Will the true Nigerian tech startups please stand up?

by | May 3, 2016

In the few years I have been covering the Nigerian tech industry, I have had to endure my fair share of email and elevator startup pitches. My default response has transited from unfettered awe, in my earlier days, to near-extreme apathy. I often have to hold myself back from quipping, “your idea is crap”. Don’t blame me; if you received nearly as many email pitches as I do, you’d be jaded too.

Granted, when it comes to building a successful startup, ideas are a kobo a dozen, so to speak, and execution is key. It is not my intention to pooh-pooh anyone’s hustle. If you get your execution right enough to deliver consistent revenue and add value to your customers, no one really cares about your idea being unique. I honestly do not have a problem with that.

What I have a problem with though is the increasing frequency with which the word “startup” is being thrown around these days. I’d rather people just stick to their hustle without trying to force the startup label. Especially because most of the time when people say ‘startup’, they really mean ‘tech startup’, seeing as the very nature of startups often demands that they utilise technology to scale and operate efficiently. I think it’s very important we make a proper distinction.

Startup vs Tech Startup

To identify what a tech startup is, it’s probably a good idea to first understand what a startup is. Atlanta, US-based Venture Capitalist, Lance Weatherby, offers, in my opinion, the most accurate definition of a startup:

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A startup is a business with limited operating history. Limited in that it could just be a girl with an idea. Business in that it is a purposeful commercial activity.

So yes, by this definition Linda Ikeji’s Blog is/was a startup. Defining a tech startup on the other hand can be a bit tricky because you would find a lot of contradicting definitions.

According to serial entrepreneur, Ben Dyer, a tech startup is a “business launched to achieve commercial success from a novel technology or novel application or improvement of a technology”.

Paul Graham, co-founder of Y Combinator has an interesting definition for a (tech) startup. He assumes that all (or at least most) startups are tech startups. In his famous article on how to make wealth, he writes:

Startups usually involve technology, so much so that the phrase “high-tech startup” is almost redundant. A startup is a small company that takes on a hard technical problem.

I’m not sure I am quite comfortable with Graham’s generalisation. I would prefer we continue to make a distinction between startups and tech startups, considering how technology services are becoming increasingly commoditised. You see, the ubiquity of technology services that make it easier and faster to build websites and mobile apps has brought about a revolution of sorts. Now everyone Tomi, Dike and Halima who can (have someone) install WooCommerce on top of WordPress thinks they are a (tech) startup, when indeed they are just a tech-enabled online business.

Based of Dyer and Graham’s definitions, I would reckon that in order to be a true tech startup, the unique (very difficult to duplicate) adaptation or creation of technology must exist, such that it can create enough value with potential for massive revenue generation. One keyword here is “potential”; it has the potential, but it’s not quite there yet. Also, if you took out the technology from a true tech startup, the core of the business would be drastically affected or obliterated.

So where are the true Nigerian tech startups?

Judging by these definitions you’d be hard-pressed to find a true Nigerian tech startup. What we have more of are technology-empowered startups, tech-enabled businesses if you would. That’s not to say there are no true tech startups. They exist but I could probably count them off the fingers of both hands. Off the top of my head, they are:

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By default, most eCommerce ventures in Nigeria do not count as tech startups. Not even the giants like Konga and Jumia, which anyway have practically outgrown the startup phase. However, I am aware that Konga is beginning to metamorphose into a tech company, with the ongoing revamping of its Seller HQ and marketplace, and products like KongaPay.

I am trying really hard to fit other Nigerian startups into this group. For all I know, they are mostly all tech-enabled online businesses.

However, I stand to be corrected so, will the true Nigerian tech startups please stand up?

Múyìwá Mátùlúkò
Múyìwá Mátùlúkò

Chief Servant. I bully myself because I make me do what I put my mind to.


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