What makes a successful startup founder?

November 28, 2019

Youth, the playwright George Bernard Shaw famously claimed, “is wasted on the young”. But when it comes to the public perception of the qualities of a startup founder, thanks to Mark Zuckerberg and co, the appearance of youth seems to be prized above all other attributes.

And yet the truth is, if you delve into all the data available, the average age of founders of the most successful tech startups is 45. Moreover, according to a study published by Harvard Business Review, even the tech titans who did start out in their early twenties — Bill Gates, Steve Jobs, Jeff Bezos, Sergey Brin, Larry Page — experienced their biggest business success when they were middle aged. Steve Jobs and Apple launched the iPhone when he was 52, while Amazon’s future market capitalisation growth rate was at its peak when Jeff Bezos was 45.

Profile of a tech entrepreneur

“Every entrepreneur has a unique story,” says Aftab Malhotra, 41, founder of disruptive artificial intelligence tech startup GrowthEnabler. “That involves big exponential ideas, passion and courage.”

The qualities of a startup founder also include “patience, pattern recognition, grit, communication skills and authenticity”, argues serial tech entrepreneur Sachin Dev Duggal, chief executive of Builder.ai.

Age helps, he adds: “What I understand today, that I didn’t decades ago when I started out, is to be a successful entrepreneur you have to be able to see past the noise and darkness and brave your way to the other end.”

Wisdom build over the decades. “My fifth startup, Carbonite, just got sold for $1.4 billion and I’m almost three years into my sixth, Wasabi, data storage in the cloud,” says David Friend, founder and chief executive of Wasabi Technologies, now aged 71 and a successful, seven-time entrepreneur. “I finally feel like I know what I’m doing. My first startup, right out of college, was reasonably successful, but it makes me cringe to think of all the dumb mistakes I made.

“After more than 40 years as a CEO, you see many of the same issues emerge over and over again. Issues like how to put a team together, how to position and differentiate a product, building a corporate culture. After all this time, I have a sense of what will work and what won’t. More importantly, I have a higher degree of confidence in my day-to-day decisions and that sense of confidence ripples through the organisation.”

Qualities of a startup founder improve with age

Despite all the media emphasis on young entrepreneurs, the qualities of a startup founder are enhanced with age and this helps when it comes to seeking investment, scaling their business and ultimately achieving a successful exit after acquisition.

“I IPO’d a business I started in my twenties, I grew a not-for-profit in my thirties and now my latest business is growing at a pace that is exhilarating and terrifying in equal measure,” says Mark K. Smith, chief executive of tech company ContactEngine. “I’ve raised tens of millions of dollars and I’ve seen huge success.”

After more than 40 years as a CEO, you see many of the same issues emerge over and over again

But, like many other successful tech entrepreneurs, Dr Smith has also suffered, and survived, failure. He sums up his tale within the length of a tweet: “(12/04/2000) IPO on LSE, market cap of £100m, price dropped 40% in a day. Worth £8m at 8am, £5m at 4pm. Hero to villain in exactly 8hrs.” This happened when he was only 34.

“You’d imagine, wouldn’t you, that this experience might be the end of a career? Well it wasn’t for me. The thing is that when you IPO you are entering into a human construct that defies logical explanation. Markets ebb and flow not, as you might imagine, on the basis of science, but of the more nebulous metric of sentiment,” says Dr Smith.

Learning to embrace failure is key

Sentiment, on a national scale, explains our negative attitude to failure in the UK; we would not see having failed as one of the essential qualities of a startup founder.

“I’ll always remember the classic water cooler conversation with a friend of mine who told me she’d heard someone commenting on me,’ recalls Eric Mayes, CEO of the Cambridge tech company Endomag, which uses nanoparticle technology to help surgeons mark and remove cancerous tissue.

“They had said, ‘Eric has great ideas, but he’ll never deliver’, because my first venture failed. Of course, it hurts and touches you, even though you know it is narrow thinking. It’s always a shock to hear people think that way, when you have the kind of positivity that creates something out of nothing,” he says.

Older tech entrepreneurs who’ve overcome early disaster have resilience; they’re not afraid to ask questions or ashamed to admit they don’t know everything. “There is a certain power in not trying to be the oracle with all the answers,” Mr Mayes explains. “It frees you up to ask the questions that lead to better answers. It’s a great basis for managing people, projects or teams in general.”

By contrast, in the United States, failure is viewed as a nightmarish part of the American dream.

“‘Failing fast’ is a mantra that startups and entrepreneurs often quote,” says Mr Malhotra. “What that means is having the courage, passion and tenacity to do what others fear. Try things and challenge the way things are done. Being an entrepreneur is the hardest and most mentally exhausting undertaking and those who have the energy to try again and again will learn and grow at warp speed.”

The secret to being a successful startup founder?

Ironically, having been through failure is one of the ultimate qualities of a startup founder that give older business brains an advantage. “Entrepreneurs who ‘fail’ will eventually succeed and change the world. They will become the mavericks, the disruptors and the leaders the world admires,” says Mr Malhotra, giving 48-year-old Elon Musk (Tesla, SpaceX) and 81-year-old Ratan Tata (Tata Group) as examples.

Interestingly, Dr Smith sees the experience that comes with age as so integral to the qualities of a startup founder that he’s only really interested in investors who are at least 45 years old. “That seems rather specific doesn’t it? Well here’s why: the last tech crash’s 20-year anniversary is next April and, if you ignore the 2008 banking collapse when, oddly, the ‘new’ tech bubble avoided being burst, then we are due for a ‘correction’ quite soon,” he says.

“And if your investors are wee boys or girls and have not seen the trough and only the peak, then beware. Because you need to understand that shares go down as well as up. That is when ‘proper’ companies win out. Just another ‘Uber of’ or another social media silliness will crash and burn.”

Emily Hill is a writer at Raconteur Media Limited, London, United Kingdom

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

The 3 Fundamental Mistakes I Made Founding a Startup

November 21, 2019

It’s been almost two years now since my full-time job at a company I founded. Since then I’ve gotten to work with some fantastic individuals that have changed some of my core beliefs about startups. Namely Nate Watson at Contemporary Analysis, Cory Scott at LiveBy, and the three founders of Buildertrend: Jeff Dugger, Steve Dugger, and Dan Houghton.

Preston Badeer, data scientist, product manager and startup founder

Learning from these people and many others has drastically changed my views on what’s important in an early-stage business. In hindsight, I think my mistakes as a founder were caused in part by core beliefs that were fundamentally wrong.

False Belief 1: ‘VC is evil’

One of the biggest mistakes I made when starting companies was delaying raising capital for as long as possible. Mind you, I wasn’t pushing it off because I didn’t need it, but because I despised the idea of it.

Asking others to fund your company always seemed backward to me. If it’s a viable business model then it should fund itself, or at least be on its way toward doing so. And if that’s the case, why raise money at all? Why spend time formulating a pitch deck when you could be formulating your actual product?

I also found it easy to question the authority of VCs on any given topic, since most are successful founders and most successful founders would admit to luck being heavily involved.

This then draws into question the “success metrics” by which a VC can claim their authority or point to past success. There seems to be very little agreement on which metrics should be used, and many of the ones in use were clearly chosen because that particular VC had good results on that particular metric.

However, despite all this, I now believe investment (VC or otherwise) is crucial to the success of any startup. It’s purely about timing and the investment style. My problem was that I was focused squarely on VC, didn’t evaluate other styles, and had the timing totally wrong.

False Belief 2: ‘Focus on the product’

I was a developer for a long time, and some habits are tough to break. One of those is an incessant focus on product quality and development “progress.”

Unfortunately, neither of these things make money, and if you mean to build a business, you must at some level follow the money.

Product quality is only as useful as the sales it creates. If the quality is causing your ideal customers to say “No,” then work on the specific area of quality they complained about. Make those potential customers give you feedback during the development of the fix, and continually ask them what their barriers to buying are.

If you mean to build a business, you must at some level follow the money.

Development “progress” is things like features launched, integrations created, lines of code written, pages of your app created, etc. and it’s easy to get attached to building these out. Development can be very abstract, so performance-driven individuals (or developers who report to them) will grasp for some way to measure progress or success.

This is a lose-lose situation for everyone because you’ll focus on the wrong things and also gain false confidence in your product. Using potential sales to inform what you develop and measuring success based on sales impact will force you to focus on what your potential customers are focused on.

False Belief 3: ‘Quit your job’

In the introduction to the book Originals, Adam Grant makes a point about common misconceptions. His prime example is when he didn’t invest in the earliest stages of Airbnb because the co-founders held full-time jobs.

It’s well-known that investors don’t like to put their money into part-time endeavors. If you want VC money, you’ll almost certainly have to quit your job and go full-time. Or — and most VCs prefer this — you already have by the time you’re asking.

As Adam Grant points out, however, having a full-time job outside of your startup actually increases the odds of your company surviving by 33%.

This alone should tell you not to quit your job, but I want to take it a step further. I believe that if you can’t pay yourself at your startup, and you don’t have a seperate full-time job, you should spend time getting one.

Ideally, you should get a job at another startup with founders you look up to. You’ll learn from their mistakes, your own mistakes, and learn a lot from general experience, all of which benefit your company.

In addition, by getting a stable job you’re actually decreasing the burn rate of your startup and increasing its runway. Which is why I believe (again, if you can’t pay yourself at your startup and you don’t have a full-time job) getting a job is actually what’s best for your company, not just you.

Avoiding investment before sales might sound like the slow lane, but if you put sales first then you’re on the fast track to either paying yourself or being appealing to investors (whose money you can use to pay yourself). This, in turn, will allow you to quit that job and focus all efforts on your business.

I believe early-stage founders having or getting full-time jobs is not a bad thing. In fact, it’s actually in the company’s best interest. It’s also the key to getting the right timing for investment.

Preston Badeer is a data scientist, product manager and startup founder

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Lessons This Founder Learned Raising A Series A Round Of Funding For His Startup

November 16, 2019

My startup Meddy, a GCC-based consumer-facing online platform that helps patients find the best doctors and book appointments with them, recently raised a total of US$2.5 million in a Series A funding round led by NYC-based Modus Capital, along with participation from 212 Capital, Kasamar Holdings, Dharmendra Ghai (Health Tech Angel), Innoway, and others. While we get set to use the funds we raised to scale up our operations in the UAE, I also wanted to share some of my insights from the fundraising experience with all you entrepreneurs out there- hope these help you in your own startup trajectories!

1. Start early (as it will take a while)

Fundraising is a very long process, as you have to build a relationship with investors before they are ready to talk terms and commit. A lot needs to happen between your first call or meeting, and ultimately wiring the funds. According to a report published by MAGNiTT, 71% of startups claimed fundraising took up to nine months. So, don’t start fundraising when you have only less than three months of runway. You will probably not close in time, and even if you do, you’re unlikely to get favorable terms, because you won’t be in any position of leverage.

2. It’s a sales process

Closing a venture deal is very similar to a long enterprise sales cycle. It’s highly unlikely that your first meeting will lead to a term sheet. You will probably start with an email, which will lead to a call, which will lead to a meeting, which will lead to reviewing the numbers and research, and so on and so forth.

There are multiple decision makers along the way, and it’s key that you be spending most of your time with the key decision maker. You will know you’re making strides when they start introducing to other people in the firm to get their buy-in. Remember that it’s not uncommon for your lead to go cold on you after staying in touch for weeks or months- you may have to find another entry point to get back on their radar.

3. Manage your funnel properly

You should treat fundraising similar to how you treat a sales pipeline- you have to manage and nurture them properly. I maintained a Google Spreadsheet with detailed information about investors, their sector focus, prior investments, last meetings, etc.

Towards the end of it, this evolved into becoming a nice customer relationship management (CRM) record of all the investors I met, as well as those who I needed to meet. At the end of the day, it’s a sales funnel, and you have to keep feeding the top of the funnel with a lot of investor meetings to increase the probability of some of them eventually converting and writing a cheque.

4. Don’t underestimate a very well-written cold outreach

The prevailing wisdom is always to get warm intros to investors, and I fully agree with that. But most people underestimate a very well-written cold outreach. My lead investor came through a cold outreach on Twitter.

5. Target the right investors

Do your research to figure who would be the right investor for you, and for the stage of your company. Most investors make it explicitly clear on their website at what stage they invest in. So, don’t spend too much time chasing investors who do late-stage growth rounds, when you’re raising your seed or Series A round. You should certainly get in touch with them to get their feedback and nurture them with quarterly updates to eventually get them to participate in your next round.

However, it’s best you prioritize your time finding a strong lead investor for your round. As the name suggests, lead investors are extremely important as they set the terms for the round for them, and for everyone else to participate. They also become your partner, and they will help you close other investors.

6. Remember that venture capital (VC) funds are not the only source of venture capital

As counter-intuitive as it may sound, there are more sources of capital than just going after the venture funds. Angels, angel groups, and accelerators are, of course, a big part of the ecosystem, but not many startups are targeting family offices, high net worth individuals, C-level executives at big companies, large corporates as strategic investors, etc. Most of them are looking to diversify their investments from asset-heavy businesses to asset-light investments- not to mention their extensive network connections in the market that you can leverage.

7. Build a document for frequently asked questions (FAQ)

Since you will be meeting a lot of investors, you will start getting the same questions over and over again. Instead of winging an answer every time on the fly (and probably putting yourself at risk of saying a different answer), you should build an FAQ document for yourself where you can put concise answers that you say to anyone who asks you the same query another time. This will make you sound more confident and prepared, and investors like it when you have already thought about the questions and concerns that they have. It just makes you seem that know what you are talking about.

8. Legal takes a long time

When we first got a term sheet, I thought I can just delegate all this legal stuff to a lawyer, and have him/her take care of this. I couldn’t have been more wrong. Legal ended up taking an insane amount of my time. Legal due diligence gets very messy if not handled properly, but that’s for a different post altogether.

9. Be prepared to not get any answers

You will be meeting a lot of investors, and as such, you’ll constantly be getting feedback. It’s imperative you learn from the feedback, and improve your business and pitch deck. Some investors would be kind enough to give you an affirmative “no,” and even give a rationale behind it. This will help you move on, and spend your time and effort going after others.

However, most investors will not reply, and they’d just ghost you. VCs are notorious for not saying no to keep you on the hook, in case you become interesting down the line. From my experience raising multiple rounds of funding so far, a “yes” usually comes a lot quicker than a “no.” However, it’s not uncommon for them to change from a “yes” to a “no” later on as well.

10. Get better at storytelling

In order to raise funding, you need to have great numbers and compelling overall traction. But numbers are not everything. You’re there to tell a story, you’re painting a picture that roughly follows this format: the current status quo is not good enough, millions of people are struggling with a problem. You have a product that is 10 times better at solving the problem, and is, in the process, making the world slightly better.

You need their money to accelerate that progress. You’re there to convince them that you and your team are the right people to pull it off. Numbers and traction definitely help with making a decision, but they are not everything. It’s also a lot about your chemistry between you and the partner at the fund. After all, people make decisions emotionally; they just rationalize the decisions to others (and themselves) with numbers. So, being good at telling a story and convincing others to join on that vision is super important.

11. Always keep in mind that fundraising is a means to an end -and not an end in itself

Fundraising itself is not a goal of your company- that should be to build a sustainable business that solves a problem. So, treat fundraising as such, and get back to working on your business. Don’t spend any more time on fundraising then you have to.

Haris Aghadi is the founder of Meddy, a GCC-based healthtech startup that helps patients find the best doctors and book appointments with them, shares his insights from the fundraising experience.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

4 ways Startups Can Become A ‘business baobab’ On The African Economic Landscape

November 6, 2019

The ratification of the African Continental Free Trade Area (AfCFTA) on 7 July is a major milestone in the integration of Africa’s markets — and a big opportunity for business. Provided critical parts of the agreement are finalized in time, countries are due to commence trading under the AfCFTA on 1 July 2020. That will create new impetus for investment, trade and industrialization across Africa.

The AfCFTA builds on years of effort by African governments to accelerate regional integration — and past progress provides an encouraging indicator of the opportunities ahead. For example, the six-member East African Community and the 15-member Southern African Development Community have both seen their intra-bloc trade grow at around 15% a year over the past decade.

How can companies capitalize on Africa’s economic integration to build successful regional or pan-African businesses? In our book, Africa’s Business Revolution: How to Succeed in the World’s Next Big Growth Market (Harvard Business Review Press, 2018), we point to four core tools to guide a company’s expansion in Africa.

First, set a clear aspiration to guide your expansion.

The most successful pan-African firms have been deliberately bold. Consider the example of Saham Finances: in little over a decade, the Morocco-based company grew from a small local firm into a leading African insurance company operating in 23 countries across the continent. Saham’s strategy included buying stakes in existing insurance firms in countries ranging from Angola to Madagascar, then overhauling their management and rapidly growing their sales. In 2018, Saham merged with Sanlam, a long-established South African insurance company that had also made Africa its major growth focus and was operating in 34 countries.

Second, prioritize the markets that matter most.

In a continent with such scale and geographic complexity, companies need to be clear in prioritizing markets. Coca-Cola provides a compelling example. Even though it is present across the continent, it picked 10 countries as priorities for growth — and within each of those countries, it focused on the big cities that accounted for the lion’s share of GDP. In the other 44 African countries and thousands of smaller towns, the company offers a simpler portfolio of products and packaging. In constructing a successful pan-African portfolio like Coca-Cola’s, companies need to look not just at the spending power of countries today, but also at the fast-growing countries that will be home to tomorrow’s consumers (see below).

Third, define how you’ll achieve scale and relevance.

Companies need a clear plan for how they will achieve scale and customer loyalty in every territory they play in. One essential component is a company’s brand: Because African consumers must navigate greater uncertainty in their daily lives than their counterparts in developed markets do, they place great value on brands they can trust. A further step is to tailor your offering to Africa’s diverse consumers, country by country and city by city. Companies such as Coca-Cola have conducted careful customer segmentation exercises, then evolved their traditional products and created new ones to target each segment.

Fourth, shape the ecosystem you need to thrive.

The guiding question here is: Who will we work with to win? A company’s ecosystem must be broad enough to provide all the elements it needs to run its business in Africa. These include reliable power and water supply, appropriately sited land, a robust supplier base for everything from raw materials to business services, and a distribution network that can get its product into towns and villages across the continent.

The integration of Africa’s economies — many of them rapidly growing — offers exciting opportunities for companies that craft bold yet wise geographic expansion strategies. It also opens up the potential for more large-scale African corporations to emerge. McKinsey’s research shows that Africa is already home to more than 400 companies with annual revenues of $1 billion or more, but this is just 60% of the number one would expect if Africa were on a par with peer regions.

We might think of big companies as the baobabs of the business landscape: Not only do they tower above the rest, they also have deeper roots and longer life spans. Known as the tree of life, the baobab produces highly nutritious fruit that sustains many communities. Business baobabs, too, enliven their local economies: They contribute disproportionately to higher wages and taxes, productivity improvement, innovation, and technology dissemination. Like baobabs, large firms create their own ecosystems, fostering small-business creation through their supply chains and distribution networks. They are also better able to attract capital, which means they are much more likely to compete on the global stage. We are confident that regional integration will help spur the growth of many more business baobabs across Africa.

Acha Leke, is a director at McKinsey & Co in Johannesburg.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

UK Government Pours Kshs 1.3 Billon Into Catalyst Fund For East African Fintech Startups

October 27, 2019

Fintech startups in East Africa now have a new fund to pitch to. The UK Government, through its Department for International Development, which is responsible for administering overseas aid has announced a 1.3 billion shillings ($12.5 million) investment to Catalyst Fund, a fund managed by US-based consulting firm, Bankable Frontier Associates (BFA).

Here Is All You Need To Know

According to Cytonn Investments, this investment is aimed at boosting the FinTech sector in the East Africa region, particularly Kenya, by providing access to growth capital.

Catalyst Fund specializes in early-stage venture building targeting low-income customers in emerging markets, with an aim of spurring innovation that is targeted at financial inclusion for the unbanked population in emerging markets.

Its most recent investment was in June 2019, where they announced that they had on-boarded four finance startups into its incubator program, with three having an Africa focus, these being

Chipper Cash, a mobile money transfer platform with operations in Kenya, Ghana and Nigeria,
Salutat, a Singapore-based startup that helps financial institutions to reach out to more underserved entrepreneurs, especially women, by offering lower-interest loans and financial literacy training, with operations in Thailand, Myanmar, Kenya, and Zimbabwe, and
Turaco, a Kenyan low-cost insurance provider targeting low-income customers. The fund has garnered the support of firms such as the Bill & Melinda Gates Foundation and JPMorgan Chase & Co.

This investment is an indicator of the positive outlook for the FinTech sector.

Analysts from Cytonn Investments expect the FinTech sector to continue to witness more investments, given the untapped potential in credit and credit-related industries in Africa, highlighted by the significant difference in credit extension activity in Africa compared to other world regions, which results in slow growth of enterprises, especially MSMEs, both through a lack of access to growth capital as well as lack of access to consumption capital, thus limiting the spending power of consumers to the populations served by these enterprises.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Why Startups Fail to Generate Revenue Quickly — And What to Do Instead

October 3, 2019

The more revenue you have coming in, the better the chances you can raise (and not waste) investor funds. At startups, the difference between survival and running out of runway always comes down to taking our eyes off revenue.

We don’t want to do this, and we certainly don’t do it on purpose. But when we’re in the middle of the startup run, it’s pretty easy to fall into a trap of wasting time on feel-good tasks that feel like progress but don’t bring in any money.

No entrepreneur is immune to this trap, myself included. It’s part of the drive that makes the successful entrepreneurs successful.

I’ve founded, worked at, and advised a ton of startups, and each one tends to make the same mistakes where revenue is concerned. Whether a founder is launching their first company or their fifth, there’s one universal fact they can’t ignore: The path to success starts with survival.

The odds of survival depend on how fast you can generate revenue. The key to getting to revenue fast is to do nothing else but seek it out. Here are the easiest traps to fall into and how to sidestep them.

“Remember: Raising money is not the same as generating revenue.”

Mistake #1: Raising money before you’re ready

No one joins a startup to do something ordinary. But if you want to do something extraordinary, you’ll need a shitload of money to get it all done.

That doesn’t happen overnight. It happens in stages — sometimes long, mostly boring, often very scary stages. The problem is that we usually see, hear, and read about startups as overnight successes: Some kid genius has a great idea, drops out of college, works on it for a couple months, and then raises a few million dollars at a $1 billion valuation.

This is the trap: Like the lure of the lottery but with pitch decks and spreadsheets instead of Powerball tickets.

Before you try to raise money, you need to establish that what you want to build will generate revenue. And remember: Raising money is not the same as generating revenue.

Here’s what I usually advise to avoid this trap: You might estimate that you need a few million dollars to take a serious run at your dream company. Break that number into small pieces, and raise just enough to get to that first revenue-generating piece. As a guide, think about how much of your own funds you can scrape together to put into your company. Multiply that by 10 and go raise that.

But even before that, figure out how you’ll get to your first dollar of revenue, and then build your deck, financial model, and pitch on repeating that process over and over. Because this is what almost all successful entrepreneurs do anyway — they just take bigger strides. It’s also the reason investors love repeat entrepreneurs, because those entrepreneurs can say, “Remember that time I made all that money? I’m going to do it again but a little different.”

Unless you have already built a track record, you can’t say that to investors — and believe me, it’s not that simple even when you do have a couple exits under your belt. The more definitive your proof that revenue will be coming in, the better the chances you can raise (and not waste) investor funds.

Mistake #2: Building out the company before the product

From business plans to business cards, founders can spend a lot of time dreaming and building their company before the first dollar is made. Here are some of the things startups don’t need before going after revenue:

A website or social media presence.
A mission statement, brand statement, or logo.
A board of directors, advisory board, or management team.
A financial plan or P&L statement.
Office space, T-shirts, or stickers.

It’s not that a startup shouldn’t have these things. But how the initial revenue comes in will drastically alter not only whether those things are needed, but also what their true purpose is. A common example of this trap is building out an amazing web app and then realizing all the things paying customers actually need are three or four clicks deep.

I get that company and brand building are intended to establish legitimacy. The advice I usually give to avoid this trap goes like this: “You want to be an entrepreneur? Boom. You’re an entrepreneur. But no matter how cool your brand is or what your mission is or how far out your financial plan goes, you’re not really an entrepreneur until someone pays you money for something you’ve made.”

Everything will change when that happens, so make it happen early.

Mistake #3: Hiring or teaming up before the idea is fully formed

I can’t exaggerate the number of times a startup co-founder has come to me with the lack-of-revenue issue and it turns out there are a dozen people fighting over the strategy of a company that doesn’t have a single paying customer yet.

Look, running a startup can be hard to do alone. But for your own sanity, as well as for the integrity of your vision, it makes sense to get as far as you can down the revenue road on your own. You may not be a coder, but there are a number of SaaS tools that can get you to MVP. You may not be a financial expert, but most of us can wrangle a spreadsheet in the early days. You may not have sales magic, but if your idea is good enough, you’re probably the right person to get it into the hands of those first paying customers.

Yeah, it’s always easier building something with other people, except when it isn’t. There are priorities to juggle, schedules to wrangle, agreements to hammer out, decisions to get consensus on. Believe me, especially in the early days, it can be much less of a headache to go it alone.

Mistake #4: Mapping out the full infrastructure of the product before the first release

If we’re building a rocket, we first need to build something that manages to take off and land without exploding. How far it flies, its reusability, and what color it is don’t matter yet.

This is a trap that most repeat entrepreneurs get caught in, and I still fall for it. I know the true vision I want to build is not version one, but version five of my product, and the trap I fall into is trying to build all five versions at once. In other words, before I launch, I plan for every use case in every scenario with multiple features across multiple customer segments.

My advice to avoid this trap is something I still tell myself on a weekly basis: Narrow it down and get to a small feature set for a small segment with manual steps. Then collect money, figure out the priorities based on where the money comes from and what breaks, and move on to building the next feature.

Mistake #5: Focusing on innovation before execution

A startup without innovation is a small business. But innovation without execution is just a great way to earn a doctorate degree.

Obviously, the trap is worrying about innovation before building the product. Again, I raise my hand as having been guilty of this many times over, just not anymore. My advice is something I started doing about halfway through my career: If you want to innovate on a product, first you need to sell the product. If you have a new way to mow lawns, start by selling regular lawnmowers. If you can’t sell a lawnmower, you can’t sell the lawnmower of the future.

Mistake #6: Chasing a large number of customers before landing one

Almost everyone makes this mistake, especially during the early stages of their startup. The trap is trying to sell your minimum viable product to hundreds or thousands or even millions of customers at once, tailoring the marketing, the pitch, and the price to a target we think might be somewhere in the middle of the curve.

This seems like a good way to generate revenue quickly, but it’s really just a flawed way to try to generate a lot of revenue. It’s also crazy expensive. My advice is to start with one customer and sell the heck out of them. How that first customer gets sold, how they get onboarded, how they adopt the product, and when they stop using it will all be lessons to learn.

Learn from customer number one, then go to 10 customers. Learn from them, then do 20, and so on until you have definitive, repeatable, scalable revenue streams. Then go innovate, launch new versions, hire the team, build the company, and — if you’re still interested in growing — raise the money.

Joe Procopio is a a multi-exit, multi-failure entrepreneur. Building Spiffy, sold Automated Insights, sold ExitEvent, built Intrepid Media. M

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Date For Nigerian Businesses To Secure More Loan From Banks Further Shifted To January, 2020.

For businesses desiring to raise funds from banks in Nigeria, beginning from January 1, 2020 may be the best time to do so as more banks may be rushing after them. Recall that the Central Bank of Nigeria recently made it mandatory for money deposit banks in Nigeria to maintain loan to deposit ratio of 60% effective September 30, 2019. A new review has been made on that by Nigeria’s central bank.

In its most recent directive to banks and other money deposit banks in Nigeria, the apex bank (CBN) has further raised the Loan to Deposit Ratio of banks from 60 to 65 percent.

Here Is All You Need To Know

The CBN gave the directive in a letter signed by the Director of Banking and Supervision, Bello Hassan, to all banks on “Regulatory measures to improve lending to the real sector of the Nigerian economy.”
The CBN indicated that the credit level in the sector grew by N829.4bn or 5.33 percent at the end of May from N15.56tn to N16.39tn as of September 26.

The circular read:

“The Central Bank of Nigeria has noted the appreciable growth in the level of the industry growth credit, which increased by N829.4bn or 5.33 per cent from N15.56tn at end of May 2019 to N16.39tn as at September 26, 2019 following its pronouncement on the above initiative.

“In order to sustain the momentum and in line with the provisions of our earlier letters, the minimum Loan to Deposit Ratio target for all Deposit Money Banks is hereby reviewed upwards from 60 per cent to 65 per cent. “Consequently, all DMBs are required to attain a minimum LDR of 65 per cent by December 31, 2019 and this ratio shall be subject to quarterly review. To encourage Small and Medium Enterprises, retail mortgage and consumer lending, these sectors shall be assigned a weight of 150 per cent in computing the LDR for this purpose,” it said. The CBN said “failure to meet the above minimum LDR by the specified date shall result in a levy of additional Cash Reserve Requirement equal to 50 per cent of the lending shortfall implied by the target LDR”

This is The First Time The Central Bank of Nigeria Is Weighing In On Minimum Lending Ratio

Previously, there Nigeria had no rule on minimum loan-to-deposit ratios. However, many Nigerian lenders have pegged ratios of about 40%.

However, Nigerian banks are so reluctant with lending to businesses and have resisted lending to businesses and consumers and instead piled their cash into naira bonds, which yield 14.3% on average, one of the highest rates globally.

Lenders worry that with inflation at more than 11%, extending more credit could endanger the financial system through an increase in non-performing loans, or NPLs.

That makes some analysts skeptical of whether the new measures will work.

“Forcing banks to lend under the current macro-economic situation will only result in a buildup in Non-performing loans,” analysts at Lagos-based CSL Research, including Gloria Fadipe, said in a note to clients.

“This could pose a risk to financial stability.”

CSL estimates it could result in an additional 1.4 trillion naira ($3.9 billion) of lending if the central bank gets its way.

Bad Loans

Non-performing loans as a percentage of total credit in the Nigerian banking industry declined to 11% in the first quarter from 14% a year ago, according to the National Bureau of Statistics.
Past experience with such measures isn’t encouraging. The central bank last year allowed banks to use their statutory cash reserves to fund manufacturers on the condition that such loans were at a maximum interest rate of 9% and a minimum maturity of seven years. The lenders didn’t take advantage of the policy due to credit risk and high returns on government bonds, according to Michael Famoroti, an economist and partner at Stears Business.

The Implication of This To Businesses

With this move, it is expected that Nigerian money deposit banks are going to loosen up money to Nigerians. For businesses desiring to raise funds, from January 1, 2020 may be the best time to laugh as more banks would be rushing after them. However, it remains whether Nigeria’s commercial banks would not fight back, by either setting up SPVs or lending to more stable corporations, in which case the vision of the CBN may have been defeated.

In any case, businesses should, once again, dust up their loan procurement files and get set for January 1, 2020.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Why More South African Startups Have Raised Funds This Year

October 2, 2019

According to data curated by Maxime Bayen, GSMA Ecosystem Accelerator’s Insights Director, just in the last 7 months, January to July 2019, African startups have succeeded in raising close to $225 million in funding. While South Africa had 33.3 per cent share of the startups invested into in Africa during this period, Nigeria’s shares represented about 24%. Maxime Bayen pulled together a total of 44 start-ups from nine African countries for his enquiries.

The list was mainly dominated by startups from South Africa, Nigeria, and Kenya. While South Africa saw a record number of 15 startups on the list, 10 startups were from Nigeria while 8 were from Kenya. Uganda got three, Ghana and Egypt got two, while Mauritius, Zimbabwe and Zambia one each.

Here Is Why The Above Facts Are Interesting:

Although 2019 is not yet over, it does appear that Nigeria has displaced and is now leading others, including Kenya (Africa’s top startup funding destination in 2018) as the top ecosystem with the highest amount of funding this year. However, should 2019 end with Nigeria’s total fundraising amount still below $250 million (including Kobo360’s $20m recent funding from Goldman Sachs), Nigeria comparably would trail Kenya’s performance in 2018. Kenya in 2018 raised a record $348 million in startup funding, the highest ever amount raised by any African startup ecosystem in years. The current year figure would also mean that 2018 was the best year for African startups in terms of the total funding raised.

The above facts are also interesting because even though Nigerian startups secured the most funding, more South African Startups secured funding above $1 million compared to other startup ecosystems, with over 30% of the startups that raised funding above the $1 million threshold in Africa found in South Africa.

Below, we consider why more startups in South Africa are raising funds compared to other startup ecosystems.

A Large Presence of Local Investors And Equity Funds

South Africa unlike, other African startup ecosystems, has a very large presence of local investors such as venture capital funds, angel investors and other private equity funds who are increasing their stakes in local startups.

Indeed, while other African startup maintain little or no presence of sigificant early stage investors, South Africa has more of these ventures. Top South African companies in 2016, for instance, launched the R1.4-billion SA SME Fund, a VC fund to co-invest alongside various investors (not solely VC investors). SA SME Fund CEO Ketso Gordhan further said the fund would invest over R1-billion or 75% of its R1.4-billion funds in black-owned small and medium-sized enterprises, including tech startups.

Just recently, South Africa’s SME Fund and the government’s Technology Innovation Agency (TIA) also announced a public-private partnership to co-invest R350 million across three venture capital funds. A Memorandum of Understanding (MOU) was signed between TIA and SME Fund at the Innovation Summit in Cape Town on Friday 13 September, 2019. The partnership sees over R350 (over $23 million) invested in three venture capital funds. These fund managers will invest in a portfolio of early stage businesses and provide capital, as well as other support, to the entrepreneurs, to help them commercialise technologies and grow their businesses. The South Africa’s SME Fund’s mandate to the three fund managers includes a requirement that they invest at least 50 percent of the fund into businesses owned by black entrepreneurs.

Source: the latest Southern African Venture Capital and Private Equity Association’s (Savca) Venture Capital Industry Survey

Notable active VCs in South Africa include AngelHub Ventures which today provides pool funding, expertise and networks to foster startup growth. The firm has supported startups such as GoMetro, Snapplify and AmaLocker. 4Di Capital through its Early-Stage Technology Fund 1 is aimed at startup investment opportunities with big growth potential at the seed and early stages in the mobile, enterprise software and web sectors. 45i Capital apart from running Grindstone Accelerator, has invested in Sensor Networks and Aerobotics. Knife Capital’s recent achievements include the exit of radar startup iKubu to Garmin in 2015. In 2017 Knife Capital invested in its first international deal, increasing its investment in 2018 in healthtech 5nines Technologies. Business Partners in 2012 launched a R400-million VC fund. Armed with that, it made investment in 19 South African startups. Business Partners funds startups in the clean energy, agri-processing, biotech and ICT sectors up to R25-million. Kalon Venture Partners has invested in companies such as SnapnSave, i-Pay and The Sun Exchange. See this article for more information. Edge Growth has a pool of over R900-million of early stage venture capital and has invested in more than 45 deals since launching its first fund in 2010. Its investment include funds for startups Sweepsouth, Mobenzi, Pioneer Academies and Everlytic. Invenfin is an early-stage venture capital fund that looks at ventures across all industries. Some notable portfolio members include ArcAqua, Ad Dynamo and Bos Brands.

The table below shows that more South African investors invested in local startups than any other African local investors doing same for their local startups between January and July, 2019.

S/N	Name of Startup	Country (Headquarters)	Country (Headquarters) of Lead Investor
1	Andela	Nigeria	London
2	SolarNow	Uganda	US, Tanzania
3	BitPesa	Kenya	Japan
4	Shortlist	Kenya	US
5	WhereIsMyTransport	South Africa	Mexico
6	Flow	South Africa	South Africa
7	M-Tiba	Kenya	France
8	RapidDeploy	South Africa	US
9	TeamApt	Nigeria	Nigeria
10	Sokowatch	Kenya	Ghana, US
11	Retail Capital	South Africa	South Africa
12	Daystar Power	Mauritius	Nigeria
13	PEG Africa	Ghana	European Union
14	mPharma	Ghana	Ghana, US
15	OneFi	Nigeria	Kenya
16	Aerobotics	South Africa	South Africa
17	Valr	South Africa	Seattle, US
18	Flexclub	South Africa	South Africa
19	Farmcrowdy	Nigeria	Atlanta, US
20	Kudi	Nigeria	San-Francisco, US
21	Centbee	South Africa	Antigua and Barbuda
22	Neopenda	Uganda	East Africa, US
23	mDaaS	Nigeria	Nigeria
24	Payitup	Zimbabwe	UK
25	Lori Systems	Kenya	Undisclosed
26	Instadeep	Tunisia	Tunisia, US
27	Gokada	Nigeria	San Francisco, US
28	MyDawa	Kenya	Mauritius
29	Intergreatme	South Africa	South Africa
30	GovChat	South Africa	South Africa
31	Safeboda	Uganda	Germany
32	Swvl	Egypt	Sweden, Dubai, China, Egypt, Kuwait
33	TymeBank	South Africa	South Africa
34	Arnergy	Nigeria	EU, Norway
35	Max	Nigeria	Nigeria, Kenya, Japan
36	Lulaland	South Africa	World Bank, Washington US
37	Twiga Foods	Kenya	France
38	Sweep South	South Africa	South Africa
39	Inclusivity Solutions	South Africa	The Netherlands
40	Rent to Own	Zambia	The Netherlands
41	Opay	Nigeria	China
42	54gene	Nigeria	US
43	Enko Education	South Africa	South Africa
44	Lynk	Kenya	New York, USA
45	Yumamia	Egypt	Saudi Arabia

Additionally, South Africa Receives More Share of All Private Equity Investments in Sub-Saharan Africa

In addition to the numerous local investors, South Africa is also receiving a wave of investment from international investors and private equity firms. According to Asoko Insight , South Africa is the main target of investment on the continent with 39% of the total offices set up by these investment firms. Kenya comes second with 14% and Nigeria is third with 13%.

The Increasing Role Of Crowdfunding

2019 has quite been significant for South African startups, with Intergreatme and Beerhouse raising substantial sums from Uprise.Africa, a crowdfunding platform in record-breaking deals. Crowdfunding refers to raising money from the public (who collectively form the “crowd”) primarily through online forums and social media. At a time when most African countries are yet to open their doors up to crwofunding, South Africa is increasing the chances of startups raising capital through this means. Enabled by the friendly legal framework on crowdfunding in South Africa, Africa’s first equity crowdfunding, Uprise.Africa, and South African alternative exchange ZAR X recently entered into an agreement that will see the mini stock exchange list any up-and-coming entities, which have already successfully raised capital via crowdfunding, and freely trade their shares on the open market. Not only could the arrangement be the funding gap filler that fledgling South African entrepreneurs desperately seek, but it could bring the local capital market to the people. The partnership also solves the fundamental flaw of all other pre-IPO models, namely that once a company has issued the shares they remain fairly illiquid, with investors having their funds tied up until that company looks at going public. Tabassum Qadir, co-founder, and CEO of Uprise.Africa says they plan to conclude at least three deals a month.

“We are simplifying venture capital through this mutually beneficial partnership for both entrepreneurs and investors,” Qadir says.

Reducing The Risk Exposure of South African Startup Investors Through Legislation

One significant role government has played in enabling more inves in South African startups is the introducing in 2009 Section 12J tax incentive, which gives tax relief to investors for investing in qualified Venture Capital Companies (VCCs). The objective of section 12J is to create and maintain employment and to grow the economy and ultimately the tax base. The incentive allows investors who make investments in approved VCCs — that then invest in qualifying small companies — a tax deduction. Section 12J was introduced with a “sunset clause” that takes effect on 30 June 2021. It is not clear whether the incentive would be extended.

By operation, Section 12J, enables venture capital firms to upon investment in an approved venture capital company (VCC), claim an income tax deduction in respect of the expenditure actually incurred to subscribe for VCC shares. For example, if an investor subscribes for shares in an approved VCC for R100,000, that taxpayer will be entitled to an income tax deduction of R100,000 against taxable income.

A lot of venture capital firms have been opened in response to Section 12J, notable among them including Kalon Venture Partners, KNF Ventures, Kingson Capital and Grovest.

In February, it was revealed that Vinny Lingham is involved in one 12J fund, the Lion Pride Agility VCC Fund, through his investment company Newton Partners.

Historical VC Investments in South Africa (2009–2018) — Source: the latest Southern African Venture Capital and Private Equity Association’s (Savca) Venture Capital Industry Survey

Other notable South African startup ecosystem boosters include a large presence of incubators and other private equity firms.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Egypt’s Ecommerce Startup MaxAB Raises $6.2 million in Egypt’s Largest Ever Seed Round

September 26, 2019

Egypt’s startups have been consistent with fund raising this year, with investors so far almost turning sector-agnostic. The latest to join the train is startup MaxAB — a Cairo-based B2B ecommerce marketplace that connects informal food and grocery retailers with suppliers through an easy-to-use app — which has now raised $6.2 million in seed funding. From available data, this would become Egypt’s largest-ever seed round raised by a startup and in the whole of Middle East and North Africa (MENA)

“Nobody has addressed the underserved retailers before,’’ says Belal El-Megharbel, Co-Founder and CEO of MaxAB. ‘‘Retailers are faced with a limited assortment of products, the hassle of dealing with multiple wholesalers and restricted access to credit facilities. At the other end of the supply chain, the FMCGs have limited visibility on market trends, demand patterns and retailers’ business needs — leading to losing potential revenue opportunities,’’

Here Is The Deal

MaxAB’s round was co-led by Dubai-based Beco Capital (who are making their second investment in Egypt after Swvl), Africa-focused 4DX Ventures, and Endure Capital (that has offices in Egypt and the United States), with participation from 500 Startups, Morocco-based Outlierz Ventures and other local investors.
The startup, with this capital, expects to reach half of Egypt’s population before expanding across different markets, it said in a statement.
The previous highest seed round was of $5.85 million raised by Abu Dhabi-based agtech startup Pure Harvest (it revealed recently that it had closed its seed with $5.85 million in multiple tranches).
Earlier this year, Tenderd, a YC-backed Dubai-based heavy equipment rental marketplace raised $5.8 million in what was the largest seed round of MENA at the time.

Why The Investors Invested

On why the investors invested, Yousef Hammad, Managing Partner at Beco Capital, said:

“ ‘This is Sparta’ was the first impression I got when I met this team of warriors, battling one of the biggest inefficiencies on the country’s balance sheets. By leveraging technology, MaxAB is redefining the grocery supply chain in Egypt to fit the requirements of the micro retailers who make up 90% of the grocery market. The metrics they have recorded in such a short period are impressive, and we expect to continue to see double-digit growth as they scale.”

Peter Orth, co-founder and Managing Partner at 4DX Ventures, said:

“We’ve been consistently impressed with how Belal and the rest of the team have executed, and achieved significant traction in a very short period of time. We believe that their B2B e-commerce model is the right way to serve this significant market, and we’re really excited to partner with the team to drive the next phase of growth.”

What MaxAB Does

Founded (last year) and led by Egyptian and Libyan entrepreneurs Belal El-Megharbel who was previously with Careem and Mohamed Ben Halim who previously worked for Aramex, MaxAB, according to the statement, has already built a stock list of over 600 products which includes groceries, beverages, dairy, confectionery and non-food products.

The Cairo based startup connects brands to retailers via its Android app, closing the gap between these traditional retailers (over 400,000 in Egypt) and FMCGs. It aims to automate and simplify $45 billion FMCG food retail market and claims to have recorded month-on-month growth, with 9,000 activated retailers on the platform already. According to its website, MaxAB has processed over 40,000 shipments to date.

“Brands using MaxAB have access to real-time demand monitoring and business intelligence tools, which improve end-to-end supply chain control, and better forecasting. Retailers in remote and under-served areas will have access to a wide variety of products, the convenience of ordering stock online in addition to second-day deliveries not to mention the added benefit of access to credit facilities,” the startup said in a statement.

‘‘We are using data and analytics to understand purchasing and retail behaviors, as well as make the end-to-end process of brands seamless and convenient. This will enable FMCGs to make informed decisions about their purchasing, which will ultimately have a positive effect on their bottom line and catalyze one of the biggest markets in Egypt. This investment round will allow us to accelerate our growth plans and develop new products and services throughout North Africa using the first of its kind B2B ecommerce platform,”the statement further noted.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Tunisian Fashion Startup Dabchy Raises $300,000 seed For Its Peer-to-Peer Fashion Marketplace Expansion to Egypt

September 24, 2019

Tunisian startup Dabchy, a peer-to-peer (P2P) fashion marketplace has raised $300,000 in a seed round to further lead major expansion effort to Egypt and to build more on its team.

Here Is The Deal

The investment was led by 500 Startups and joined by Flat6Labs, Saudi Venture Capital Company (SVC), Khobar-based Vision Ventures and Daal, and a group of angel investors.
Amani Mansouri, the co-founder and CEO of Dabchy said that they plan to use a part of these funds to expand to Egypt by the end of this year.
The startup also plans to use the investment to accelerate its product development and expand its team.

“At Dabchy, we operate as a trusted third between buyers and sellers and have facilitated more than 100,000 transactions to-date. Our ambition is to become the number one fashion marketplace in the region and to empower a new generation of women to become microentrepreneurs by creating their own businesses online,” Amani Mansouri said in a statement.

Dabchy was part of Flat6Labs Tunis’ first cohortand is currently taking part in the second class of Womentum, an accelerator program for female founders by Dubai-based Womena.
According to the statement, it was also the first Tunisian and African startup to have joined European Fashion Tech Incubator last year.

Why The Investors Invested

Hasan Haider, a partner with 500 Startups, commenting on the occasion, said:

“We’re pleased to back the team behind Dabchy and make this our first investment into the Tunisian market. What the team have managed to achieve so far has been amazing, and we look forward to Dabchy continuing to lead the way for used fashion online in North Africa. There is a significant market need and demand for the product, and that has already been demonstrated by their traction so far.”

The investment is also the first for both Vision Ventures and Daal in a Tunisian startup.
Kais Al-Essa, Founding Partner and CEO of Vision Venture, said:

“We’ve been eyeing the North African market beyond Egypt [for some time]. It is starting to boom and the population is young and tech-savvy. Dabchy has been able to prove that their product and business model is needed in the market with a limited investment. We expect that, under the leadership of talented Amani Mansouri, it will further dominate the market very soon.”

Read also: Tunisian Startups Can Now Benefit From World Bank $75m Fund For Startups

What Dabchy Does

Founded by Amani Mansouri, Ghazi Ketata and Oussama Mahjoub, Dabchy that had initially started as a Facebook Group now has a community of over 400,000 users in Tunisia, Morocco, and Algeria, who use its web and mobile-based platform to buy and sell new (unused lying in one’s wardrobe), self-made, pre-owned (used) clothes and accessories for women and kids. Dabchy’s Android app has been downloaded over 100,000 times.

In Tunisia where most of the Dabchy’s business comes from, it takes care of the entire buying and selling process including shipping and payments.
The startup claims to have doubled the catalog of items listed on its platform to 420,000 which (it says) makes it one of the largest online stores in Tunisia. The users, according to a statement by Dabchy, are adding more than 2,000 new items every day.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Profile of a tech entrepreneur

Qualities of a startup founder improve with age

Learning to embrace failure is key

The secret to being a successful startup founder?

Charles Rapulu Udoh

False Belief 1: ‘VC is evil’

False Belief 2: ‘Focus on the product’

False Belief 3: ‘Quit your job’

Charles Rapulu Udoh

1. Start early (as it will take a while)

2. It’s a sales process

3. Manage your funnel properly

4. Don’t underestimate a very well-written cold outreach

5. Target the right investors

6. Remember that venture capital (VC) funds are not the only source of venture capital

7. Build a document for frequently asked questions (FAQ)

8. Legal takes a long time

10. Get better at storytelling

Charles Rapulu Udoh

First, set a clear aspiration to guide your expansion.

Second, prioritize the markets that matter most.

Third, define how you’ll achieve scale and relevance.

Fourth, shape the ecosystem you need to thrive.

Charles Rapulu Udoh

Here Is All You Need To Know

Charles Rapulu Udoh

Mistake #1: Raising money before you’re ready

Mistake #2: Building out the company before the product

Mistake #3: Hiring or teaming up before the idea is fully formed

Mistake #4: Mapping out the full infrastructure of the product before the first release

Mistake #5: Focusing on innovation before execution

Mistake #6: Chasing a large number of customers before landing one

Charles Rapulu Udoh

Here Is All You Need To Know

This is The First Time The Central Bank of Nigeria Is Weighing In On Minimum Lending Ratio

Bad Loans

The Implication of This To Businesses

Charles Rapulu Udoh

Here Is Why The Above Facts Are Interesting:

A Large Presence of Local Investors And Equity Funds

S/N

Name of Startup

Country (Headquarters)

Country (Headquarters) of Lead Investor

Additionally, South Africa Receives More Share of All Private Equity Investments in Sub-Saharan Africa

The Increasing Role Of Crowdfunding

Reducing The Risk Exposure of South African Startup Investors Through Legislation

Charles Rapulu Udoh

Here Is The Deal

Why The Investors Invested

What MaxAB Does

Charles Rapulu Udoh

Here Is The Deal

Why The Investors Invested

Read also: Tunisian Startups Can Now Benefit From World Bank $75m Fund For Startups

What Dabchy Does

Charles Rapulu Udoh