Popular Nigerian realtor and human rights activist, Mr Segun Awosanya, has explained why many Nigerian startups fail.
Sharing his thoughts on the matter via Twitter, yesterday, Mr Awosanya asserted that his commentary is based on the trajectory he has observed overtime.
Speaking from experience – According to him, he has built some businesses and handed it to their respective owners, only for said businesses to collapse few months afterwards. And the reason boils down to the major problem he identified.
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It is simple to trace the trajectory of the failure of most startups in Nigeria. I can say this in the know because I have built a few & handed over to their respective owners before they failed months after. Here is why: 👇🏾
— SEGA L'éveilleur® (@segalink) March 15, 2019
Why startups fail
The loss of focus is the major reason – He argued that most startups lack direction and are easily carried away upon recording the smallest amount of success. He explained that in a bid to show off their success to the world, startups end up making bad decisions, which ultimately fast-track the collapse of their business.
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…they want to live the life of success. Of course success have many relatives. The awards starts pouring in, each day an interview or articles comes out about you. Everyone wants a piece of you and writing about you creates a buzz & your mentions are on Fire.🔥
— SEGA L'éveilleur® (@segalink) March 15, 2019
Your success story proliferate soft sells and by now investors are hounding you for a bite in the cake of your future as perceived. In your mind with their money you can achieve more. Even bank marketers are helping you to project your new bright future. They want to give loans.
— SEGA L'éveilleur® (@segalink) March 15, 2019
No need to flaunt your little success –According to him, all the unnecessary flaunting of success distracts startups from focusing on the importation business of running their companies and driving growth. It also gives false impression to existing and potential stakeholders.
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They deserve better homes and a change of environment commensurable to their new status. They want to make a statement with what they wear and drive. The office needs makeover and Govt hacks are calling for you to handle their PR. You are suddenly the Bomb.
— SEGA L'éveilleur® (@segalink) March 15, 2019
But you can avoid all these troubles
Further in the Twitter thread, Mr Awosanya proffered possible solutions to the problems. According to him, knowing what works best for your company might help you make better decisions, letting the crowd determine how best things could work out.
Do not bite off more than you can chew- First, just because your company is booming doesn’t necessarily mean it needs more hands. In other words, understanding when to hire and when not to, helps in the smooth management of a company.
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We maintain our core team and curate interns carefully. We never rush to hire and even when we find the need to do so it is purely based on diligence, competence, discipline, prudence in matters and the recommendation of a credible sponsor. This is our corporate culture.
— SEGA L'éveilleur® (@segalink) March 15, 2019
Not all angel investors are “angels” –Secondly, Mr Awosanya added that it is important for startups to be careful about and selective of whom they allow to invest I their businesses. In other words, not all investment offers should be welcomed, no matter how tempting it might be.
Don’t be a flash in the pan. All that glitters are not gold. Nothing ever remains the same. Stop increasing liabilities just to appeal to people seeking distractions. Focus on your path & be mindful of your society for we are society.
— SEGA L'éveilleur® (@segalink) March 15, 2019
Be patient and follow the process – Further more, Segun Awosanya advised every startup to be patient in running their business, not to get carried away just because they want to prove a point to the public, urging them to invest wisely.
He also added that they should stop increasing liabilities just to appeal to people seeking distractions, as they should focus on their paths and be mindful of their society.
I think one major reason why Nigerian startups fail is not understanding the market. People think that if it works aboard it will work in Nigeria. That is not true both markets are different. You must do your market research before starting up a business