It usually starts with a great idea, then an invisible force pushing you to bring the idea to reality. Sadly, this drive is often accompanied by challenges that make the once-great idea get questioned. These challenges, when left to chance breed failure, and the idea suddenly gets pushed out of the way.
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Many startups have been founded with the founders having great transformational ideas, but these challenges they face come to choke them. And if the startup does not have a strong back, it usually fails. According to Business Day, the failure rate for startups in Nigeria is at 61%, leaving only 39% to survive.
Tech is a fast-rising innovation in Nigeria and the world in general. Due to this, tech startups feed on generating innovative ideas and working on them to see that they come into full realization. Meanwhile, between the period of idea generation and implementation, many ‘waters’ go under the ‘bridge’. This article will be discussed the five (5) major killers of tech startups in Nigeria.
Insufficient Funds/Lack Of Funding
Nothing kills startups like lack of funds. Funding is basic for every business to start and scale. It is only an idea when it is in the head. Resources are needed to make it a reality. Some tech startups even got to start operations, but due to insufficient funds, they were soon swept away. So many crazy ideas these days, but little or no resources to push them. This is a great impediment to tech startups, who need a reasonable amount of capital to develop their innovative ideas.
Competition for market share is a daily battle for products and services in the market space. This can be healthy in the sense that it serves as a watchdog to checkmate the quality of delivery of these competitors. However, it can also be negative when a new product tends to overwhelm or outcompete the one that had been existing. An example is Uber which came into Nigeria to revolutionize the cab business. After some time of operations in the country, Bolt came in with better technology, more user-friendly features and more funding, somewhat relegating Uber to the background. This has occurred with several other tech companies. It is, therefore, important that while staying focused on your startup, you should keep an eye on your competitors.
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Absence Of Market Needs
It is one thing to have a business idea, it is another to be sure the idea will be accepted and embraced by the market when fully developed. There are several tech startups that have been established which have cool systems in place, sleek mobile applications and websites but are not really meeting the market needs. That is one mistake some tech startups make; selling or emphasizing their features at the expense of the problem they are in the market to solve. That is what customers are after. This absence of market needs often pushes some of these tech startups out of business.
Wrong Business Model
It is not enough to just pick up an idea and start running with it. It is pertinent that you thoroughly evaluate the business model, the physical and liquid structure of the business, before starting up. Lack of this evaluation has ruined several startups in Nigeria, as their models are undefined, wrong and faulted in a number of ways. A business model is what identifies what your business is all about, your strengths, weaknesses, how you plan to serve your customers, and very importantly, how you plan to make money. If there are loopholes in any of these categories, it could cause the business so much, if not send it packing. Therefore, startups should do well to fully assess their business models before diving into operations.
Laws made by regulatory bodies can actually be the fastest way to kill any startup if the laws are not in their favour. For instance, the ban on motorbikes by the Lagos State government caused startups like MaxOkada and Gokada to go out of that line of business. This factor usually causes an abrupt end to the operations of the startups.
Scaling a tech startup is not an easy ride. You should be able to exercise extreme levels of patience and endure these frustrations by these killers of startups. Nonetheless, staying true to your idea and pushing it till it succeeds has its own rewards.
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