Increasingly, as Nigeria’s web space has started to rise in prominence both regionally and even globally, there has been a slow but steady influx of businesses looking to make a lot of money online in Nigeria. The rationale is that online markets like Nigeria are virgin territory with boundless opportunity. Of course, this intuition is correct and articles such as this recent one written by The Wired’s Editor help to continue spread the gospel. Read “Want to be an Internet billionaire? Move to Africa.”
Of course, there is nothing wrong with this trend. This is great and I look forward to seeing what the space matures into in the coming years.
What I however fail to understand is the concept of throwing money at ideas that seems to be adopted by some of these new entrants.
With huge advertising budgets and conventional revenue models based solely on banner ads, you wonder how these businesses ever expect to reap back their profits in a short time frame. Some seem to be adopting a long haul strategy but majority are not and are honestly hoping to make back their profits in two to three years.
If you actually want to make money on the web in Nigeria, do the work and build a valuable website and a following. If you don’t know how to do so, hire someone or a strong knowledgable team to help. If you must advertise, don’t do so foolishly. Crunch the numbers and ensure that your ad budget makes sense given your revenue model and expected payback time.
However, if you insist that you will throw buckets of cash at this burgeoning sector, please do so with the view that even if you have not made your money back in five years time, you will still be as happy as a lark.
If not, good luck to you and your strategy but please don’t complain when you find that you have to close shop.