"Start-ups will shut down, some will partially survive and a few will thrive." - Idris Ayodeji Bello
Less than six months since the spread of the Coronavirus also known as COVID-19 in Africa, it has greatly influenced African start-ups. While for some it has been a growth in demand and sales, for others it has been a downward spiral ever since. With no idea when this would be ending, I spoke with Idris Ayodeji Bello, a voice in the start-up eco-system on the fate of businesses, survival tips for start-ups and how investors can support portfolio companies.
Idris Ayodeji is an ‘Afropreneur’, award-winning strategist and global thought leader with far-reaching and diverse experience in technology, strategic planning, and project management in different sectors. He is also an investor with over 10 years’ experience and over 37 portfolio companies under his belt; it was an honour and a privilege to speak to him on behalf of Ingressive Capital.
When asked about the fate of Start-ups he said; “I hate to be the bearer of bad news this Friday afternoon but, Start-ups will shut down, some will partially survive and a few will thrive.” Sighting examples of start-ups that are likely to die, he mentioned start-ups in events, transportation, especially in the travel sector. However, startups in agriculture and medicine will thrive. He backed this up with a conversation he had with a drugstore founder who said his company has made more revenue in 2 months than they ever recorded in their 2 years in business.
Regarding his advice for start-ups to thrive this period, Idris gave survival tips for African Start-ups. He said, “no one knows when this will end, it could be six months, a year or more. Don’t believe this will end soon and relax, rather assume this is the new norm and adjust to it.
Cut down on expenses, if you had plans to move to a new office, now is not the time, save that money. Every unnecessary spending needs to be cut down as the business needs all the cash it can get and investors at this point would rather spend more on companies thriving than the struggling ones.”
Idris Ayodeji Bello also advised start-ups to repurpose asset, figure out how your business can be aligned with the recent happenings, and solve problems. Build a continuity plan, no one anticipated this, hence equip your business for the unknown. Raise enough capital, it is not easy to raise capital this period, but it is not impossible, exhaust all the options.
On investors supporting start-ups in their portfolio, Idris Ayodeji advised both venture capitalists and angel investors to let human component lead. He said, “This is not their fault, so in this tough time, ensure your founders are safe and sound both mentally and physically. Talk to them, help them in sourcing for funds in cases where you are unable to fund them, walk them through a thought process to deal with this.”
He explained that entrepreneurs are risk-takers, entrepreneurship is a risk, and founders should not feel guilty about this crisis as no one expected this, but now is the time to adjust. Be observant he said to investors and founders there will be new start-ups, new opportunities, and new trends, he mentioned that some of the best startups in Africa were founder during a crisis, some of such startups included Andela during Ebola and Flutterwave during a recession.
Rounding up, he said Coronavirus will go one day don’t build a business dependent on it.