Connect with us

Technology

Why African Tech Startups Fail and How to Mitigate Risk

Published

on

Tech Startups

By Otori Emmanuel

Technological start-ups in Africa are innovative about providing solutions to challenges that exist in Africa. However, with these solutions come several bottlenecks which eventually create a barrier to the survival and sustainability of the business.

There are several factors that contribute to the failure of start-ups in Africa and the ability to learn from these failures would support a new way of thinking to help mitigate these risks.

In this publication, I would be sharing risk factors from working with not less than 100 companies in the technological, FMCG, retail, agro, fashion, events, confectionary and manufacturing in providing consultancy services and some of the patterns I found led to the business failure.

  1. Huge Injection of Capital Without Traction

Generating and implementing an idea has to go through several stages of design thinking to ascertain the viability of such a product before it is released into the marketplace based on the feedback from prospective end users.

Due to the fact that some early-stage entrepreneurs have already built a name in the ecosystem can easily make them access funding even when an idea is still just an idea that has not been properly researched but because entrepreneurs sometimes are also very emotionally attached to an idea sometimes, they can make several assumptions without considering the facts and then begin to seek capital inflow to kick-start this idea.

Traction is important because it signifies growth and growth could be seen in the form of demand which eventually leads to cash flow. Investing in an idea is too risky and even riskier for an early-stage entrepreneur with limited experience and exposure.

In order to ensure an idea would scale, it is important to employ design thinking to limit assumptions.

  1. Not Working With the Right Team

Not Working with the right team has huge consequences in itself. A start-up should have one core, and it is in the ability to execute with the team. Because most start-ups bootstrap at their early stage, they tend to work with whoever is available and not necessarily the skilled and competent professionals who would hit the ground running and deliver the required expectations.

I remember working in a pharmaceutical start-up where mislabeling of medications occurred because the professional involved was not aware of the procedures as a pharmacist would. This could have been a huge mistake if it was unnoticed until it reached the retailer who did checks and found out.

The right time would limit the time a task is expected to be done. Start-ups should never play down on experience, proficiency and competence. In fact, it is necessary to develop specific in-house procedures for hiring that suits the company’s culture.

  1. Lack of Product-Market Fit

A product could be a fantastic one, but if the market is not ready, then its sustainability is questionable. A very innovative start-up that came with the idea of solving the challenges of travel is GoMyWay, this Start-up was launched in Nigeria but did not thrive.

Was the product fit for the market in terms of providing the needed solution to the already existing challenges, I would say yes, however, factors such as kidnapping, assault, killings have created trust in the mind of travellers and so this travelling application that was supposed to connect a traveller with a car with another traveller going in the same direction could not survive because the safety of travellers was in question.

  1. Government Regulations

Several administrations of government have worked tirelessly to make the business environment conducive, however, there are still gaps to ensure that the start-ups do not get gagged as their benefits are very key to economic development.

The recent move to create a start-up bill to ensure that the interest of start-ups can be protected is one to secure sustainability and increase interactions with regulators in such a way that regulations understand the peculiarities of these businesses and work around policies that would not see capital investments go down the ground with just a regulation.

I believe the start-up bill would create stakeholders in the overall value-chain and then ease how business is done.

There are other factors that contribute to business failure and the listed are some common ones that affect businesses based in Africa.

I however believe that as there is an ongoing conversation to create a roundtable for stakeholder’s interaction, there would soon exist synergy in the ecosystem.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Technology

Telco Ownership Changes Above 10% Now Subject to NCC Approval

Published

on

NCC

By Adedapo Adesanya

The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have introduced a new regulatory requirement mandating prior approval for significant changes in the ownership structure of telecommunications companies operating in Nigeria.

This was contained in a statement jointly signed by the Director of Public Affairs at the NCC, Mrs Nnenna Ukoha and Head of Public Affairs at the Corporate Affairs Commission, Mr Rasheed Mahe.

According to a joint press release issued by the two agencies, the directive, which takes immediate effect, requires all licensed telecom operators seeking to transfer ownership or control of shares amounting to 10 per cent or more of their total share capital to first obtain a Letter of No Objection from the NCC before such transactions can be registered by the CAC.

The statement reads in part, “The directive, which takes immediate effect, requires all licensed communications companies seeking to transfer ownership or control of shares amounting to 10 per cent or more of their total share capital to obtain a Letter of No Objection from the NCC before such transactions can be registered with the CAC.

“The requirement is in line with the provisions of Section 90 of the Nigerian Communications Act 2003, Regulation 28(2) of the Competition Practices Regulations 2007, and Regulation 42 of the Licensing Regulations 2019, which empower the NCC to monitor transactions involving licensees and ensure fair competition within the sector.

“Under the new arrangement, the CAC will only process and register requests for changes in shareholding structures of telecommunications companies where the transaction involves 10 per cent or more of the company’s shares and is accompanied by evidence of prior approval from the NCC.

“According to the two regulatory agencies, the measure is aimed at strengthening oversight of significant ownership changes, preventing anti-competitive practices, and preserving a fair and competitive communications market. It is also expected to enhance transparency, boost investor confidence, provide greater regulatory certainty, and support the long-term stability and sustainability of Nigeria’s telecommunications industry.

The NCC and CAC reaffirmed their commitment to fostering a transparent, stable, and investor-friendly business environment. Both agencies pledged continued collaboration to promote fair market practices, strengthen regulatory compliance, and ensure the orderly development of Nigeria’s communications sector.”

Continue Reading

Technology

Rising Cyber Threats Could Undermine Business Sustainability, Profitability—ISSAN

Published

on

David Isiavwe ISSAN President

By Modupe Gbadeyanka

The relevant stakeholders have been urged to take urgent action to curb the rising sophistication of cyber threats, which could undermine business sustainability and profitability.

This call was made by the Information Security Society of Africa – Nigeria (ISSAN) during its monthly meeting held in collaboration with MAXUT Consulting.

The group noted that identity theft, mobile fraud, ransomware, and social engineering attacks are threats to organisations, especially those who may struggle to protect information assets, maintain operational resilience, and address vulnerabilities before they can be exploited.

The president of ISSAN, Mr David Isiavwe, who doubles as the Executive Director for Risk Management at Nova Bank, stressed that cybercriminals are deploying increasingly sophisticated attack methods targeting individuals, businesses, critical national infrastructure, and strategic assets.

Among the threats highlighted were identity theft, Business Email Compromise (BEC), phishing, ransomware, WhatsApp account hijacking, Distributed Denial-of-Service (DDoS) attacks, payment card fraud, cryptocurrency-related attacks, and other forms of social engineering.

According to him, the increasing frequency and sophistication of cyberattacks mean cybersecurity can no longer be viewed solely as an IT issue but as a critical business and national security priority.

To address these challenges, he urged organisations to adopt proactive risk management practices, implement continuous monitoring systems, promptly address vulnerabilities, and invest in regular cybersecurity awareness programmes for employees and customers.

Also, the importance of leveraging emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), and automation to enhance threat detection and response capabilities was emphasised.

“No organisation can successfully confront today’s cyber threats in isolation. Information sharing, collaboration, and collective vigilance remain essential to protecting our digital ecosystem and safeguarding public trust,” the ISSAN leader said at the event, which featured a technical presentation titled, Confronting the New Mobile Threat Landscape: Beyond User Authentication.

ISSAN reaffirmed its commitment to promoting cybersecurity awareness, capacity building, information sharing, and industry collaboration to strengthen Nigeria’s cyber resilience and support a secure digital economy.

Continue Reading

Technology

Zoho Launches Nathu La Server

Published

on

Zoho Nathu La Server

By Modupe Gbadeyanka

A designed-in-house server known as Nathu La has been launched by a global technology company, Zoho Corporation.

Nathu La is engineered with hardware-rooted security at every layer of the stack. Its indigenous IP-driven approach reduces dependency on external entities for security audits, firmware updates, and licensing continuity.

The solution aligns with open-source software principles and reflects Zoho’s broader commitment to building sustainable, secure, and scalable digital infrastructure. It also supports the growing global focus on digital sovereignty, local innovation ecosystems, and high-performance computing capabilities.

The platform was introduced by the company as part of a pivotal step in its journey towards building its full technology stack, from the hardware layer to software applications.

With Nathu La, Zoho has achieved equivalent performance with 12-18 per cent lower power consumption and 20-30 per cent lower total cost of ownership (TCO), thereby reducing inference costs.

The Nathu La server, comprising Intel® Xeon® 6 processors, was developed collaboratively with Intel, leveraging their enablement capabilities and technical expertise.

The design philosophy behind Nathu La is rooted in the Open Compute Project (OCP), emphasising modularity, thermal efficiency, and ease of maintenance. This enables Zoho’s data centres to significantly reduce total cost of ownership and power consumption.

Zoho plans to host its applications on the Nathu La server platform, enabling the company to optimise the full software-hardware stack for its specific workloads, reduce costs, improve performance, and strengthen data governance for its global customers. This will also help bring down inference costs for Zoho’s AI usage.

The Nathu La server motherboard and chassis platform is the result of five years of R&D across hardware, firmware, and systems management. Based on Intel® Xeon® 6 Processors, the server is designed to optimise performance for virtualisation (VM), High Performance Computing (HPC), AI inference, and storage applications. This results in improved performance of Zoho applications for end users.

The server features customised power delivery subsystems, an in-house DC-SCM (Data Centre Secure Control Module) design, and modular chassis options compatible with diverse end-user environments, offering flexibility across deployment types.

All modular components – including the DC-SCM and NIC (Network Interface Card) – were designed in-house by Zoho’s hardware engineering team and assembled through electronics manufacturing partners, enabling tighter integration and quality control across the platform. Over five patents have been filed covering advanced thermal management and cost-optimised server architecture designs.

“Zoho Corporation has invested in building its own technology stack from the ground up over the last three decades. The Nathu La server launch is in line with that goal.

“With our strategy of using contextual, right-sized models, running on our own platform, on our own servers, in our own data centres, we are compounding the benefits accrued from owning and operating our entire technology stack. This ensures that our solutions are more sustainable and accessible for businesses.

“These long-term R&D investments we are making at every layer of the stack are aimed at delivering customer value,” the Country Head for Zoho Nigeria, Mr Kehinde Ogundare, stated.

In 2020, Zoho established a small R&D team in Nagpur, a Tier 2 town in India, focused on projects such as server design and systems engineering.

Members of the Nathu La R&D team include hires from SETU – short for Students’ Engagement for Transformative Upskilling – an initiative designed to build a pipeline of industry-ready engineers, with a focus on advanced learning in Electronics System Design and Manufacturing (ESDM).

Continue Reading

Trending