African startups need to solve big problems, not chase unicorn status

The magical beast.
The magical beast.
Image: Reuters/Kieran Doherty
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In 1938, when the Nigerian author D.O. Fagunwa published his seminal work, Ògbójú Ọdẹ nínú Igbó Irúnmalẹ̀, it was the first novel ever written in the Yoruba language of southwest Nigeria. It was translated into English in the late 1960s by Nobel Laureate Wole Soyinka, while he was held as political prisoner. Soyinka’s translation was titled Forest of a Thousand Daemons and it captured Fagunwa’s vivid imagery of the brave hunter Akara-ogun taking on spirits, snake people, magical trees, and many other mythical beings in this forest.

But the brave hunter never meets a unicorn.

That same mindset is needed among startups in Africa. They don’t need to borrow from the mythologies of other cultures to prove themselves worthy. The unicorn in Silicon Valley terms is a startup valued at over a billion dollars. In Africa, that’s as rare as the mythical creature itself. Yet, some believe African hubs need to produce their own unicorns to be seen as successful.

As investors and startup founders (including Lidya, Bitpesa, Beyonic and Impact Africa Industries) discussed at the Accelerating Africa 2.0 event earlier this week at Quartz in New York, African startup ecosystems shouldn’t be trying to recreate Silicon Valley in Lagos, Nairobi, or Cape Town.

Doing so creates a paradigm where young entrepreneurs pitch the ideas they believe investors want to hear rather than the ideas in which they believe, notes Eghosa Omoigui of Lagos-based EchoVC. That isn’t the way to build $10 million companies, much less those worth $1 billion.

That doesn’t mean Africa won’t build $1 billion enterprises from scratch, they have done so and will certainly do so again. But while an over emphasis on valuation, rather than innovation and problem-solving, can be a mere distraction in Silicon Valley, in Africa it can do real harm to much smaller and sensitive startup ecosystems.

Every investor and entrepreneur on our panels said the same thing this week, they all think it’s still very early days in Africa. That said, those in the know say there are several African $100 million startup valuations which are much closer to fruition than we may realize, likely over the next year. That would have more impact today on Nairobi or Lagos than yet another $1 billion valuation would in the Valley.

When you have daemons, who needs unicorns?