DC-Based Investor Shares Insights On The Nigerian Technology Ecosystem

DC-Based Investor Shares Insights On The Nigerian Technology Ecosystem

Ross Baird — Executive Director of Village Capital — joined the Case Foundation from the U.S. in exploring the entrepreneurial ecosystems in Kenya, Ghana and Nigeria. See his previous posts on the Nairobi ecosystem and the Accra ecosystem. Here is the last post in the series. “If entrepreneurship is truly going to transform the world, it has to

Ross Baird — Executive Director of Village Capital — joined the Case Foundation from the U.S. in exploring the entrepreneurial ecosystems in Kenya, Ghana and Nigeria. See his previous posts on the Nairobi ecosystem and the Accra ecosystem. Here is the last post in the series.

“If entrepreneurship is truly going to transform the world, it has to include everyone,” said Jean Case, CEO of the Case Foundation, to a packed house of entrepreneurs in Lagos. And in the past week, touring the entrepreneurship ecosystem in Africa, we saw an ecosystem that is emerging faster, better, and more competitive than I think we even imagined.

At our opening breakfast in Lagos, with about 25 entrepreneurs, Eghosa Omoigui, co-founder of local venture firm EchoVC, said, “our ideal entrepreneur has a Nigerian hustle, a Ghanaian integrity, and a Kenyan smoothness.” That’s the ecosystem we saw in a soundbite—and in Nigeria, the hustle was on full display.

I think we expected hustle from Nigeria—and a booming welcome from the moment we got off the plane never stopped. The first question I got from everyone I met: “How are you enjoying Lagos?” And the second question: “When are you coming back?” Everyone here is committed to building an ecosystem—everyone wants to figure out a way to work with everyone else—and people across the city are relentlessly finding a way to do a deal together. This is the kind of relentless enthusiasm that builds great ecosystems.

In Nigeria, I noticed three core trends that define not just Nigeria, but Africa:

1. Great startups have children and grandchildren—and the first generation is critical to Africa’s success

Around the world, great ecosystems come from great startups. The DC startup ecosystem today, for example, has a lineage tie to AOL, which our partners Jean and Steve Case built from the early days. In Nigeria, we had a major gathering at the offices of Tony Elumelu, who has invested in hundreds of entrepreneurs after building one of Nigeria’s biggest commercial successes—and we saw entrepreneurs everywhere paying it forward. Sim Shagaya, CEO of Konga.com, a fast-growing e-commerce site in Nigeria, has already started angel investing even though his company is off to the races. People behind Sim’s back were predicting he’d be the first big IPO in Nigeria—a great flag to plant for the rest of the ecosystem. Sim was openly sharing Conga’s vision and strategy at a breakfast of e-commerce CEOs—folks who you would think would be his biggest competitors, but ultimately all together are building a great ecosystem. Across the country, we saw not only entrepreneurs on the verge of it big—but reaching back to pull those just behind them along with them.

Capital for African Startups

Founder, Village Capital, Ross Baird

2. Human capital just may be more important than financial capital

At the opening breakfast, Steve asked everyone around the table to raise their hands if they had gone to school or spent time outside Nigeria. 100% did. Nigeria’s entrepreneurial class is incredibly well-educated and well-connected, though the biggest challenge we heard to growth wasn’t money (unlike Ghana and Kenya)—it was people. While much of Nigeria is externally educated, 60% of Nigeria lives in poverty (more than 3x by percentage) and finding people with the appropriate skills to work in a growing startup was a bigger challenge in Nigeria than anywhere else. So much of the startup attention focuses on fundraising—yet solutions for human capital, not financial capital, may well be the way forward in Nigeria.

3. Don’t forget about everyone

In Nigeria, we heard fewer complaints about the capital gap than in other locations. Most entrepreneurs said that while they struggled for growth venture capital, they had a reasonable time raising friends and family money to get off the ground. Steve Case then asked, “well, what happens if your friends and family don’t have any money?” In one of the most unequal countries on the world, leveling the playing field is critical to making the entrepreneurial ecosystem work for everyone.

We were encouraged, however, by a few things we saw. Printivo, Africa’s hottest print-on-demand startup, was founded by two entrepreneurs who worked extra jobs and saved their $60K in start-up capital over three years. Andela teaches young people to code—and have over 1,000 applicants for their 12-person bootcamp classes. The result: they are able to provide world-class services to customers such as Microsoft and Cisco for 1/10th the price, while paying students to learn how to be world-class coders. On the theme of startups having children and grandchildren, keep an eye out on Andela Fellow’s startups in the next 5-10 years. So while there are challenges for the next generation of Nigerian entrepreneurs, we have an incredible amount of hope.

Africa is a source of solutions, not problems

The over-arching theme of the trip echoed President Obama’s lines at the Global Entrepreneurship Summit—that Africa is the source of solutions, not problems, as the rest of the world might think. And the pitch-fest winner in Lagos, WeCyclers, couldn’t be a better example. In Lagos, on sanitation day (Thursday), where businesses shut down until 10 because the trash is so bad the city needs a day to clean it up, WeCyclers went into the Co-Creation Hub and won a $55,000 investment prize for turning trash into cash. As the founder, Bilikiss Adebiyi, said, “We hope that trash is worth as much as oil one day here in Nigeria,” with a wink to the country’s most famous asset. (Not to mention that, on the topic of inclusive entrepreneurship, women went three-for-three in winning Africa pitchfests on the trip).

Nigerian hustle, Ghanaian integrity, Kenyan smoothness: they all start to blend together in the exceptional entrepreneurs we met this week. Africa is truly on the move.

 

Ross Baird
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