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.

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11 thoughts on “RE: Live in Nigeria? This is why your startup will fail.

  1. Your claim that nothing works in Nigeria is false. We have our problems, no doubt, but you failed to provide one idea or solution. What can a techpreneur go into in Nigeria? What are the areas of need?

  2. Actually, you don’t expect an applause attacking your audience, but then, we must acknowledge the fact.

    Startup is Nigeria, especially, Tech based may invariably suffer, cos a lot of people (average Nigerians) would not find use for it. Reason being that they are mainly jobless or just subsist on unfavorable work.

    Again, the issue of clone comes to play. The so-called elite may not patronize you based on the fact they’re already familiar with an original alternative and at their disposal.

    But not withstanding, nimbleness will always bail the cat, innovation rules. Nigerians are such!

  3. Interesting article. You said “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.”

    Now my question is this: how about applications/startups that provide services that due to their inherent nature, are not aimed at the “average person” (market woman, jobless youth, stay at home mum, white-collar banker, etc.). For instance, some startups provide services that are aimed at other businesses or organizations and not individuals. You do agree these sort of services exist right?

    Therefore, from your article, is it safe to conclude that any startup idea you have that does not satisfy the need of the “average person” is not worth pursuing in a country such as Nigeria?

  4. Yes, there’s truth up in here. And no, there are no absolutes.
    20+% of 160million folks is still a lot and a real cool niche.
    That said, even the very poor still have “disposable income” and if you can push a want into a need, they’ll make provisions to pay for it. Examples abound: cigarettes, call credit, etc.
    I also believe that the sheer failure of the government to meet the basic needs of the people does create a huge room for entrepreneurs to play. Examples: generating sets and sachet water.
    I submit.

  5. This is bull… shhh!

    [3] Clones may not work in all aspects but sometimes it does and it has worked for Dealdey (I watched someone buy on dealdey!); you have no idea how many deals they sell per day in Lagos and they are just getting started (Lagos/Abuja out of 36states), million of people doesn’t know them yet!

    You may have heard of Group buying (Groupon etc), but not every Nigerian has! To most of them Dealdey maybe their inventor of such business and surely they will continue to grow and at least it is a business. (They will get to know more and adjust a lot for the Nigerian market)

    Then in your notes:

    Speaking of Dangote Group and the Banking capitalization… C’mon, what do you expect? Every business to serve every living organism or what? You can’t tell me banks shouldn’t be there because Dangote makes more! Should they all switch to grocery production???

    The blinding factor causing you to write this may be the success of likes of Google, Microsoft, Facebook etc; but not every business has to be that big to be called a success! There are more tech business even in the US that are awesome as well, maybe with less than 500,000 consumers, it doesn’t always have to be 1billion.

    Business is about making sales; profit and grow with improvements.

    I don’t buy this, this is demotivating for Nigerians!

  6. I agree with many of your points.and like you said a start up that will likely succeed is one that can solve a problem or can be used by a group of people.it should not necessarily try to target everyone.that is almost impossible.for clones i think it is okay as long as you are doing it right.here is what i mean.you can clone a nairaland for a particular topic instead of every topic.you can clone an elance for use by just nigerians.for cloning to work right you either “create a better mouse trap or create a mouse trap for a particular mouse”.hope you got that.for dealdey ,i dont really know if they are doing well .i doubt it though.as far as the trust and online payment is still an issue in nigeria then that model has real issues to deal with. VCs in nigeria?you are kidding right?many people will rather invest in a failing offline business than listen to your online pitch about some idea that you have.even worse,will label you a scammer or something. Things will change and get better and we here wil have to make that change happen.

  7. Reminds me of guys in Zimbabwe that solved a change problem.

    As you may know Zimbabwe is now using US dollars as official currency following the hyper inflation (and loss of value of Zim dollar) of the past decade. One of the biggest problems wit the USD has been that retailers don’t have coins to give to customers as change so usually they ask to give you sweets, chocolate or cigarettes for your change. needless to say this resulted in shoppers losing tiny bits of change everyday to retailers.

    Some guys developed a system that credits the shopping change to your mobile phone account as airtime.

    They resolved a real problem and definitely not clone coz it was a problem specific to Zimbabwe. Will be writing about them this coming week on http://www.techzim.co.zw so check for the full story!

  8. ok I believe a lot of the comment and hype is based on the fact that a lot of people misunderstood what this guy was just trying to say… What I understand is that we have some primary needs that billions of people in third world countries will be willing spend their last penny on. So why trying the Silicon valley stuff? I feel like the ”Geek’ and ”Nerd”, entrepreneurs just try to replicate or show the western word that we can also build cool stuff, instead of exploiting the niche that their markets offers. I’m an entrepreneur and I see a lot of ”let’s look legit” instead of actually really pursuing opportunities. Until the day we will understand the difference between ‘’needs’’ and ‘’wants’’ we will not be able to develop products that will change lives and impact markets… If your niche is a high priced service or product for a very tiny population of wealthy individuals so be it but keep in mind that you will not be Google. Technology has for goals to ease our lives and not complicate them. If you build things that will look fancy for a tech competition, it’s cool with us; code away!!! But it’s time we start living in the real world. There are no VC to help you in West Africa (they work more live investment banks looking for sure and large deals with a steady growth) but they are few Angel investors that are most of the time successful entrepreneur’s themselves. Let’s be more innovative my #AfricanEntrepreneurs and stop crying all the time.

  9. I just found dis blog,it an anwser to my prayer. someone that really address the tech space from a nigerian pespective.keep on the gud works. Pls try 2 promote ur blog more, wish had found u earlier

  10. I kind of agree with the author except for where he suggests creating solutions for the average guy. You can’t create solution for all the average people, you chose the type of average person you want to target. His assertion that nothing works in Nigeria is actually not a disappointment. In fact the problems all around us are opportunities for creative people that can come up with solutions for them. Low end Chinese phone manufacturers saw an opportunity in our poor gsm services that make people carry a back up sim card. So they brought forth thr dual sim phone, now the big players saw the money in it and are now try to get a share of that niche.

  11. Brilliant blog. Great insight. I think a lot of miss the point. The blog doesn’t say u must make a mass market product, it says you should make the most of your market.
    On the issue of nothing working, it jut highlights our challenges. However, It also shows that there are opportunities we could exploit as business men.
    The comment about Zimbabwe is such an incredible idea, it’s amazing.

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