Equally as known for his free business seminars and hit business book Small Business Big Money, as he is for NairaBet, Akin did not have a very inspiring start. In his words, he was a boy of “No particular ambition”. While his secondary school mates dreamt of becoming doctors, lawyers, and engineers, Akin simply wanted to be a ‘billionaire’.
“I just wanted to be as rich as legally possible,” he told me during a recent chat at the NairaBet HQ in Lekki, Lagos. “I couldn’t care less if I was going to be a rich doctor, rich salesman, or rich whatever. I just wanted be rich.”
After five failed attempts to get into the university, which forced him to settle for an HND, Akin decided to focus on personal growth and entrepreneurship.
“I consumed a lot of knowledge, be it from books, audio materials, training sessions and seminars.”
As is evident from the huge library of books he maintains in his office today, that habit has stuck. Many years down the line, he eventually got that coveted university degree by way of a Masters in Marketing from the University of Liverpool, England.
Akin Alabi shares his origin story, thoughts on entrepreneurship and his political ambition.
Muyiwa Matuluko of Techpoint (MM): Would you say that your desire to be rich is what pushed you into entrepreneurship?
Akin Alabi of NairaBet (AA): Yes, absolutely. Unless you are deceiving yourself, that is the primary reason why you start a business.
Of course, there are other secondary reasons you can claim — to generate employment, to contribute your quota to the economy, to touch lives. But I think if anyone tells you that they entered into business not because of money, they’re lying.
MM: I understand that prior to NairaBet, you made quite a lucrative business of information marketing and organising seminars. Tell me about that.
AA: In order not to stay idle, I laid my hands on different things. From selling chickens on the streets of Ibadan, where I grew up, to exporting and importing of cash crops and other materials. But all those businesses failed.
After my NYSC in 2002, I stumbled on Internet and information marketing. It looked like something anyone with half a brain could do and it didn’t require too much capital to start.
Soon after, I created my first information product — a Canadian immigration package — which I put up on the Internet for sale in January 2003. I didn’t even have a website; I used just email and auto-responders.
After spending just ₦3,500 on advert space in a magazine and making lots of sales, I knew I had to repeat. So I moved my campaign online and increased the price; yet, sales did not reduce. This taught me an important lesson on pricing.
I created many other information products on several other topics including affiliate marketing, seminars, and registering a business name, among many others. For every information product I sold, I made a point of experiencing first hand what I taught. Some sold, some didn’t, but I kept on.
After a while, I started publishing online articles on information marketing and people were reaching out to me to teach them more. That is when I realised I could create a business out of organising seminars. Soon I moved on to publishing business opportunities. I ran a sports publishing business which eventually failed too. This didn’t deter me from trying several other things.
MM: So how did the idea for NairaBet come about?
AA: I made a lot of money from information marketing and seminars, which afforded me the luxury of travelling abroad. So I went visiting my brother in the UK who introduced me to sports betting. My first ever bet was placed in a Coral betting shop. I put in £20 and won £35. Seeing how easy it was, I kept placing bets and learning more.
Soon enough, I saw another opportunity for an information product I could sell to Nigerians. I figured all the betting shops must have a website that allowed online betting. So I went looking for those that accepted e-currencies like e-gold because at the time, card payments were difficult for Nigerians.
So I created an information product on how to place bets online from Nigeria and priced it at ₦4,500. I called a friend in Nigeria to help me place a half page ad in Complete Sports.
It was an instant hit. I made about 100 sales (worth ₦450,000) from that first offline campaign. I don’t think the half page ad even cost me up to ₦180,000. That’s when I realised I had a hot product. When I decided to take the campaign online, sales skyrocketed.
MM: I find it interesting that the online ads converted so well. Even now in 2018, many still argue that there is hardly a viable market online.
AA: They don’t know what they are saying. When you sell what people want, even if you make it as difficult as possible, they will beg you to take their money. It is only if you sell commodities that you will have a problem with conversion online. That is why I always say get the market before you create a product, not the other way around.
Back to my story, sales continued to rise. After I got back to Nigeria, I started receiving calls from people who needed help transferring money to the betting websites. Some of them wanted to bet as much as $1000. I thought to myself, “Rather than transferring the money abroad, why can’t I receive the money here?”
That’s when I decided I was going to build my own online sports betting platform. In those days, there were hardly any sports betting solutions for small businesses. The cheapest solution I found cost £2 million; I did not have that kind of money. These days, you can find a package for as little as €5000.
So I called up a developer friend who built me something very basic. Everything was done manually and the site crashed every weekend. In fact, if you tried using it today, you are likely to fail before you start. But like I said, I was playing in a hot market, so it worked out.
The day he was done building, I asked him if it was ready to go to market and he said it was. That night, I sent an email to my existing database; it went something like “Hey, if you want to bet online, you no longer need to transfer money abroad, you can bet here in Nigeria.”
The next morning, over 200 people had already registered. My developer friend couldn’t believe it; he genuinely thought we had been hacked. He didn’t understand that I already had an audience in my email list.
That is how I started NairaBet. I used most of the money I got back then to improve the software. We actually used that software for 3 to 4 years before moving to more robust solutions.
MM: Weren’t you worried about regulatory obstacles before starting out?
AA: Anyone that is worried about those things is not ready to do business. Start and then worry about the problems later.
I knew we were fine online. The challenge came when we decided to do a bit of retail by opening our first shop. We had no idea who was regulating sports betting in Lagos State so we figured we’d just start and let them find us. One week after, the Lagos Lottery Board came to shut us down and we said, “We have been looking for you, let’s talk”.
MM: I find it interesting that you started the business strictly online but still decided to include an offline strategy.
AA: My dream is actually to have a strictly online business. But I know there is money in the streets as well.
I don’t regret doing retail though. I just wish we could have an environment where I could be strictly online. Retail gives you more credibility, which is what one of our competitors has done well by growing a huge agent network.
Another advantage to having a network of shops is it makes it easier to pay customers. This is because loose change is still not fully banked or electronic in Nigeria.
If you are selling items worth hundreds of thousands of naira, you can insist on electronic payments. But if you are in a business of micro-transactions, it’s a different kettle of fish.
The average NairaBet customer might have three bank accounts but when he wants to buy ₦200 recharge card or Amala by the roadside, he is not likely to use his debit card. And it is little monies like this that our business rides on. Of course, we still offer other payment options like debit cards and bank transfers, especially for bigger transactions. But the core of the business is in these small payments.
MM: Do you see Nigeria ever going completely cashless?
AA: Nowhere is completely cashless. As long as your business is based on change, a huge part of it has to be cash. This is the same even in developed climes.
MM: How have you managed to keep the business afloat after all these years?
AA: First of all, it boils down to customers. Before I try to start any business, I ask myself if the market is hot. I don’t do business because it is cool or I feel it is going to revolutionise the world.
Now, if you are playing in a hot market and you have customers, you don’t have a choice but to evolve slowly, else it would crash on you. When I started NairaBet, I did everything on my own, with some assistance from my then girlfriend. Then I got one staff who helped with bank deposits whenever bank transfers to customers proved a bit difficult. When the workload got too much for her, we got one more person. That’s how I continued adding staff; incrementally as the business demanded.
But I see a lot of startups just starting out and they already have accountants, HR personnel, and so on. What are you accounting for when there is no money? Why not get one of the guys on your team to do the bookkeeping? You don’t need an accountant except you are starting a big business from day one.
We applied this same thinking when we decide to open shops. We started with one cashier. As the crowd grew, we added another cashier. When it became obvious the shop was getting too small for the crowd, we got another shop.
You also can’t afford to stay at one spot stubbornly. I believe that many old school Nigerian entrepreneurs fell over the road side because of their stubbornness. If you are honest with yourself and aware of your weaknesses, at some point, you will even need to hire experts to come look at things from the outside.
MM: Did you ever raise any external funding to build the business?
AA: No. I bootstrapped totally
MM: If you had a chance to go back, would you bootstrap again?
AA: In my circumstances, yes, I would do the same. When you have money coming in from your customers, there is no pressure. I don’t see the point of collecting or raising money from investors.
For me, the primary aim of collecting money from investors is to accelerate. But depending on what they bring to the table, I would rather get an expert to come into the business.
If in those early days when I was using the platform my friend developed, a top sports betting company had come with their own software to acquire a part of us, I would have said “Yes”. But if you are coming into the developed market today with the kind of software that I had then, and someone offers you money, I’d say take it. So it’s not a straight jacket answer; I’m neither pro or against fundraising. It depends on the circumstances.
MM: I understand that you plan to contest for a seat in Nigeria’s Federal House of Representatives in 2019. How did you get into politics and what is your motivation?
AA: My father loved politics. As a young boy, I would accompany him to party meetings. So that’s how I fell in love with politics too.
I have come to understand that politics is the most powerful tool you can use to impact society. There are other tools you can use but that is the most powerful. You can only do so much with personal wealth. While billionaires like Dangote will run away from handling capital projects like the Lagos-Ibadan express way ,Benin-Ore road or Zaria road, an ordinary minister can face it head on. That’s how powerful government is.
Nigerian startups raised $178m from 166 deals in 2018. Find out more when you purchase Techpoint’s Nigerian Startup Funding Report 2018 here.