Latest / Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint / Does Your Startup Really Need an Investor?

Transcript

Does Your Startup Really Need an Investor? · Closing Sales in Nigeria - Sales For The Nigerian Business Person: The Sales and Marketing Blueprint

• 0:01
  Today on the podcast, the question we're going to tackle
• 0:04
  is what do you need when working on your first business, on your
• 0:09
  first startup? Do you need an investor or do
• 0:12
  you need someone who is willing to give you something in
• 0:15
  exchange for using your product? The reason why we're looking at
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  this today is because it was a question that was asked by a
• 0:24
  Nigerian founder who was speaking at a startup event in
• 0:28
  Lagos at OK, let me not mention the place Lagos in 2025.
• 0:34
  And the video was sent to me. And I have been making a series
• 0:37
  of commentaries on the video to explore a couple of things that
• 0:41
  he got right from a sales and business development perspective
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  and things that he could have said better.
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  So today I'm continuing with the commentary.
• 0:51
  Now, apologies for the noise in the background because today is
• 0:54
  a Sunday. And for you regular listeners,
• 0:56
  you know that my kids are in catskyism classes.
• 0:59
  So I'm in the parking lot outside in church, and then at
• 1:02
  the building next door, they're building some sort of mall or
• 1:05
  something. So there's lots of construction
• 1:07
  noise going on. And then there are teachers
• 1:09
  teaching catskins and, you know, children answering questions
• 1:14
  and, you know, people who have finished their classes, people
• 1:17
  running all over the place. So you're going to hear all that
• 1:19
  noise bleeding in through the microphones.
• 1:24
  Now, if you love these sorts of things, I mean, not the Catholic
• 1:27
  side of me, but you know, me and my fascination with sales and
• 1:30
  marketing and business, then subscribe to the podcast on
• 1:33
  Spotify, on Apple iTunes, on YouTube, or any player of your
• 1:38
  choice because this is what I do over here on the podcast.
• 1:41
  And I do that every other day and I've been doing it
• 1:44
  unfailingly. I don't think I've missed.
• 1:47
  OK, well, I've missed a few weeks, but I've been doing this
• 1:49
  for the last five years now. My name is Tavishima Ayede, I'm
• 1:53
  the host of the podcast. If you would love to connect
• 1:56
  with me because you have questions, you have comments,
• 1:59
  you have queries or you'd like us to work in a collaboration
• 2:02
  together, that's not a problem. Anything that's going to bring
• 2:05
  in money, I am down, especially since it's Christmas period.
• 2:09
  So my eye on the tear. I'm looking for naira any which
• 2:12
  way so you can call, send me a text message or a WhatsApp
• 2:16
  message on 08064662140. All right, now back to the
• 2:24
  question, what do you need when working on your first startup?
• 2:28
  Do you need an investor or do you need someone who's willing
• 2:30
  to give you something in exchange for using your product?
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  So like I said in Niger tech bro, a startup event in Lagos.
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  Now this was the answer that he gave to the question.
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  And let me use, let me just sorry, hold on, let me scroll
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  through my device because I want to quote the guy directly.
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  And this is what the guy said. And I quote, I believe the first
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  thing you need, even though some people believe the first thing
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  you need is an investor. I believe that the first thing
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  you need is somebody who you are able to convince you to pay some
• 3:07
  money or some value or something in exchange for using your
• 3:11
  product. Now, let me repeat what the guy
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  said. The guy on stage at the podium
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  told other would be Nigerian entrepreneurs and other would be
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  Nigerians who are about to start a business.
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  And I'm glad he said this because I say these things to
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  tech people. But sometimes, you know, we'll
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  be as if since me, I'm not a tech person, we'll be as if, you
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  know, I'm saying what I don't know.
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  So this is what the guy said. If you don't believe me, just as
• 3:44
  in is one of your brothers, the guy has built the startup, the
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  guy has cash out, you know, and the guy is, you know, he has a
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  reputation for being a boss in the industry.
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  And this is what your boss said. For those of you who are in the
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  tech space, he said, and I quote, I believe the first thing
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  you need. Even though some people believe
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  the first thing they need is an investor.
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  I believe that the first thing you need is someone who you are
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  able to convince to pay you some money or some value or something
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  in exchange for using your product.
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  I agree with your guy. I agree with him.
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  The first thing you need is not necessarily an investor, at
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  least for most of you. It's an interesting argument,
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  but The thing is, even though he said his point, he moved on and
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  started talking about some other things, but he didn't say why.
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  And so today I want to explain the dynamic just in case there
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  is somebody who's about to start business.
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  You're about to be a startup founder, you're about to become
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  a tech bro yourself, you're about to do a fintech, you're
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  about to do a something and you don't understand why there's
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  some people saying you don't need an investor first.
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  And of course, in your mind you're wondering, ah, Zuckerberg
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  uncle, didn't Zuckerberg have investor?
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  And then you call all of them, Didn't these people have
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  investors? Why not say you won't have
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  investor? Why?
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  You're saying it's not necessarily the first thing that
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  you need. So let's explore some of the
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  reasons why. Now, when you're starting a
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  business, when you're starting a start up, there are so many
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  questions that you need to answer.
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  One of them is how am I going to get money to fund this thing?
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  Do I need investors? I'll be, should I bootstrap?
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  That is the first question that you'll be asking yourself where
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  will I get this money? If I have savings, I'll drop my
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  savings. You know, that's what some
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  people do. Some people even if they have
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  savings those and let me go and look for investor.
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  Let me de risk, let me not carry too much risk on my own head.
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  But shall I ask the first question you're asking yourself
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  most people, how will I get money to fund this thing,
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  investors or bootstrapping? Then the second question that
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  you ask yourself is do people live on like this thing self
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  with this thing be a hit? Will there be any demand and
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  would I be able to sell this thing at the right price?
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  Because people don't just bootstrap for the sake of
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  bootstrapping. They are hoping that this thing
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  will be big and this thing we blow so that they will live
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  large and live well. People don't just collect
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  investors money for the sake of collecting investors money.
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  They are doing it because they hope that this thing will be a
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  hit. This thing we blow, this thing
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  will go blah, so that they will live large and they will live
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  well apart from people, except for people who have fraudsters,
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  because there's some people who run around, they say this is my
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  idea. They collect investment money
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  and then before you know it, you know, they're not answering
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  phone call again. And then where's this guy?
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  Where's this guy next to you here?
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  Or maybe he's in Canada. The guy Domies has collected
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  investment money and the guy has disappeared.
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  And I've heard unfortunately, that a few people have done that
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  kind of behavior. You know, I've seen some people
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  complaining, excuse me, complaining on LinkedIn that
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  somebody came and raised plenty of rounds and person for small
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  activity and then next thing the person was back in the US.
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  So invest some money now what happened?
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  That's it, money don't miss. So if you're not a fraudster,
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  those are two questions they're asking yourself.
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  How will I get money to fund this thing, investors or
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  bootstrapping? And then will people like this
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  thing? Will it be a hit?
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  Will it be big? Will there be any demand?
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  And can we get this thing going at the right price?
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  That will make sense for me and also to make sense to my
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  investors so that them too, they will recoup.
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  Now, if the answer to the question for you is
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  bootstrapping, then you need people to exchange money with
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  you so that you can get the liquidity that you need.
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  It is from selling one or two units, three or four or five or
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  six, however many in the early days, you now take the profit on
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  top. You now take that profit and
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  that's what you use to plow back to grow the business.
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  So your answer is bootstrapping. You can see that in the
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  beginning you need someone to exchange money for your product
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  or your service so you can get the funding that you need to
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  grow this thing. And then in this case it's a 2
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  for one, because them giving you money is a vote of confidence.
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  It is proof that people like this thing because most people
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  are not going to give you money for your product or your service
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  unless they believe that this thing works or they believe that
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  this thing has value. OK, Well, except for Mumsy and
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  Popsy. You know, Mumsy might just buy
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  because, you know, it's my son, let me help him.
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  Pops who may also buy because it's my son, let me help him.
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  But once you leave Mumsy Popsy, your cousin's, your brothers,
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  your uncles and your aunties, other people are dropping money
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  because they think this thing in my work or this thing, there's
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  this value there. Now for those of you on the
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  African continent, and I'm only talking to people on the African
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  continent now because from what I hear, I don't know it to be
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  true first hand, but from what I hear, the dynamic on the African
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  continent is different from what's going on in Western
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  economic climes. Well, like I said, this is
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  Dempsey. Dempsey, this is what I have
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  heard. So 1 moment.
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  OK, sorry about that. I had to pause the recording.
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  I had to pause the recording a little bit because the the Sir
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  Christian was walking by. So I said let me just heal the
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  guy. Where was I?
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  OK, for those of you who are not Catholic, the Sir Christian is
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  the person who the person takes care of the the sacresy.
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  The sacresy is the place where the priests and other people who
• 9:45
  are going to be celebrating at Mass, you know, the the place
• 9:47
  where everybody gets gets ready, they go the vestments are there,
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  you know, they dress up, you know, say prayers, prepare, and
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  then they make a procession to the altar.
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  That's for those of you who are wondering which one be said
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  Christian the game. So yeah, so that's the guy I was
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  hailing. What was I now.
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  So I was telling you now that what I'm going to say next now
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  is is not something that I have verified for myself because I'm
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  not in that space. But I hear that the dynamic on
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  the African continent is different from US, different
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  from UK. So if you are in Niger or Ghana
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  or South Africa, from what I've heard, and the answer to your
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  question is what I need first is investors, then what you need is
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  some sort of proof of concept. You need some proof that this
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  thing is working. You need some proof that this
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  thing is moving. You need some proof that the
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  extraction, you need some proof that this thing is can't work
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  because from the gist I have heard, please go and verify.
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  Don't quote me. From the gist I have heard, it
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  sounds like African investors don't like to drop money when
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  all you have is a wonderful PowerPoint presentation or you
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  say you have a groundbreaking idea alone.
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  So that's the gist I've heard that in America and in the UK
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  places new place, you know, those, those parts of the world,
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  you can come and say I have a revolutionary groundbreaking
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  idea and then you sketch it, you give them nice presentation and
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  you know, you start collecting money, you don't erase funds
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  like that. But just I've heard that in
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  Nigeria people, you know, it's a wonderful idea, wonderful idea.
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  But then they want to see that this thing is working, that is,
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  it is moving. So in this case, you need people
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  to exchange something of value, give you money or give you time
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  as proof that people like this, like this, your idea, that is
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  what will now give the investor confidence to give you some
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  money. But like I said, there won't
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  verify. First though, this is your gist
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  that I've heard. You know, I'm not a tech
• 12:04
  founder, so I've never been exposed to these dynamics.
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  It's just the gist that I've been hearing.
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  So if you're on the African continent, you're South African,
• 12:14
  you're Nigerian, you're Ghanaian, are you say investor
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  is the first thing that I need. Unfortunately, when you get
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  there, you'll find out that investor is wanting to see, have
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  you sold some units, Have people signed up?
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  What are your daily active users?
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  Be your monthly active users. You're something.
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  So they want to see that something is moving in the right
• 12:37
  direction before they start writing checks to you.
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  So the question now becomes, how do you convince people to give
• 12:46
  you money or change something of value?
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  Well, we have spoken about this in previous podcast episodes.
• 12:52
  So there's no need to go into all this in detail where you can
• 12:55
  go and research, of course, using your favorite AI tool like
• 12:58
  Gemini or ChatGPT or whatever. Of course, number one is
• 13:01
  obviously, you know, sell the finished product.
• 13:02
  Now should be you have a finished product, go ahead and
• 13:05
  sell it. If you move a couple of units,
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  universals will say there's this progress here.
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  So for those of you who watch the Dragons Den, this is the
• 13:15
  sort of dynamic that you see at play.
• 13:17
  So Dragons Den, it's a, is it American, a basic Uki can't
• 13:24
  remember myself. I think he's UK, Deborah Mead
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  and a couple of other people. So that's the dynamic that you
• 13:29
  see. I play, somebody will come and
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  say I have this business, we value it as social.
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  So and so, and I'm looking for £5,000,000 investment for, you
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  know, 5% of the company. You know, something like that
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  eventually gets to the point where Deborah Mead and the other
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  people will start asking the person questions.
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  OK, nice business. When did you incorporate this
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  thing? I incorporated it in 1999.
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  OK, since 1999, how many units have you sold?
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  I have sold. So, so and how much profit
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  margin? You know, they're asking all
• 13:58
  those questions because the investors, the potential
• 14:01
  investors on the Dragons, then they're trying to do the math in
• 14:03
  their head. OK, this guy started in 1999.
• 14:06
  So this business don't don't day like, you know, 20 something
• 14:09
  years, how many units has he has been selling?
• 14:12
  OK, so many thousand profit margin is like this, like this.
• 14:14
  You know, they're trying to figure out how big is this
• 14:17
  thing. So sell the finished product to
• 14:22
  them and you would have demonstrated that this thing is
• 14:26
  workable. So therefore they can drop money
• 14:29
  and invest in your idea. Then there's pre selling.
• 14:33
  Pre selling is when you know The thing is not really on ground
• 14:35
  yet, but then you collect the order, you collect their money.
• 14:38
  You now use the money to go and facilitate the transaction.
• 14:42
  So the first time I spoke about this over on my radio show, the
• 14:47
  very next person who reached out, she said that that is how
• 14:53
  she has been doing her business, that she doesn't hold the
• 14:56
  inventory, she doesn't hold the stock, but she collects money
• 14:59
  from people. She now uses the money to buy
• 15:02
  from other people and then she delivers and then she puts her
• 15:05
  own margin on top. She does pre selling or
• 15:09
  pre-orders or whatever you call it.
• 15:13
  So that's also one way that people can validate that, look,
• 15:17
  this thing is moving. Then there's also the idea of
• 15:23
  creating an MVP, which is the minimum viable product, which is
• 15:27
  the smallest version of your product or your idea that you
• 15:30
  can release into the market so that people can see it, can
• 15:32
  taste it, can touch it, can smell it, can try it, can like
• 15:36
  it, can abuse it, can reject it, butcher.
• 15:40
  There is something concrete that people are interacting with.
• 15:44
  And this can also be a way that you'll be able to show your
• 15:47
  investors that you know what this thing get like, like The
• 15:49
  thing is moving. Then I think this guy, what's
• 15:55
  his name for our week? What's his name?
• 15:57
  What's his name again? The guy that wrote the four hour
• 16:00
  week, his face is in my mind now just forgotten his name.
• 16:06
  Anyway, Google for our week. You you see the guy.
• 16:08
  So he has spoken in the past about how he used landing pages
• 16:12
  to validate his own business ideas.
• 16:14
  So basically set up a landing page to say if you're interested
• 16:16
  in this disease, you know, pay £5, pay $5, pay whatever, then
• 16:21
  people pay. And he now uses that as a sign
• 16:25
  to show that old people are actually interested.
• 16:28
  So I can't remember how he did it in his own case, but some
• 16:30
  other people who they collect the money and then they now
• 16:34
  reach out to the person to say, oh, thank you very much for
• 16:38
  placing the order. Thank you very much for your
• 16:40
  faith. Truth of matter is, you know, if
• 16:42
  he never did ground yet, but, you know, these are the options,
• 16:45
  you know, should I return your money to you or are you willing
• 16:48
  to hang on? Yeah.
• 16:49
  In another one month, two months, you know, it will be
• 16:51
  ready. We'll now deliver it to you.
• 16:53
  You know, I can't remember exactly how he, in particular
• 16:56
  this guy who did the four hour workweek, I can't remember the
• 16:59
  exact way that he used the landing page to validate his own
• 17:02
  idea. Or shall people do things like
• 17:04
  this also to show that your product, your service, your idea
• 17:09
  that The thing is worthy of investing in.
• 17:13
  Then there's also crowdfunding. Now I haven't done the research
• 17:18
  yet. Let me be honest, I'll tell you
• 17:19
  guys, I suppose I've done the research to see how now to check
• 17:24
  SEC rules, that is the Securities and Exchange
• 17:27
  Commission of Nigeria to check their rules to see how
• 17:30
  crowdfunding is applicable in Nigeria.
• 17:32
  So whether it's applicable in Nigeria, how it applies in
• 17:35
  Nigeria. But at least in America,
• 17:39
  crowdfunding is one way that people have used to show, show
• 17:45
  traction for their ideas. So if an investor sees that, oh,
• 17:47
  you've been doing crowdfunding, people don't need a drop bar.
• 17:49
  You know, you've moved a couple of units, you know, they now
• 17:52
  know that, OK, no problem, I can invest in this thing.
• 17:56
  So like I said, there are plenty other ideas that have been
• 17:58
  explored in previous broadcast episodes.
• 18:00
  And now with the benefit of AI, all you have to do is just go
• 18:03
  into your favorite AI tool. Like Google Gemini, for
• 18:07
  instance. You know, that's my favorite
• 18:09
  one, not because it's the best, but just because it's already on
• 18:11
  my phone and it's free, so why should I go and pay for
• 18:14
  something else? So you can go into your tool and
• 18:18
  say I'm a Nigerian in the startup space.
• 18:20
  I'm thinking of doing a startup like this, like this, like that.
• 18:23
  I would like to attract investors, but before I look for
• 18:26
  investors, I want to be able to show that there is traction for
• 18:32
  my business idea. So what are the ways that I can
• 18:37
  show traction for my idea? You know, something like that.
• 18:40
  And then you hit send and apart from some of these things that
• 18:42
  I've mentioned, it's going to give you a bunch of other
• 18:44
  interesting stuff. So all you do now is just print
• 18:47
  out that list. So let's say it gives you a list
• 18:49
  of 10. Print out those lists and start
• 18:51
  from #1 and start working your way down.
• 18:53
  You try And yeah, that's it. But bottom line, summary, what
• 18:58
  I'm saying today is for those tech founders who stand up on
• 19:01
  stage in Lagos or in Abuja or in Port Harcourt or in Kano or
• 19:08
  wherever and tell other would be intrapreneurs that look, you're
• 19:14
  starting business, The first thing you need is not really an
• 19:17
  investor, but you need people to give you money first or you need
• 19:20
  people to give something of value first before you start
• 19:23
  looking for investors. Summary What I'm saying is
• 19:26
  whenever people say that, I say look, I agree wholeheartedly
• 19:30
  100%, at least as are today. Who knows, maybe another four or
• 19:34
  five years things might change. But for now, it's looking like
• 19:38
  you need to prove that this idea is workable first.
• 19:40
  And the easiest way to prove honestly is that somebody has
• 19:43
  paid you money for the thing before.
• 19:45
  I remember when I was starting off as a young wedding
• 19:49
  photographer, before I started, or rather before I collected my
• 19:54
  first 50K. That's how much you charge for
• 19:56
  the first wedding. People who tell me all sorts of
• 19:58
  things like, ah man, you're good, you're talented, I have
• 20:02
  faith in you. This is this not that that
• 20:05
  people can say all kinds of things by the time it became
• 20:08
  real. Was there somebody transferred
• 20:11
  50K into my account? Like, oh, OK, OK, somebody
• 20:15
  actually believes in me. But anyway, that's the story for
• 20:18
  another day. And I'm sure for those of you
• 20:19
  who've been listening to the podcast very well, you're really
• 20:21
  tired of me talking about my first 50K.
• 20:23
  So let me just let that one go. So excuse me.
• 20:27
  So that's it. And that is all.
• 20:29
  Thank you very much for listening.
• 20:30
  Remember, if you'd love to connect, then you can call send
• 20:34
  me a text message or WhatsApp message on 08064662140.
• 20:43
  Thank you very much for your time and attention.
• 20:46
  I'll catch you all some other time.