A Nigeria story: Empowering those in need through technology
One of the leaders in the online space in Nigeria, Wole Faroun, the founder and managing director of NetPlusDotCom, is helping launch online products in Sub-Saharan markets, such as WebMall, a digital mall which helps businesses set up an online presence and sell their products. Today, they help over 5,000 businesses in Nigeria.
NetPlusDotCom also own NetPlusPay, offers a convenient way to accept online payment for the new online businesses.
Holding an MBA from Wharton University of Pennsylvania, Faroun spoke to Wamda about starting up in Nigeria, the challenges of Sub-Saharan markets, what foreign investors are missing out on, and the promising startup he sees today.
Wamda: You launched NetPlusDotCom in 2012. What were some of the challenges you faced? Were they country-specific?
Faroun: We started business operation in Nigeria in 2012 because there was a regulation by the government to drive a ‘cashless’ society, which essentially meant reducing cash transactions and providing more channels for electronic ones. We thought this was going to provide opportunities for technology companies like ours to bridge the gap between stakeholders in the financial services space and the users, namely the merchants. We’re collaborating with many leading players in the space and have now expanded our operations to Ghana and we will soon be providing similar services in other countries across West Africa. The challenges of a startup in Sub-Saharan are common across countries in many respects, but challenges that are peculiar to specific markets are also present. Limited access to venture capital, the lack of infrastructure which significantly drives the cost of operations, regulations (sometimes too weak, other times too strong) are all common factors across markets. In Nigeria specifically, there are challenges with consumer behavior that sometimes lead to low product adoption. Access to capital is often limited although we have seen some investments in early stage companies across Sub-Saharan Africa in the last few years. Building a team is also a challenge, attracting and retaining top talents could be very expensive, and startups are hardly able to compete.
Wamda: You previously worked as product director in two leading software companies in New York, and before that you were a banker. What made you venture into ecommerce in Nigeria?
Faroun: I have always wanted to solve problems irrespective of the situation. I started my first business in college at the age of 18, leasing movies and generating revenues. Technology has always been my passion, so it came naturally trying to use technology and innovation to solve challenges that businesses face. Moving to the US at some point was for career development, but I always knew there are several problems back home that I could use my background and experiences to solve.
Wamda: What is one interesting startup in Nigeria that rally caught your attention and why?
Faroun: Apart from NetPlus? (smile) - well, Wakanow.com is a travel startup that started about 10 years and they have achieved incredible success using technology to drive the travel industry. They have since expanded beyond Nigeria with operations across West and Eastern Africa.
Wamda: How would you convince a foreign investor to invest in Nigeria?
Faroun: The Nigerian market is a big one, big enough for substantial ROI for investors. However, due to market challenges [high cost of doing business, inconsistent and steep regulations, cultural biases that could lead to low product adoption, low technology penetration, etcetera.], meeting investors’ goals can be a challenge. So investors could sometimes consider alternative markets with similar economics before Nigeria... [such as] Brazil, South Africa, and Eastern Europe. However, I think startups that can solve problems across markets and geography will be able to attract foreign investors before the evaluation of the business and solutions, then go beyond the local market. For example, NetPlus in collaboration with Mastercard developed a solution to solve the challenges associated with pay on delivery options for ecommerce in Nigeria but indeed, as you can imagine this is a solution that can be deployed in several emerging markets and regions across the world. There are active conversations with merchants in the GCC region, Eastern Europe, and APAC [Asia Pacific], and we are very excited about this globalization of our solution. With this, potential investors evaluate the opportunity of investing in our business beyond Nigeria.
Wamda: You hold an MBA from Wharton University of Pennsylvania. What lessons did you learn in college that you are applying now in your startup career? Did it help you avoid any mistakes?
Faroun: ‘Managing people at work’ was a class I took in my first year. It has proven to be a great lesson for my career up to this point and one that will be useful going forward. We made many mistakes along the line, especially making assumptions about consumer behavior and adoption of our solution. I guess any successful startups must be willing to make such educated assumptions but be prepared to pivot quickly based on real market data as they come in.
Wamda: How would you describe the Sub-Saharan African startup scene five years ago?
Faroun: The ecosystem is presently energized with so many incredible talents trying to solve the myriads of problems in the market. I guess you can say Africans are trying to write their own narratives, and creating opportunities for generations to come. I believe the success stories to come out of Africa will make investors and leading organizations around the world see the opportunities in the African space and would increase the investment possibilities in our market, which in return will drive the next wave of successful ventures in the region.