Business advice for Africa innovators
Daemons & unicorns
In 1938, the Nigerian author D.O. Fagunwa published his seminal work, Forest of a Thousand Daemons (its title after being translated from Yoruba by Wole Soyinka). The novel’s vivid imagery tells the tale of the brave hunter Akara-ogun taking on spirits, snake people, magical trees and many other mythical beings in this forest.
But the hunter never meets a unicorn.
The point here is that Thousand Daemons is a perfectly fine book without the need to borrow or transfer the mythologies of other cultures to the author’s. The same kind of mindset is needed with startups across Africa’s various hubs, because in this context the unicorn is a startup valued at over a billion dollars. In Africa, that’s as rare as the mythical creature itself. Yet, some believe African hubs need to produce their own unicorns to be seen as successful as in Silicon Valley.
However, as investors and startup founders (including Lidya, Bitpesa, Beyonic and Impact Africa Industries) discussed at the Accelerating Africa 2.0 event earlier this week at Quartz’ offices, African startup ecosystems shouldn’t be trying to recreate Silicon Valley in Lagos, Nairobi or Cape Town.
Doing so is what creates a paradigm where young entrepreneurs pitch the ideas they believe investors want to hear rather than the ideas in which they believe, notes Eghosa Omoigui of Lagos-based EchoVC. In ecosystems where funding levels are still quite low relative to the opportunities, some Africa-based founders seem to think this is the best way to “get in the door”. It might very well be true, but it isn’t the way to build 10-million dollar companies, much less billion-dollar valuations.
To be clear, we’re not saying African startup hubs or cities will never produce billion-dollar companies, they have done so and will certainly do so again. But while an over-emphasis on valuation, rather than innovation and problem-solving, can be a mere distraction in Silicon Valley, in Africa it could do real harm with much smaller and sensitive startup ecosystems.
Every investor and entrepreneur said the same thing on our panels this week, they all think it’s still very early days in Africa. That said, those in the know say there are several African $100 million startup valuations which are much closer to fruition than we may realize, likely over the next year. That would have more impact today on Nairobi or Lagos than yet another $1 billion valuation would in the Valley.
When you have daemons, who needs unicorns?
— Yinka Adegoke, Quartz Africa editor