Generations of Nigeria Tech Startups; Wannabes, Failures and the Success. Part 1

So, I was reading through my timeline on twitter and I saw back and forth tweets from Mark Essien and Jeremy Johnson and they both agreed somewhat on generation of Nigerian tech startups. I thought, ok, let me drop a line. As an observer during the first wave, a participant during the 2nd, a part player during the third and a possible juggernaut(I said possible because I dont know why I’m yet to be “successful” ;) )in the forth.

I disagree that Konga, iRoko, Wakanow are the 2nd generation. Saying that is to erase the history of the toiling, failing and hopes that drove startups/projects that happened between 2005–2010/11.

When we look critically, there are some ways in which a generation connects with next and help the new leapfrog its challenges and achieve wider reach, profitability and legendary status.

I will be drawing from the lessons learnt by mentors in the industry who cut their teeth in the 1st generation and are a playing active roles to ensure each generation learn from the one before it so we don’t repeat same mistake; Victor Asemota, Emeka Azuka Okoye Ade Atobatele and a host of others.

How do we define tech startup in this talk?

A tech startup is a company/biz/project started as a way to use technology to solve problem/create new experience/platform for huge number of people through combination of hardware, software and the internet. Consulting and agency companies are not included, they are not meant/built to be high-growth.

Here are the first generation tech startups;

1st Gen
CWG,Omatek, Systempec, Sidmach, Taviatech, SocketWorks, eTranzact, Interswitch,portalnigeria.com, faceoffestac.net

I founded ogbaonline.com, pastquestionsng within the period.

What do they have in common? For the successful ones, they were founded and found success before 2005, Heavy government and enterprise patronage, huge revenue but inability to own/create the future fast enough. For the ones that failed, there were just too few Nigerians online then to make sense or achieve scale.

Key Lesson

If you want to build huge startup, don’t rely heavily on government patronage. Don’t get too comfortable making huge money. Disrupt yourself! Think beyond Nigeria. If you have the right product in wrong time, you will die a painful death. Unless of cause, if you have an unmatched staying power, why not? You can continue building while you market grows.

2ng Gen (2005+)

Nairaland.com, gbogbo.com, lovebase.com, jobberman.com, naijapals.com, notjuskok,etc

What do they have in common?

They were founded by the wannabes and in most cases attempted to clone what already succeeded in developed market. Founders didn’t have enough skill to build combination of scalable platform and scalable business models. And in some cases, the developed market they attempted to clone had an overbearing success that the local clone couldn’t get enough traction to survive or enter mainstream. Most of the founders were locals with little on the ground foreign exposure and experience (except @simshagaya, anyone else? Please drop in the comment.)

Key Lesson

1. Knowledge is key, market is important. If you have a good product in a wrong market without a safety net or funding, you may not survive.
2. Local knowledge may not be enough, building scale and generating revenue cannot be overlooked.
3. “Maybe your village people are following you”: meaning, nobody including your parent got what you were trying to build. They just thought you must be crazy, mad or they cast spell on you from the village. You are too futurist for your market to know they need you. So they ignore or abandoned you and then you abandoned yourself.
4. Build what the market can understand; features don’t equal adoption. If it succeeds elsewhere doesn’t mean it will here, different market different people and different spending power.
5. There was a huge disconnect from the generation before; they were either loathe or thought irrelevant to learn a thing or two from. Older generation may not be critically matter but they can teach you a thing or two about survival and making money. If you can’t eat or pay for your server lease, you are dead.

3rd Gen

The 3rd generation cycle is just closing. For me, you need atleast half a decade for a generation in tech. There are usually frenzy, fads and inspiration within this period. So, non of the leading startups has grown beyond 5years.

3rd Generation startups

Konga, Jumia, iRoko, hotels.ng, Andela etc.

What do they have in common?

Firm understanding of technology, local market, foreign exposure and funding.

Key Lessons

Prior to founding Konga, Sim founded Lovebase (alarena.com), gbogbo.com in the second generation. He failed! He has that learning under his belt. He understoods the market has he ran dealdey and an offline ad company.

Founders of other startups also experienced failure in one way or the other and to a large extent have the street cred to build a better team(Andela?), get proper funding and hit mainstream.

The 4th generation is coming, but they have not arrived. They are expected to finally take us mainstream. They won’t ONLY build e-commerce they will build consumer startups that will make huge money, alter perception of tech and people will be willing to pay for. Startups being founded from 2016 will fall into that cycle as the hype, hope and euphoria of the one before them is dying down. They will receive less funding and get proper guidance. They will receive love from the ecosystem as they are part and parcel of the generations before them. They we shake Nigeria and if they find success will go beyond Nigeria. Some of them would have taken front role seat at other successful startups before them so they will demonstrate more awareness, knowledge and confidence. Don’t won’t necessarily have to school abroad before they can raise huge funding.

4th Gen examples

PayStack, Surebids etc

I will expand on this and come up with part two, if you get the drift, why not write you piece, let share our common story and history. If we don’t, someone else will albeit in a wrong way.

NB: this was written on mobile. I will proofread, correct any grammatical crinkum crankum you might encounter. Please point out as well so I can correct.