By Akin Olaoye
I have woken up in the morning several times with a breakthrough or while taking a shower struck a thought I believed would be the next big thing. Have you? Most times we often seek the ears of close friends, spouses, relatives or co-workers to solicit input or approval. In Africa most people will urge you not to share your ideas with anyone even investors or venture Capitalists due to the risk of others running with your idea, sounds logical but definitely limits potential in some ways.
I remember an instance in which my aunt came by to complain to my mum on how her colleague, a school teacher showed up to work the next day with 2 coolers and 100 sachets of ice cold water. Ironically my aunt had discussed this new opportunity with her colleague the day before, about an easy profit making venture by selling frozen water in nylon bags to the school students. I will save my energy for another article on how this particular behavior has impeded our ability to increase GDP in many ways.
As we know copyright and intellectual property right violators are not prosecuted in Nigeria or other African countries, which tends to be a discouraging factor why many of us undervalue pride in being innovative. Also, a lot of entrepreneurs in Nigeria rarely innovate because of the lax laws needed to protect their ideas, but will conveniently imitate a successful startup or brand to grab a piece of the pie (market share). This behavior often limits potential in any economy and only leads to recycling of existing ideas and services, however if you are imitating but providing a comparative advantage, there’s no beef between us.
Growing up in the early 90’s, I remember when the pure water trade hit the Nigerian scene, very few individuals had the resources and leverage required to be successful in this business. Entrepreneurs with the ability to source plastic sachets, sealing machines and access to uninterrupted water supply via borehole water pumps, along with steady power generation made very good profit and ROI within six months or less. A lot of these first entrants became mass suppliers and introduced a different supply chain process that rivaled that of Coca cola or other water bottling giants. The ability to sell water unrestrictedly by the roadside, to private homes and schools without tax burdens or government regulation at the time encouraged many others to follow pursuit.
As easy as it was for manufacturers to sell water directly to consumers or retail outlets in an inexpensive sachet, a model not even considered by other water packaging giants in Nigeria at the time, paving the way for a niche. Every aspiring entrepreneur saw the small scale water selling business as a fantastic idea capable of turning profits within a short term. What happens when a particular niche becomes a widely adopted business model for a large number of entrepreneurs in a country of over 130 Million (Look at the water business in Nigeria today). It may seem profitable, but is it genuinely innovative and has it improved our way of life?
As a nine year old kid, visiting Aba market increased my interest in manufacturing from very young age. Walking round this expansive market ground, from one line to another within a span of ten hours and not even covering 50% of the stores displaying goods and services, I often wondered if the factories were behind the store sheds. I would walk along the market line that sold sandals, taking a glimpse at shoe cobblers sewing sandals for various individuals in excitement with the feeling of national pride, assuming these same cobblers made every single shoe on display.
My worldview of Aba market was one in which the local shoe cobblers in the area designed and manufactured everything on display. Driving home from Aba to Port Harcourt, I would ask my mum questions about the manufacturing/assembly process for rubber slippers to plastic bowls we purchased, ruminating ideas with her on how they could have different shapes, prints or why they even had Made-in-China or Taiwan embossed. I was always thrilled whenever I went on excursions to factories/plants operated by local companies e.g. Michelin tire, NBC and the NNPC refinery. I often believed Nigerians developed the machineries, equipment and tools used in manufacturing these products that were consumed by the local population.
As I grew older, I began connecting the dots between made in China/Taiwan stamps and the goods on display at Aba market, the employment of specialized foreign workers sourced to install, build and operate these machineries I used to be fascinated with. The disappointment experienced in my childhood years after learning otherwise, inspired me to develop a yearning to invent, innovate and identify things that can make a difference in my home country. A lot of times I wondered if my peers saw things through the same lenses, or were we all content with consuming whatever was imported and waiting for someone else to discover the next big breakthrough. How can Nigerian youths be inspired with this “consumer attitude”, as this is what they have been raised to accept as the norm from a very young age?
There is ample room for innovation and big ideas in Nigeria, but it will not present the opportunity for profitability immediately. Nigeria is a country where a business model is not considered ideal if it doesn’t reveal ample short term profitability (I am speaking from experience). Innovation can be the offspring of a solution that is non-existent where an essential service, technology product or process is deemed necessary. A lot of individuals come up with ideas which sound fantastic, but may yield no value-add or provide any relevance to the particular market that is being targeted. Regardless of the fact that a lot of people will be unsuccessful, a system or ideas bank to acknowledge those that made noble attempts should be developed as this may provide future benefits. With the high number of graduates annually from higher institutions in Nigeria, it’s safe to assume a few would constitute of “afrinnovators” and disruptive entrepreneurs, which now begs my question; have they been innovating in ways that could really change the landscape, but have limited resources or support to advance it?
It’s a known fact that there are few venture capitalist or angel investors locally or foreign that are willing to place bets on tech ideas that could be the engine for economic growth and a source of employment for the young generation. Rich investors in Nigeria often focus on building new hotels, food chains, schools and other services that are abundantly available. This is a huge barrier that impedes maturity of the Nigerian tech space, because the ability to take an idea from being a mere concept to a marketable product requires substantial funding. Most banks and finance companies often lack the ability or interest in identifying potential in tech ideas, as they don’t fall with the typical traditional business models they would seek to invest (I have more to say on this later). I will say it is about time that they open up their pocket strings and begin placing bets on startup ideas and play a huge role in exploiting this untapped space.
Perhaps they may be suffering from that “tech startup parasite” or “money no dey am” syndrome that kills innovation in my country Nigeria. Profitability and duration is always the first question a large percentage of people/investors approached will inquire before anything else. I always avoid people with such perspective, as they are the ones who will discourage you from moving further with your research and business plan to reach a solid conclusion. Rather seek individuals who are sharp thinkers or advisers who will scrutinize this idea and identify a value add or a niche that will lead your start up on the path to profitability. If you insecure and can’t lay trust in individuals you want to consult, you can ask them to read and agree to the terms of a “Non disclosure/Non compete agreement to mitigate any infringements and protect your idea legally. There is an abundance of resources online that can provide you with sample a draft. Owning a start-up in Nigeria whereyoudey, I have encountered a lot of these challenges first hand and I can attest that an unwavering focus, coupled with a burning passion to make a difference helped me avoid getting my idea to end up in a trash can.
If you are an aspiring entrepreneur with innovative ideas and you court such individuals to ruminate with you, the odds are likely that your ideas from inception through execution will lead you towards success. Avoid short term thinkers, overnight profitability and ideas without the potential for growth.
Focus on “product acceptance and high penetration” in your chosen market of entry with profitability in mind over a long term. Very often we read about startups in the western world that devote donkey years and efforts to creating a new product, which is utilized by the public for free without a clear path to profitability. These entrepreneurs are often inspired and tend to be agents of change or have extreme passion for the product of service they innovated. The ultimate goal is to identify opportunities for profitability, which could come in different forms through an acquisition, merger or by your product going viral, opening doors to economies of scale. Not all startups with great ideas and passion will enjoy this experience. However a number of them will fail creating opportunities for others to succeed where they do not.
Given the fact that basic services like constant light, security and access to small business enterprise funding are not abundantly available in Nigeria, this shouldn’t give way to excuses why very few startups see the light of day. India, Kenya and a host of other countries with similar infrastructure related issues constantly churn up new innovations embraced on a global scale, why not Nigeria or Africa? With all the questions raised and setbacks we may be faced with, I am certain of one thing “The average Nigerian or African encompasses Ingenuity and cleverness needed to overcome even under the most arduous circumstances”. I hope this to reveals itself more often through innovative ideas in Technology & Science.
I would love to read about startups going under every week, because it demonstrates that we are not asleep. For every successful startup, there should be 20+ other failures. Are we scared of failing? Do we lack the resources to execute?
Are potential innovators seeking approval from myopic advisors? Or is it a case of sitting idle and adopting what the rest of the world innovates?
What’s been your startup experience and how has external influence or advice encouraged or discouraged you with pushing forward?