Quarter 4 is over, and the world hasn't ended—just the year. This implies there's room to improve; I'm writing this from the corridor of real-world experience on the driver's side of this Danfo bus, and I hope you've picked up a few pointers along the way this year.
I want to give a shout-out to the founders who have recently paid out wages for the 12th month, despite the difficult circumstances with which we are all too familiar in Nigeria.
It's OK if you haven't, but I'll go ahead and recap my thoughts and observations anyway. Then, let's get started. I can't predict the future or foretell anything, but the sad reality is that Nigeria and the rest of Africa are feeling the effects of the reduction in venture capital financing. Take a sip of water and come along for the ride; next year will see a significant change in the excitement around venture capital.
According to data compiled by CB Insights, between July and September, investment in Africa's startup scene fell to $367 million. This was down from the $522 million that was put in over the preceding three months (April–June). One billion, two hundred and twenty-one dollars were invested in the same quarter of 2021.
Investment in and the value of agreements with African tech start-ups dropped by 54 percent and 13 percent, respectively, between January and September 2022, according to research by ItwebAfrica. Nonetheless, interest remained high in e-commerce, Internet software, and Fintech.
Choosing to ignore the facts does not make them go away. Several venture capital (VC) funds have been raised in the ecosystem during the last three years, indicating the presence of capital; the financed firms are now tasked with meeting the agreed-upon goals.
Because you spent all of 2023 working on PowerPoint, a business model, and a financial projection to attract investors' money but completely disregarded establishing your firm as a business, you should quit if your business is founded on vanity metrics and a lot of data filled with juked figures. In the following year, you'll need to ditch them and focus on growing your company sustainably, with the understanding that any more cash you get is only gravy.
In the realm of PR
Public relations are crucial to the success of any company, but squishy PR results in higher costs and fewer customers signing on. You can't just pour water into a basket and expect it to hold its shape; you need a functional product to give your PR some weight.
We also need to focus less on vanity metrics; some businesses will pay to have their app featured in the Google Play store, which drives up their downloads and reviews but does nothing to improve the app's usability or its potential to keep customers as paying users. Making a product that sells is crucial to a company's success since it generates revenue.
Before pouring a lot of money into public relations, we need to get back to the basics and focus on developing a solid company.
Talent
Stop employing people that you don't need! Startup founders and CEOs need to put their thinking caps on; they can't afford to keep recruiting people they don't need. In this scenario, an entrepreneur in Lagos, Nigeria, is using "I pass my neighbor" to find a former Twitter employee and recruit them to work for their firm. Why on earth would someone want to do anything so absurd? Can you afford to hire them, especially if they bring with them all the advantages of their previous position? How long will this last?
Another issue is a lack of confidence in your ability to employ the right people. If your company does not already have a digital marketing team in place, a Growth Manager is not something you need right now. To bring in a big personality, you should not recruit a team that would keep your OPEX in the red every month.
Stop this "revolutionary" founder; if the industry you're attempting to disrupt is killing your finances, leave it alone and figure out how to adjust your firm so that it can generate income. You're not Superman. You are not working for a greater good by any means; rather, your ultimate goal is financial success.
Since 2022 was likely focused on creating business plans and pitch decks to get funding, in 2023, let's focus on rapidly expanding our company in the following key areas.
Diversity and Inclusion
Problems in so-called "grey regions" require founders and product developers to investigate the commercial feasibility of enterprises in unrelated fields. Let the "unbanked" catch their breath; this marketing strategy also means focusing on improving the quality of service provided to regular customers, which, in turn, has enhanced their lifetime value (LTV) over time.
Automation (Artificial Intelligence)
The next year will see a significant increase in the application of artificial intelligence across a wide range of industries, including marketing, sentiment analysis, media monitoring, sales automation, and retargeting. AI has also entered the realm of content production, so yeah, it is a thing. ChatGPT: have you heard of it? This is not some fancy metaphor.
Data and Research
For next year's goal of lower costs and higher productivity, this is an absolute minimum need. It dispels uncertainty and pinpoints your audience, the marketplace, and, most significantly, the product's actual performance.
In a conclusion, we create enterprises out of issues; nonetheless, the situation is substandard, so it is recommended to grow along with it; this does not make you less ambitious; rather, it is just doing what is genuine.
Our coverage of Africa's future unicorns ends here in 2022, but we'll be here to tell their tales whenever you need us. Because of your faith in us, our pen never ran out of ink.
Have a wonderful holiday season and a prosperous New Year!!
Cyril E. Akinyemi is an unrepentant startup ecosystem evangelist who enjoys beans and bread.
Play audio
No comments