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Why African Tech Startups Fail And How To Mitigate Risk



Why African Tech Startups Fail And How To Mitigate Risk

Author: Emmanuel Otori

Technological Start-ups in Africa are innovative about providing solutions to challenges that exist in Africa. However with these solutions come several bottlenecks which eventually create a barrier to the survival and sustainability of the business.

There are several factors that contribute to the failure of start-ups in Africa and the ability to learn from these failures would support a new way of thinking to help mitigate these risks.

In this publication, I would be sharing risk factors from working with not less than 100 companies in the technological, FMCG, retail, agro, fashion, events, confectionary and manufacturing in providing consultancy services and some of the patterns I found led to the business failure.


  1. Huge Injection of Capital Without Traction

Generating and implementing an idea has to go through several stages of design thinking to ascertain the viability of such a product before it is released into the marketplace based on the feedback from prospective end users.

Due to the fact that some early stage entrepreneurs have already built a name in the ecosystem can easily make them access funding even when an idea is still just an idea that has not been properly researched but because entrepreneurs sometimes are also very emotionally attached to an idea sometimes, they can make several assumptions without considering the facts and then begin to seek capital inflow to kick-start this idea. Traction is important because it signifies growth and growth could be seen in the form of demand which eventually leads to cash-flow. Investing in an idea is too risky and even more risky for an early stage entrepreneur with limited experience and exposure.

In order to ensure an idea would scale, it is important to employ design thinking to limit assumptions.

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  1. Not Working With the Right Team

Not Working with the right team has huge consequences in itself. A start-up should have one core, and it is in the ability to execute with the team. Because most start-ups bootstrap at their early stage, they tend to work with whoever is available and not necessarily the skilled and competent professionals who would hit the ground running and deliver the required expectations. I remember working in a pharmaceutical start-up where mislabeling of medications occurred because the professional involved was not aware of the procedures as a pharmacist would. This could have been a huge mistake if it was unnoticed until it reached the retailer who did checks and found out.

The right time would limit the time a task is expected to be done. Start-ups should never play down on experience, proficiency and competence. In fact, it is necessary to develop specific in-house procedures for hiring that suits the company’s culture.


  1. Lack of Product-Market Fit

A product could be a fantastic one, but if the market is not ready, then its sustainability is questionable. A very innovative start-up that came with the idea of solving the challenges of travel is GoMyWay, this Start-up was launched in Nigeria but did not thrive.

Was the product fit for the market in terms of providing the needed solution to the already existing challenges, I would say yes, however factors such as kidnapping, assault, killings have created trust in the mind of travelers and so this traveling application that was supposed to connect a traveler with a car with another traveler going in the same direction could not survive because safety of travelers was in question.


  1. Government Regulations

Several administrations of government have worked tirelessly to make the business environment conducive, however there are still gaps to ensure that the start-ups do not get gagged as their benefits are very key to economic development.

The recent move to create a start-up bill to ensure that the interest of start-ups can be protected is one to secure the sustainability and increase interactions with regulators in such a way that regulations understands the peculiarities of these businesses and work around policies that would not see capital investments go down the ground with just a regulation.

I believe the start-up bill would create stakeholders in the overall value-chain and then ease how business is done.

There are other factors that contribute to business failure and the listed are some common ones that affect businesses based in Africa.

I however believe that as there is an ongoing conversation to create a roundtable for stakeholder’s interaction, there would soon exist synergy in the ecosystem.

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Developing a Legal Framework for Agriculture in Nigeria – Bashir Saleh Abdu, Esq



Developing a Legal Framework for Agriculture in Nigeria

The Muhammdu Buhari administration came into power amidst massive celebrations all over the country. With agriculture being the largest employer of labour in the country, you can safely say that the majority of Nigerians who celebrated that victory are farmers or people who benefit from the largely informal agricultural value-chain engaged in one agri-business or the other.

A look at the investment, through intervention programs, made by this government in agriculture, will reveal that the government intends to do something about agriculture in the country. Unfortunately, the interventions end up in the wrong hands and therefore having little or no impact on the development of agriculture in the country. This may be largely due to the fact that the investments were made indiscriminately without recourse to any strategy or policy document, let alone a comprehensive legal and regulatory framework.

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First and foremost, the Land Use Act 1978 needs to be amended to give the Federal Government more powers to regulate agricultural lands. This will shift the power to control agricultural land from Local Governments who, have over the time failed, in developing agriculture in the rural areas or even making a positive impact.

There needs to be more centralization so as to harmonize policy directions for agriculture in the entire nation. The amendment should give way for the development of a central agricultural land registry for the entire nation in a digital format, to allow such registry to be integrated into the Nigerian map, also digitally, just like the way there is a political map detailing the states, local governments, it should extend to farmlands if we are really serious about developing agriculture as the mainstay of the Nigerian economy.

This may be seen as a gargantuan project, but it is not a difficult task to achieve as there are several Nigerian startups developing something similar albeit on smaller scales for NGOs and others purposes. The government can bring together experts to brainstorm and formulate ways to actualize this project.

Achieving a central agricultural land registry will give the Federal Government unhindered access to real farmers in the country and not people who have been accessing interventions without having a square foot of arable land.

This will also bring ease in regulating the sector, policies relating to taxation, extension, and research will have more impact as the government will know the farmers being engaged directly. Some of the major challenges bedeviling the agricultural sector will be easily addressed through this registry, issues like sensitization and training of farmers on skills and methods that will increase output yield, poor monitoring, and evaluation of implemented policies.

It will also accord the farmers the opportunity to contribute to the formulation of policies that will have an effect on them. The government should consider reviewing the laws regulating agriculture directly as most of them predated the current agricultural policy which was formulated in 2017.

A quick look at the Executive Summary of the policy reveals that it recognizes the lack of coordination among Federal Agencies as part of the problems of the agricultural sector, but curiously, it neglected to identify reviewing the laws regulating those agencies as part of the solutions.

Alternatively, the FG may consider enacting all-encompassing agriculture legislation that will govern the entire agricultural sector, from land registration; cultivation; extension; produce aggregation, supply and exchange; agro-allied production; research, and much more. The bottom line is, the government needs to do more to develop agriculture in Nigeria.


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Impact of Covid-19 on Startups and Adopting the Lessons for Sustainability



Impact of Covid-19 on Startups and Adopting the Lessons for Sustainability

Author: Emmanuel Otori

The Covid-19 pandemic has had a widespread effect on businesses in many ways that has caused huge layoffs, bankruptcy, reduction in the production of the units of goods or services offered, increase in price from suppliers and change in the way work is done globally.

With this pandemic, comes the opportunity to become innovative and creative to serve the market demands and the different unseen variables that have influenced the world of business today.

Huge Layoffs

Start-ups had no constant cash-flow as a result of the covid-19 pandemic and needed to only keep staff that work directly on the areas of priority that serve the customers. Layoffs then became an option as without considering this solution, there would be a backlog in the payment of salaries which will negatively impact the company. These layoffs would also affect the productivity of the limited staff as they had to work longer hours and perform more task than before.

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Organizations that took off with initial investments or loan from financial institutions and could not sustain the repayment terms as working capital got depleted and there was not enough traction to request for a second tranche of investment, saw businesses go under as operations came to a grinding halt.

Reduction in the units of production

Consumers as a result of the covid-19 pandemic focused on just the essentials such as food, healthcare and education. There has been an increase in the price of foodstuffs and other items which made consumers to begin to cut spending as their earnings had not changes, this impacted the usual quantities of items purchased and businesses had to adjust by either adopting production upon request only to curb wastages or production in limited quantities as general consumption dropped due to increase in price.

Increase in price from suppliers

The supply chain is an important loop that affects all stakeholders as they obtain directly from manufacturers and then sell to retailers before reaching the final consumers. The conditions leading to whatever form of change from the manufacturer goes to affect the offering provided by the supplier and then goes on till everyone is impacted. Suppliers had to begin to obtain only what can be sold to the wholesalers which came in limited quantity as well.

Thriving In Times of Covid-19 Pandemic

Change is inevitable and only organizations that can adapt to the changing times remain sustainable in business. These are measures to ensure businesses keep running

  1. Adopt a remote work system

Start-ups have realized that the 5-day work week might not necessarily apply any longer as their team can now work from home and still get the job done. Majority of organizations now have a hybrid system of work where some staff work from home and the others onsite, this ensures productivity as teams can now manage themselves without making the top management resort to micromanagement. Tasks such as data entry, phone calls, receipt and reply of emails, online marketing can now be done by a remote team.

  1. Implementation of a cloud based storage system

The use of cloud based storage system might not have been easily adopted by a large percentage of businesses, however as covid-19 began to develop resistance and human-human interaction became limited, a cloud based storage system then became necessary not just for storage of files but for collaborative work and easy referencing of stored documents.

  1. Focus on Cash-flow

Organizations get into a web of numerous activities that then makes them to ignore their core. Inability to focus on their core then begins to bring irregularities in their revenue and this loophole was only exposed during the covid-19 pandemic. Guaranteed cash-flow is the lifeline of every business even if it does not make profit initially; there is a huge possibility of breaking even eventually. Focus should be on every activity directly or indirectly that can lead to generation of revenue for a business.

  1. Data Driven Decisions

Companies are trying to curb wastages that could occur in the application of their resources and they begin to pay attention to the data they are generating. Embedded in the customer’s data are insights that could lead to what quantity of items should be produced on a weekly, monthly, quarterly or yearly basis based on the demand from using predictive analytics. Several tools can be used for collecting data for business purposes, mostly used are Google Forms, Google Analytics and Hubspot, the collected data can now be analyzed using specific tools in data science.

  1. Adoption of Wage Earnings System

The era of weeks of work before earning a salary has also come under challenge as there is a rise in the demand for freelancers to perform certain tasks without having to provide medical care, workspace, internet services and all the offers that comes with servicing a full-time staff. Companies need to decide on what roles demand a full time staff and the ones that demand freelancers, consultants or part-time staff.

Emmanuel Otori, the writer has worked on the GEM Project of the World Bank Bank, Conducted training for entrepreneurs and professionals at the Abuja Enterprise Agency and has over 8 years of experience of working with over 50 SMEs across Nigeria.

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Creating A Social Media Plan for SMEs



When we have a product or service to offer, we have crossed the first line and second is to be able to find the channels to ensure that words about what we sell gets across to the audience that have the money value.

Author: Emmanuel Otori

“Every business that wants to create global footprints must have a clear social media strategy”

When we have a product or service to offer, we have crossed the first line and second is to be able to find the channels to ensure that words about what we sell gets across to the audience that have the money value.

People usually use digital marketing and social media interchangeably; however, digital marketing is the broad variety of activities that is performed on the internet to ensure the promotions of goods to the audience on these platforms. Social media is one of the components of digital marketing, which we would delve into as we enlighten small business owners about its functionality and use.

Through the ages past, businesses depended solely on the traditional form of media to reach customers for its products and services; with considerations to radio, television, newspaper which were the most appreciated as they could be used to reach a large number of people over a long distance, but this changed with the introduction of the internet as there were many questions the electronic media could not answer, such as reaching just a particular group of people within a time frame, or to be able to monitor how many people are listening or watching per time, the digital media also proves to be cheaper than the traditional media as what is spent on traditional media to digital media is 1:3.

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The above metrics is for Facebook, but could as well serve for other platforms.


With digital media comes the ease of flexibility, choices and options to target a particular group of people, by location, age group, sex, hobbies and interests. In fact, the clicks and impressions on a particular campaign whether organic or paid can be ascertained, who clicked what, the location, the overall visits, and this helps to plan better and reach an audience with exactly what they want, this became personalized marketing, which relinquishes the one message to many customers which is perceived as spam and substituted with one message to one customer.

Social Media Marketing is the process of gaining website traffic or attention through social media sites. Social media marketing programs usually create content that attracts attention and encourages readers to share it with their social networks. A corporate message spreads from user to user and presumably resonates because it appears to come from a trusted source, as opposed to the brand or company itself. Hence, this form of marketing is driven by word-of-mouth, meaning it results in earned media rather than paid media. Increased communication for organizations fosters brand awareness and often, improved customer service.

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