The Rich Uncle Network

“Nigerian (tech) entrepreneurs need to show traction”…. I hear this all the time and whilst it is true, it still irks me when I hear it. They compare Nigeria to America and forget the myriad of problems that exist here.

This diagram below shows a little bit of how tech entrepreneurship works in America.

The American tech bro’s journey…

And no, I am not talking out of my behind. In the USA, it took us 2 years to raise a total of $25million. These funds were spent (we also got grants) over an 8-year period till when we were able to sell our biotech company for hundreds of millions of dollars to the largest pharmaceutical company in the world.

In the same space of time in Nigeria, I consider myself only about “ready enough” to raise less than half of the same amount to begin the arduous journey of potentially operating profitably for an extended period of time and paying dividends, or exiting, or failing. The only thing that makes failing an unlikely option is because I have succeeded before and my experience (which most younger Nigerians do not have) makes me quite nimble.

The diagram below represents the how tech entrepreneurship in Nigeria works:

The Nigerian tech entrepreneur’s journey…

In Nigeria, it is clearly not the same. We do not have a burgeoning middle class and we do not have a semi-formal network of investors who know their place in the value chain and who parley with each other from time to time.

When we talk about a middle class in Nigeria, it’s only fair that we put some approximate numbers to this concept. The CBN reported that they were less than 2 million accounts with more than 500,000 Naira in balances residing in them. Some statistics will tell you that only 1% of Nigerians are wealthy.

The fluidity of wealth in Nigeria is relatively undefined to the extent that the term wealthy could cover anyone who can afford a clean shirt and three square meals a day to some of the bombastic thieves that covet our nation’s wealth.

But let us use the percentage — if so, then this means that you must have 99 other family members for you to have at least one “rich uncle”. So if you are a Nigerian entrepreneur, whilst your counterpart in America can have a couch to sleep on and free food to eat while he is developing his idea, you are subjected to the struggle of Nigeria plus the fact that you must have a job to survive. Your counterpart in America can also develop his idea with the comfort that when the time is right, there will be a family member on hand or an Angel network that will give him $25K to $100K to test his idea out in the market.

The Nigerian entrepreneur has 99 folks to battle with to get to the ear of his rich uncle relative who would most likely deny his request for seed capital because he doesn’t “understand what you do on the computer all day”. You can’t blame the Uncle though. He has made it to Lagos… established a family and now 99 nephews and nieces from Abeokuta, Ife and Shagamu who want to use his couch and living room to “do entrepreneurship”.

And this is the reason why one day soon, when I am retired, I will set up the Rich Uncle Network with a bunch of my old retired friends — male and female please.

It will be a group of old entrepreneurs and professionals, far past their glory days, but still committed to bridging the non-financial gaps needed for startups to show traction. We will offer anything from office space so you can gist with us and we can talk your ears out with tales of success, woe and failure, to access to any existing customer base for A-B testing we may still have access to, or just a friendly face when you need access to our network of current CEO’s who could be the difference between you scaling or sinking.

Or maybe we could start this earlier, who knows- watch this space on Twitter and Instagram @pyjama_ceo

Originally published on Medium.

About the author
Edmund Olotu is a serial entrepreneur with companies including Novira Therapeutics, sold to Johnson & Johnson for $600M and TechAdvance: a utility payment company processing more than ₦21 billion annually.