“Therefore, as we have opportunity, let us do good to all, especially to those who are of the household of faith.” – Galatians 6:10
Very early on in my career as an entrepreneur, I learnt a very powerful lesson in building ecosystems from a 23 year old. His name is Ted Livingston, CEO of Kik Interactive.
As far as I am concerned, in the Canadian startup landscape, he is right up there with Mike Laziridis, founder of Blackberry (funnily enough they may be mortal enemies for this reason).
At age 23, as a young founder like us who had also started his company at Velocity, then the University of Waterloo dorm incubator, he gave what must rank as one of the most transformational alumni gifts ever – $1million to endow the Velocity Fund. The Velocity Fund gives $25,000 equity free to four companies every semester. It is a very successful program. Many very successful companies from the Waterloo area now, including two particularly amazing breakout successes Thalmic Labs (raised $14.5m) and Bufferbox (acquired by Google) are recipients of the Velocity Fund. In fact the fund is so successful, the joke is that winning the Velocity Fund is the Canadian shortcut to an interview slot at YCombinator. No surprise, given Paul Graham praises companies from University of Waterloo all the time.
To build, first the sacrifice
I will never forget the day the gift was announced.
My startup at the time, Bookneto (now acquired) had been running from a conference room in my co-founder, Pierre Ary’s residence at Velocity. We had only just been moved to a corner of a budding startup heaven in Kitchener’s tannery district called the Communitech Hub managed by one of the greatest startup organisations in the world, Communitech (all my startups so far including Fora have been headquartered in this Hub free of charge). I had a startup update meeting with Jesse Rodgers the day before (he was the manager of Velocity; now at Toronto performing the same magic). He hinted towards the end of our meeting that a huge announcement would be coming the following day. I had no clue how large it would be.
As I arrived at work the day of the announcement, all the Velocity entrepreneurs were clustered discussing in hushed tones. I heard from a fellow entrepreneur. Ted had given Velocity $1million. I was like, “Wow. Where did he get that kind of money from? He (or his parents) must be filthy rich.” Student entrepreneurs like myself were so excited that we would be getting real money to run our startups. $25,000. That is almost N4 million. And we didn’t have to give up any equity. Sweet!
When I confirmed the news on Techcrunch I was so full of pride. But what I found more interesting was what happened to the atmosphere around Velocity after this event. Ted’s act of sacrificial giving made us more than a gathering of startups or a community of technology entrepreneurs. It made us family and it certainly made me very proud to be forever identified with Velocity. Many of my friends who would go on to start and build very successful startups were inspired by that event to help other startups however they could. Yes, we might not have a million dollars to give Velocity. But we have years of experience and mistakes and specific subject matter knowledge to share with other startups and budding student entrepreneurs. We would do anything in our power to help them. Ted’s gift to us was worth more than a million dollars. It was the lesson that we were more powerful together, as a family of entrepreneurs that supported each other in concrete ways than as individuals. Especially in ways that did not personally benefit us.
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Last spring, after I left Bookneto, I took a break from startups to help one of my mentors (and my favourite person in the world) organizse a conference about innovation that brought together visionaries, venture capitalists, students and faculty at the University of Waterloo to discuss what was next in technology and business. We invited Ted to speak (and also to exclusively announce that he had raised a very large Series B round). It was then I heard the actual story of how he came upon the $1 million dollars he gave to start the Velocity Fund.
While Ted was raising Kik’s Series A, his round was very quickly oversubscribed, but he wanted to make space for an investor he really liked to invest at a stake that investor would be comfortable with. So he opted to sell some of his personal shares to this investor. The value was about a million dollars and some. Although it was be perfectly within his right to keep the cash (this was a company with a patent infringement lawsuit with Blackberry in court, so it was probably the safer option) or start his own private VC fund (many founders in the Waterloo area do this), he chose to give it to Velocity instead.
It was an amazing story of how the entire ecosystem benefited from the good fortune accorded to one of its own.
He could have rested after giving $1m but till this day, Ted continues to led that ecosystem a hand. Shortly before I moved to Nigeria, I told him about Fora and he asked me to reach out if I needed any help.
Whither the pillars of our ecosystem?
Now back to the more depressing state of our technology industry in Nigeria. There is a lot that has been said about the ecosystem and how depraved of talent it is, how deficient of funding it is, how untrustworthy and loud its principle characters are, how selfish we have become. I have my own opinions about all of that, and I beleive it is time to look ourselves in the face and speak the truth without fear of who will take offence
Our startup community is in slow motion because we, Nigerians, are a people who prize empires over communities, forgetting that empires will rise and fall but only communities will last forever.
We have not learnt that our strength is in the ecosystem. We have not learnt that we must support it. We have not learnt that to do this, we must give in a spirit of sacrifice, completely devoted to it so that, some times, the actions we take do not even benefit us or our organisations.
The bible says, in Mathew 16:21, “where your treasures are, there your heart we be also”. A lot of the times, it seems we don’t understand that great companies are not built in a vacuum. It is not just access to a great market or creating one trick ponies. We need to cultivate an environment where it is easier for great companies to be built. This is what an ecosystem is for – and ours is weak because the ones that should be its champions have abandoned it.
We are talking about building an internet cluster in Yaba, but when they have the opportunity to move buildings they go into Isolo or they set up office in Ikoyi. This is what our champions are doing with their millions of foreign venture capital – and it is a shame.
If we say this is our country and this is where we will build our billion dollar or multi million dollar companies, why don’t we do more – especially given the opportunities and resources we have to improve it?
Now, at the risk of making myself a pariah to these Empire Builders, examples are needed.
I was very happy and proud when Jason Njoku and Iroko Partners came to the limelight because of the efforts of community builders like Oo Nwoye, Bosun Tijani and Seyi Taylor amongst several others who God gave the vision and common sense to take advantage of the opportunity from journalist, Sarah Lacy’s Nigeria visit. Jason benefited heavily from their generous community building effort. I remember sharing those articles that came out of the experience with friends because it validated my country’s potential in technology in such a great way. I doubt that without that divine encounter, he would have built his startup into the success it is today so quickly. He was not alone. His community was beside him.
However, the jury is still out on Jason – has he bettered the ecosystem that stood up for him? I have become more convinced that the ecosystem is of less concern to him than the empire he is – legitimately – building. This is one of many reasons I am not particularly fond of him.
Okay, he is angel investing in a market where funding is scarce and very few others have the foresight or intelligence to fund high growth internet startups. And yes, without this capital, growth will be, not impossible, but slow. However, investing in startups is not an exercise in pity. It is a not a social venture. it is a business venture and I like that Jason has made that especially clear about Spark.
According to Jason himself, “this isn’t about me ‘giving back to the ecosystem’.”
So there, my problem. What has especially disappointed me about Jason and many others startup leaders in this community is how very few of them have really used their resources to bring and build the ecosystem in the way that Ted did when he gave to start the Velocity Fund.
Now, these so called leaders, who have not committed any significant resources to the ecosystem despite their incredible means and the amazing opportunities given to them by the ecosystem, except for tokens, now want to rally the ecosystem to advance their own selfish causes.
One of the most shocking pieces of evidence that we prefer building empires to the ecosystem is how little support these group of people have given the Co-creation Hub. Anybody that knows Nigeria’s technology ecosystem very well knows that Co-creation Hub is ground zero. It is to Nigeria as Communitech is to Waterloo or YCombinator is to Silicon Valley. Many great companies have had their start here.
Now, how many Nigerian tech companies are in the image below?
Apart from Vanso, MainOne and the Tony Elumelu Foundation, all the other companies there – encouraging the incredible value it is adding – are foreign. Yet you, who has never done anything altruistic for the Nigerian ecosystem, now says that foreigners are bad it. Is that not hypocrisy?
Another example. TechCabal just started the TechCabal Battlefield – an amazing competition I intend to compete in.
Look at the sponsors of TechCabal Battlefield.
Stanbic IBTC is a foreign company majority owned by the Standard Bank Group. Jobberman, whose founders are actually amazing and quiet investors as well as supporters of the local ecosystem, is the only local company sponsoring. They are one of the few local companies actively developing the ecosystem and helping us even source talent.
Iroko Partners on the other hand is nowhere near the picture. Neither is Konga.
Even outside of tech, the Afrinolly Film Competition is supported by Google and MTN. This is something that should directly concern Iroko as a company that buys local film content. It has a complementary business advantage to that business. Yet, again, Iroko Partners is nowhere to be found. And its founder claims to have a fondness for the ecosystem. It truly makes me wonder.
There are also all sorts of stories out there about iROKO taking advantage of content owner illiteracy to make them sign agreements that are not advantageous to them in any way. I won’t even get into how he shames young founders on the internet or disgraces a CEO of one of his companies. You may say all is fair in love and business, but this is not how to build your ecosystem. This is how to build an empire for just yourself and your family.
What am I doing?
Now you might say, enough with the Jason bashing. What have “you” done for the ecosystem? This is no opportunity to boast, but I know I have done and will continue to do my own part in the ecosystem, and I am not even a leader in it.
I don’t have millions of dollars raised (and if I did, I would give money to the ecosystem) but I used a little money of my own to help fund the Founder’s Convo Dinner series (now Tech Cabal Sessions) with the amazing Bankole Oluwafemi. When it grew too much for me or him to handle as a side project, I advised him to make it part of Big Cabal media and helped fund that effort as an individual. I am very happy it is an amazing success by any standard, generating self sustaining revenues and poised to be there for many years.
I have selectively introduced founders I like to investors who have previously invested in my companies and trust my judgment and I continue to do so, despite weak pitches.
I try to give practical advice to entrepreneurs through my writing about the nuts and bolts of building a company (not sanctimonious sermons from the rostrum about how I rock and everyone in the ecosystem sucks balls).
But there are a few heroes who stand out
Despite my disappointment with Jason and others, I remain very thankful to God for many other leaders in the African ecosystem who are amazing as leaders and mentors. Many of them are silent and quiet – not looking for attention. They will not even want me to mention their names but I will anyways.
People like Idris Ayodeji Bello, who invested in Fora after two phone calls without ever meeting me in person and has invested his own money in several Nigerian founders straight out of the Obafemi Awolowo University, knowing very well they will fail even before they start.
People like Pule Taukobong, who sold his apartment, cleaned out his Pension Fund Account and lived on people’s couches as he travelled cheaply to build one of Africa’s most active and successful angel investment funds, African Angel Networks. He funded us 48 hours at a very fair valuation after meeting me in New York and I didn’t even have a website.
People like Akintunde Oyebode and Yvonne Johnson who have helped several startups including mine better understand the financial consequences of their business decisions and are helping them navigate the heady funding waters for free.
People like Bankole Taiwo who paid the ultimate price for this ecosystem (May his soul rest in peace).
People like Bosun Tijani, Gbenga Sesan, Seyi Taylor, Bankole Oluwafemi, Oo Nwoye (and many many more who I have no space or time to name right now), without whom you cannot even begin to talk of an internet ecosystem in Nigeria. They built the skeletons of what we have today.
These are the people who deserve our thanks and respect – not loudmouths who want to build an empire off of our ecosystem and not give anything back to it despite the incredible opportunities and advantages it gave them.
What we can be…
I want to conclude with a story. Again from my favourite startup ecosystem in the world – the Waterloo ecosystem.
I talked about Communitech as one of the greatest startup organisations in the world. It is what I personally hope Co-creation Hub will become when it grows up. But what is truly remarkable about Communitech was how it started.
In 1997 , a group of technology entrepreneurs in the Waterloo region including Mike Laziridis (Blackberry), Jim Balsillie (Blackberry), Tom Jenkins (OpenText), Peter Schwartz (Descartes) and many more had been meeting together to play poker and talk about common challenges with building their technology startup companies in the Waterloo area (something of the spirit I was looking to engender with Founder’s Convos). Over time these conversations evolved to set up a member organisation where everyone was equal, that would help advocate for technology companies and provide an avenue for sharing resources to benefit each other and build an ecosystem. They gave sacrificially to build Communitech into the nerve centre of a very strong ecosystem. It became so strong that when the Blackberry empire went through very tough times, it did not swallow everyone. It remained very resilient.
Now, imagine what would happen to Nigeria’s tech ecosystem if Konga and Iroko suddenly vanished today. We would all be dead meat is the truth. It has even happened before with the old generation of internet companies in Nigeria when companies like Chams and Socketworks went down and we had to wait 10+ years to see the current resurgence in startups.
Today, that ecosystem has grown from a group of founders playing poker in someone’s office or sitting room to the 16th strongest startup ecosystem in the world with over 800 companies making $30b in revenue. (Keep in mind this is an area with just about 559,000 people as compared to Lagos’ 14m.)
Look how beautiful the result is fifteen year’s later.
Nigeria, this can be our story too but we will all have to pitch in. No excuses, no finger pointing, no grandstanding, no theatrics, no drama, just working selflessly hard to build the ecosystem of our dreams.
Ecosystems are more powerful than empires was first published on Iyin’s Blog