Africans can Build Billion-Dollar Companies: YCombinator Visits Lagos, Nigeria

I was going through my personal website and found this gem of an article. It’s a bit old but still very valuable. It gave me strong faith that YOU and I can get into YCombinator and build products that’ll change the world. Enjoy.

The chat with YCombinator (the Harvard of Incubators), took place at Lagos Business School. On arrival, I was taken aback by the environment; serene and beautiful.

I met the founder of Techcabal (Africa’s Techcrunch, and the Linda Ikeji of Nigerian Tech News), Bankole. He’s a really humble guy. Shoutout to all my old friends I saw there. Printivo was there (online prints), Imisi 3D (virtual reality) and several other Nigerian tech startups. The energy was amazing, these are a group of people that are building stuff, creating, disrupting. The future of the Nigerian/African tech scene.

Registration

There were 3 key sessions in my opinion: chat with Nigerian investors, chat with Nigerian Incubators, and chat with YCombinator (YC).

The members of the panels that took part in these sessions seemed like some really smart people. They gave invaluable insights, filled loopholes in my knowledge and I really connected with what they were saying. Powerful sessions. The sessions were framed in a Question and Answer type format (key lesson for event organizers generally: interactive sessions (Q & A) are way better than 3 hour speeches. Massive shoutout to OO Nwoye and the techcircle team. Wonderful job. Looking forward to the next “Building a Startup” event.)

Chat with Nigerian Investors

Before today, I literally knew only one Nigerian investment company for tech startups: Spark (they’ve invested in Hotels.ng and Drinks.ng). At the event, I got to know more companies; the likes of GreenHouse Capital and CardinalStone Partners.

What opportunities are Nigerian technology entrepreneurs missing?
Nigerian entrepreneurs are too focused on individuals as customers. The B2B (business to business) and enterprise space is underserved. Sell to businesses, use technology to create solutions that help businesses make more money(increase revenue/profits), or save money(lower costs).

Create products that will serve as substitutes for imported products. With the fall of the naira, and given Nigeria’s heavy reliance on imported goods, the cost of said goods are relatively high. Therefore, consumers would consider good and affordable alternatives which give them “value for money”. Now is the time to gain market share (someone should please make a low cost alternative to Suremen and rice, I would be the first customer).

If you are solving a big problem in a big market, you need an investment company’s backing. Why? well money for expansion, and tapping into their powerful networks which is even more amplified in Nigeria (a highly status based economy; who you know really really matters).

Chat with Nigerian Incubators

I got to know new incubators in the Nigerian scene. Previously, I had heard of CChub, Wennovation hub and Idea hub. The incubators present were all new to me: Ventures Platform, MEST Nigeria, and She.Leads.Africa (SLA)

SLA is majorly a pro-women entrepreneurs organization. They help in raising funds, link you up with mentors and contacts that can solve your problems e.g. lawyers for legal issues, designers for tech products etc. Try to be as specific as possible when applying: “I need SLA, so I can get xyz funds to do abc things”. So if you are a female entrepreneur, you should hit them up.

MEST is 2 months old in Nigeria, this is the best time to get in. Before they toughen up their procedures, systems and protocols like Andela.
They run a training where they teach the entrepreneur how to run a business, things to look out for (KPIs to measure), connect you with mentors etc. Plus its all learning by doing. At the end of the program, entrepreneurs pitch their businesses, and MEST provides funding to the company for equity.

Ventures Platform (full disclosure; they are my favorites) is the Ycombinator of Nigeria. You apply and if chosen, you simply travel with your backpack to their facilities in Abuja; here you will be provided power, internet, workspace (all the basic infrastructure headaches we have in Nigeria). Its a 3–4 month program where you focus on the problem you want to solve, and hack out solutions. At the end of the program, they invest $20,000 (approx. N9,000,000) for 10% of your company. This values your company at N90,000,000 (quite reasonable). They also have teams that can help with issues you would face when building a company e.g. they have a legal team to help with legal issues (awesome stuff).

Chat with YCombinator (YC)

Brief Background: YC was started in 2005, they are the Harvard of Incubators (an incubator helps you refine your idea at the very early stages of a business). They are the ultimate startup and have built so many companies, notable of which are: Dropbox, Airbnb, and Stripe. They have 10 companies in their portfolio that are billion dollar companies, and the combined values of their companies is over $70billion.

YC funds 200 to 250 tech startups every year. They invest $120k for 7% equity in each company, and help you raise funds from major Silicon Valley Venture Capitalists.

Michael(CEO) and Qasar(COO) from Ycombinator, came all the way from San Francisco (Silicon Valley), to have this chat with us. I have watched lots of YC videos and being live at a session was amazing. It felt fucking great. YC alumni Shola (Paystack) and Tonje (Afrostream) were also present.

L-R Michael, Qasar, Oo Nwoye, Shola, Tonje

It was a very enlightening chat. Here are the highlights:

Qasar: “As we were driving from the airport to the hotel, all I saw was opportunity. Billion dollar problems = Billion dollar companies.
Solve a Nigerian problem, the basic problems you face as Nigerians (electricity, water, transport). They need to be solved.”
{You and I have to solve them, and in solving them we are building billion dollar companies (1billion dollars = 400billion naira); attainable.}

Michael: “YC is here to back you, we believe in you, and think you can build great things. We are waiting for you to apply. Just apply. I am expecting many more applications from Nigeria.”
{YOU CAN GET INTO YC.}

Qasar: “I was born in a Pakistani village, migrated to the USA while I was young, worked at Google, got into YC and built successful companies. There’s nothing special about me, there’s no difference between me and you. If I can do it, you can do it. The only thing that sets me apart is that I took that courageous step and pursued what I wanted. It’s time for you to do the same. Build billion dollar companies. There are so many problems to be solved in Nigeria, you only have to solve one.”

Michael: “Investors invest 90% of the time out of fear. They don’t want to miss out on the next big thing. Make something people want. Build a product/company that’s sooo good, its hard to ignore. Then you’ll get the money you need. Still apply though.”

Qasar: “Create the Nigeria you want to live in. Every significant problem you face is an opportunity. Start looking at the problems you face as potential billion dollar companies.”

Michael: “YC wants to fund Nigerian companies. American dollars will go a long way in the current economy ($1 = N400). Just apply to YC.”

How to get into YC?

Michael: “We do a lot of pattern matching in our heads i.e. does this company’s profile fit with the ones that have gone on to be successful. Stuff like: do you have a technical co-founder on the team (this is a must, YC funds TECH companies).
I look out for: What. How. Why.
What are you doing? How are you doing it? Why are you doing it?
I play the video first, and notice things like sound track on your video (Don’t put a sound track on your video; it shows you spent more time on the video than on your business). Just speak clearly about what you are doing.

Qasar: “Be explicit. Simple explanations. Clarity of expression. Communicate. e.g. Uber for health … we built an app that connects mobile doctors with patients at home.
Describe your product from the user experience e.g. open the app, click on a doctor, get an estimate, doctor arrives at your house, you pay.
Michael and I have lots of applications to read; so be straightforward. Use simple words.

Michael: “When answering the question: ‘What does your company do?’
This is the question every YC parnter reads. So tell us what you want us to know about you. What your company has achieved. The breakthroughs, deals signed. What is amazing about you.”

Qasar: “I highly recommend Paul Graham’s essay: 18 mistakes that kill startups.
Give us an interesting proposition. Something unique to your ecosytem/environment e.g. an Uber for India application, indicate stats like:
In India, only 3% of people own cars, thus 97% of the population need our product.
Make it something realistic, plausible.”

Michael: “We look out for companies that move fast and learn quickly. Don’t be afraid to fail, be bold, move quickly and learn quickly.”

Qasar: “Give your application to somebody to read it, and ask them if they understand the business (tell them you stumbled on the plan i.e. it’s not yours, so as to get honest feedback)
Write what your company does very clearly, describe it in a way anyone can understand. (avoid the word ‘platform’ as in ‘we are a platform that…’ instead use ‘we built an app/website that…’)”

Tonje: “Your responses to application questions, should be a maximum of 3 sentences. YC partners don’t have time. Be straightforward and concise.
I am very willing to help you cross-check your YC application (email me tonje@afrostream.tv), and so are other YC alumni. Reach out to us, to help you vet your application.”

Michael: “Majority of the applications we receive, we don’t understand them. The single most important reason people don’t get into YC, is because they do not communicate clearly. Write clearly.”

Shola: “I first applied to YC in 2007, my application was rejected. I just got accepted in 2015.”
{You have to keep believing in yourself, work hard. Never give up on solving problems. His email is shola@paystack.com}

Qasar: “I hate the word ‘startup’. At the end of the day; a startup is just a business. It faces all the problems businesses have to deal with. Focus on building your business.” (His email is: qasar@ycombinator.com)

Michael: “We want to fund companies that are passionate about the problems they are solving. Don’t create a company just so as to get funding from YC. You should push on regardless of YC, but we are here to help. Just Apply.” (His email is: michael@ycombinator.com)

In conclusion, we can build awesome things. The numerous problems we face daily as Nigerians are huge opportunities to build great products. YOU CAN SOLVE THESE PROBLEMS.
If you are building a product/company that utilizes tech, Apply to YC.