Fat Men Can’t Scale

Scale and Sub Saharan African Startups

This is one of those speed posts I write in 30 minutes or less. Pardon the typos and feel free to correct my errors.

When Paypal came to Nigeria, we didn’t quite get it. We thought it was a drill. They didn’t really quite come in fully. When Uber came to Nigeria “FULLY”, I was happy. It must have sent shivers down the spines of “Big Men”, who suddenly looked small because of globalization. Netflix too? Heaven!! Stripe also does not hide its ambitions.

I don’t see the Silicon Valley incursion into Africa as a bad thing at all. It is not because of all of us small fry that it will give hope and inspiration, it is because of the big men that it would teach a bitter lesson — the World has changed forever.

Scale is good. Globalization is a real thing. My only regret is trying to scale services instead of products and wasting time trying to get people to scale when they didn’t see it.

You are not a big man if you are milking a market with monopoly, you are a “FAT MAN”. It is not the BIG that eats the small anymore, it is the fast that eats the slow. Fat Men Can’t Jump. I know this is true, because I weighed myself yesterday….

“Scale” doesn’t only refer to the instrument you use to measure how much blubber you have accumulated. Scale means leaving your comfort zones and creating new markets. An investor we approached to scale our agent network asked why we were going outside Nigeria when we had not yet dominated Nigeria? I told him that Nigeria was not as important to our business as East Africa. Africa was our market, NOT Nigeria.

“Hubris” — such an important word. Rarely used in conversation but more abundant than hydrogen and stupidity. Hubris is what makes us believe that the market begins and ends where we live. It prevents us from chasing new cheese as Spencer Johnson wrote.

Smart South African Startups rarely have hubris, and that is why they try to survive by scaling beyond their comfort zones. There is no South African startup I have done business with that is not now working in more than 10 countries in Africa. I rarely see startups from Sub-Saharan Africa doing the same thing. Most prefer to “defend their market” by any means necessary, instead of finding new markets.

Size is an illusion. It blindsides people to new threshold competencies that smaller, nimbler companies adopt.

One startup I respect for their tenacity and ability to scale is Iroko. I forgot to tell Jason this on New Year’s Day. The deal with Canal+ is Gold!! How many startups are following Iroko’s footsteps? Why is French speaking Africa still opaque? Who says we can’t even take the fight to Europe and America as they have done?

The news is: That “local advantage” is gone. The Indians are here, the Chinese are here too and the Americans are coming. What are you going to do? Don’t be a fat man. Be a lean man. JUMP!

We are setting up UK and US offices this year and someone asked me why? This post is my answer.

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