Startup Growth Pattern: Why Most African Startups Fail and Best Solution
Stop the madness and get sane with reality. The name ‘Launching a startup” makes most Nigerian/African entrepreneurs forget their ground and before they know it, they fail and shut down business operation and move to the next thing, leaving their investors in pain.
Even though the concept of running a successful company in Nigeria has been ‘create a great product that solves a pressing need’, the Startup Growth Pattern discussed in this article have been one of the major reasons why most Nigerian startups fail after few years of being in business.
The new trend right now is startup raising millions of dollars from seed funding, releasing either App on Play store and Apple store or releasing a web platform and in few months’ time, go into extinction.
Let’s not let history repeat itself during the early days of Web 1.0 (1999 and early 2000s) where many people rushed into starting an internet-based company because of the boom and failed to look at what market value and problems their startups is solving.
According to Andrewchen,
Here was How Startups worked in 1999
- Raise millions of dollars in funding with an idea and impressive founders
- Spend 9 months building up a product
- Launch with much PR fanfare
- Fail to hit product/market fit
- Relaunch with version 2.0, 6 months later
- Repeat until you run out of money
Still, on same tense, between 2002-2009, entrepreneurs learned a lot of great ways to work quickly, deploy code a few times a week, and get very iterative about proving out their product. At the end of the day, the process led to many startup failures in during the early and middle days of the internet.
Fast forward to how things seem to work right now in 2018, it still looked much similar to the same failed startup approach which many founders are adopting.
Here is how things (startup growth pattern) seem to follow with respect to the pattern that failed most startups in 1999 even after smartphones become readily available.
- Raise funding with an idea and impressive founders
- Spend 6 months building up a product
- Submit to the app store and launch with much PR fanfare
- Fail to hit product/market fit
- Relaunch with version 2.0, 6 months later
- Add Facebook Open Graph
- Try buying installs with Tapjoy, FreeAppADay, etc.
- Repeat until you run out of money
Not much different, unfortunately.
Related: Major startup funding challenges and how to solve them
Having spotted out the problems, it’s great I pitch possible Startup growth pattern that will help entrepreneurs become successful with their businesses.
Startup Growth Patter Solution
The Below StartUp Growth Pattern Will outperform the Old
- Pick a passionate team and build a product.
- Release version one and push with zero funds, Search Engine Optimization, social media marketing and cheap email marketing services will do a lot of good here. (Staying away from Investors will take away pressure from you at this unprofitable stage. This is the exact approach we’re using in our company Satowallet and Sumo Bank)
- Track your conversions/analytics from the little you have done and make corrections from users/customers reviews/feedback/.
- Release version 2 of the product whether the platform is becoming a little bit profitable or not.
- Rebrand and build a reputable profile for founders.
- Evaluate and go for a seed funding (trust me, this will give you better stance and allow you have control over what Investors are asking (shares) for any amount invested.
- Use the money raised for High PR, field Marketing and possible partnerships. At this point, you will get full traction.
- Scale and expand to become a successful company.
Related: 6 Major challenges startup founder face after launch
NOTE: if you have a great product, this system surely works. If you don’t, it won’t.
Don’t forget the success of your startup depends on how well your user/customers can connect with your company.
The best marketing strategies for startups must be applied in the course of using this proposed new model to grow a startup idea into a successful company.
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