Spark..ng, owned by Jason Njoku, is a Nigerian company which builds other companies with focus on Lagos based startup ventures with scalable revenue models. Having funded and built companies like Hotels.ng by Mark Essien, Drinks.ng by Lanre Akinlagun and Fikayo Ogundipe’s Totel.com.ng; it is evident that Spark is on a course to revolutionize internet startup
Spark..ng, owned by Jason Njoku, is a Nigerian company which builds other companies with focus on Lagos based startup ventures with scalable revenue models. Having funded and built companies like Hotels.ng by Mark Essien, Drinks.ng by Lanre Akinlagun and Fikayo Ogundipe’s Totel.com.ng; it is evident that Spark is on a course to revolutionize internet startup business in Nigeria.
The entrepreneur cum investor, Jason Njoku is obviously no newcomer to the Nigerian tech community having successfully built iROKO TV before delving into investing in budding entrepreneurs. Here is his recently published 6 point agenda for Spark 2.0.
- We still focus on Lagos first
If you look at any report around data usage in Nigeria, it’s quickly apparent that Lagos is the gateway to build services. Abuja and Port Harcourt are somehow relevant, but Lagos is the powerhouse. Lagos always comes first, second and third for attempting to solve problems at scale. The internet usage is here. The population is here. The talent is here. The community is here.
- . We still focus on linear revenue models
In Lagos, startups need customers, not capital. They need to be lean at first and focus on understanding their base unit economics on creating real value. My #1 issue with startups are when they believe ‘aggressive marketing’ can solve their problems. I always, always, always recommend zero marketing until they have a certified product market fit. And in this market, that usually takes 2-3 years. Marketing budgets make folks fat, lazy and stupid. Get your money up, costs down and prepare for the long haul. Because those ‘interested investors’ will waste years of your life before they actually go ahead to fund anything.
- Local champions
I have a bias against foreign-educated entrepreneurs. You heard that right. I now have a bias against myself. But I am tough, totally reckless and had nothing to lose. If you are not prepared to spend the next 10 years toiling over your startup, then you have no business pretending to found one.
I believe Lagos founders need to be forged in fire. You need to be ready to snatch the souls of your competition. It’s literally do or die. For every foreign educated founder – Mark there are x1,000 local founders like Fikayo. People who just have an innate understanding of Lagos and her problems. Who would and could build real value for people. I feel the next wave of internet startups will be local folks building things really peculiar to Lagos. The obvious western startups have been attempted, most failed or had to be mutated to Lagos. The next wave who will emerge in these brutal climes will be scary tough, resilient and more street smart than the returnees who defined the last wave.
- Capital efficiency
The manifesto hasn’t really changed that much. It’s still the same as before. The one thing I know is that a lot can be achieved with less capital. Originally, we funded companies up to $250k. I am still interested in being first money in, but with enough experience, I feel most companies can reach the same level with $20-50k. So that is where the focus will be. $20-50k first money in to support the first phase of experimentation. Also $20k is the new $50k as the Naira has devalued from N165 to N380-400. So now is the time to deploy capital efficiently. I would prefer to invest in more experimentation, than not.
- No batches
This time we will be more opportunistic. When deals appear, we lock them down and hunt for new ones. Great companies are being built in all climates. These hardcore founders are toiling away breaking rocks and bleeding the stone to demonstrate that the ‘consumer internet market is shit’ is just noise of the weak.
- Embracing failure
We made a ton of mistakes at Spark. Nothing fatal, but at the minimum we learned from them. Mistakes which I believe others will join in making as they try to deploy capital locally. The person I was in January 2013 is completely different from who I am today.
Many millions in losses and lessons learned have been institutionalised across the Nigerian tech space. We are in recessionary times, no doubt. Things are hard for the entire country. I was super negative for the last 18 months. Everything collapsing. Nigeria is shit. Nigerian business class is a bunch of delinquent indebtors and had optimised the best business model ever. Get an outsized loan. Default. Do big bwoys. Nigeria is shit. Then I realised that now was the best time to be active. I feel more alive than I ever have been.
iROKO is doing just fine. We are on track to grow 100% y-o-y. Hotels is doing just fine. YTD revenue is up 123%. ToLet are pretty much breaking all their prior revenue records qtr-o-qtr. So all the doomsday scenarios are overblown. Lagos will still be the largest internet market in Africa. Amazing, real value built companies will be created here, and after a little time off from doing deals, Spark is back in the game. We actually completed our second deal this year.