critic, funding, hacking, programming, Technology & Startups

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.

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

  1. Critical and straight to the point post as usual.

    Yea, I still kinda remember my basic economics – So you might want/need to make a little correction up there in your definitions :)

    BTW: I smell a SUB …

  2. Harry says:

    Excellent article and I agree with most of your points. You defined “NEED” first and “WANT” latter but actually repeated “NEED”. I mean you mentioned NEED again when you mean to define WANT.

  3. Very good post that seems to sum up points that should be (but apparently are not) owed to common sense.

    Just a minor correction: In the first paragraph (quick definition of “WANTS” and “NEEDS”) you wrote “NEED” twice. I think the second occurrence is meant to say “WANT” instead of “NEED”.

  4. If I’m to go with your opinion here, all of us running Internet startups should shut down our sites and go an open microfinance banks in rural areas; that way, we’ll be creating something the 60.9% of people in Nigeria actually NEED. But the reality is that there is still a sizable percentage of people (and in Nigeria, that’s big market) who can afford what some of these startups have to offer. Wealth is created when entrepreneurs create things people actually want – not necessarily need as a basic necessity.

    Whether or not a clone is a startup, is debatable as even these clones have a use case. I wouldn’t invest in a clone for certain because there isn’t any competitive advantage and nothing stops a competitor from launching another clone. Take a look at bulk sms sites. There used to be a time when that business was viable but now, it’s been reduced to a commodity. There’s little or no advantage any competitor has over the others. They all have the same features and almost no innovation.

    Thirdly, I don’t see why reading “too much” Techcrunch is a bad thing in itself. It’s what you do with the information that matters. In the world of globalization, thinking local will do you in. There are too many cases of founders who have had their lunch eaten because they couldn’t think global and think beyond the borders of their current markets. You should think global but act local.

    I do however agree that most Nigerian startups need to actually charge their users. Not every startup can be sustained by advertising.

    • Good point Tim. You refused to go with the bandwagon. Even though the post makes some sense. But, like you pointed out, if we all really want to meet a need, we all then would pull resources and set up a bank to help people.
      You must not tailor your start ups to address ‘needs’ all the time. You can provide entertainment, some want it and might even need it. For instance, go to the brothels and bars, and you will see the average Nigerian drinking beer and whoring, even when money no too dey. They just do it to unwind. Do they need it. I don’t know, but some one is meeting a demand and smiling to the bank. My watchword is be creative and be original.
      @Bankole. Cool blog, you’ve got. Me dey re-strategize.

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  6. Oh my God, my God …. I think I should print this post, hang it on my wall and read it to the next person pitching a cool start-up, this nails the coffin [hard].

    I’ve personally stopped reading techcrunch a long while ago when I figured their game (white elitist PRs), it encourages coders to build castles in the air. Starting up an online business is the same as a brick-morter business but because the cost of entry is very low for web-business, coders start building houses without a blueprints, but that’s a different point.

    Yes. Needs have to be addressed BUT “need” can also be created if that entrepreneur is smart enough, or at least has a smart business analyst/marketer. When I was schooling in Boston and some Harvard kids where saying it’d be cool to “find” another student online most thought they where nuts, there is clearly no obvious need for it [then], but they created that niche and did so very nicely and that one of several examples (wait, did I just compare a yanki company, mehh). Having the product is only 10% the story.

    A few days ago I read about some gbedu.fm; contrary to the argument here, I see a big, BIG market in the music business (if a person called “WhizKId” can make money of Nigerians, anyone can) if the folks behind it can smarten up — I see a big, big chance to CREATE A NEED. Let me propose a model based on the mobile phone craze — set a deal with mobile phone carriers and labels to wireless “deploy” African music (which is still kinda niche at this point) and not charge either but get cuts from advertisers (real companies that is, like Guniness or Blackberry) — make a Gbedu.com API publicly available, and encourge other wannabes [cloners] to develop with your API (they really can’t compete with you since you will always be setting the trend and have a nice advantage)… anyways, that one of several, several ways to go. And I notice Oo said: “trying innovate a truly new business model in the music industry ..” make it happen, and go hard!

    What is important to an entrepreneur is create a solid business model (IMO).

    A supposed entrepreneur asked the other asked how to create a 9ja version of Ebay/Amazon. Just like jazz music, I thought, if you keep asking that, you can never know.

    On a second thought, why hasn’t anyone bought nairaland.com and monetized that baby! Sorry I’m just a capitalist like that. Now let me go whine about this on the programming section of Nairaland.

  7. Pingback: Lessons in unsuccessful African startup creation « The Technological African's Blog

  8. chika says:

    prefer the term “developing country” myself instead of “3rd world country” but that aside, a brilliant post. I think concentrating on a NEED is very important. There aren’t too many wants for a country where the majority of citizens exist on less a $1 a day particularly if you are trying to get your product widely adopted.

  9. sola akindolu says:

    i ll love to reply to this post in three months…and i however recommend jason fried’s book-Rework and there is a talk by matt brezina on a good freemium model and however i think you can build a want so far you are reaching out on a loal scale and hoping on patritism.wish everyone goodluck

  10. sola akindolu says:

    nigeria is a poor country and yet her people buy blacberry and spend hours tweeting.its not about need vs want…its about you commnicating your idea properly and secondly music is not technology,so dont compare…there are different and always be.

  11. well, to be creative could be hard but i wil find a way. As per music, notjustok.com kinda understood how to get into the naijamusic though i doubt they really make much profit from the initiative.

  12. I come in peace: No disrespect intended but you are quite a pessimistic fellow. Could that be because you have failed repeatedly in starting a business? If yes, then I think you are very close to success due to the lessons you must have learned. There is something called wisdom, ask it for free and be amazed what it can do.

    Now to make a real point, there used to be a time when American Music dominated our parties and clubs, I grew up partying to non stop us hits with the small exception of Ras kimono and Shina Peters, the remedies and plantation boys would not have started if they listened to talk like yours, now our music shines through the continent, even though our stars are “clones” of International stars. Same can be said of our movies.

    Very soon, you may find it difficult to remember five foreign websites because our so called clones have taken over and are providing excellent services that are tailor fitted to our indigenous whims or even Need.

    We as Nigerians may not be excellent innovators, but we copy excellently and spice it up a bit. Ask P-square, ask Aba boys.

    Focusing on our strengths, we will beat any opposition, even a forecast as gloomy as yours.

    Kudos my friend, you had me reading. Stop by on geniusaid.com anytime maybe we can relate.

    Peace.

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