Compassionate Conviction: The Power of “And”

By Monica Brand Engel

The news of Clay Christensen’s passing popped up on my news alerts just as I was reflecting on the past decade in preparation for the one on which we’re about to embark. Clay’s book The Innovator’s Dilemma and the premises that underpinned Clay’s theories on disruptive innovation were core to our motivation for launching Quona Capital, a venture firm focused on inclusive fintech in emerging markets.

When we first came to market in 2013, these ideas — venture capital, fintech for inclusion, emerging market investing — were more marginalized than mainstream. Venture capital had just come off its worst-performing decade, brought down in part by over-capitalized funds where many GPs earned more in management fees than carried interest. Financial inclusion had been discredited by a few bad actors that sullied the benefits that decades of thoughtful microfinance had brought to international development. Emerging markets were still viewed skeptically, as developed markets began favoring inward-focused strategies over globalization. But like the innovations Clay profiled, we knew that in the right market environments, democratized financial services could be a powerful tool for positive change.

We decided from the outset to focus our venture capital strategy on areas where we had domain expertise, in markets where we had lived and built networks, and on businesses that had demonstrated some proof of concept. Thus we combined our conviction about the transformative power of venture capital with our compassion.

We knew these ecosystems were still young and needed to be de-risked for investors. We knew we needed to mollify the concept of venture in emerging markets for our LPs — many of which were skeptical that the success of venture capital in Silicon Valley could be exported. We held firm to what was then a contrarian view: in just the way that U.S. fintechs took up the space left open by mainstream financial institutions that were forced to retreat and retrench in the wake of the 2008 financial crisis, we believed that a new wave of business models and companies would emerge to satisfy the needs of the vast majority of underserved in emerging markets. As Clay repeatedly documented, disruptive innovation starts scrappily from small cracks that can spread and topple enormous infrastructure when allowed to grow. Venture — at its best — is about building businesses with more compelling value propositions, better unit economics, in large addressable markets.

We focused on emerging markets because developed markets were turning inward. Brexit reflected a nationalistic movement where economies focused more on the size of their slice rather than how to grow the overall pie. Again, we had a contrarian view: we believed that looking outward and connecting previously isolated ecosystems could be the source of mutually beneficial opportunities. Not only could emerging economies be markets to adapt and replicate some early innovations piloted in the west, like alternative lending — they could also be the source of innovation. Given the absence of legacy infrastructure to overcome and a powerful need for cost-effective solutions, some fit-for-purpose innovations — like mobile banking — flourished in emerging markets before they took hold abroad.

And yet the idea of venture in emerging markets wasn’t sufficient. Effective adaptations and cross-pollination required the right mix of factors: the right enabling environment (e.g., thriving venture ecosystems), solid business models (with defensible value propositions and sensible unit economics), resilient management teams (with the stamina and creativity to overcome challenges) and appropriate capital (smartly structured deals with incentive alignment). Quona’s ability to evaluate these opportunities holistically and see the synergies in potentially conflicting ideas — whether it was understanding the role of mainstream financial institutions in supporting innovative startups, or the importance of “touch” along with technology along the customer journey — has been an important part of our portfolio success to date.

Embracing the critical complementarity in the “and” (tech and touch; developed and emerging markets; marginal and mainstream; profits and purpose) is part of what we mean by “inclusion.” That word also describes a foundational principle at Quona — which incorporates diverse backgrounds and viewpoints. Learning happens when one’s conventional thinking is challenged. Transformation happens when one actively listens to identify the nuggets of truth in each side of vehemently argued debates.

From our small beginnings just seven years ago, today Quona has a 19-person team representing 10 nationalities and speaking 14 languages; but we have not achieved this diversity by setting top-down targets. Our diversity happens organically through a focus on market needs and a fit-for-purpose approach to problem-solving — and an openness to alternative ways of looking at the world, framing problems, developing solutions. In his final published book, The Prosperity Paradox, Clay posits that innovation and entrepreneurship are the most powerful tools to address poverty and re-ignite optimism for the future.

So as we embark on a new decade of challenge and possibility, I reflect on compelling ideas Clay put forth about how to measure success. Clay encouraged us to re-allocate time to our families — a “powerful and enduring source of happiness” — and count how many people’s lives we have influenced. As a daughter of an immigrant mom and war-ration-raised dad who brought the concept of “lean startup” to our family life, I learned early the values of essentialism and giving back. My formative professional years in Silicon Valley in the 90s — where combining meritocracy, creativity, grit and capital (social and financial) transformed ideas into thriving businesses — instilled a sense of boundless possibility.

These beliefs — first principles, excellence, abundance, agency, team — are shared by my co-founders and are core to Quona’s culture. Solve real people’s problems, develop a compelling formula to address them, and deliver solutions with an exceptional user experience. Contribute without cost accounting: it will come around. Identify the key roadblocks impeding forward motion, mobilize people motivated by mission and market-moving businesses to make progress towards our ambitious goals.

I’m more excited than ever by what we’re seeing in emerging markets, and I’m looking forward to another roaring 20s.

Monica Brand Engel is co-founder and partner at Quona Capital, where she focuses on Quona’s global investments. Before co-founding Quona, Monica was the founder and Managing Director of Accion Frontier Investments Group, a growth-stage fintech portfolio. She also launched and managed Accion’s Marketing and Product Development Unit, where she oversaw the creation of new financial services to move the industry beyond microcredit and worked in Mexico with Compartamos Bank, the largest microfinance institution in Latin America, which IPO’d in 2007.



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Quona Capital

Quona Capital

Quona Capital is a venture firm specializing in financial technology for inclusion in emerging markets. Learn more at