This is a guest post written by Mark Essien, founder of Hotels.ng – the biggest hotel booking website in Nigeria. The article was first published on Medium here.
I am 100% convinced that the incubation model in Africa is fatally flawed as a method of creating big software companies. Of the 9 biggest software startups in Nigeria, none was built by an incubator (Konga, Wakanow, Iroko, Paga, DealDey, Jobberman, Cheki, PrivateProperty, Nairabet, Nairaland).
Of the 15 next biggest software startups after the above, the only one that came out of an incubator is BudgIt, and I’m not sure that BudgIt was properly ‘incubated’, all I know is that they used to operate from CcHub.
Incubators just don’t work, otherwise they would have produced more successful startups in Nigeria. Even Kenya and Ghana that have a stronger incubator scene have produced nothing of note.
The reason I believe they do not work: Incubation attracts the wrong kind of founder. The type of founder who wants to be ‘taught’ how to build a startup, and who is willing to show up daily at the incubation center to be ‘incubated’, is someone that is far away from the grit and problem-solving ability necessary to build a startup that works.
To build successful startups, the people who want to incubate have to focus on attracting the type of people who can build successful startups. The pitch that they will be ‘mentored’ is not attractive. One does not want mentorship, one wants information. The so-called mentorship where some guy comes and tells his life story does not help you in knowing how to manage your taxes.
A successful startup group has to bring together smart people who can bond and exchange information, then get out of the way. There is far more value in talking to fellow founders than in anything else. The smarter the other founders around, the more knowledge one can get and the faster one can move.
If incubator groups want to help, then when startups need information on particular topics (e.g marketing or HR), they should be able to access it and avoid making mistakes.
To me, incubators that can never work are ones that select ‘teachable’ people, then bring in a bunch of ‘experts’ to show them how to do things. The incubator then forces the startups to pivot to particular things (that the founders may not be knowledgeable about). The incubator then makes the founder discuss every key decision with the incubator owners. I cannot imagine a scenario where this works.
A working ‘incubator’ is one where they focus on finding the very best founders, giving them lee-way to figure things out, looks bi-weekly at growth metrics, has equal-partner discussions with the founders, and has people in place to show the founder specific technical things (e.g finance, hr, marketing etc). So more like an accelerator than an incubator.
I’ve seen the scene first-hand for a while now. I’ve seen what is working and what is not. You can’t teach someone to become a founder, stop trying. When he/she is ready, he/she will be ready. Focus on finding the people that are ready now, and just need capital and some key knowledge to move things to the next level.