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