Seibel: Nigeria is a Fertile Land for Investments in Tech Startups

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Mr. Michael Seibel is the CEO of Y. Combinator, the most successful early stage fund and incubator company from Silicon Valley, USA, who is in Nigeria to invest technology startups. He spoke to Emma Okonji about the company’s interest to invest big in Nigerian startups

Seibel

What is the interest of Y Combinator in Nigerian technology startups?

We are a large incubation company and we are interested in mentoring global startups with great ideas that could rule the world. We have large companies that applied to us from Africa and we need more of them, hence our interest to be in Nigeria at the Startups Friday show, to invest in more technology startups from Nigeria and bring them on board. Already we have about four Nigerian startup teams in our network and we need more to invest in. This is our interest to be in Nigeria. We were also motivated to come to Nigeria by Maya, the founder of www.ingressive.co, who is also interested in investing in Nigerian startups.
We think Africa is a huge market place that needs to join the rest of the world in the technology space, and Nigeria is a fertile ground to invest in technology startups, because there are signs of future growth.

What kind of support do you give to tech startups on your network?
We support them through mentorship and financing for those that have good ideas that could be turned into viable ventures. At the initial stage, we give each team $120 and they are mentored in our three months incubation programme and we organise a Demo Day for the large number of startups in our company and we bring investors to invest in their solutions. So we mentor them, give them money and support that will make them excel.

What is your expansion plan like?
We have plans to expand our network, hence we are in Nigeria to invest in technology startups. Now 50 per cent of co-founders in our company are not from America, in fact 30 per cent of our founders are from outside America. So we are big and we are expanding, and encouraging people and companies from all over the world to apply to our company for possible investments

What are some of your criteria for the selection of startups?
We look at the quality of the teams to know how viable their solutions are. We consider the technical talents of the team and provide the appropriate mentorship. The team must understand themselves and be focused on their targeted solution. Such teams must be building products and solutions and marketing such products. We are interested in investing in teams that show viability of solutions that address essential challenges.

What plans do you have for those teams that may not be successful to the final stage of selection, since only few of the teams will be selected for investment?
Yes, all the teams that pitch will certainly not be selected for our investments plan. But the truth is that those that will not make it to the final stage, must have learnt something during the period of incubation that will make them smarter and they could begin in their own small way to either grow from that level or try creating more solutions and improving on them over time. Our initiative is to fund as many startups as possible and present to them opportunities to grow big and also support them as they continue to grow.

How do you ensure the protection of solutions of startups before they are ready for the global market?
In the United States of America, protection rights are slow to guarantee, when it comes to breaches. But the truth is that if startups concentrate too much, thinking of how to protect their products and solutions, they will end up not developing the solution as fast they could because attention will be divided. What most teams do is to concentrate on their solutions and ensure that the solutions are good enough to attract public attention. When that is achieved there will be less need to be afraid of intellectual property theft, which will always rear its ugly head.

What is your assessment of Nigerian technology startups?
They are just great and passionate about developing solutions that work, and I see great potentials in them. Since I came to Nigeria for the Startup Friday show in Lagos, I have seen several startup companies that have viable products and what they need is the push in terms of support and investments in their solutions and that is the reason we are in Nigeria to invest in the Nigerian technology startups.

So where do you see the Nigerian startups in the next five years?
This is a tough question to attempt, but what I see today in the Nigerian startups, is that they are building platforms that future startups will ride on. For example we are investing in Paystack and the number of Nigerians using Paystack payment platform is amazing. People want to identify with good solutions and when the team has good solutions they are bound to grow faster than imagined. So communities will continue to create bigger communities and five years from now, I see bigger communities of enthusiastic startups in Nigeria.

So how many startups has Y. Combinator invested in so far, and what are their prospects till date?
We have invested in over 1,500 technology startups globally at the moment in the past 12 years and we are still investing in more and it is the reason we are in Nigeria to invest in more startups that have marketable solutions. Those startups are doing great and they currently worth over $70 billion in value.

In Nigeria, infrastructure is not at its fullest, and this may not bring out the best from the startups. What is your view on this?
The truth of the matter is that the startups are creating value, even in the midst of poor infrastructure. Nigeria has the market in terms of population and once a solution is good, it becomes scalable and people will want to invest in the solution.

What category of startups is Y Combinator looking out for in Nigeria?
We are not looking at categories of startups, but we are looking at talented teams that have solutions that can address societal and economic challenges. We are looking at solutions that will address what Nigerians need.

Bearing in mind that Nigeria is a late starter in the technology startups space, do you still see Nigeria catching up with the rest of the developed economies of the world?
Definitely yes. Nigerian startups still have ample of opportunities to tap into in the technology space and I see them catching up fast.
Some people could start late in life and end up very successful. It does not really matter when the team starts, what is important is the commitment of the team to their project and the end results.

So how can startups move their ideas from ground zero to greater heights?
There is need for startups to think big and conceive great ideas that are scalable and economically viable, but they must start from a humble beginning. Not all ideas are great but some startups will always think that their ideas are great when actually they are not. The truth is that ideas rule the world, but the ideas must be driven by strong passion to succeed. So idea without passion is as good as not having idea. Again, not all ideas are successful at the first instance. Some fail in the process of implementation, but the team must always remain resolute and determined to succeed against all odds. Startups should therefore not be afraid of failed ideas. They should continue to try and improve on their solutions, because most solutions that are making the waves today globally, have suffered some set of setbacks at the initial stage.

What kind of advice do you have for upcoming startups?
My advice for them is to remain focused with their ideas and projects. They should always think of solutions that could address peculiar issues in Nigeria and in the entire world. They should be able to share ideas among their team mates without hiding things from one another. Ideas shared will attract great inputs from others. The solution that will be created out of such inputs will definitely attract more market value. They should have trust for one another as well as mutual understanding. There could be arguments among team members but such arguments should be considered as necessary to move forward. There must be guidelines which all team members must abide with. No team member should see himself or herself as more important than another. Collaboration and team work are the best ways to excel among startups.