This week’s theme for the Startup chronicles, aka “Why some Nigerian businesses fail,” is inexperience. We hope that you are both entertained and educated by this story.
There was a Nigerian founder who decided to enter an industry dominated by foreign companies. She did not understand the sector, but it annoyed her that foreign companies were leading in that sector and repatriating funds to their country. She wanted to stop it.
However, there was another problem.
She had worked in government agencies all her career so she had no experience running commercial businesses. Still, she felt ready to take on the challenge; so she resigned from her public sector job.
She hired a small team and they spent a few months developing the product. She even secured an investment from a local venture capitalist to help get her business off the ground. Finally, after months of hard work, the product was ready for launch.
Then, she chose green as the brand colour and launched the product with pomp and pageantry. She even invited a federal minister to the launch. The national broadcaster covered the event, and the minister persuaded Nigerians to be patriotic and patronise the business.
The founder was excited and believed that it would be so.
Unfortunately, things didn’t go as planned. Despite her best efforts, the product failed to gain traction. Consumers said the product was a lower spec than existing products.
The founder had focused so much on patriotism and hadn’t taken the time to understand her competitors to be able to rival them. Her inexperience and poor knowledge of the market led to the failure of her startup. She was devastated. In addition to investors’ funds, she had put all her savings from her employment as a civil servant into the product and had let everyone down.
𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲
A critical mistake any founder can make is failing to understand their competitors. While the government is campaigning for Nigerians to buy made-in-Nigeria goods to strengthen the Naira, people will not buy a product out of patriotism if it is substandard.
Originally shared on LinkedIn
