You don’t know much my brother, that’s why you’re talking like this
you make it sound like traditional businesses don’t make losses.
what if the founder wants out?
First of all, @MikeOck I think there are many gems of wisdom in your original post but it was diminished severely when you didn’t afford Iroko and its CEO a degree of anonymity in what came across unfortunately as a salacious, poorly veiled attack. I concede that the “attack” was perhaps not your intention but it did come across that way and it isn’t cool.
Secondly, @Jason_Igwe_Njoku, I think IrokoTVshould have responded to such issues through its PR and not debase its brand by having the CEO get involved in a ln online war of words with an anonymous belligerent. That said, I appreciate the passion to defend your life’s work and standing down is easier said than done.
On the substantive issues, running a legit company in Nigeria is terribly difficult. The stress levels are high as the tripartite stresses of government hinderance, staff underperformance, and cashflow problems combine to tear your business at its seams. The Glassdoor reviews don’t paint the full picture and I think it is rather poor and selfish that people will go up here to tarnish a company’s reputation indefinitely. Whatever the problems were, they could have fixed it by now and insofar as IrokoTV is still operational, it is god manners give them the benefit of doubt, at least publicly and especially without hard facts to prove otherwise. Even if they are a zombie, they are still providing value to their staff and customers.
the main goal from day one of traditional business is to make revenue and be profitable in a short time,they believe cash in bank is key,they also try their best in cutting down loss or avoiding it because they know they will close shop
VC backed companies are the highest loss marker,they invest in growth and depend on spending investors money.to float,some of them live on fantasy land and then close shop.
Any venture capitalist would invest only for returns, no one would have long term plans or goals with any company.
How much equity will I get? what is the return on my investment? and what is the exit strategy?
They don’t bother about the product and improvements, apparently they bother about how the product is performing in the market.
but companies make losses. shit happens. it’s not a “startup thing”. don’t paint it as iroko is making losses for the fuck of it.
If it was my company, I would take the Glassdoor reviews seriously. No smoke without fire. For every disgruntled employee there are tens who could just not be bothered to air their grievances or don’t know how to.
you prevent shit from happening
that’s not the point i was making
If I had lied about something, then you could say I’m attacking. But all my claims can be verified with a few Google searches and even by looking on Jason’s own blog itself. It’s not an attack, it’s just that the truth hurts.
Let us now see an example of my original post’s theory in action. This report says that ToLet.com.ng is doing $100k annual revenue and making losses on that:
But they are out here forming like a Silicon Valley company, acquiring others when you yourself are making losses, building swanky offices with PlayStation area and loft
Raising million dollar funding, which means valuation is now somewhere around $5-10m
All this Silicon Valley swagger, but only $100k revenue and no profits. I won’t be shocked to start seeing ToLet on Glassdoor also in a few years.
What are the components of ToLet’s business? You need:
Agents to get houses to list
Web developers to create the platform
Initial marketing budget
Salespeople to sell the premium listings
Does that really need millions of dollars and swanky offices to execute? If the founder of ToLet could have followed the path I explained in the original post, he could be making $30k annually and having precious peace of mind. But now the guy is probably racking his brain trying to think how they’ll give a return on a $10m valuation with $100k in revenue. Which one do you want to be Radarians?
There is a lot to be said about silly-con valley style of business here in Africa and You quite covered it well in your post. I have bookmarked this and would be referencing to it from time.
Though the attack on the IrokoTV guy’s response wasn’t necessary.
Season 8 is awesome!
Who is this guy? You seem to be talking from insider knowledge, and I must say you hit the nail in the head especially with respect to the local “investors”!
This OP is clearly someone very deep in the Nigerian tech ecosystem who has disguised his voice. Everything he says is unbelievably spot on. From flakey dopey investors to zombie startups parading the red carpets and doing all swag but broke as hell. It is a serious mess.
I didn’t realize until now that ToLet has been acquired, its good-news though for our “Silicon Valley” styled startUps… Atleast one oyibo"malaysian oyibo" can come and acquire us…
Am just concerned on how much the founders would get from the acquisition.
I mean the company has 4 founders…how them go share the money.
Plus oga Jason invested previously in ToLet, he would also be cashing out with this acquisition…
So how much the individual founders go carry go house?
Seems this co-founder stuff no go work for Naija o…
No one acquired Tolet… Go read the article again
It was Jumia House Nigeria that was being acquired by ToLet.com.ng. Also note that Jumia House’s funding was $56m
and the exit for Jumia House Nigeria was $500k. Like I said in the original post, the founders of Jumia House likely got very little in this transaction, because in such a situation, the investors will prioritize getting some crumbs of their money back over everything else.
Real Businesses Do Not Exit. They acquire smaller companies to strengthen their position in the market. Ope Adelaja
If you can not use your sweat and blood to grow a company in Africa don’t even start it. And when you have used your sweat and blood to grow the company and it has grown, why will you want to sell it?
All these Konga, Jumia, Iroko making losses year on year is heartbreaking.
Oh… My bad.