Hi Radar,
I need your help and guidance with a new startup education project: thesources.co
I’ve designed and taught startup education in different parts of the world - some of my better known work includes Oxford University and Seedcamp in Europe, and recently a wider range of entrepreneurs from South America, Asia and Africa. (I designed the education part of The Africa Prize, and just got back from a guest lecture at MEST.)
From what I’ve seen, the African environment is so different that a lot of good advice elsewhere doesn’t apply here. Things like the power gap (“the Oga effect”) affect how deals are made, or the difference in investment and economic landscape (how to grow rapidly when VC is still relatively new and so many countries have monetary or poliitical instability) - even Customer Development is different in African cultures.
I’ve started going to the source - people who’ve been there done that - on typically African challenges. I want to spread their knowledge with everyone quickly, so everyone can move forward faster.
I’ll start with some short simple videos - made from interviews, and go from there.
I’d love your feedback and guidance here. How can I make this as useful as possible? Who should I talk to? What topics are most pressing for you?
Before I started with The Africa Prize, I asked for advice from a few friends who’d run accelerators and incubators in Africa. One issue that came up was that while mentors were willing to offer their time, the startup founders felt it was inappropriate to call or email too regularly. The program managers needed to constantly re-connect mentors with startup founders to make regular meetings happen. I witnessed similar myself.
I was in Ghana last week for MEST, and a few higher profile investors popped in. They wanted to get to know the teams, and were open to help. At the big dinner, where everyone was mingling, very few people were approaching those investors! When I started asking everyone why, the term “power distance” or “power gap” came up. I ran it past some of my students in the Africa Prize - it’s a pan-African group - and that name resonated immediately. So - it’s not academically examined, but it’s a thing!
The next step was to find people who’ve dealt with it - and I got some very practical advice from two people, one in Ghana, the other operating in Kenya. That’s going in the first video we’ll release.
I replied this to the wrong person. I wanted to reply it to the main creator of the post, so please forgive me. Good work as well. I think the main and number one problem of African Startups is the idea or problem they are trying to solve. I think that is the main reason why they don’t succeed. Is like most ideas are either clones of Western Startups or ideas meant for the upper 10% of the population that can or have enough time for the internet. I think we should refocus on ideas that will help us out and at the same time bring in money or revenue, leading to win-win situation. IrokoTV and Hotels.ng are great ideas and startups, but for the Africa Market, they are ahead of their time because not many of us have time/money for it. Yeah the upper 10% might use these startups/companies but what about the lower 90%? I can go a month without watching a Nigerian movie on the internet or staying at a hotel, but can I go a month without food? Without water? Without money? If Im female, is homelessness a good thing for me for a month? I feel like Africa has a lot of potential or energy but that we are focusing it on things not really necessary at this moment. Like, lets refocus our energy or will be digital colonized by the Western world all over again. Stay positive and please keep up the good work.
Currently part of the Abuja startup community, I think you could also reach out to this community. People like Bankole Oloruntoba and Mike who both run an incubator in Abuja would be very valuable in this regards.
Hey davidsmith8900,
I would to politely disagree with some of the things you said, just so that we get the right information out there.
Firstly how you said “most ideas are clones of western startups” - I honestly don’t see the problem with this at all. The “western world” is obviously more developed than this part, (for so many reasons) they also have well established systems that have worked for years and years. That said, I see nothing wrong with less developed societies/eco-systems cloning ideas that have been proven and tested in the more developed societies/eco-systems. I mean, isn’t it the same way our entire education system - as we know it - got “cloned” and brought to Africa.
So, contrary to what you said, I would like to encourage as many African startups as possible to replicate solid, trusted, working models, and bring them here.
Secondly, how you said only upper 10% of the population are using internet startups. I’d like to say that Nigeria is ranked the number 8 country based on the percentage of its population on the internet, with China as number 1, the united sates as number 2 , and India as number 3, et cetera. Considering this stats, A LOT of Nigerians are actually using these internet startups.
I personally have used hotels.ng a couple of times when I had to travel outside Lagos and had no idea of the price range/location of decent hotels. You can also check the number of users these startups/companies have…you’d be surprised.
So,the moral of my story is that, most startups/companies are actually doing very very very well (no need to give examples) and they aren’t actually “ahead of their time”.
How many Western Startup clones are making it in Nigeria? Please name 10 of them n if you can also please post their profits or revenues?
Nigeria is ranked as number 8 as country’s internet population access but how many Nigerians use it daily?
Y is dat Google Nigeria n Facebook which are top sites in Nigeria get only about 5 million visitors per day when da country’s population is 170 million n about 82 million have internet access? Where are the other 77 million? Y is it dat Nairaland & LIB only get about 1.2 - 1.5 million visitors daily? Where are the other 80 million?
How much is hotels.ng making yearly? How much is their revenue? If it really was booming y did they only get $1.2 million dollars as an investment? Y didn’t they get more? Y does Irokotv only have about 500,000 android app downloads when it’s downloads should be n in da millions? I wouldnt be surprised if most Irokotv users dont actually live in Nigeria. I think dat they are just ahead of their time.
Name 5 internet millionaires from Nigeria along with what they have built?
I love your points. I was even about to write about this topic on my blog the other day. There is a sort of tech bubble in Nigeria currently and people don’t realize like you said that only the top 10% use the internet regularly. I don’t know why the startup founders don’t do an independent study of the Total Addressable Market. They constantly rely on statistics brought up by secondary bodies which are often overestimated or not detailed enough.
I’m in the upper middle class, though I’m still young and in the university. And like Jason said ISP’s like Swift, et al don’t provide enough data. So people like me that use wifi mostly at home are really less than 1 million. In fact I believe the people that use wifi the most are Companies and not private homes. Sometimes it just takes me a few minutes to walk around my neighbourhood and I see several people who either have no education to use internet services properly or the financial ability.
And the issue about mobile internet booming. I agree yeah, but this doesn’t increase the want of the said consumer to pay for services online. RESEARCH AND RESEARCH. You will find that the internet habit of the average nigerian that pays for 200mb of data includes messenger apps, blogs and music downloads. And that is were it ends. And like davidsmith8900 said most of the so called successful startups like IrokoTV have a large percentage of users in the diaspora. However, companies like jumia and konga are fulfilling a need though there’s still room for improvement and even then they are nowhere near profitable.
What we really lack is TRUTHFUL market analysts. If an actual survey was done in our tech market you all will realize just how low the actual internet adoption rate is for services, because again education is a factor. Even banks can’t get so many people on the internet banking platform and telcos find it hard to get people buying airtime online even with all their marketing money.
I’m an outsider, though my dad is Tanzanian, so I have some cultural connection to Africa. My first and still current view on African tech opportunities were around empowering founders to solve local problems with technology and make money while doing it.
That said, empowering founders to do what they want, some will choose to focus on middle class markets, and some will use Western models as analogs, or at least, as starting points. A lot will be different in African markets, but if they figure that out, they’re onto a high-growth business model in a high-growth market. In the best cases, this means the business take off in the first year, and grow to multi-millions or even biliions within a year or two. It’s great for them if that’s what they want! In those cases, I think “necessary at the moment” could be defined as “what business will be most likely to show a high return in 2-3 years.” Western models (and the investment capital that follows) can be a good fit for some.
Figuring out a business in the poorer economic classes, the analogs aren’t going to come from The West, but my hunch is that they’re already out there. I know people in Africa figuring out new agricultural business models, new security products, new ways to bring clean water and sanitation to everyone – and they’re doing it as a business, not an NGO. ( There are likely some useful lessons to be learned from South America and Asia here too, but they don’t have the same media power to reach us.) We can go to learn from them, and copy them where appropriate, so building a business for these markets has the same fast growth potential. That’s the commercial promise of the 90%. To me, the key to unlock that is to find those copyable business models and paths to market. For example, can the M-KOPA business model be used elsewhere? For water? For tablets for kids’ education?
And of course, not all tech founders care about achieving the hyper-growth. We have different goals and drivers. Which means there are even more role models to seek out to share their experiences. I’m interested in all of them.
I’d love to hear answers to any of those questions if anyone knows. They’d really help me understand the landscape with more specifics.
I learned yesterday that a friend of mine here in Bulgaria met with Irokotv. I’ll see if I can ask them directly. Though, even if most of their customers are in the Nigerian diaspora, I’d say good for them! That sounds like an opportunity we can all learn from.
If only I had time for research. I’ll still work on it tho because like I said research is the missing link between our investors, founders and consumers. But most of what I said were observations from school, work and word on the street.
I see what you mean. There’s an expectation that the market will grow and the startups will grow with them. Okay so some of my major concerns with our startups are advertisement and marketing. Most of our startups don’t invest so much money into marketing. Even when they do its really hard for their product to reach the consumers so a lot of ideas never really take off. Also for the sort of market we have I’ll have expected more marketing money to be spent offline than online.
Also payment. Nigerians are still really reluctant to spend money online. This isn’t a tech problem alone but more of an ecosystem fault. And e-commerce is driven by e-payment. So I just don’t see how the e-commerce adoption can outgrow e-payment as I said earlier.
Over saturation of a market space. I don’t usually like comparing Nigeria to america but I’m going to. So in Nigeria we have several copy paste business models essentially doing the same things. In the delivery space; Konga, Jumia, Dealdey, Kaymu. Don’t get me wrong this isn’t wrong but the fundamental problem is they all operate in one city LAGOS. In America for instance different companies start from different parts and even then they aren’t as differentiated.
Not analysing the Total Addressable Market. Like I said the founders do not work with the market space. The over reliance on bloated secondary statistics and ego boosting Nigerian NCC has caused people not to focus on particular niches of people that will adopt services. Will they pay, will they be returning customers and so on.
I feel what you’re saying, and personally I don’t know what you being an outsider means, but where are these businesses that are focused on the 90%? Do they have a website or tech media dedicated to them?
I couldn’t agree more, Nigerian companies don’t do enough research.
As for marketing, I assume that most companies don’t spend enough because there is hardly ever money after developing a product, paying staff e.t.c.
If I was developing a course for African entrepreneurs based on my experience here I would do a course called Entrepreneurial Instinct. The idea would be to train young startup entrepreneurs to think like entrepreneurs. I find a lot of the young people who start high impact tech businesses tend to fail because under pressure they default to thinking like highly paid employees not mission minded entrepreneurs. It is really not their fault. It is simply the culture.
So what would be in this course?
Module one : Problem Solving and systems thinking. What is your first reaction to a problem? Entrepreneurs see opportunities in hairy problems. Entrepreneurs also realize that solutions to problems can be scaled if they can systematize the solution to the problem.
Module two : lean startup and launching new ventures. Key question is how do you validate a solution you have at a small scale very quickly.
Module three : mental models and decision making. How do you think about the world and how does it impact your decision making. Many entrepreneurs don’t think properly and so they make sub par decisions - especially long term.
Module four : basic finance and investments. Every startup founder should understand what liquidation preference is for instance. They should know how to structure a round (convertible debt, equity, etc) How to present their financials and so on.
Module five: how to hire and build a high quality team. A startup cannot survive on just one founder alone no matter how talented that founder is. He needs a team of people to support him to scale up. This is key as I have seen so many promising one man startups die a natural death in this parts. Two heads are always better than one.
I also founded Leancamp which helped bring Lean Startup to Europe 5 years ago.
And a lot of the other topics you’re describing we cover at Founder Centric
Thing is, these topics will all have different practicalities and big differences in attitude when taught in different parts of the world. How did you imagine this looking for the founders you had in mind?
