Nigerian Internet Startup Challenges- What’s to blame?

Nigerian Internet Startup Challenges- What’s to blame?

1. Konga Raised $75M was reportedly sold for about $10M

2.Efritin shut down operations after only 16 months.

3.Jumia currently valued at $ 1 Billon yet not profitable after over 5 years

4. OLX closes office in Nigeria, Possibly Kenya and Ghana too

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I Believe the challenges are combination of these 5 things.

1. Distrust- The pay- on -delievry model leads to several returns- It is highly unsustainable

2. Logistics- Amazon relies on postal services to deliver products. BUT ecommerce operators in Nigeria have to setup/ sortout thier own logistics- The unit economics is not great.

3.Low literacy rates- Not everyone is that internet savvy.

4. open markets- I can easily buy stuff from the security man or from the road side

5.High cost of broadband- Despite the rapid penetration of internet services in Nigeria- It is still expensive.

 

So What Should Startups With Internet Ideas and Businesses Do?

1. Understand your business model- Your competitor may just be that little guy that you are overlooking

2. Depth before height- I personally favor organic growth

3.Avoid the “Na we get am” syndrome- Your staff doesn’t have to be family- Hire great staff, make strategic partners.

4. Startup- Do Not seek equity funds until you have exhausted all other options like Bootstrapping, grant and Small business loans.

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Do you need strategic advise/consulting on venture growth and capital selection ? email me us at hello@thebusinessoutliers.com

http://www.thebusinessoutliers.com

find us on instagram @thebusinessoutliers.

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