by Oluwatobi Soyombo
“Technical know-how does not guarantee business success…”
The Nigerian technology industry witnessed a good number of tech start-ups this year. For a country that has just begun to understand and embrace the huge potentials of technology, the start-ups figures are not discouraging. While I sing the praises of this development, I cannot but ask myself “For how long will these start-ups be in existence?” May be I’m being pessimistic and maybe not.
However, if you look around the tech community, you’ll understand the reason for that question. Since I became interested in this sector, I have watched numerous start-ups fold up within 6 months. Some strive for a year or two and finally crash. Here are three of the reasons why tech start-ups fail:
1. Inadequate Funding: This accounts for the major reason for the failure of start-ups, whether a tech start-up or that of any other sector. Nigeria’s tech industry has still not attracted more investors. There are many young people in this sector who have fabulous ideas but lack financial backing to push it forward. Many of them started a company but left business after the first year when they could not sustain it.
2. Lack of Business Sense: Just like Michael Gerber, American author and founder of Michael E. Gerber Companies, appropriately wrote in his book “E-Myth Mastery”, technical know-how does not guarantee business success. That implies that the fact that I am a good app developer does not guarantee that my app start-up will be successful; and the fact that I know nothing about app development does not mean that my app business will fail. So, there’s more to an app business than just being an app developer. This is another reason why tech start-ups fail. Most of the founders of this tech start-up lack adequate entrepreneurial skills.
3. Lack of Vision: The vision of a start-up definitely affects the decision-making process of such start-up. The founders of most start-ups in Nigeria are just too concerned about what’s in for them today. Many tech start-ups settling are for less, trading future benefits with present crumbs they’re getting. For a start-up that lacks vision, its future is predictable.
There are many other reasons why tech start-ups fail in Nigeria. So, if you’re the founder of a tech start-up or considering starting one up, you want to ensure that these variables do not limit your success. You want to sit and plan your start-up well. Make it as ‘Future-proof’ as possible. What does your start-up hold for the future?
State clearly what your income streams are (or will be). How do you intend to approach investors, or is it just going to be solely run by you? If you lack appropriate business skills, you will want to ensure you partner with a friend who has strong business skills. If partnership is not your thing, you will want to sign up for those Start-up monitoring schemes to help monitor your business progress; perhaps a consultant may be good (if you can get one without breaking the bank). After all said and done, you should then ensure that you “Keep Evolving”.