AI Breakthroughs & Entrepreneurial Evolution: Navigating 2024's Digital Shift

Uncover the most significant developments in AI and startup fundraising from 2024 that could change how we work and innovate. We promise you'll learn about the breakthroughs in conversational AI, with the potential to make keyboards obsolete as machines understand us like never before. As we navigate this digital evolution, we candidly explore the limitations of current AI tools, acknowledging they are not yet fully autonomous but remain invaluable in enhancing productivity across varied fields.

On the startup front, we celebrate the rise of inventive entrepreneurs from Africa, who are addressing the continent's unique challenges with bespoke solutions. Yet, the road is not without obstacles, as many startups grapple with securing bridge rounds in a transforming market. We tackle the critical need for realistic valuations and the power of strategic partnerships, advocating for measured approaches to funding. Join us, as we offer insights into navigating these shifts, ensuring you stay ahead in the dynamic world of AI and entrepreneurship.

For more information on Push visit www.push.africa

Transcript

Speaker 1: 0:01

Welcome to the Push Ventures podcast, push your Advantage, and thanks a lot for tuning in. Today is our year in summary, and this episode is dedicated to what happened in 2024. We will be talking about AI, then, where the startup fundraising landscape seems to be and what we believe where we're headed to. Let's get started with AI. Well, of course, ai is the word that everyone spoke about in the last year, and even here on the podcast channel, we dedicated quite a lot of time to talking about it and exploring it. I think it is safe to say that we can say that there has been rapid progress on AI in general.

Speaker 1: 0:44

However, the tools are not really quite the holy grail yet. They oftentimes lack accountability. Oftentimes, on top of that, the results they produce are not always what we expect them to be. You've probably played around with a few tools yourself. I've used some of them and realized that, whilst they have the promise to help us improve productivity quite a lot, they are not quite self-starters yet or running independently. However, I believe with time, many of them will get far better and evolve into tools that truly help us become more productive and truly rely more on AI tools.

Speaker 1: 1:24

One of the things I believe is going to be extremely interesting is where conversational AI is going. There was one podcast that we did with OpenAI's ChatGPT, and we tried to simply interview ChatGPT, and the nice thing about it is that when you listen to those conversations or I encourage you to actually listen to this episode you can see that it seems to be very conversational. The drawback, however, is that the answers oftentimes appear quite exhaustive. Quite call it one prompt answer rather than a focus on the entire conversation. Rather than a focus on the entire conversation, and why I'm pointing that out is because I believe that when or whoever does crack, this conversational part of AI will truly have the ability to control our interactions with machines going forward. What I mean by that is forget about the keyboard. Once AI truly allows us to have conversations in which we feel that, 99.9% of the time, we're truly being understood and our requests and our prompts are being translated into what they're meant to be, and then we create the outputs by the machine that we expect or that we want, then you don't even need to use a keyboard anymore, because you can just simply speak to an AI in order to use your machine, and I think that's going to be very interesting and provide us with a whole lot of applications to improve our productivity, to improve our judgment and improve how we do what we do. So, overall, I believe that good solutions are still evolving. None seem to have truly automated everything, but what they truly do is they make us more capable. They're like an enhancement for the time being, improving our speed, improving our outcomes and allowing people who are not, let's say, a coder to use some code, not a lawyer to make some requests and prompts about what the situation in the law is and have thus better informed decisions with, for example, their advocates.

Speaker 1: 3:27

Let's look at the startup fundraising picture. What we've observed is we've seen a whole lot of new startups coming out of Africa in general, which is exciting because there's truly talented young entrepreneurs looking at challenges that are unique as well to the continent. Looking at challenges that are unique as well to the continent, and they're looking at solving them, and they're looking at doing so in ways that work for Africa, which is great. At the same time, obviously, since the times have changed, a lot of the old ones disappeared, they went under, they struggled. In the end, they couldn't fund bridge rounds. A lot of them were trying to raise bridge rounds. At the last valuation, they accomplished despite the fundamentals not being intact, and ultimately, they had to pay the price by closing down.

Speaker 1: 4:16

What we still see, however, though, is valuations oftentimes still seem quite pricey, and when you have small revenues and a great idea, that's not often warranted. So we do. We do still believe that you should focus on, as a founder, on finding a good agreement with the people who can support you. Rather than raising a huge amount of money, go for smaller amounts. Find the right investors, find good agreements and ask them to not just fund this first round, but maybe fund you in drips over the next year for one and a half, allowing you to have that ability to execute, have that runway and really show that you are onto something. Then those great innovative ideas that are focused on Africa.

Speaker 1: 5:02

I think it's great to see that We've seen a lot in the agri-tech space, where people are really looking at how does African farming actually look like and how can we improve that, and it's great because it's less of a copy and paste than what we've seen in the last time call it the last cycle, in which a lot of the startups simply tried to copy something that worked in America or in Europe. Now we see people looking at the challenges we truly have here on the continent and we're very happy about that. However, many are still struggling with growth because a lot of the markets show limited size and call it the infrastructure and logistics in Africa make make it cumbersome at times to actually grow and find your customers and serve your customers, but I believe with time, even that will get better. Where do we believe that we're going? One thing for sure is that lower interest rates are expected to bring capital back into play, and attractive opportunities abroad will still limit the players on the continent, however, and I don't see that changing anytime soon. We believe that an increase in funding is expected, but also an increase in governance, because when you look at some of the failures of the past, oftentimes boards might have missed out on pointing out serious flaws sooner, and that lack in checks and balances created some of the call it pains that could have been avoided, but the focus was on simply grow, grow, grow. So it is very hard to say whether or not that will change, but we believe if it did and we think certainly should it would be good for everyone.

Speaker 1: 6:46

I believe also and we're certain that it will happen that the adjustment in valuation will happen slowly because founders are seeing that there is less capital. They're looking at actually adapting to it and that I think will become more apparent in the coming year. The stabilization of exchange rates is also going to help startups because when you look at it unstable exchange rates a lot of them seem unattractive in dollar terms, but in local currencies it's actually grown well and that is slowly now coming back to a more steady level, allowing them also to look more attractive in dollar terms. So we believe the next year is going to be a year of recovery, with challenges remaining, and we believe that we'll see more bigger raises by the winners that survived Just like earlier today there was a new unicorn formed in Africa and we believe that more of those bigger ones will raise also higher amounts because they can actually showcase that they've survived this last drawback.

Speaker 1: 7:50

Oftentimes they restructure to come out better and they can now focus on executing and growing their businesses even more. And further to that, more smaller raises by new players will happen, oftentimes, however, with increased scrutiny. We believe so because governance becomes important. The importance is also that people are really focused on executing and overall, I think the next year will become very interesting in the startup space in Africa. So focus on execution and focus on having the right investors. Make sure that your business makes sense and it's not just a leap of faith with other people's money. We wish you a wonderful end of the year, merry Christmas and Happy New Year to everyone who's listening, and you can find our podcast on YouTube, instagram and Facebook. You can find us as Push Venture Capital and on Twitter as hashtag Push your Advantage, and we'll be back soon with another podcast on the African tech ecosystem available on Spotify, apple Music, f-rep and, of course, youtube.