Adetayo Bamiduro is the co-founder of MAX (Metro Africa Xpress), a Nigeria-based mobility platform that connects users to vetted professional motorcycle-taxi drivers via a mobile app; He has shared 4 great lessons from his entrepreneurial journey which young entrepreneurs to learns from.
Dynamics in economic growth, demographics, and connectivity make this obvious — and Nigeria sits at the intersection of all three trends. Nigeria has been an innovation hub for sub-Saharan Africa and a hotbed of entrepreneurship and young talent.
Frontier markets, developing countries that are more developed than the least developing countries, but are too small, risky, or illiquid to be considered emerging markets, are high-risk, high-reward opportunities for today’s young tech entrepreneurs. Among such frontiers, global analysts have proclaimed time and again that Africa is the future.
The challenges facing an entrepreneur in a country like Nigeria are incredibly steep and require an uncommon level of savvy and adaptation. While building and scaling his company, Adetayo Bamiduro faced difficulties which included accessing capital and talent, sorting through unpredictable regulatory crises, and solving for market size and a fragmented customer base.
Adetayo learned to rely on his strengths of being able to study markets and the local culture, and being able to keep adapting the product offering based on user feedback to bypass the inevitable roadblocks in an entrepreneur’s path to success.
Here are 4 good lessons from Adetayo Bamiduro’s entrepreneurial journey which young entrepreneurs can learn from.
What to do When Capital is Scarce
In frontier markets, as elsewhere, it all starts with capital, a lack of which can stop a good idea in its tracks. Adetayo thinks, for startup founders in Nigeria, finding capital to fund their vision can be difficult, if not impossible. Because his co-founders and him were MIT graduate students, they were able to leverage their network while at school in the U.S. before heading back to Lagos.
According to Adetayo, they got into TechStars, a startup accelerator in New York, and established our business with the help of accomplished entrepreneurs and mentors there before returning home to Nigeria. With capital markets much less developed in a place like Nigeria, Adetayo mentioned that he and his co-founder always recommend that peers seek entry into a top-tier global startup accelerator in Europe, the U.S., or Asia.
Finding Good Talent Can be an Uphill Battle
Access to talent presents a similar challenge, due to a shortage of top-quality tertiary education in frontier markets. Only 6% of prospective students receive some tertiary education in sub-Saharan Africa, compared with 80% in developed countries. This shortage is even more dire in the computer science (CS) field — CS departments on the continent are underfunded and unable to accommodate the number of students who wish to enroll.
Facing this challenge, Adetayo Bamiduro and his co-founders hired their first technical team members from MIT. When they launched in Lagos, they recruited local talent through referrals from friends in the tech ecosystem and through LinkedIn.
According to him, they couldn’t afford to pay the market rate at the beginning, so they learned to sell their company’s mission of making mobility safe, affordable, and accessible to 1 million Africans to attract great talent.
Cultivating Relationships is Critical
Sure, engineering talent is crucial to the success of a start-up, but in frontier markets like Nigeria, soft skills like communication and adaptability are even more critical to deal with regulatory challenges. For many African startups, regulatory challenges will present an existential threat at some point in the early stage of a business.
Bureaucratic bottlenecks are commonplace, tax requirements spread across multiple jurisdictions, and regulations can change at the drop of a hat. In an environment that lacks a predictable regulatory process, founders have to stay on their toes.
Adetayo emphasized that for startup founders in frontier markets, engaging regulators is a survival skill and a chance to influence long-term prospects for sustainable growth. The opportunity to participate in such conversations is one of the greatest honors of operating a start-up in a frontier market.
Consider Scalability and Price
Market size and fragmentation present, for some frontier start-ups, a fundamental limitation that must be baked in at the concept stage. In Adetayo’s case, he had to engineer a technical product with unique pricing challenges and market barriers in mind.
For example, while disposable income in sub-Saharan Africa is among the lowest in the world, his product is intended for mass-market consumption across the continent. His company had to tailor their its and services to maximize exposure to the greatest number of low-income consumers, which limits its margins.
The company had to be scalable from day one in order to be profitable, a challenge that many founders in developed markets don’t encounter until further down the line. Further complicating things, Africa is not a homogenous market. Barriers abound — from cross-border payments to multiple languages within a single community to differing cultural attitudes around transportation.
The only way to work around these barriers is to live within them. Adetayo mentioned that entrepreneurs need to rely on strong communities, wide networks, and authentic relationships in order to navigate such a fragmented system.
Adetayo said his experience has left him with the certainty that market immersion is as essential to successful entrepreneurship in a place like Africa as is access to capital and talent. Building a product that is really in demand, that people will connect with across boundaries, and that consumers can adopt at scale requires an intuitive sense of the market.
Adetayo Bamiduro implored founders who are serious about frontier markets to go there themselves, be in constant contact with customers, suppliers, and regulators, and gain immersion in the culture. The rest will flow from there.