Prof. Oye Ibidapo-Obe, a former Vice-Chancellor of the University of Lagos has advised tech startups to emulate the new Konga.
He gave this charge in a recent engagement with budding entrepreneurs, business owners and other Ph.D. students in Lagos.
According to Prof. Ibidapo-Obe, Konga has sprung a surprise in the last six months, noting that the impact of the new owners of the business has been felt in the e-commerce landscape.
“The new Konga is a very good case study for tech start-up to emulate as it is obvious that there is a clear plan by the new investors. If we consider their omni channel strategy which is quite expensive, only a few Nigerian banks can match the fusion of online power with the number of stores being rolled out across the country, mostly in Lagos as I have seen.
“What we can learn from this is that, apart from strategy, planning and tact is very critical in the Third World. I am sure the former owners of the business will be amazed at the transformation the business had undergone within the last six months. A company like Konga has proven that Nigerians have the capacity to make things happen and though I am not sure what their figures look like today, I am sure it must have appreciated over 200 per cent,” he said.
Continuing, the Professor of Systems Engineering and Fellow of the African Academy of Science cautioned that startups must be seen to deliver on their promises and not just raising funds or using investor capital to fund flamboyant lifestyles.
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“The Konga example shows that African entrepreneurs can hold their own and succeed. It is very important, however, for budding entrepreneurs or startups to go through an incubation period and excite their investors to inject more funds rather than being on negative and still asking for more funds. It has become fashionable for startups to keep looking to raise money without looking at the book balance while unconsciously signing off their equity.
“When entrepreneurs gradually liquidate equity, they must see a bigger future even as they continue to dissolve their shares. Modern investors are very smart and when they see that they are gradually getting a foothold in the business, they can see that you are gradually liquidating and their funds is at risk. This is why there is a high failure rate among startups as investors must, at a point, take a business decision not to put in more money because the owner has reduced his stake substantially that he has nothing to lose anymore.”
While noting the difficulty in gathering accurate statistics in Nigeria, Prof. Ibidapo-Obe observed that a lot of business decisions are based on assumptions. He, however, disclosed that the image of the new Nigeria will be built by the new breed of young Nigerian whiz-kids, irrespective of the current harsh economic climate.
“You must not be discouraged by the current economic and political situation in the country. Every country goes through it and Nigeria is no exception. Most importantly is the fact that, the country will emerge stronger from it and young, smart entrepreneurs will own the country in future and will create even more wealth in a short space of time than the present set of entrepreneurs,” he concluded.