AFRICAN TECH ROUNDUP

Tough go­ing on the con­ti­nent as once-promis­ing start-up duo close shop

The Star Late Edition - - BUSINESS REPORT - Andile Ma­suku

DUR­ING the past month or so, two fairly promis­ing African start-ups an­nounced that they would be shut­ting down. First, there’s Afrostream, the videoon-de­mand ser­vice founded in 2014 by the Cameroo­nian, Tonjé Bakang. Afrostream stopped sign­ing-up sub­scribers on Septem­ber 13. Then there’s GoMyWay, the Nige­rian ride-shar­ing plat­form launched in 2015 by Damilola Teidi. GoMyWay is re­port­edly set to wind down com­pletely come the end of the month.

Afrostream will cease op­er­a­tions in France, the UK, Bel­gium, Lux­em­bourg, Switzer­land and in 24 African coun­tries in­clud­ing Benin, Burk­ina Faso, Cameroon, Congo, Gabon, Sene­gal and Togo.

This in the wake of a dis­tress­ing pe­riod of grad­ual demise that Tonjé Bakang chron­i­cled in ex­cru­ci­at­ing de­tail in a Medium blog post writ­ten in French.

It was sub­se­quently trans­lated to English by Au­drey Lang and pub­lished by OkayAfrica.

In his open let­ter, Bakang pretty much walks read­ers through the grave­yard of his four-year Afrostream jour­ney, point­ing out where all the “bod­ies” are buried. Ul­ti­mately, he failed to con­vert an in­spired vi­sion (de­liv­er­ing “the best black films and TV shows” to a Pan-African au­di­ence), valu­able Y Com­bi­na­tor in­sight and net- work ac­cess and sub­se­quently $4 mil­lion (R54.35m) of in­vest­ment into a suc­cess­ful stream­ing busi­ness – facts he com­pletely owns.

It turns out that the fi­nal nails in Afrostream’s cof­fin were Bakang’s in­abil­ity to con­vince new and ex­ist­ing in­vestors to bankroll fur­ther run­way ex­ten­sions, and fail­ing to close deals with po­ten­tial buy­ers.

Mean­while, Damilola Teidi founded GoMyWay on the premise that Nige­rian pri­vate car own­ers with spare pas­sen­ger seats would cheer­fully let riders headed in the same di­rec­tion hitch a lift with them.

Teidi’s ven­ture was not only backed by the likes of for­mer Konga chief ex­ec­u­tive Sim Sha­gaya and e-com­merce an­gel in­vestor Bill Pal­adino, but also re­port­edly sup­ported by Nige­ria’s Co-Cre­ation Hub com­mu­nity.

By the time the com­pany cel­e­brated its first birth­day in mid-2016, it claimed to have 4 000 users signed up and boasted of help­ing pas­sen­gers in 20 Nige­rian states land 30 000 rides via their app. Since then, GoMyWay claims to have tripled its users and to have fa­cil­i­tated 106 630 rides.

Un­sus­tain­able

Yet, de­spite this progress, the com­pany’s in­vestors have de­cided not to fur­nish the com­pany with fur­ther fund­ing – fu­elling spec­u­la­tion that GoMyWay’s model was ul­ti­mately deemed un­sus­tain­able. It’s said Teidi and her found­ing team pri­ori­tised grow­ing the plat­form’s user base over dou­bling-down on mon­eti­sa­tion ef­forts.

And now, with sign-ups switched off, the start-up has told users that its cus­tomer sup­port de­part­ment will keep pro­vid­ing rout­ing ser­vices un­til the end of Oc­to­ber.

Here’s the thing. I couldn’t be more proud of Tonjé Bakang, Damilola Teidi, and their re­spec­tive teams at Afrostream and GoMyWay. I reckon that as en­trepreneurs they val­i­date the no­tion that African found­ing tal­ent is truly world class. How­ever, it’s their au­dac­ity that I most ad­mire.

Think about it. Bakang set out to cap­ture the loy­alty of an un­der-served cus­tomer seg­ment that lay within the con­fines of a su­per-com­pet­i­tive stream­ing mar­ket.

We’re talk­ing a well-de­fended industry dom­i­nated by in­ter­na­tional ri­vals like Net­flix, and by in­creas­ingly con­fi­dent African start ups like iROKO – the for­mer re­port­edly spend­ing some­thing like 33m (R530.6m) on mar­ket­ing alone in the first year it launched in France (re­port­edly Afrostream’s most im­por­tant for­eign geographic mar­ket). That tid­bit should put into proper per­spec­tive how very lit­tle the $4m Bakang man­aged to raise over four years ac­tu­ally is.

Yet, I would haz­ard that many of the plat­form’s ar­dent fans might vouch for the fact that in us­ing Afrostream’s ser­vice, they never sensed that Bakang might be run­ning a busi­ness with such an ex­tremely un­favourable com­pet­i­tive po­si­tion.

Sim­i­larly, in hind­sight, Teidi and her team at GoMyWay prob­a­bly never ac­tu­ally stood a fair chance against “too-big-to-fail” ri­vals like Uber and Tax­ify – who ap­pear as in­tent on pa­tiently wear­ing out in­no­va­tive up­starts who burst on the scene as they are com­mit­ted to out­pac­ing chal­lengers in terms of user and rev­enue growth.

The race to­wards achiev­ing global ubiq­uity within ride-shar­ing is bru­tal.

I have ar­gued be­fore that Africa pro­duces a unique breed of en­tre­pre­neur. Founders here need in­cred­i­ble stamina to “make it work,” never mind suc­ceed.

Hap­pily, more and more sto­ries are sur­fac­ing to help us all ap­pre­ci­ate that African tal­ent, re­silience and sheer en­tre­pre­neur­ial pluck are not the ex­cep­tion but the norm.

That’s why I’m in­spired by the painful, yet strangely grace­ful, demise of Afrostream and GoMyWay. These two star­tups were clearly founded by in­di­vid­u­als will­ing to face up to pro­found un­cer­tainty – re­fus­ing to let im­pos­si­ble odds abrade their ide­al­ism or side­track their mis­sion.

Trans­parency

I am es­pe­cially in­spired by Bakang’s trans­parency in tak­ing the time to ex­plain how and why, de­spite every­thing Afrostream ap­peared to have go­ing for it, fail­ure hap­pened any­way.

As the firm’s founder and chief ex­ec­u­tive, he was cer­tainly obliged to of­fer his team and users of his plat­form a de­cent ex­pla­na­tion for why they were clos­ing shop, but I reckon that his open let­ter is in fact an un­nec­es­sar­ily gen­er­ous gift to the con­ti­nent’s tech ecosys­tem for which we should all be grate­ful.

So, while An­dela stays win­ning fol­low­ing the suc­cess­ful close of a $40m Se­ries C in­vest­ment round led by CRE Ven­ture Cap­i­tal, my heart is warmed as I sense that Africa’s tech com­mu­nity is slowly learn­ing to value los­ing as much as win­ning, and com­ing to ac­knowl­edge that there’s no at­tain­ing suc­cess with­out both.

Andile Ma­suku is a broad­caster and en­tre­pre­neur based in Jo­han­nes­burg. He is the ex­ec­u­tive pro­ducer at AfricanTechRoundup.com. Fol­low him on Twit­ter @Ma­sukuAndile and The African Tech Round-up.

PHOTO: SUP­PLIED

Damilola Teidi founded the Nige­rian ride-shar­ing plat­form GoMyWay, which is re­port­edly set to wind down com­pletely come the end of this month. Africa’s tech com­mu­nity is slowly learn­ing to value los­ing as much as win­ning, says the writer. €

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