“The competitor to be feared is one who never bothers about you at all, but goes on making his own business”
Nigerian founders, competition is not your main enemy as you build that startup. Your main enemies are the internal elements in your company which could affect flawless execution. Do not fret morning and night about competition because ideally for a Nigerian startup, you do not have many competitors!
Most of our industries are still at infancy with the incumbents largely operating at sub-optimal levels. So, when you focus on competition, you lose the sights to think how to innovate and make great products. (You should be aware of competition, but do not think they are there, to snuff life out of your business. That is not the case.)
Failing as a Nigerian startup is not because any competitor took you down. The likely major reason is that you could not execute to fix that friction you have established that company to solve. For the solar companies that went under, they did not die because of DISCOs, since the DISCOs are still not distributing enough electricity. Those logistics startups did not collapse because of competition as our logistical systems in Nigeria are still at infancy. The farms did not collapse because we suddenly have excess produce capacities from big farms. Largely, failing as a startup, in Nigeria, has nothing to do with excessive competition: it is a product of inability to execute. (I am hoping you do not plan to start another Facebook to make a case that competition does kill!)
Fix a Friction: Frictions exist in markets and because of those frictions we have the need for companies. Those frictions are the market needs which companies are created to solve and fix. As an entrepreneur, your main job is to find frictions which are prevalent in markets and which affect many people and companies. For example, in Nigeria, we have a friction in the inadequacy of electricity. It affects many people and companies and certainly something that needs to be fixed.
So, as a founder, give yourself a break and focus on the real business: building great products and a fantastic company. Do not allow another new fund-raise by a perceived competitor to stress you. Do not allow another new city expansion by the same competitor to stress you. Do not allow another hiring of Vice President to stress you.
But worry if you are not serving your customers and improving your products. Many startups do not die of murder [competition], they die of suicide [lack of execution], notes Sam Altman of Y Combinator.
Get back to work and stop being fixated on competition. Sure, you do need to be aware of competition but it does not need to stay in your face as you pursue your mission. Most sectors in Nigeria remain at infancy. If you have a real business model, you would be fine. You may see big buildings and expensive cars driven by (incumbent) executives, but if you check well, the market has not been scratched.
Consider the insurance sector where we still have only single-digit market penetration [Vanguard has 0.4%]. There could be “competition” but if you are really innovative, you can create a new basis of competition and disrupt the market. Not doing well in the insurance sector cannot be due to competition, rather your inability to at least move the penetration to say 30% from the current single-digit. That is execution failure.
NB: Startup in this content means going to create something of value with transformational impacts in the market. It is different from small business which could be “barbing salon” [Nigerian slang for barbershop], selling corn along the roads, etc that rarely scales. While a barbing salon [small business] could have competitors on a street, a barbing entrepreneur who runs many salons across Nigeria, will not collapse because of many salons, at the moment. Rather, the entrepreneur will likely go down because of poor execution. Nigeria has not attained parity on the number of barbing salons it needs at the moment; we have more rooms to grow nationwide, but that has to be done optimally and profitably. The competitive elements remain low.
“A company five years old can still be a startup,” writes Y Combinator accelerator head Paul Graham via email. “Ten [years old] would start to be a stretch.”…
One thing we can all agree on: the key attribute of a startup is its ability to grow. As Graham explains, a startup is a company designed to scale very quickly. It is this focus on growth unconstrained by geography which differentiates startups from small businesses. A restaurant in one town is not a startup, nor is a franchise a startup.
---Will you join me at Tekedia Business Webinar? $15 (or N5,000). Click and register here.
---Visit our Store for my books, cases, notes, etc. Now, enjoy our consolidated subscription for all contents (past, present and future).
-- We offer Advisory Services (tech, strategy & Africa).