‘Incubators and accelerators can learn more from collaboration’

V8 Africa, a premium co-working space located in Lekki, Lagos, recently opened its doors to entrepreneurs and tech start-ups looking for an enabling environment to grow their ideas and actualise their innovation. Founders of V8 Africa, Tobi Oke and Ugo Okoye spoke with FRANK ELEANYA on the need for collaboration within the tech ecosystem and the opportunities that start-ups will be leveraging working from V8 Africa.

What stage is V8 at the moment?

At this stage we are at completion, about 95% getting there. This is the stage where we get the information out there and start engaging with potential businesses to work on. We are not only looking at startups, we are also looking at small businesses, professionals, individual entrepreneurs, teams working on specific projects. Also we look at early growth companies that are in the Lekki area looking to move from their existing space to where they can be more effective and collaborate for growth. But this kind of space appears to be extremely beneficial for start-ups from a cost perspective.

What important criteria do start-ups require to walk through the door and stay?

The application process is like a filter, because we are trying to build a place that will not only take but give. The criterion is an entrepreneur – a truly dedicated African entrepreneur who has an idea and is dedicated to make it work. It does not necessarily have to be the best idea because what we find is that most successful companies started with one idea and ended up doing something completely different. What we are looking for are serious minded business people who are not following the pack, but people who actually have well researched data to back up what they want to do. And they know why they want to reduce their cost; they know why they want to be mentored.

Does that mean that before a person is accepted, there would be an interview?

Not necessarily an interview but something like an assessment.

Why do you think this was the best time to have a co-working space?

Ugo and I always knew at some point we would do something entrepreneurial in digital technology after leaving College. While I went on to do investment, he stayed in technology. We both saw how the ecosystem of investment and technology grew in our separate worlds. We have always wanted to invest in African tech. You can see a lot of money is being invested in tech companies like Konga, Jumia etc. These popular technology companies require a lot of capital and have mainly been funded by foreign capital. But we have businesses that are solving African problems that do not require a lot of capital; they only need a good place to work, a good mindset, good direction, focus and they would be successful. We told ourselves that if we ever find companies like that, we will love to invest in them. For us to get something, we need to give something, so we decided to create a space where people could come in and fulfill these objectives. That is why we did it. The whole idea of success to us is the number of successful businesses that pass through us. It does not necessarily have to be the best ideas, they may just come here, work here for a month. We are in an era of technology where with the right product you can achieve rapid distribution. You do not have to go crazy to find a client. You can use technology to find all your people. We feel there are a lot of opportunities for Africans to develop our economy using technology. We also think that now is a good time with the stage of the technology ecosystem.

Do you share the view that Nigerians find it hard to invest in technology ideas?

I am not sure that is true. I would agree that maybe international investors find it easier to invest. Investment from my experience has a lot to do with the mindset of the person investing and you only invest in things that you understand and things you believe in. The Nigerian investor tends to understand oil, real estate and goods that he can see and touch. Investors are also focused on returns as should be the case. The traditional Nigeria HNI (High Net-worth Individual) understands what the return profile for the traditional businesses look like. They are less familiar with investing in a technology start-up, and have not yet seen enough examples to understand the true power of technology investing. As many African economies are emerging, the opportunities to expand existing businesses tend to outweigh the desire to invest in new ones. The moment we have an African technology company being listed on the stock exchange at a sizeable exit, investors’ attitudes will change. It is all about what you can understand.

How long do you think it would take for a Nigerian tech company to be listed on Nigerian Stock Exchange?

I think there were a lot of tech companies enlisted on the stock market during the boom of the financial market from 2005 before the crash happened and some got delisted. I do not think it requires a lot to be listed. Obviously the state of your stock market is an indication of how well your economy is performing. The stock market has not been doing well for a lot of these companies to want to list. There is no point listing. So a lot of companies want to stay private for as long as possible until they get to the position where they need to raise money. I think the appetite is there but the environment is not ripe to do that. The stock market is a public representation of our general feelings. If all of us want to invest in a particular thing, and that is listed on the stock exchange, Nigerians will buy that stock. It has happened before. In buoyant times people are more willing to invest than in a recession. But it is our confidence – we believe and we will fan the embers of start-ups. We want to make sure that the more companies pass through us the stronger and more resilient they are. What we find is that the more successful you are the more people are interested in investing. If a number of people are investing privately, it is only a matter of time before these guys are confident enough to come. The more collaboration we have in technology, the better. You need the ecosystem to be strong, not just one or two companies, like ten to twenty companies, so people start getting confident that there is something to Digital Technology. So I would say soon but we cannot predict exactly when.

Do you ever feel that there should be a lot more collaboration in tech ecosystem?

Yes, you make a valid point. In business the best situations are win-win situations. You win and I win. Unfortunately in our part of the world we usually have win-lose situations. Sometimes, there are situations where only one platform is required and an entrepreneur has the idea of becoming the platform so he decides not to talk to anyone else. But as the ecosystem develops, I hope people start to realise that even if your business fails, it is not a failure as you gain the learnings which help you to be successful in your next venture. When you stay inside you do not learn anything. Recently, there has been an interesting research around entrepreneurship and start-ups and they have discovered that the old economies look at individuals and how talented they are.

But innovation and digital technology is all about learning – what can you learn? What can you learn about the reaction of the people that you serve? This is where collaboration comes in. With more collaboration you have better learning. When you learn, monetization comes quicker. If you stay insular you may monetize but you have to ensure you keep learning. Collaboration to learn therefore is key.

What is the most interesting thing as an incubator and accelerator working with start-ups?

I think it is the vibrancy of new ideas and the ability to look at problems from a different angle. Nigeria has had the same problems for 50 years; traffic, congestion, poor health services, bad roads and so on. But some start-ups are considering solving those problems through the use of technology where you only need to collaborate rather than embark on heavy lifting. Digital Technology means you now attempt solving problems with a much broader and deeper ability to collaborate. Hence, someone in Kaduna can work with another in China- all doing the same thing. There just needs to be the right environment. We look forward to working with the best talents but aim to be the best platform with the best environment for talent to flourish. There is no doubt that technology is going to solve a large chunk of our problems in Africa and Lagos will be one of the key centres of excellence for technology. Inadequate infrastructure can be a major hurdle, however, we believe that technology is going to help bridge these gaps. So many opportunities would be created through the use of technology.