Top 3 reasons why start-ups fail in Nigeria.
There is an explosion of startup in Nigeria, with it comes hopes and disappointment.
Hope that startup can help address unemployment in Nigeria while improving service delivery in the country. There is also disappointment in the sense that many of the startups tend to crash, dragging many people back to unemployment and deeper poverty.
As many startups that have succeeded, so many others have failed. This is not peculiar to Nigeria. It’s a global trend. 90% of startup fails! It’s huge but it is a fact.
What then are major pitfalls of startups in Nigeria? There are many, but I would dwell on just 3 in this article.
- Unwanted product or service: Most people behind startups are very passionate people, and passion is a key attribute of any successful entrepreneur. However, when passion can drive you to ignore market data and to develop good or service that no one needs. If no one needs your products, you cannot make sales; therefore, you won’t have revenues and destined to fail. No wonder sensible investors look for evidence of some revenue before backing any venture.
- Wrong team: Sometimes you may have strong viable ideas, but with a weak team. Idea execution is crucial, and it’s important you have a solid team that can drive that delivery. Nigerians startups tend to suffer highly from this malaise because they tend to work with friends and family members even though they don’t have the requisite skills required by the business. We are a nice lot, and we do not want to hurt peoples feeling. I have seen many tech-based startups with no IT person in the team; instead they rely solely on subcontracting IT aspects to a third party organisation. There is nothing wrong in using a third party to handle your IT related task, but it tends to add to the cost of running a business and slows things down.
- Poor decision quality: Decisions quality is very important in any human endeavor. As a startup owner, you would be required to take series of decisions. The quality of these decisions would determine success or failure of your business. Most people rely on sheer gut feelings and sentiments while taking decisions. I am not saying this is wrong, but basing your decisions on hard facts can lead to better decisions.
Conclusion: Now that you know the top 3 reasons why startups fail in Nigeria, I hope you would reflect on your business and adjust accordingly.
Bizintelng.com provides business development services to small businesses.