"We just wanted to build the market, so we burned through our money," Unknown.

Many high flyers are flying straight into a banner with the words of the headline above written on it. It's not totally dumb for a startup to try to burn through a pile of cash and create a new market that it will turn into a future cash cow. It takes though, a lot of vision to achieve, and, of course, very patient investors.

Jet.com is the highest of these flyers, it is trying to take "some" of Amazon's business by spending it's way to growth in a span of a few years. As crazy as it sounds, these guys have vision. I must say. But there is a difference between vision and desperation, and the smaller "wanna be' flyers that I am seeing are more of the latter.

Selling stuff so cheap that a company shifts it's losses to it's investors is just the tip of the "losses for growth startup" icebergs we've been sailing through lately. Now startups give away money to users to have them sign up. You read that correct. You sign up with them, you get paid!

Not to pass any naive judgments here, many believe this is now the secret to building big startups fast, by losing money very fast in order to have growth. Uber, Airbnb, and many more are all doing this. My gut tells me this is not the right way, the Facebooks and the Googles where not built this way.

The main reason for this is probably the cheap money that is about to dry up in the coming months as credit is tightened with the coming rising interest rates. Then the market will get a reality check and we'll see if this strategy has worked or if it will backfire and then we'll see the ones saying - "We just wanted to build the market, so we burned through our money,"

Nigerian Startups Advertising Everywhere Are Those You Won't Find Anywhere, In The Future!

My own startup dream started around 2000 and 2001 when the startup market in the US was collapsing. The time prior to the collapse was filled with memories of startup ads on TV and on every website you visited. These startups were everywhere, you couldn't get away from them. From adverts of Boo.com on anything you could get your eyes on to CNN advert videos with (high royalty paid) songs by Beatles advertising Nortell Networks. Where are these companies now?

Be it the year 1999 or 2013, it is never sustainable to spend a lot of money as a startup in order to continue to be in, or acquire new business. That is why startups are called "startups" in the first place. They find creative ways to market or build marketing within their products from the start. How many people taught Groupon was a big idea and bought shares in it's IPO. Groupon would have been a really great idea if they didn't spend so much money on sales.

So there are a ton of Nigerian startups mainly e-commerce sites and some content or media sites buying up Billboards in various locations in the big cities, buying TV spots, Youtube pre-roll ads, promoted tweets and handles, expensive Facebook likes and banners on every high traffic site that is offering to sell ad space. These startups are too focused on the short run and the money they are throwing on ads that may or may not perform at times could be used to build a great product that would promote itself for free in 5 years to come. Building a startup is not about short-term hype but building a successful company or product that would last a life-time.

There is only one way to build a successful startup, and it is by building a product that people will keep coming back to and that would be talked about by people there-by growing virally naturally. That's how I got on Facebook and Yahoo in the early days of email in Nigeria, peer pressure. My peers laughed at me because I didn't have an email address and I was mainly on Myspace till my friends pressured me into joining Facebook.

So I boldly predict that you won't be able to find most of the Nigerian startups making noise right now in the next 5 years. By 2018 a lot would have crashed after burning a lot of venture capital and smarter technology focussed startups come in and disrupt there business. Actually, 5 years is a long time but trust me a lot will happen within the time. If you are building a startup, make sure you make technology your biggest advantage, not a money-bag or some noise making bloggers.

To cut a long story short, very soon a highly focused technically talented startup would come along and optimize the whole e-commerce system in Nigeria, and also a hardware focused, great product genuises would come and change the content and data game. Watch this space :)

Lessons Entrepreneurs should Learn from the Uprising in the Middle East

The #1 lesson entrepreneurs could learn from the recent uprising in the Middle East is ...... No, not Social Media.... Guess again! Social media is surely one of the top lessons but the top-most lesson you can get out of the events in the Middle East isn't so obvious.

#1. Momentum in a trend is good.

I know most people won't agree with me because Social Media organized and spread the whole revolution so it should be number one on the list. The truth is, I disagree.. Without my number 1 lesson to be learned here, the revolution would have taken place in Tunisia alone or may be Egypt and wouldn't have spread protests and potential (as for now) regime changes in Libya, Yemen, Bahrain and the minor demonstrations we are starting to see in Saudi Arabia and Iran. The momentum created a wave across the whole region, and now that the momentum is still building, it's really a crucial and fragile time for regimes in the region and elsewhere to hold on to power to survive the momentum's waves.

Increasing momentum convinces people in business, warfare, politics and so on (by building a growing hope for change or a certain event). When people see build of power, confidence or activity, they tend to believe in some sort of coming result and they follow.

With this strategy, entrepreneurs can learn to project confidence with investors, employees and even customers by constantly achieving milestones. You could stay silent for a while, but once you start, keep moving with a series of activities and coverage. Inconsistency kills (kills momentum and confidence).

I'm pretty sure the leaders whose regimes are facing these protests wouldn't want to see any more leaders step down due to pressure because that would build confidence in their own protesting oppositions and increase the whole Middle East uprisings momentum. I predict if one more regime should fall, then it wouldn't be the last ruler we'll see step down due to protests in 2011... The fall will make the protests spread more across the region and beyond. Also, if no leader should fall in the coming weeks or days, (Libya being a crucial point) then the momentum may begin to die down... Therefore, the fate of many other Middle Eastern regimes facing protests may lie in Tripoli. Just saying... ;)

#2 Social Media

The lesson #1 would be an entrepreneurs greatest take-away from the recent uprisings. Understanding this whole psychological concept of using momentum to project confidence would be a great asset to you. Lesson #2 is obviously everyone's favorite lesson from the happenings. It is SOCIAL MEDIA..

Social Media gave power to the people in these regions through mass real-time connection, spread and organiztion.. The campaigns that toppled decades long regimes started on the 2004 founded social network Facebook. Give people social media and they have freedom..

Also, engage your users on social media and they'll work for you through spreading your message. Especially if you can relate to a cause, social media sites like Facebook or Twitter can make your message go viral.

#3 Greed isn't good afterall.

Another take-away for entrepreneurs from the recent events is the fact that greed isn't good for anything you are doing in the long term. The toppled regimes have been accused by their followers of embezzling of billions and not providing necessities and jobs to their followers.

Therefore, what this means to entrepreneurs is, if you want to build the next big thing, don't be greedy towards your employees, investors and customers... Don't be too self focussed.. Stand up for them if you want your venture to go far.. Don't focus on yourself, focus on the company's interest.. Forget making a huge net-worth for yourself, rather, build a very valuable company. If you think in the long run and shun greed, you and your company will do more financial and the party will last much longer.

Lastly, if you believe there is more to be learned from the recent uprising in the Middle East both as business or life lessons, let us know in the comments below.

Startup Lessons: 3 Ways Nairaland Got So Big!

Nairaland has been around for a long time.. So have so many other early Nigerian websites, but Nairaland has outlived them to become successful.

Here are 3 (THREE) reasons I think Nairaland lived and grew successful over the years.

1. FIRST MOVER ADVANTAGE

Nairaland started around 2001... A year or even 2 before I got my first web presence. Nairaland is one of the earliest web properties in Nigeria.

There are early Nigerian sites that haven't changed a bit since they first started and they have successfully made themselves forgotten.. look at Motherland Nigeria. I am not saying MotherlandNigeria.com is a failure. As a matter of fact, it was a pioneering and great site back in the day. But I don't think it has changed in it's 11 years of existence. I'm just saying....

I'm saying, Nairaland utilized it's early advantage and grew very large over time (since 2001). This huge over time growth means lots of posts on the forum, many threads, many topics, many users (readers and posters) and many pages of the forum indexed in many search engines overtime for a wide variety of search keywords/keyphrases and ranked high in search results due to long articles (threads), freshness of content and external links.

As a result of above, Nairaland gets a lot of traffic from search engines alone and new user are brought to the site, many end up registering to participate in the discussion..

It all goes back to the first mover advantage... now Half a million registered users.

2. VIRAL & WORD OR MOUTH.

People talk about Nairaland a lot, in real life, they talk about stories they have read on Nairaland and discussions or polls they have participated in to their friends and so on, thereby spreading news of Nairaland through word of mouth...

Viral, this happens when people forward or share links to Nairaland threads/pages on other sites, through email, on facebook or as tweets.. This causes a wave of commenting, sharing, resharing and retweeting. The story on Nairaland and the user participation make it go viraland grow bigger with fresh users discovering the site all the time.

3. USER ENGAGEMENT

The gists, the gossip and discussions make Nairaland engaging. A poll I once came across on Nairaland comparing the site and Facebook in user engagement, Nairaland beat Facebook hands down in Nairalanders perspective.


So there you have it... The 3 (THREE) secrets that made Nairaland once the most trafficked Nigerian website. You can still use the same secrets right now and build a 500000 user or even million user online empire in Nigeria.

Study these 3 points well and build them into your web service or application...