STOP wasting time on “SHINY” tech startups

IN THIS POST, I WANT TO TALK ABOUT WARREN BUFFETT, TWO BILLION AND WHY I THINK YOUNG MINDS IN NIGERIA SHOULD STOP WASTING THEIR TIME ON SHINY TECH STARTUPS.

Callum Laing quoted an interesting excerpt from Warren Buffett’s book, The Snowball (Bloomsbury, 2009)
In The Snowball, Warren Buffett explains that one of his biggest challenges is that he needs to invest $100m a week, every week, for Berkshire Hathaway to be successful. And there are just not that many companies out there that can absorb that much money….

100 MILLION DOLLARS


Some months ago, I attended a late night webinar put together by ‘Kunle Soriyan, I was stunned when his guest told the tale about how he travelled to Australia in search of funding. His presentation to the Australians was well-received, however they declined to fund Him because he was looking for “just 300 MILLION”.

He said the Australians he spoke with informed him that they do not do deals less than 2 BILLION. (I didn’t get the currency, so, I can’t tell if it’s 2 BILLION US DOLLARS or The local Australian currency, but the figure stood out: TWO BILLION)

TWO BILLION


We are here, in Nigeria, trying to “start small” with little or no money, or we are looking for a million naira or 10 million Naira to start something small, and we can’t seem to attract or access the funding.

So, on one hand people like Warren Buffett are looking for companies to fund but OTOH, our companies are too small and so, they pass. Can you handle the truth? The truth is that Nigerians are poor and broke, how many Nigerians have millions of money in their account that they can quickly lend you to do a N5 Million Naira business?

A report from 2 or 3 years ago from CBN revealed that:
“Out of 180m people, only 26% have bank accounts.” – 46.8M people
“Above 70% of accounts have balances less than N5,000” – 32.76M people
Only 2% of Nigerians have bank balances above N500k. – 936,000 people

I have no idea what the 2020 numbers would look like.

Money Africa shared a list of top 10 banks in Africa, only one Nigerian bank made the list: Zenith Bank… At number 10. South African banks took all first 4 places on that list. Then Egypt (3 banks), Morocco (2 banks). The only Nigerian bank on that list was at number 10.


The TRUTH is that this is not the time to be mentally lazy, all in the name of starting small. We have to step up and develop capacity for BIG THINGS. It is BIG THINGS that can pull in the funds from pan-African or international sources. If we keep playing small, we will continue to recycle poverty and underachievement. We won’t “break out”. The places we can access money from don’t do small deals.

They are only interested in people that have developed capacity to do bigger things.


I was on a seminar on Tuesday and the discussion was about accessing certain US Government grants for businesses operating in Nigeria and other West African nations focussed on the agro space.

They were only interested in helping ESTABLISHED COMPANIES with those grants. They told us BOLDLY that they doubt if startups could access that particular grant…

…because among other things you must match whatever funds they give you either through debt or equity. And they don’t release less than TWO HUNDRED AND FIFTY THOUSAND DOLLARS. Which means at the very least, my business should be like US $500,000.

I sighed on my seat and shook my head slowly.


After that seminar on Tuesday, I took a deep breath and declared that we are wasting our time building fancy tech startups in Nigeria right now…. It is a waste of our youthful energy.

We are focused on the wrong thing.

The people we are building “digitally enhanced experiences” for, don’t have the money to pay for it. Nigerians have low purchasing power that is obvious to anybody that has ever tried to sell anything in Nigeria before… Especially if you’ve been in business for more than 2 years.

I think we need to start thinking differently and looking differently. That’s why I come online daily to shout and scream that we need to change tactics and change course. I THINK we need to start thinking about how we can come together to build PYRAMIDS (bigger Companies), the guys that have money won’t fund your HUT (small businesses, scrappy “startups”).

We need to be thinking about how fast we can STITCH together companies that are big enough to get international attraction and possibly funding, in proven industries that can give handsome (NEARLY GUARANTEED) returns to such international investors, equity partners and other partners.

The way I see it, we have to BUILD THOSE BIG PYRAMIDS FIRST, money will circulate, then we’ll be able to give money to those that want to build smaller pyramids and huts.

This is the BIGGEST PROBLEM we must fix right now, and it won’t happen if young Nigerians are busy with skill acquisition and opening up shops all over the nation….

…it won’t happen if we are busy investing our youthful energy into shiny tech startups that are known to NOT WORK. (I know first-hand that “startups” in Nigeria don’t work!)

OVER THE NEXT TEN YEARS, THIS IS WHAT WE SHOULD BE DOING. We should plant:
💥 At least 10 innovative companies headquartered in West Africa worth at least $100 BILLION DOLLARS.
💥 At least 100 innovative companies headquartered in West Africa worth between $10 to $80 BILLION DOLLARS.
💥 At least 1,000 innovative companies headquartered in West Africa and worth at least $1 BILLION DOLLARS.

Over to you: what do you think?


Ademola Morebise
💪🏽🔥

P.S.
Ademola Morebise is a Global Invention and Creativity expert, interested in shaping Society, influencing national economies and BUILDING formidable institutions that will take Africa to the next level.

About The Author

Ademola Morebise Posted on

Ademola Morebise is praying and working towards unlocking the CREATIVITY, PRODUCTIVITY and WEALTH of ONE BILLION AFRICANS. Go to the homepage to download my free books and to learn more about me and what I do.

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