among the elite of almost every country, American ideas are the accepted ideas–free markets, respect for everyone’s lifestyles, individuality, mannerism. I’m not saying it’s bad, far from it. I’m saying these ideas did not spring from Abakiliki.

Since 1944, The world has had a cohesive ideological center with America at the top of it, and countries like Russia, China, Iran as it’s antithesis. Now, Trump threatens to tip America over to the Dark Side, which, America being what it is, will upend the world in a serious way, and just might unleash an actual race to empire between America and the emerging Great Powers. That is the fear that animates November. This is why this election is so fun to watch. Impending disasters have always been incredibly fascinating to witness and this is no exception.

So About These Earnings 

Last week was a major one for quarterly earnings. A lot of tech companies beat expectations including the big leaguers like Google, Facebook, Apple, which saw their stock soar like crazy. But the thing about expectations is that anyone can beat them if they’re low enough. So we’ll glance through a bit and see which ones are on a truly positive trajectory, and which ones are enjoying the rewards of low expectations. 


We begin with my old favorite, a formerly rad company turned very meh, Apple Inc. Apple beat earnings expectations and soared almost 7% which would make you think they’ve got it all figured out finally but they don’t. Their businesses are still either stagnant or declining, except for service earnings (Apple Music, App Store and iCloud) which were up almost 20%. They made a big deal about moving 1 million more iPads than analysts expected (they sold about 9.95m) but that’s still a lot less than the 11m the same quarter last year. They sold 40.4 million iPhones this quarter, helped strongly by the popular $400 iPhone SE but that’s still down 15% year on year. Considering the average selling price of their iPhones came down to $595 from $606 due to the cheaper product mix, the volumes should have gone way up. It didn’t. Mac sales were 4.3m, down 12% year over year. No surprise there. Quarterly revenue of $42.4 bn was down a whopping 15% y-o-y. Bottom line is, people’s expectations were way down for Apple so when it wasn’t as bad as that, the stock bounced up. But make no mistake, the business is on decline. I want to speak of Tim Cook running the company to appeal to Wall Street analysts instead of the hard won consumers Apple made its name on, but far be it from me to criticize the CEO of Apple Inc. from my little IKEA desk. I still have respect. He sha needs to shape up some. 
Moving on.

Should Apple Buy Tidal?

Last year I tried to answer the question of whether Apple should buy Tesla. My verdict was no. You can read that here

It seems this year, the flames being fanned are for Apple to buy Tidal. Is it a good idea? I think so. 

On, Twitter @afrovii made the case for acquiring Tidal essentially for the cool and the pop culture relevance and cred. Tidal’s whole sell is that it belongs to the artists. It has exclusives for half of RocNation and beyond, with Beyonc√©, Kanye especially having dropped their wave making albums on the platform first, spiking downloads. Yet for all that,  Tidal has a bare 4.5m subs to Apple’s 13m+. Imagine what Apple would’ve done with those kind of artistes on its roster. Artiste support is the biggest asset Tidal brings to the table and if they hook that up with Apple’s reach and pockets, Spotify’s 30m subs will finally be beaten. Easily. 

There’s also so much Tidal could offer Apple Music around video delivery, specials and all sorts of creative content that could really make Apple Music a monster of a platform and a total force in streaming. 

Of course there are downsides to a potential Tidal acquisition. The top one is that the company is a rather lackluster operation, business wise. The second is that it’s loaded with artiste “cofounders” which is a plus if most of them decide to maintain their exclusive relationship after they get their checks but a huge minus if they decide to walk, because then what’s the point? In fact, any acquisition has to come With the condition that they stay so I’m not even sure why I’m bothering to mention this. It’s pretty much a deal breaker.

At the end of the day, it makes sense for Apple to buy Tidal. The latter frankly need the deal more, but Apple will be helped by it. And if they don’t, Spotify might. Sometimes, that is enough to get things rolling. 
Bonus thoughts: Kanye tweeted about wanting to sit down with Jay, Cook, Jimmy etc to end the Apple/Tidal beef this week. I have a feeling he tweeted that because he knows it’s already happening. So Let’s be on the look out.