that corporate bullshit has got their employees together to build one of the most valuable tech corporations in the world. And what does that make of your assertion?
Would you have preferred “Corporate Speak”?
Make no mistake, every “Big Mouth” Boss/CEO would like to brag about having the best paid employees.
This is where we collectively played ourselves. Definitely idolised the wrong things. And that’s why we have bad founders culture. The worse thing is folks who know better, stay silent. You know why? Fear of burning bridges and too respectful of ‘status quo’. Also ‘self caution’ - ‘I never hammer’, so I don’t deserve to have my voice heard. And the worse, they’re ‘my friends’, so even when totally in the wrong, we give them a pass.
And because we have bad founder culture, it’s becomes a vicious circle. People want to start their own thing to become like people they dislike, so they can run a startup they wouldn’t want to work for (except as CEO) and they get praised by peers and public. Well, that sends a good signal to everyone that bad behaviour is rewarded, which triggers an exodus of ‘employees’ to leave the said crappy startup. So they can start their own crappy startup. Press repeat to start again.
On the other hand, capitalism is brutal everywhere. And early employees are shafted in startups, all over the world. Did you read about how Good Technology ‘employees’ lost out when the firm was sold? Whereas ‘management’ cleaned out. So many examples like that, but the point is there’s general growing awareness of this issue. We just have to make sure we’re not left behind, while others are progressing.
Proliferation of startups is nothing to be worried about. In the short term, it’s mostly mushroom startups not adding much value. In the long term, these same startups will equip a lot of people with the required skills to do great things. Bad founder today, becomes veteran founder tomorrow.
The other key point I feel we discount is that the ‘top’ startups of today, will not even exist in 20 years. But the best founders will last. They will continue to create value in in interesting ways like Marc Andressen, Paul Graham etc. The industry is at 1st base and loads of stuff will eventually happen.
Very few do,but come to think of it.How many employees,would-be employees even understand what pool options mean in the real sense?
Lets be honest,majority of people i have worked with in the past three years,from startups upto traditional management structured companies,are usually peeps with vast experience in what they are trained to be and other fields?Subpar.
The startup in my Testcase,did have pool options.
The mentality from my experience is always about what do I gain now,not what can I gain two years down the line.Ego also comes in,especially when you as an employee happens to even be older than the founder (my junior brothers agemate mentality comes in).
Throw in the the fact, its a male/male thing.Only female employees behaved themselves,would I had been honourable if the founder were female like me?Probably,probably not.
You’ve talked about founders thinking about themselves and family,I do agree with you but is it really peculiar to founders alone?
Aren’t we all brought up around here to think just family,rather than care about our neighbours well being?
Yup. Goes beyond the tech industry too.
I also think generally a lot of people in the echo system,do not have enough knowledge about what to do and undo,and always seem to lack a quality advicer to guide them through.
Testcase for my above point(I won’t call names).
I do know of a startup founder last year,who was hoping the launch a product in a novel market,he worked with a friend(partner)who led him to an investor, after which he got an investment offer for 60% equity, he rejected it and off to a techhub he went(dumping his partner).
At the hub,he launched his product but by coincidence,someone else was planning to launch a similar product.The someone else approached him to make an investment into his startup for 90% equity however with some good pecks. ; A brand new Car + 500k monthly salary.The lad rejected it,eventually the said someone went ahead and launched anyways.
Today my dear startup founder,has a product with barely no traction,after the initial IGG lol
From the Above Testcase,the element of founders lacking enough knowledge as to what to do and not do,comes to play.
The techspehere still has a long way to go.
This is because a lot of people in the ecosystem look at “startups” like they are completely different from regular businesses. You see it #OnHere every day. “What startup should start?” “what’s the best startup is the best”.
It’s insular thinking and keeps you from acknowledging or seeking advice from other businessmen in the industry. Because, as far as you’re concerned, you’re “startup” founder and not just some business owner.
Imagine Printivo thinking it’s any different from Doculand (just an example, they don’t think this).
Here we go. How do you ask for 60% or 90% equity from a founder at seed stage? You might as well buy the company and employ the guy. Nonsense.
YC gives you $120k for 7%, my Almighty Nigerian investor wants to give you $15k for 35%, and own you while doing that.
What they don’t know however is, the investor is actually playing himself when he ask too much at early stage because there is no growth allowance, and the founder becomes demotivated. Money lost. Everyone is just greedy, and somehow ignore what is truly optimal.
At seed stage, you should be looking at 15% top. If a company is too expensive for you, pass. Go invest in the next jollof rice startup or the 100th sport betting site.
Its not nonsense in a way,jn another way,it could be.
First realism:If the said founder were realistic,he would had jumped at the opportunity.Access to funding aside,he lacked the means to pull it through(Am tempted to share a link to a pitch by the said founder),but I won’t.
500k over the next one year,he probably has N5m in his account, coupled with he now has a good resume.
On the other hand,it was probably greedy from the investor,but its a norm here that 9/10 Nigerian investor believe he is doing a favour,probably he is(he is taking a risk),but you needn’t show it.
Try attend one of these startup pitching event,and from the moment you enter the building,the body language of everyone is simply telling you,we are doing you a favour.
Hence, very terrible funding culture. Fuck him, and his cash. That so called N500k salary will probably expire after 6 months. Let me ask when the money finishes, how is the guy with 10% be able to raise? What stupid, nonsense opportunity is he jumping at? Don’t play yourself. That’s how we encourage bad behavior.
It’s okay to turn things down. It’s OK to say no to bullshit in the name of favor. Nigger, you are not doing me a favor, we are merely bringing resources together to build something and gain together. This is biased as a favor today because the demand and supply funding market is not looking great yet.
Accepting money at that point disqualify you from any follow up round. YC will likely not even accept you even if you have an incredible business, and give away too much pre-seed. Sam Altman ranted on he observed this with many international startups applying, to YC. And that’s many Nigerian startups will never become anything great. You’ve sold your soul, boy.
Always seek at all times what is optimal and fair, else the universe will fuck you and you lose all the monies at that greedy 90%, the startup fails and you’ll come around to blame the founder after you demotivated him, or make it impossible for him to grow.
Spot on. This post is supposed to be framed and hung somewhere.
Sunday Sermon. Oshey baba!
People have to respect founder(s) decisions. Just because he refused to accept the wicked equity doesn’t mean people should condemn him. What if he accepted and after few months he got fired by that same investor, is that not back to square one?
In this part of the world, we have sharks who called themselves investors.
The investor should shut the fuck up! Other good investors are also taking a huge risk! The startup game is binary. Either you lose or win.
Just because you need the money doesn’t mean you should settle for a wicked deal. Those who did this the other day are regretting this big time. You can ask the Nigerian founder who got fired the other day.
Yeah, the funding environment here is brutal… But c’mon, lets focus on the goal.
So much to respond to here. But I’ll jump in quickly at the trying to shame someone for turning down investment. So very wrong! Not all money is good money. In fact, most money trawling the continent right now is bad money. A current trend, I hope it’s not migrated to the west from here is that people(“Investors”) have figured out that founders(some) make really really good business managers. So ideally, what they offer it’s not an investment but a good signing bonus. I have a few friends who’ve signed away their life’s work and lives. You can’t leave and yet you don’t even really own the company you started.You become a slave faster than you can say the word capital.
Essentially, it comes down to having limited proper business education and not enough people consulting good finance lawyers. How many of you can read and understand a term sheet?! Start from there.
@akindolu so many excellent points raised. Preach!
This is one argument that no-one is ever going to win because both sides, founder and employees come in with baggage from previous experiences. For every bad founder story you can throw into the argument, there are stories of bad employees screwing founders. At the end of the day, everyone has to be brave enough too enter the arena and trust that you are in a good partnership. I can only say that as a founder of a few ventures, I now understand the actions of my previous bosses. I thought I could see all the angles that they saw but I was no-where close and I misjudged them even though I think i hit the jackpot working with some amazing leaders.
Come on folks. Let s not be too naive nor emotional. Lets look at reality. The cold harsh reality.
i) SF is not the paradise one makes it out to be. Its ruthless and folks get screwed all the time.
What do they all have in common? Founding team member was forced and / or screwed out of the company. Do you honestly think in the age of the unicorn most SV employees aren’t sitting under layers of preferences shares and ratchets? Please. Google it. The information is there if you wish to see it. Look for the downside protection language.
ii) Risk capital in Nigeria is materially different than the western world. I have probably had 10+ different employees fired for stealing from me. Not bad work nor even incompetence but straight up theft. Like inflating supplier deals or taking kick backs from producers. This is rarely something you have to factor in the west. Ever. If you did. They would be in jail. In Nigeria. Nothing happens.
All asset classes in emerging markets and especially Nigeria operate at a value discount. Why. Nigeria is pretty lawless when you are used to actual law abiding things. There is a reason why 100% of the venture capital raised in Nigerian internet startups are NOT allowed to come directly into Nigeria. No one is a fool.
iii) I have spoken to pretty much most startup founders in Nigeria. It is a nightmare. You cannot even begin to understand the true emotional horrors of building a startup. 90% fail. You lose so much in the eyes of your peers in a place like Nigeria. For the victor to not share the spoils is ridiculous. I can see how Bezos, Zuckerberg et al are handing their equity back to employees. Their not. They earned it.
Thats the beautiful thing about capitalism. When its your turn you can do as you please.
iv). There is a social contract between employer and employee.
In Nigeria this is broken. Its very common for most SME’s to basically not pay their staff. Big companies and the actual government don’t pay their workers. This is wrong. And for all intents and purposes illegal. But its standard faire in these parts. I believe most of the tech ecosystem in has avoided that fate. One thing I know. Most even if they are forced to have mass layoffs. Try to make their people whole. With a little safe on the top.
v.) No one owes anyone anything. If you want salvation. Go to church. Being angry doesn’t adjust your bank balance. Go ahead. See. Have you seen it?
If you want to build awesome things and growth wealth. Then do that. But you will be unhappy. It will take 10+ years if you are one of the <1%. Whereas If you want to be happy. I would strongly suggest you don’t. Find something where you can balance work life balance. But 100% of the stress and sacrifice you have to make in order to be CEO goes towards your happy family life.
vi.) A good founder CEO leads a team to greatness. A bad founder CEO leads a team off a cliff. Or never leaves the comforts of his/her dreams and bedroom. But the biggest challenge is finding a market. That isn’t easy in anyway shape of form.
What it takes for technology companies to succeed: fierce, often unpleasant, founders able to make hard choices and place unpopular bets.
vii). When I started Iroko I gave up 50% for an initial investment of £500. Granted I did all the work and Bastian funded significantly more than that in the end. Sweat vs Cash. I believe he is happy with his investment. I am happy that I had someone willing to give me £500 when I literally didn’t have it. You know what. Cast around. Most people are busy solving their financial problems to free up some of their hard earned after tax money to invest (most likely lose).
No one in London or NY offices have side hustles. That’s a uniquely Nigerian thing. Now that may be because of terrible employers. But it can’t be everyone.
viii). @akindolu welcome to the founders club. Last time we saw I told you quite literally that you haven’t suffered enough. That you are still early. Go and build a company in SV? Its easier than Lagos. Or perhaps not. YC black founder tweetstorm on racial biases
I know you are a young ambition person. I have no doubt you will lead us into a brighter future of labour and startup culture in Nigeria. I am so pumped to see Revova do well. As you know I have always given you the time whenever you asked. And obviously tried to be helpful where I can’t.
ix). I personally know and saw Mark Essien, Fikayo Ogundipe or Lanre Akinlagun go through brutal emotional anguish just to keep their heads above water. Just to survive this startup thing. Layoffs. Rejection after rejection from ‘interested investors’, family doubt, personal doubt. Everything. But no. Fuck all of us and our efforts.
When you quote people building companies. If you plan to be in Lagos or Africa. Find others from within the actual lands you wish to change. Sam Altman. Patrick Collison. In Nigeria there are no lessons to be learned from them other than product purity. Anything to do with market. Forget it. They probably still think Africa is a country.
We use stripe at irokotv. We have a transaction volume of $3.5m+ through their systems. My black Nigerian Harvard educated product manager tried to go to their SF office to have a chat, spend some time, explain some of our challenges. He literally didn’t get pass the receptionist. They gave him a branded mug and sent him on his way.
x). Things you experience in Lagos. You will experience no where else in the modern world. The people and cultural challenges are just fucking taxing. Its a horrible horrible place to do business. Fucking terrible. I speak for not just myself for most of my startup CEO’s who attend my little impromptu support groups. Yes we meet a few time s a year to support each other through this bullshit we call an internet market in Lagos. And we are supposed to be the fortunate ones.
Finally as my Chairman Victor Asemota once wrote. Lagos does not love you look outside. The climes have changed and its brutal. Survival first and foremost. Because no one really wins when we all fail.
Anyway. Why are folks not building big, interesting startups?
I could speculate on real estate or go ahead and invest some. Which I am actually doing by the way.
Minus everything I said above. I still believe in Lagos and Nigeria. I have money. If you have something that makes sense. Send me an email at jason [at] spark [dot] ng
Sigh. I told madam I wouldn’t be on this radar thing.