Nigeria’s Technology Sector: A coming of age?
Early in the year 2001, I had a girlfriend in Warri, and I was driving a Mercedes-Benz e-Class in Lagos. Because I had one, I could not have the other. My girl’s cousin told her Dad that I was a “419 guy”. The prevailing perception in Nigeria at that time was that people who used computers on the Internet to make money were largely fraudsters.
They were not aware of SAP consultants who were earning between 400 to 1,200 pounds a day on UK based projects. They did not also realize that you could be in Nigeria and work on projects abroad to make money. The people who made money on the Internet around that time were mostly into cybercrime. Guys like us who did it legitimately were outliers.
Lagos in 2016 is very different from Warri in 2001. A lot of people cannot even remember the last time they went to a cyber cafe (the preferred operating arena of 419 fraudsters) and a lot of individuals operate online businesses or interact with them. I am sure that there are very few people in Lagos who have not heard the term “e-commerce” or know the names Jumia and Konga.
Sim Shagaya (founder of Konga) told us the story of a delivery he made once to a building site; he found to his amazement that a bricklayer had ordered a phone through Konga.
Technology people are now even admired. A lot of individuals want to emulate them. People are clamouring to get into Andela; remote working is no longer weird. People even believe that “the next Marc Zuckerberg” may come from amongst the current crop of bright young Nigerian technology professionals.
To Cluster or Not to Cluster?
There is a lot of unnecessary argument currently about which geographical location resources and infrastructure to develop technology should be focused but the debate seems to be favouring Lagos, more than anywhere else in the country. A lot of technology company products reside on the Internet, but people who build them still have to live and work at physical locations. The first cluster of technology companies in Nigeria was at Surulere around the Ogunlana Drive, Adelabu Street axis. It was the place that companies like Simoch, Gicen, Computer Warehouse Group and other technology companies were founded and thrived until they moved to “The Lagos Islands” with the banks.
With Internet companies, products reside on the Internet, so the argument of those outside Lagos is that location should not matter. People who build products still have to live and work at physical locations and the grounds for Lagos is that the concentration has always been a net positive for the industry with Silicon Valley cited as a model.
Enterprise technology was predominant in Nigeria’s first technology wave, and the banks were the primary customers of tech. Consumer technology became focussed on retail hardware sales and repairs before it moved in the opposite direction to Ikeja witnessing the emergence of Otigba computer village.
There is no denial about the impact of Yaba or Lagos on Nigerian technology. It has won the war for tech talent, for now, the same way Lagos won the war for creative talent in music and acting.
Those outside Lagos probably will create the next wave but the current attention is on Yaba and they would like some of that attention on them too as well. The interesting thing is that they also exist as clusters themselves, so it is basically an argument about which cluster will emerge as the most dominant. I believe strongly in the Michaelangelo quote – “Criticize by creating”.
The story of the technology revolution in Yaba has been one of dogged vision by a few key players and plenty of support from the private sector. Yaba did not need government to start or thrive. Young people just got together once again and did it themselves.
CoCreation Hub started this revolution with support from MainOne, Google, Omidyar, and others. Microsoft through its BizSpark start-up support scheme has also been of tremendous assistance in providing free cloud infrastructure to several of the start-ups operating in Yaba today. Gradually, Yaba attracted other tech ventures, and it became a cluster. Some people wonder if Yaba is a real technology cluster or just a convenient location with better Internet? There is real collaboration happening within the community in Yaba. I have seen several instances and one particular story stands out.
Izegbua “Ized” Uanikhehi is a young, determined, single mother and entrepreneur. She had been struggling with her digital media business and sometimes unsuccessfully pitched for my support until she came upon a brilliant idea called “ServiceSwap.”
The idea for ServiceSwap is quite simple but powerful. It is bartering. SMEs just swap services with themselves instead of cash to support each other. Her first Swap happened with her company. Professionals at Yaba took her in and started helping her build the technology for the business in exchange for her digital media services. She eventually moved her business to Yaba.
Ized started this business based on a personal need; she was not copying Silicon Valley. As soon as she started, we discovered that a similar start-up called “Simbi” had just raised $1.2m and was also part of the YCombinator Accelerator in Silicon Valley.
Such collaboration and Silicon Valley validation is a common occurrence at Yaba. People are helping each other to build great ventures. The interesting thing is that it is also gradually happening outside Lagos at the same time too.
Innovation outside Lagos
Have the views of Warri people about technology jobs changed in 2016? I wouldn’t know. I, however, know that Port Harcourt is changing. Technology start-ups are being created and run from there. Jos has changed, Abuja has changed, and Kaduna has changed too.
Outside Lagos, a lot of other new technology initiatives have been started by tech entrepreneurs. nHub in Jos was founded by a hardcore geek named David Daser. He has an ambitious goal of making Jos “the innovation hub of Africa.” They have invested in and are incubating seven start-ups right there in Jos. They have a thriving outsourcing component in the hub that may also one-day rival Andela.
Abuja has the brand new audacious incubator called Ventures Platform. Sanusi Ismaila of Precognition has also started a new tech hub in Kaduna. Ife is planning to see the biggest of them all as a company called SpringPort Group founded by Nigerians in Diaspora, announced that it has raised over a $1 Billion from US investors to build a technology village at Ife to complement the university.
YCombinator’s CEO Michael Seibel, and Partner Qasar Younis, will be visiting us in Lagos this week. This tour is happening less than a month after Mark Zuckerberg came to Nigeria. They all have made investments in Nigerian start-ups and have come to see the market for themselves.
Ingressive, run by Maya Horgan-Famodu who lives between San Francisco and Lagos, is facilitating the visit of YCombinator to Nigeria. The business connects Africa’s top founders with Silicon Valley capital and expertise and it organises annual tech tours to Africa to support tech hubs and start-ups.