Earlier this month, I had the opportunity to go back to Lagos as part of a research project to design a Market-Creating Innovation (MCI) initiative. This time, our stay was a little longer, yet it felt shorter because, from the moment we landed to a couple of hours before departure, our schedule was jam-packed with entrepreneur site visits, learning and networking dinners, one very large entrepreneur event, and many, many meetings with experts in Nigeria’s entrepreneurial ecosystem.
It was a blast, and here are three key takeaways from those activities:
Entrepreneurship requires an ecosystem approach
A recurring message we heard from entrepreneurs during our site visits, our dinners, and our event survey responses was that “entrepreneurship requires an ecosystem approach.”
In Nigeria, collaboration is key. Success will come from working across industries and leveraging different strengths and existing systems. This is particularly applicable to young entrepreneurs who may need bigger players to support them in areas like manufacturing and technology infrastructure.
That being said, and like in so many other growth economies, infrastructure in Nigeria may not exist or may be unstable. Many times, entrepreneurs will need to build internal supply chains instead of relying on external, unstable sources. However, collaboration can come in many different ways. If there are no existing systems to leverage, entrepreneurs can still learn from studying established companies (such as Tolaram (Indomie)) to understand the growth strategies and succeed in Nigeria.
Financing needs structural changes
Access to finance was a common barrier for entrepreneurs and one that came up long before we touched down in Lagos. Through our desk research, we found sources from 2016 to 2023 that reported limited access to finance as a major barrier to company growth across sectors, whether they be in healthcare, education, agriculture, or even financial services. What we learned from our trip is that entrepreneurs don’t just need money, they need a very specific type of money.
Entrepreneurs need blended, patient, and risk-tolerant capital. Many entrepreneurs rely on foreign investment because local capital typically seeks short-term returns and avoids infrastructure investments. But foreign investment in Nigeria is limited, and even when it’s available, it’s not necessarily very patient. Entrepreneurs need patient capital to support long-term ventures, and honestly, they need patient capital to have the privilege to fail, as many startups do in higher-income countries.
There is a major opportunity to empower marginalized groups through innovation
Women, people living with disabilities, and youth are looking for ways to increase their economic agency. And they’re doing so through innovation.
We had the privilege and pleasure of sitting down with a group of young entrepreneurs whose expertise ranged from creative media to assistive technology development and fashion. One inspiring lesson I took away from our discussion was that although they’re often bottlenecked by financial and structural barriers, Nigeria’s youth remain resilient and hopeful. In fact, they brought up major innovation opportunities in the building of ecosystem solutions, such as equipment financing and shared facilities. They also identified that assistive technologies are often an overlooked opportunity that would both empower people living with disabilities and create jobs through local production. Nigerian youth are looking to create opportunities for themselves and their communities.
As are women. The topic of women was trending during our dinner with investors, which also happened to fall on Women’s History Day. An attendee raised the issue that women drive consumption in Nigeria, yet very little capital goes to female-led startups. This just highlights the huge opportunity to harness and invest in women’s economic roles by empowering them not only as entrepreneurs but also as consumers and participants in the value chain.
Stay tuned
These are only three takeaways from a deeply immersive week. This is only a taste of all the enlightening material that I look forward to diving into in our upcoming report, in which we’ll discuss what theory has to say about these learnings and, more importantly, how theory will accelerate growth in Nigeria’s entrepreneurial ecosystem.
