When Abasiama Idaresit started a digital marketing firm in Nigeria’s bustling economic capital three years ago, he quickly learnt how brutal life can be in a market where tech startups are in their infancy.
No one would lend him money to hire staff or pay for office space, so Mr Idaresit spent eight months hustling the streets of Lagos, trying to convince clients his plan to help them develop online campaigns was a winner.
"During those first eight months, I didn’t make a dime … I was demoralised. At some point I wondered if it was worth it," he said by telephone from his Lagos office.
It took a money-back guarantee before a baby products retailer gave Mr Idaresit a break with a $250 contract to develop the shop’s online presence. Within two months, the retailer’s revenue began growing by $1,000 a month. Then it hit $100,000.
Mr Idaresit’s firm, Wild Fusions, is now a Google Adwords partner valued at $20m, with revenues doubling year on year. It helps brands such as Samsung, Unilever, and Ecobank develop online marketing strategies for African audiences.
Wild Fusion’s struggles are typical for startups in Africa as the world’s poorest continent wakes up slowly to the opportunities of technology.
In other emerging markets such as Asia and Latin America, a tech startup with a smart idea in a booming economy might expect to attract investor interest, especially if competition is slim.
Business leaders and investors say the sector in Africa is held back by lower internet penetration, scarcity of early-stage capital and a lack of management expertise.
Many startups in the region are caught in a catch-22 situation, said Churchill Mambe Nanje, who launched an online job-search engine in Cameroon called Njorku.
"To hire the best talent to develop a startup, you need capital. Finding capital is hard because you need to have a track record and a viable product but to get those, you need capital," said Mr Nanje, whose company has been profiled by Forbes magazine as one of Africa’s best startups.
