A few years ago, there was a story about Kuluya.com receiving a valuation of $2 million. At that time I argued that the valuation didn’t make any sense, considering the quality of games they were deploying. If my memory still serves me, I remember @lordbanks also sharing the same views, he posted a comment on facebook or somewhere.
Being an ardent gamer myself (on multiple platforms including android), I gave advice on a blog post somewhere that Kuluya needed to focus and develop one great Africa themed game, instead of dishing out tons of half baked games. For those who never visited the site, Kuluya developed quite a number of flash based (Africa themed) games, including a briefly popular oga at the top. I played at least 80% of the games and none of them had enough matter to make anyone want to play again. Any true gamer knows a game with a poor replay value won’t go far.
I make it a duty to monitor and track startups for no apparent reason, may be it is because of a sincere love of the startup communicty.
I find it weird that in just around 2 years of this valuation kuluya cannot even keep its domain up… I know startups fail… a good buy message on the index page would have been tolerable or maybe a page redirect or something. 404 not found is just downright shameful especially after such valuations. I think Jason owes us a blogpost on kuluya.
To cut the long story short, I am seeing this same trend in a lot of startups now. Unrealistic startups with unrealistic strategies in unrealistic markets. My opinion is that the start-up scene in Nigeria is off to a faulty start and this may backfire. Currently Nigeria ranks as one the worst places for investors so founders need to be extra careful, especially the media babies who have built a nice reputation for themselves. I hope to share some of my opinions on this in another post.
Classic case of believing your own hype. Nobody likes being told they made a wrong investment, especially one they have deluded themselves into thinking makes all the sense in the world. This stubborn thought process is also what keeps teams from quickly seeking out alternative strategies quickly, but spend all the time convinced silver linings magically appear. The slow and long drawn out death is almost always inevitable.
Hindsight is always a 20/20. Anyone who puts in money or time into a venture is definitely going to hype the venture. Any less, and they wouldn’t have put the money in the first place. Considering that only about 10(ish)% of investments survive in this space, the demise of 90% of ventures is a harsh reality. Every successful investor have their very long list of “Kuluyas” that didn’t work out, and they learn to live with it. Every backed venture looks like a winner, until it isn’t. You can’t let that stop you from still investing in the next “winner”. They learn and move on. If you are waiting for an “I’m sorry, you’re right!” card, you’ll wait a very long time.
Commendable observation.
However, I think its a good thing that startup - realistic & unrealistic - is the new rave in Nigeria. It’s only about time, proven products will stay. We shouldn’t expect less the number especially considering our population amd the % of unemployment looming.
I anticipate more re and more and I see it as a good source of gathering vital data for future analysis.
As for the rate of failure, we shouldn’t blame ourselves so much considering that most startup founders had no clue what it ment to be an entrepreneur - they just jumped right in.
Finally, i would love to draw strength from how Nollywood started and it’s journey so far. They are not there yet however, progress is being made and naturally the industry is stabilizing it self.
I can write a 250 worded post/essay on this but I can’t. I will just say this though: To thine own self be true says Polonius in Hamlet. Shit will always get real after some time. Not just to Kuluya but to every business. There will come a time when your business will have to go to the traditional model of profit and loss(fuck that valuation, it’s just a number. Ask Yahoo!), and you will be forced to go to the basics like every mom-and-pop store.
Be true to thyself. Are you building an actual business or you are just kidding/playing yourself? Stop building startups, start building businesses. Again, be true to thyself.
Sure. And I always appreciate that. In this specific case however, foresight was 20/20. I made a note of this back then as well. Same with Maliyo, which apparently Jason fell out with or something before going on to start Kuluya. The valuation was mostly an ego war with Maliyo, and came with no distinction to make it substantial.
Maliyo games might not be all the rave today, but at least the domain name is still up.
Following iROKO apparent success at the time, everyone just got hit instantly to start media startups. I think it was the time we had floods of nollywood channels on Youtube. Everyone was just building iROKO clones without proper thought just because they’ve heard/read some stories. Then gaming and music startups started to look like what to explore next.
This is the problem with extending a pattern without considering or thinking of the specifics. 2014 was a year of music startups in Nigeria. A new music startup every week. 2015, e-commerce. We should have like 50 of those now. Now everyone is going payment. I just hope we get it this time. Build a business not because it’s a trend but you really, really know what you are doing, and intentional about it. Revenge businesses hardly work. Because it is reactionary. It is not intentional. Also businesses by trend.
Always ask: why do you want to do this? do you really, really understand this business or you just want to play yourself like football?
Be honest. Be true to thyself. You can bullshit everyone but don’t bullshit yourself.
Read this article immediately after reading your response. Very intriguinging the trends that “entrepreneurs” take in building startups. Looks like everyone (most people anyhow) does follow fads. It’s extremely hard to swim against the river.
“Kuluya needed to focus and develop one great Africa themed game”
I think iroko is a family run business, jason’s wife acqu-hired the guys at iroko to work with her. If you check kuluyas facebook page, you will see that have redirected it to the new business they are going after
I find it very difficult to close my eye to the first part of this sentence.
To put things in the right perspective, I will take the pains to provide the definition of STARTUP here referencing a few dictionaries/articles.
ii. From a Forbes Article:
“A startup is a company working to solve a problem where the solution is not obvious and success is not guaranteed,” says Neil Blumenthal, cofounder and co-CEO of Warby Parker.
Read more: What Is A Startup? The Ultimate Guide – Forbes Advisor
iii. From wikipedia:
A startup company or startup or start-up is an entrepreneurial venture or a new business in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.[1] These companies, generally newly created, are innovative in a process of development, validation and research for target markets.
Read more: Startup company - Wikipedia
It hurts to see Nigerian video game companies continue to fail and be mediocre when other African countries like Morroco, Cameroon and South Africa are doing so much better.
I fear leaving you to come to the right conclusion may be futile.
Before Konga.com, there was ‘Uche’ Super Mart - euphemism for those local stores that spot almost every neighborhood in 2s and 3s.
Before fashion.ng, there was Iya Bode Fashion shop- Euphemism for that mother of 2 that runs a local sewing and fashion business you’ll find one in almost every street in Lagos, fending more preorders than all the fashion brands on Konga over a single weekend, exaggeratedly speaking.
You see, this local businesses have not set up shop to woe investors, their Kinnevik, and Tomi Davies is their loyal set of ever returning customers, and they plan to be in business for atleast a decade.
Of a truth, most of these businesses may never grow beyond servicing the neighborhood where they started, but you see they have more life/longevity in them than some $2m-esque valued companies.
Hope I didn’t complicate it for you!
So you see when you mix that mindset to ‘homegrow’ with pure consumer value and local resilience with the fancy way of growth capital, you have success waiting to happen.
There is no dispute about the strategy you’ve rightly mentioned. At this point, many POVs have offset the objective of most of our submissions under this thread.
As for my response, I was only emphasizing the common mistake we make of regarding the word STARTUP as NOT a business.
