Startups 101: It's Not Just Tech & Hype, It's About Solid Business Practices

Hello and welcome to the show. Yesterday I mentioned an event which held recently. It's called From start up to Scale up navigating growth for start-ups in Nigeria and was part of the Huawei start up summit for 2024. Now I mentioned that I didn't speak at the event, although I would love to speak at these kinds of event. So if you work at Huawei, hope I'm pronouncing the name right. HUAWEIA Mobile Telephony Company. Well, tech company, because they also do routers and stuff like that.

So yeah, so if I was asked to speak at these kinds of events I would be honoured. So even though I wasn't a member of the panel, this is the topic that I have some strong ideas on or at least I have some perspectives on and I think my own perspectives are unique or kind of different. And 1st off, what I think is that whether you are a start start up or a scale up, you don't have any unique challenges that cannot be overcome by good business development and sales principles or practice.

Now the reason why I hold this opinion is because somehow people in the scale up space or in the start up space are looking for other avenues for business growth or tools for business growth. They're looking for some magical something that is going to come and cure the business problems. And for some reason it's like people in that ecosystem assume that they are immune to the normal business dynamics that the rest of us face.

So it's like if you have a consulting practice, then you build your business through one set of means. If you sell bread or rice or other kind of kinds of commodities, then you grow your businesses through you know another kinds of means. But then if you're a start up or a scale up, then the business dynamic is totally different and then sales and business development principles do not apply. And I think that that cannot be farther from from the truth.

Now The thing is, all these principles, sales principles, business development, principles and practices are universal and applied to all people, all times, all cultures, all industries. The thing is just that different things are applied in different ratios or in different strengths. You know, according to the context and according to whether you are a in a simple sales scenario or a complex sales scenario, that is something that I've dealt with in a pre in podcast previously.

OK, OK, no. Well, yes, I've dealt with it on the podcast, but I'm actually got confused because I made that as part of my own recording for a course that I have on Sailor right now, which is on fundamentals. OK. I can't remember the title, but it's about fundamental sales fundamentals or the fundamentals of selling one introduction to selling something like that. Anyway, when the course is done, I'll let you guys know about it over here on the podcast and I'm currently at the point where I

am going into the difference between simple and complex sales scenarios. Now because people in the startup and in the scale up space, I typically in complex sales scenarios where you have to be much more consultative and they assume that what they're doing is not sales. So you have to think of some fancy thing to grow. But in my own opinion, whether you're a start up or you're a scale up, there are no unique challenges that you cannot overcome by using sales principles or by using business development principles or whatever it is that you want to call it.

Now of course, what is a start up anyway? Something that I've referred to over here on the podcast, you know, that depends. There are some people who say who use the older definition, they say that a start up is any early stage business. So if you look at it that way, the person who is starting his wedding photography business or archaic business, or his tailoring business or his company security business or whatever, you can call that a start up because they are an early stage business.

But then there's a much more fancier or sexier definition of start-ups that is has lots of ideas around tech. So in the much more fancy or sexy definition of start-ups, you're not going to call yourself a start up unless you're doing something that has tech or digital enablement. Or in other words, you know you have a tech component that makes the whole business work. So if you're a wedding photographer, a regular wedding photographer, you know you go out, you shoot, you know blah blah blah, then they won't call you a start up.

But then if you have some fancy tech component or aspect of the wedding photography business that requires you to raise a huge bunch of finance, grow insane valuations and then IPO later on, that is where you put your business on the stock market so that other people can buy shares in your business. So if you're able to achieve that, then people will call you a startup. So those are the two different consumptions of startup #1.

Any early stage business and that will cater to most people. You, me, your uncle, your mum, your dad. Then option 2 will be something that has a tech component to it or some digital component to it, something that requires venture funding or to get some external financing. So it's not something that you can finance by yourself or with money that you collect from Mom's Epopsy. Then you also need to have an IPO in view.

You want to put it on the Nigerian Stock Exchange or the New York Stock Exchange or, you know, Kenyan Stock Exchange or whatever country you're in so that people can buy a whole bunch of shares in your company. And so you can be rich and you're trying to grow really huge business valuations. So that's also, those are the two different ideas about what a startup is or what a startup should be. Now what do you think? I'll leave you guys to pick whatever definition that you prefer.

But whatever definition that you prefer, whether it's an early stage business like your mom trying to start a catfish thing in her backyard or whether it is option 2, which is maybe your younger cousin coming out of university right now has this big tech idea about an app. They have to raise funding, they meet banks, they meet venture capital, they want to grow these things. So it's a 50 billion naira company and then they're going to sell shares in it in 10 years time.

So whether you're dealing with these two, they are very simple ways that you have to navigate business growth, whether you are the early stage catfish business or whether you are the beyond guy or girl coming out of university who wants to build this 50 billion naira business. So how you should navigate business growth, I think the road map is very, very simple. Number one, you have to validate the business idea. You need to be able to show that there is demand for this product or service, that there is interest and that people are willing to pay for what it is that you have.

This is where the tech people, the tech Bros and the tech sisters, this is where they talk about product, market and fit. It's just a fancy way of saying are people interested this product that you have, There's a market over there. Is there a marriage between the two? If there's no marriage, if there's no demand, if people are not signing up, if people are not paying money, then there's no point with going ahead. So whether you're a fancy tech business or whether you're going to sell Catfish in Mom, C's backyard, we all have to go through the stage.

We need to validate the business idea before we move forward. In fact, for those of you fancy tech people, if you don't validate the idea, you're not going to get investment because people don't want to throw money behind something that is not going to work. So there is some sort of validating the business idea, showing some demand, showing some interest, showing some product market feed, showing that there's a marriage,

whatever it is that you want to call it, there has to be that stage of trying to show that this thing can't work before you get more customers or before you get investors to throw more money behind it. Then the next stage is the prospecting stage where you go out and acquire more customers, whether online or offline. So if you're going to do this catfish thing at the back of Mom Sees backyard and of course that means you're talking about offline, as in talking meeting people, real world.

But then for this fancy app, you know, for your niece or your nephew who has come out of uni, maybe it might be an online play. But the bottom line is there's still that stage of prospecting which is going out and looking for more people who might be interested in the product or the service and trying to get them on board, you know, to sign up, to use it, to pay, to buy to whatever. Then ultimately we get to the stage where we need customer feedback because that is what is going to help us to determine how we change our product to our service, how we change, how we improve our service delivery.

Then we also need the customer success functions. You know are people happy and successful with the product? You know, when they use it, customer service functions, that's when their problems or their hiccups at using the product or the service. How do we, how do we deal with those sorts of things? Now the reason why customer feedback, customer success and customer service and frameworks are important is because that is what helps us to get repeat business and referrals.

Because whether it's a catfish thing or whether it's the fancy tech thing, if people don't come back again and again and tell their friends, their family members and associates and bring other people, then there's a problem. So back to the fancy thing, Zuckerberg. If lots of people hooked up to Facebook but didn't tell other people about Facebook and didn't get other people in their networks to be on Facebook, then the whole thing wouldn't have taken off.

So the reason why these ideas take off is because somebody comes today and they love their app so much that they sign up. They come back to open the app again tomorrow, next tomorrow, the day after, and eventually they tell their friend, boyfriend, girlfriend, uncle, auntie, mom, colleagues at work, and then all of a sudden everybody is on the app. So whether it's Catfish or whether it's a fancy super app, the process is the same.

We need to be worried about customer feedback. What are people saying? Are they interacting with this whole thing? That would help us to determine how it is that we're going to improve the product, improve the service. Customer success, is everybody happy? Customer service, when there's Yahwah, how do we resolve all the problems? And the reason why we're doing all this is because we want people to come back again to buy our catfish again or to use the app again.

You know, that's where the tech Bros and the tech sisters, as well as where they talk about monthly active users or daily active users. That's just a fancy way of saying are people coming back again and again? How many times did they come back in the month? How many times did they come back in the day? You know, those sorts of things. And then referrals. So how many people buy Mumsy's catfish and then tell other people that Mumsy's catfish is the bomb?

Or how many people use our app, love the app, come back again and then tell other people, guy, babe, you guys to sign up to this app and yeah, so that's it. Those are the business functions that we need is help us to improve the product, the range of offerings that we have and then the delivery. So whether you are a startup in the simple sense selling Catfish or in the fancy sense huge business app, online app thing that you want to grow to 50

billion naira, navigating business growth challenges the same. First off, validate the idea, are people interested in this thing in the 1st place and prospecting, going out and getting more people on board. And then we need to be looking at customer feedback, customer success, customer service. That's all will determine whether people come back, whether they will start talking to other people about us and get this idea, whether it's Catfish or the business app to grow.

So tomorrow we're going to look at some popular ideas on the matter and different perspectives on tech startups. So we'll just look at what popular opinions are on these sorts of things. And then I'll give my own. I'll give my own two cents about this whole thing about how do you grow, whether you're a startup or whether you're a scale up in Nigeria in 2024. But in my own opinion, it's all the same. The way that we're going to grow, it's all the same.

The difference is just going to be what principles do we apply in what ratio and are pending depending on what kind of context. So that's it. Pretty much. So thanks for listening to this episode. Connect with me on LinkedIn. My name is Tavish IMA Ayedi. I'm the host of the show. You can confirm the spelling of my name from the link. We're currently listening to this episode. Also Connect with me on WhatsApp. The number is 080, 64662140.

The country code is +234. For those of you who are not Nigerian. Thanks for your time and attention. I'll catch you guys at the next episode.