RE: Live in Nigeria? This is why your startup will fail.

“I think this guy is just plain wrong” [1], that was the first comment I got on my guest post @ Techloy.com. For the records, I never claimed to be right or a know all.  I only articulated a few thoughts of mine, which have been rattling around in my head for weeks now. So I wonder why the post elicited a lot of negative backlash from some highly “respected” Nigerian tech entrepreneurs. This response is  to put some facts straight but trust me, this is no retraction. Ok, let’s get down to business.

1. Starting a startup is HARD, very HARD: Not everyone has the opportunity to have a friend who has $160k to invest in his untested idea. A startup started in more advanced climes is most likely to fail, talk less of a place like Nigeria where nothing works. There is no place in my post where I claimed that “starting a music startup is a stupid idea” or “that you should not start a startup in Nigeria”, you only inferred it. This brings me to what is known as the “Law of Effection”  which states that “the more lives you affect in an entity you control, in scale and/or magnitude, the richer you would become”. In tech speak, the more people your startup provides a service to, the more likely you are to succeed. This is not the time to develop “me-too” or “I too can do it” website or application unless you have some safety net somewhere. Whenever you have a startup idea, which you feel has the likely hood of succeeding, ask yourself, “would the average person use my application?”. When I say average, I am talking about the market woman, the jobless youth, the stay at home mum, the middle class white-collar banker etc. If the answer to that question is yes, then take the plunge and run like hell with that idea.[2]

2. Clone Wars: I still stand with my dislike for clones, you know why? There are a million problems here in Nigeria that require bankable, innovative and profitable tech  solutions. So why in the name of anything you call holy should you clone? unless its a remix of something with a unique twist, see this [3]. Mention was made of Dealdey and how profitable is it, I might not be privy to their financial statements but I would really doubt that assertion (I stand to be corrected), you know why? I am yet to meet anyone who has consummated a transaction on Dealdey, that’s to tell you that it is not yet something the average person uses.  See my first point.

3. VC’s in Nigeria? as in really? Venture capital firms in Nigeria? If that is true, then that is awesome news. I just hope Angels are not now being mistaken for VC firms.

NOTES

1. I wonder why some people would allow their emotions to becloud their sense of reasoning.  My “random thoughts” are now being misconstrued as personal attacks at some imaginary startup founders? #AWESOME. Telling startup founders to ignore me actually sounds like a very personal attack to me, these are my opinions not the 10 commandments cast in stone from Mount Sinai. As you said, it is very easy to identify problems and since talk is cheap, lets see what “solution” I come out with.

2. Dangote group has a market capitalization of #2.28trillion as against the whole banking industry that has a capitalization of #1.8trillion. why? The group produces what the average Nigerian buys and finds useful. salt, sugar, cement, juice, etc. But not everyone has a bank account or would have the use for it.

3. I definitely won’t advice any would be startup founder to develop a 1-for-1 clone of Facebook, Twitter or even Nairaland for that matter. Anyone who does that just raised the odds of him failing to sky high levels.

Postscript: The original title to my blog post was “Live in Nigeria? (***Insert your 3rd world country here***). This is why your startup will fail”. If you marry the title to the body of my post, you would see that the attacks were unwarranted. The editors felt their title was better than mine I guess. Enough said.

Live in Nigeria?(***insert your 3rd world country here***). This is why your startup will fail.

You live in Nigeria or any 3rd world country?, are a techie and thinking of starting a web startup? here are some reasons why your startup is doomed to fail.

1. Your startup is a solution to a “WANT” and not a “NEED”. If you can remember your basic economics, you should know what “WANTS” and “NEEDS” are. Quickly, I would define a “NEED” as something you have to have, something you can’t do without e.g. food, clothing and shelter, while a “WANT” is something you would like to have. It is not absolutely necessary, but it would be a good thing to have. A good example is music.

When developing your startup idea, ask yourself, “is what I am creating a solution to a NEED or a WANT?”  According to the Nigerian Bureau of statistics 60.9% of Nigerians in 2010 were living in “absolute poverty” i.e. less than $1 per day. Do you think that taking a hiatus to create a music startup to enable these people living in abject poverty listen to music amounts to a good use of your time? or “skills”?

2. Your startup is a clone of some popular 1st world website or application [1]. Why would you clone when there are a myriad of problems you could develop solutions for? If you are developing a clone, ask yourself this question “why would anyone use this (***insert the name of your clone***) instead of the main thing (***insert the name of the website you cloned***)?” .

3. Your startup will require loads and loads of traffic i.e. pageviews with gullible people who would be ready to click on Google ads before it can generate income. In Nigeria, there are no VC’s, no Angels, no startup accelerators, no Government support programs, no infrastructure, regular electricity supply is a pipe dream, Internet access is patchy and expensive, in short, “NO NOTHING”. So it kind of beats me why anyone would base his startup’s business model on the benevolence of Google? In between the time your startup comes online to the time it can generate enough traffic to keep the lights on and the servers humming, how would you survive? Do you have some gold bars stashed under your mattress somewhere? If not, why don’t you just develop a product where you can start charging from the very first day? [2]

4. Reading too much of Techcrunch et al. These tech blogs are written by elitist white techies who live in silicon valley where the difference between over there and here is like light and day. Any advice you can glean from those sites just isn’t applicable here in Nigeria. [3]

NOTES

[1] The current fad in Nigeria is creating clones of Groupon.com. It once used to be Twitter clones, bulk sms and then Facebook clones. Why coders still do this kind of beats me. Instead of cloning, why don’t you build on these sites and take advantage of things like Facebook’s “Social Graph” etc and develop innovative solutions? Developing another DROPBOX wont meet the need of the average Nigerian, he has no need for it, and if he does why wont he go for the original? patriotism? please!

[2] Despite the fact that 60.9% of Nigerians live under $1 per day and there are 90 million mobile subscribers in the country with at least 1 mobile phone, these phones have to be loaded with “call credit” by these people because communication has become a NEED and not a WANT. So despite the grinding poverty in the country, the major Telco’s still declare mind boggling profits every year, with Nigeria now having the largest mobile phone market in Africa with 60% penetration. So in order to be successful, develop a solution to a NEED and not a WANT.

[3] Sarah Lacy, a former columnist for Techcrunch, when she came to Nigeria in 2011 advised techies not to read Techcrunch et al. Its of no use, the stories of billion dollar valuations for 6 month old companies that do nothing but count your number of Twitter followers will actually screw with your head. That can never happen here, this is Nigeria, be creative, be innovative, think local but act global.

2 Reasons why you should start a startup (The Nigerian version)

2 Reasons why you should start a startup

(The Nigerian version)

Have you been thinking about starting an Internet company? here are some reasons why I think you should take the plunge.

1. You just graduated from university or are about to and you are scared about getting a job which you know doesn’t even exist [1].
2. Nigeria is a “virgin tech forest” where technology can be used to disrupt almost all facets of society. Almost any idea you develop  can  and will disrupt society for “good”, as there are real problems that technology can be used to solve [2] which Western tech companies haven’t solved and don’t even have any interest in solving. In Nigeria, viable ideas are everywhere, the streets are paved with “idea gold”, pick one up run with it and make impact.

P.S : For the love of God, while you are at it, please don’t create another clone of Facebook, Twitter or another bulk SMS website. And for your business model, don’t make Google Adsense  your primary source of income as I feel that there are ideas that some of the 45 million online Nigerians who also mostly live under $1 per day would be able to spare out of that pittance to pay for your service [3].

Notes

[1]  Actually, you don’t even need to have a degree to start a startup, as most coders I know are self-taught. The unemployment rate in Nigeria stands at 23.9%  out of a total of over 167 million people. Why waste your time looking for a job which is virtually (no pun intended) nonexistent, when you could create one for your self and others, make impact on your society which you definitely can’t do as a “cubicle slave” and if you are lucky, become rich and retire young?

[2]  PayPal has blacklisted Nigeria, why can’t we develop our home-grown version? Also, why do I have to go through semi illiterate middle men called “agents” before I can get a place to rent?  (present solutions in this space suck big time).

[3] This is the subject of a blog post for another day.