Far away in May 2016, CEO and Chief Architect, Cymantiks Nigeria Limited, Emeka Okoye, who is also a strong advocate for the use of Mobile, Open Data & Semantic Web to re-develop Africa on Social Media. Took to Twitter to discuss the Tech Ecosystem with a focus on Nigeria.
Tech Ecosystem comprises of:
– tech businesses
– research institute's
— Emeka Azuka Okoye (@EmekaOkoye) May 10, 2016
Having listed Universities and accelerators as part of the mix, he did a comeback in October, about 8 days after Nigeria’s Independence (October 1) to talk about Universities being the “socially cohesive environ to launch innovations”.
One reason why tech ecosystem need to be fully built in #Nigeria is 4 universities to be the socially cohesive environ to launch innovations
— Emeka Azuka Okoye (@EmekaOkoye) October 8, 2016
College Business Incubators are not a new thing, as many other Universities around the world flaunt their Incubators. Perhaps, a move such as this would accord our Nigerian Universities some more bragging rights on the Global Entrepreneurship Scene.
While myself alongside other “techies” and players in the Nigerian StartUp scene perceive this as a welcomed development. I would like to remind the general public not to be oblivious to the peculiarities of the challenges that would face these hubs and the inhabitants (students many of which are first-time entrepreneurs).
Challenges to be anticipated with this recent development
In 2012, Peter Relan, founder of YouWeb Incubator asserted that 90% of Incubators will die in America and around the world (where we belong). Meaning, only about 750 out of the estimated 10,000 incubators in the world would survive (differentiating this from ‘flourishing’). Perhaps, these newly formed Nigerian University-born Incubators (NUI) would be among this 10%.
New abbreviation alert: Nigerian University-born Incubators – NUIs
In the Summer of 2013, Sramana Mitra talked about 2 major factors that could affect the posterity of incubators.
- Naiveness of the entrepreneurs
- Inexperience of the investors, friends and advisers
The above points are particularly relevant to the rise of the NUIs because, as you will find many of the participants are either first-time entrepreneurs or have been previously unsuccessful (because the stats show that 9 out of 10 startups fail).
Also, it would not be surprising to see that some of the friends and families (including lecturers, academics, well-wishers of the university) of these budding start-ups that are expected to emerge lack the ability to assess the viability/feasibility of the startup. Hence, many of them fail.
Sramana goes on to identify 2 things incubators need to ensure to be ‘successful’;
- provide real value beyond workspaces endowed with internet facilities
- define success parameters beyond outside funding received
Providing Real Value: Among one of the most important responsibilities of an incubator is to provide business and management advice and sometimes steering depending on the amount of buy-in into the startup. Hence, it is not just a workspace with electricity and internet facilities although those things are necessary to grow an online business. Also, this value can actually be gotten from the interaction between the new incubates and existing incubates such as learning about term sheets and deal terms, becoming each other’s first set of customers, giving advice on hosting plans etc.
Defining Success Parameters: A couple of Incubators have Demo Days where their incubates pitch to other investors and receive funding and buy-in. For long, this has posed to be the dream of start-ups founders: to raise money. I mean, it helps them ‘scale’. But as an incubator, your success should not just be based primarily on funding but also on things like How well the founders have been coached? Access to mentors provided? Access to like-minded entrepreneurs and alumni that could form a family and friends structure for the start-ups, as it has been argued that many startup founders are lonely also see here. For instance, one of the steps Laura Click outlined in her article for how to cope with Founder Loneliness was to join a co-working space (which is undoubtedly one of the functions of an incubator).
If these NUIs would be successful they have to do things differently, perhaps taken a cue from YCombinator (YC), arguably one of the most successful startup incubators on the planet (actually, they were ranked the most valuable incubator in 2012 by Forbes). Churning out unicorns like AirBnB as well as other internet companies such as Heroku and Dropbox.
Generally, the model adopted by incubators is to buy into the company by absorbing some equity from her incubates. However, I am unsure of the model our NUIs would adopt.
What can our NUIs do to increase their chances of Success?
Following from YC’s success and other sources I have identified a few things that could make our NUIs successful.
- Rigorous selection of Founders/Startups and Mentors
- Knowledge management within the incubator
- Having an air-tight succession plan
- Leveraging the Alumni Network
- Work on their branding
Rigorous Selection: Leadership Expert, John C. Maxwell, wrote in one of his books about how Leaders can make their jobs easier by simply identifying eaglets and give them the platform to soar. This same logic can be applied to identifying founders and startups that would most likely flourish. Once this selection process is done right, it becomes easier for these founders to grow the incubator and make it more valuable such that it can attract more applications from potentially great founders. Don’t just select for the viability of the startup but also check in your ability and in-house expertise to help them flourish. Also, of course, buy into the founder (his motivation, grit and vision) before the startup. A good founder can almost easily pivot, but it is not that easy for a startup to pivot from its pioneer.
Also, these NUIs would need to attract industry experts (basically, succeeding founders, angel investors, managers of other Incubators such as CcHub) to assist with open office hours for their incubates. The role many of these NUIs would play would be management and resourcing (personnel and funding)
Knowledge Management: Over time, knowledge is created within the company, there has to be a way to aggregate that knowledge such that it becomes easily accessible to all. Especially, the incoming incubates. Also, where possible social platforms can be created for these selected founders to interact, it doesn’t just help with informal knowledge sharing but also with building friendships.
Succession Planning: NUIs should not fall into the mismanagement that comes from thinking only in the short-term. Perhaps, at some point, these NUIs would accept applications from the outside community, but in order for this process of selection to run smoothly, there has to be a strategy in place to attract, sieve and invite the new set of selected incubates. Hence, while a department is focused on grooming the current founders another should be looking at recruitment strategies and ways to incorporate the current learnings into the next batch of recruitment.
Alumni Network: For the comers into the business incubator space such as NUIs they would not have any strong alumni base yet until after the 1st and 2nd batch. Hence, there should be a plan to keep in touch with these founders once they graduate from the incubators.
Branding: Part of the reasons why YC is so successful is because of its branding. Infact, companies tend to benefit a lot from having a good image in the market (in this case, the outside world). Hence, stories of efficient management (of staff, incubates and funds), rewarding selection process, succeeding incubates (perhaps, their MVP gathering traction) etc Can help our NUIs gain some bragging rights. Hence, in order to improve their branding, they should be more focused on results.
Other things to consider
Other things that should be considered by these NUIs (that is if they’ve already been considered) include the length of incubation for each batch, sectors they want to focus on (e.g health sector, educational sector, financial sector etc) they can start with a few and grow out into more.
What can kill our NUI? Nigeria has a peculiar problem and that is CORRUPTION. QED.
Already, we are seeing a push for tech capacity development in our universities, championed by the ForLoop Nigeria movement who already boast of visiting over 5 Nigerian Universities to hold meet-ups.
I strongly believe if the suggestions in this article are put into consideration, our Universities might be up to something. Hopefully, in the nearest future, we will be seeing commercially-viable innovations rise from Universities, as Emeka Okoye dreamed.
Takeaway: Should more Nigerian Universities get in on these? or can a second-mover advantage be more beneficial here?