2017 predictions for Tech Startups

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Phewww, 2016 is almost gone. It was the year of the Fintech startups :slight_smile:

What do you think 2017 will be about, what are your top 5 predictions for the startup ecosystem in Nigeria?

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  1. More APIs. Like flutterwave, people will see that any product without an API to extend will fail because everything has to be interconnected. This year, the big guys paved the way. Apple opened Siri, Google has started allowing early access to Google assistant, e.t.c.

  2. More Foreign Investment: As the naira looses value, startups that are dependent on local talent and materials will be attractive to investors because when the investment (typically in Dollars) will have more value.

  3. Local alternatives: As local alternatives become more attractive, weā€™ll have better quality local alternatives for certain services. Especially software services such as hosting, email, customer support software,

Iā€™ll edit and add more later

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Wonā€™t make sense if they canā€™t exit.

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Eventually they will.

  1. Naira ainā€™t gonna fall forever
  2. If the company continues to be relevant, they will still have their payday
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In no particular orderā€¦

1) The ecosystem will become an ecosystem. That is, people will share more, instead of working in silos. Iā€™ve been doing an interview series with people around and itā€™s a common theme amongst the 30-odd people Iā€™ve spoken to so far. Plus, @FatherMerry at Paystack, @neoighodaro at Hotels.ng, @cyberomin at Andela have started nudging us further down that path.

2) Localisation at last. If you paid attention to Nigerian pop music a while ago, youā€™d have found a lot of clones of international pop acts. As music producers over here learned to use modern electronic DAWs, they more or less remade already popular songs. Think P-Square (Usher) or Eedris Abdulkareem. Over time, though, as they mastered the DAWs, it became easier to form tropes that were unique to Nigeria(ns), probably based on old Nigerian music. Thatā€™s when people started to clone Fela.

I think a lot of startup founders to date have passed through that phase, and weā€™re now coming to maturity. So, the products we will build in 2017 will be more driven by locally relevant data than assumptions derived from other dissimilar markets. Iā€™ve always called Nigeria a high-delta market, so products like @Oluwakuseā€™s Buychat that tries to replicate the unstructured, conversational nature of offline commerce in Balogun Market will come to light. Connie Chan from a16z puts it better (about China).

3) More Foreign Investment. I agree with @StephenAfamOā€™s point about more foreign investment, but I donā€™t think itā€™s necessarily because of forex policy. From Mark Zuckerbergā€™s visit, to Michael Seibel and Qasar Younis (YC), to 500 startups, to Techstars, to Hiro Mashita, and the other international investors that made their way over here, thereā€™s been a bit of buzz about the ecosystems in Africa. On one hand, thereā€™s the point I mentioned up there :point_up_2:, about the solutions weā€™re building becoming more and more mature, @asemota thinks itā€™s because of the developers, but thereā€™s also a need for some of these establishments/funds to appear more diverse and, for better or for worse, they are beginning to look to Africa.

If you look at it that way, the Naira losing value may lubricate the process of foreign investment (or not, since investors need to think about their exits), but it will definitely not start it. If that was the case, wouldnā€™t Zimbabwe be the most funded country in the world? :stuck_out_tongue_closed_eyes:

4) Infrastructure. Iā€™m not sure what to think when I see people declare 2015 as the year of e-commerce, and 2016 as the year of the Fintech startup. I mean, if you look at whatā€™s obvious, right in front of us, it looks that way, but can you use that to inform a prediction? I donā€™t think so. This is tied to number (2), but I think people are beginning to build companies that take care of core infrastructural issues. So, people build e-commerce businesses because internet prices were going down and they needed a way to unlock value for themselves (or be part of the rush), but we realized that, ā€œhey! Itā€™s hard for us to accept payments for the goods weā€™re selling onlineā€, and so we went and built payments startups. While that is being fixed, we started to realize that. ā€œHey! Nobody is going to pay online, unless they ARE online, actively using the internet, and trust it enough to payā€, so are we going to see a lot more businesses built in that direction? Mobile money? Internet Connectivity? What else?

Iā€™m have since reversed my position on Free Basics, so who will do it?

5) Dust biting. Without a doubt, I agree with most of @PapaOlabodeā€™s post about the 10 stories that defined the Nigerian tech ecosystem in 2016. Especially the bit about @Possiconā€™s post about shutting down Showroom. I predict we will some startups will die natural deaths. Some of that will be due to timing, some of that will be due to a lack of ability on the part of the founders, some of that will be due to luck, or the lack of it, but people will fail, and I hope they will share more (like I said in (1)) so others can take learnings and we can grow.

One of the reasons I deeply respect @Jason_Igwe_Njoku is the fact that he shares a lot. Successes, failures, everything. Hopefully, more people will do like him moving forward.

Finally. I have a bunch of other ideas, about what willl be big and/or what will be interesting in 2017. I am reserving some of them (especially the ones related to how we will create and consume media) for my people @lordbanks and @seyitaylor, but these 5 are the clearest in my head, and in my (humble) opinion, the ones most likely to be right.

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I agree with @SkweiRd about foregin investment.
I guess my conclusion was correct but my premise was wrong.

To continue my predictions,

  1. Offline push: I was having a conversation with @spokentwice and @Freshboi_Ekundayo at the growth hacking event and I believe that in 2017, more focus will be put on bringing the offline people online. That huge percentage of Nigerians can no longer be ignored for startups that want to scale.

  2. EdTech: With Andela paving the way, there will be a focus on bridging the talent gap. There are already a few popping up, and I predict many more in 2017. We need our talented rough diamonds to be refined to get a sustainable ecosystem.

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If Nigeria, as a whole, has seen a sharp decline in foreign investment because of inconsistent fx policies, which arenā€™t changing any time soon, I donā€™t think the tech sector is going to experience it any differently. There are billions in funds that canā€™t be repatriated. Those people arenā€™t going to invest some more.

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I totally agree with most of the predictions of @SkweiRd and @StephenAfamO as they have convergence with my own predictions.
Here are mine:
1. Year of AgriTech . 2017 will be the year with more startups interested in disrupting agriculture. While 2016 was for fintech, more platforms like farmcrowdy and other AgriTech initiatives will come to the center stage. This will be followed closely by startups innovating around energy and power: both hardware and software solutions.

2. Fintech will continue its accelerated growth with payment APIs becoming common adoption.

2017 should be the year that payment in Africa becomes more open to the global world enabling better commerce and making Nigerians participate in freelancing markets and in programmes that many have been excluded from as a result of PayPal not accepting us. Thanks to bitcoin and block chain technology, more fintech solutions will be built.

There could be possible mergers of startups (think Paystack + Amplify), buyover or slow death of others.

3. US and UK fundings. More local startups will get accepted to US like paystack, andela etc.possibly with better valuations too. It is obvious that Africa is where some VCs will be staking their bets in 2017.

4. The Federal government will get tech entrepreneurship right and make policy that enables growth.

2017 will be the year that they will set aside ā€œfund of fundsā€ to invest in startup entrepreneurs. There will be a replacement of the Minister of information with someone with background in Tech like Omobola Johnson.

5. The tech ecosystem will be more collaborative and helpful.

There will be more free initiatives like Usable (for UX), #hackgrowth (for growth marketing) and what @Possicon is doing for software training.

6. Tech goes mainstream to media.
There will be more shows like TechTrends (which is showing on ChannelsTV) that will now pop up with more editorial content focusing on startups.

With local TV switching from analog to digital asignature well as emergence of services like Facebook Live and YouTube Live, a new media brand will emerge to curate Nigeriaā€™s tech stories in Videos 24/7. There will also be high quality productions possibly with irokoTv or a competitor having something to do about it.

7. User experience will mean a lot. Startups that will get the biggest market share will invest heavily in improving UI/UX, be mobile-focused and also data driven.

8. Conversational commerce, chatbots, machine learning and AR will win. WhatsApp for business and Fb Messenger are going to provide ideas for local entrepreneurs to build on and learn from.

9. Skills that will sell and make you valuable in 2017 to employers will include Augmented reality expertise, machine learning, UX/UI, data analysis and integrated marketing approach (offline and online marketing skills) and so on.

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There will be wars. Because of war, oil prices will go up. More people will leave Nigeria. Nigeria will get more rowdy and violent. A few startups will come with products for the BOP. They will do well. Iyin will become a multi-billionare (in Naira). Foreign brands will consolidate their efforts in the continent. Cashless policy will be implemented by force. Solar will start becoming mainstream. A bank may fail.

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@mark, does Donald Trump have anything to do with this ? :slight_smile:

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Yesā€¦but not only. Other parties can take the Trump era as a time they can wrap up long standing conflicts.

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this will definitely happen.

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Waitā€¦you mean you now support Free Basics? :flushed:

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Now youā€™re sounding like TB Joshua :stuck_out_tongue:

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No, I was very bullish about it when it launched (I remember disagreeing with @PapaOlabode) .

But a few months ago, I had a conversation with Nanjira Sambuli from the Web Foundation, read a few articles about its effects in India and elsewhere, and watched out for its effects in Nigeria since launch, and Iā€™ve shifted my position. I do not expect that much good will come from Free Basics over here, and asking that a certain class of people should drink the web through a straw is condescending and is only evidence of policy failure. But letā€™s not derail this thread.

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In addition to all the hard stuff mentioned I think we will see more of the following soft issues:

  1. More ā€˜Paystack Vsā€™ thread on Radar
  2. More LindaIkeji commentaries on Radar
  3. Probably a few Redesign of Naiaraland and of course the discussion on Radar
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These are constants.
The hope of any startup for 2017 is to have ā€œMy startup Vs. any otherā€ half the times Paystack had it

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Just remembered another one!!!

This is more a prayer than prediction though.

I hope someone solves more logistic problems by using drones to deliver goods.
E-commerce is everywhere, FinTech is on the rise, we need to solve logistics next. But with the degraded transportation system, it seems drones are the way forward

Maybe I should do this!!!

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You could try, but the policies against it is taunting. I had an idea to create a service that lets any ecommerce business use drones to deliver their goods to consumers without buying drones or having to think of maintaining one. I did a little research only to discover that the Nigerian government made demands that sounded like a babalawo telling me what to bring for protection rituals.

Now how will an 18 yo have 20 million naira in shares and where would he get 500 thousand naira to give some rubbish politicians who will give it to their children to buy video gamesā€¦ or do some other useless thing.

Plix, someone with that kind of resources should become sort of a middle man and kinda subsidize it by letting others operate their drones under their license, but that will then mean that theyā€™ll own every single business that comes to them.

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Wow!!!

I am speechless.