*Tech start-ups must sustain fantastic ideas
*Adebiyi’s recipe for building scalable, viable start-ups
By Prince Osuagwu, Hi-Tech Editor
Africa In 2021, Africa’s tech startups raised nearly $5billion. Five of these startups Flutterwave, OPay, Wave, Chipper Cash, and Andela also reached unicorn status. A unicorn is a privately held start-up company valued at over $1 billion.
Four of these unicorns were fintech start-ups; which according to Africa Investment Report by Britter Intelligence, contributed to a lion’s share of the investment in start-ups across Africa, with close to $3 billion.
According to the report, the top leading sectors were fintech – which raised $305,430,000 valued at 71.7 per cent, energy tech which contributed 8.4 per cent and mobility/logistics which accounted for 7.7 per cent.
From all indications, the Fintech industry in Africa, and especially Nigeria, appears lucrative. So far, this year African start-ups have also raised over $2billion. The ideas behind them are impactful to the economy, giving rise to why they are raising much needed funds to plug the gaps in Africa’s economy.
However, as have been seen in other economies where these successes took off before Africa, a fantastic tech idea is only a fraction of the work required to build and scale a viable startup, particularly in Africa where instability rules economic and political landscapes.
But the Executive Director of Growth and Partnership at Itex Integrated Services, Kunle Adebiyi, has given insights into what level of commitments fintech start-ups required to make to build lasting businesses that will leave enduring legacies.
Adebiyi is a recognized business leader with more than 25 years of experience in consulting, direct sales operations, business development, and operations management. He outlined some rules which he believes fintech start-ups in Africa can create valuable businesses on to gain appropriate sales and distribution strategies. Adebiyi’s recipe include:
Getting the technology right
The product is the first proper experience for the customer; it is important to get the tech right. Second chances are a hard ask. When a customer tries your platform once and it fails, they move on to someone or something else that can help solve their problems. So, take out time to thoroughly fix anything that might impede the functionality of your product. Test the product, retest and test it again.
He tipped powerdeal.ng by ITEX, as a resourceful tool for startups to serve end users well from the first attempt.
Automating the processes
Automation tools help to improve performance rapidly. It can help companies to deliver on the reduction of internal cost and speed of service. However, not all automation is the same, and it varies from business to business. Choosing the right tools for your business will depend on understanding the need, and knowing how you wish to address it. It is critical to reduce as many processes as possible to enable efficiency and the best way to improve efficiency is by automation.
Right legal partners drive compliance
It is important to understand the legal requirements of the industry within which a business operates. This is an avoidable pitfall that can be solved by working with the right legal partners.
Whatever one does, always protect the license. Licensing of a fintech company depends on the category of the company. It can either be a Digital Bank, a Payment Service Bank, or a Payment Service Provider. These three categories have various licensing procedures.
Your business needs to be fully compliant, as that is the only way to guarantee protection. The price of non-compliance can be colossal.
Properly defined target aids performance, drives revenue
The first thing is to create a detailed landscape of prospects, and develop a rigorous, goal-oriented pipeline. That is, articulate proper OKRs (objectives and key results) and KPIs (key performance indicators). Establish proper documentation for each step in the sales process to ensure alignment and follow-through. This will allow for accountability and ensure that everyone is aware of their responsibilities. It is very easy to lose a salesman who is remote and is not being asked questions about his performance regularly.
Never engage in price wars
Every good business needs to have a strong understanding of its key competitors, their strengths and weaknesses. It is critical for survival.
However, there is a tricky part that many stumble into – be competitive but not devolve into a price war. Price wars are a nightmare – they can harm your bottom line and your brand.
You need to ensure that you do not have a knee-jerk reaction to the competitor’s actions. Your strategy cannot be reactionary. Develop an informed strategy and stick to it. However, you also need to be nimble and responsive to the market and situation when the need arises. A major undoing of the Fintech companies in Nigeria today is the unhealthy competition that is eroding value through unfair pricing. The agents further complicate this by wanting the terminals for free and the charges at almost nothing.
Keeping staff highly motivated
Attrition and cross carpeting amongst fintech staff is very high. To develop a unique culture and brand that attracts the right talent, you need to invest in building an employee and company map that is entrenched with strong values. . The industry is highly competitive and demanding, and it is important that staff feel valued, seen and heard. This is the first stepping stone to building a highly motivated and productive employee experience.
You also need to manage your risks, don’t avoid them. Provide a clear vision for employees so that the business can be consistently focused on its long-term plan.
Ensure they have a clear understanding of how their work contributes to overcoming obstacles and directly contributing to the company’s future. The success of a business relies entirely on the people responsible for delivering its strategy and building the technology, not on the technology or the strategy alone.
Partnering the right VAS providers
Value Added Service (VAS) Providers increase customer satisfaction, eliminate complexity through abstraction, simplify the experience, and convert customers to brand evangelists. The right provider can do all of these and more, but engaging the wrong provider for your service can be equally detrimental.
The fintech business is very volatile but this shouldn’t stop you from stepping out and getting things started. This involves actual man-hours and sourcing talents dedicated to understanding the ins and outs of the business, receding remote locations and building strong partnerships across your industry.
Certain data and relationships cannot be collated or built from behind a desk, no matter how much work is done. The concept of rubber on the road remains valid to this day. If you must understand your products, your competitors’ products, the loyalty of your agents etc, you must engage your customers in the various markets where they reside and work on a consistent basis.
Software development rapidly evolves
To get to the top of the range, startups must compete with international organizations. Software developers must be at the forefront of innovation and the changes within the industry to be able to resolve issues quickly and anticipate challenges while developing their solutions.
Managing the developers in Nigeria has however become a major challenge. The market has suddenly become their market. They want to be paid in forex, they want to work from home, they want flexible hours, and they want to go work somewhere else.
Gaining agents’ loyalty
Sales agents may or may not be part of an organization’s internal sales team but that doesn’t make them less important. They must become the Ambassadors.
To gain loyalty of the agents in competitive market with several players could be an uphill task. But just keep climbing.
As investments in startups across Africa keep increasing, the fintech sector appears poised to continue to take the lead for the foreseeable future. Ensure you have the right product and have done extensive research before venturing into the ‘lucrative’ industry.