A few days ago, we got news the Jason Njoku and the Iroko Partners team for $8m in funding. First question a close friend asked was “What are we building? In fact what are you going to build?” I have heard this same question in different forms over the last couple of days. Now I have a question of my own. Actually, I have questions?
- Must you build?
- Why are you building?
- What are you bulding?
To put these questions in perspective, I’m mostly asking: now that you want to do your own startup because Jason Njoku got $8m in funding (and you want to go get yours too), what exactly are you thinking?
I’ll want to point out that Njoku/Iroko did not begin in one day. You just don’t get up to build something because of Iroko – it’s great to feel inspired, and indeed we all are, but there’s a name for jumping in that excited, inspired state to build ‘that app’ just because – it’s called suicide. Maybe there’s a softer name. Maybe it’s knocking your head in with a wooden mallet, which is sure to put out your lights for at least week and half, but it’s just not the thing you’d like to do.
There’s at least a million things to think about in order to build a successful app or startup. You won’t and can’t figure them all out in a day. You will need to put a decent, emotionless amount of work into the thinking process. You’ll need the equivalent of a ballistics resistance test on your idea before you even begin building – you take the idea out to the shed, setup a firing range, unload a few magazines of lead into it. If it survives, take it out again, do same with a business hat on. If it survives, then maybe you can start building.
Why is the business idea so important? In all of this hoopla, it should not be forgotten that Njoku didn’t sell an app or a complex, built up product. What he sold was an idea, a business plan! If your app or idea does not cut the business mustard, you are not going to see a dime. Because the funding is NOT free, funders will need to know that they will make money from their investment – I’m going to emphasize this, funding is AN INVESTMENT. This is why Njoku isn’t closing down his street for a major owambe anytime soon.
Here’s a few thoughts if you’re sure you are ready for that startup.
Be ready to not make money – yet. In fact, be ready to lose money. It’s important to not think your startup will magically start making money from Day 1.
Recognize the local environment. A tip on this is that the biggest impediment to monetization of apps and startups in Nigeria is payment systems. Ask any business minded developer, or startup owners. Until a mainstream payment solution is available for those little payments you need to collect from your app, most apps will not be profitable. Unsurprisingly, the big problem the Iroko team is still trying to nail is the “monetization problem”. The monetization problem has NOT been solved yet!
What to build? You could begin from where you know, where you have strong background knowledge. If you grew up in Alaba, think Alaba. If you know SMS, think SMS. You could then work it backwards, from the known to unknown. Of course this is not the Law of Moses, but it’s a bit of common sense.
Read. It is possible someone may have thought about that bright idea you have and walked away. Do you research. You just may find why the person walked away, or crack the kink that drove the previous idea owner off the land.
What this blog isn’t saying is for you not to build your app or startup – that’ll make me an effing idiot, you see. What it is saying is, think through it before you begin. Don’t do it just because someone else did, or you want to make money like Iroko Partners. Do something ridiculous, that actually makes sense, and maybe then, you can ask Jason how to get funding.