LOW TRUST: Biggest Challenge of Nigerian SaaS Startups

Of many things you can describe the Nigerian business environment, you may be correct to tag also it a “no trust” zone. If you’ve been on a plane travelling to Europe and sat with a white dude, you’d notice that once the both of exchange greetings, he could easily tell you his generational problems and stories. In fact, if he finds you interesting enough, you’d probably get an invite to have lunch with his family the next day.

The reverse is the case in Nigeria where neighbours, families, citizens and even leaders hardly trust one another. But the irony is, Nigeria is one huge economy, and business often requires trust, which unfortunately, is lacking.  However, one cannot take away business from this kind of environment. Especially internet serviced-businesses that thrives on some level of trust. This week at the Google Launchpad Class One graduation, one of the panellists from Kenya said: “to beat the game, you have to play the game”. I figured this could probably be applied in Nigeria’s no trust business zone.

There’s rarely a sector that doesn’t have trust issues. Even tech enthusiasts who implement the superb ideas of their friends who have found some companies or tech tools, barely trust these tools. And it’s understandable. It boils down to an agelong import mentality: Africans rarely use the made-by-African products.

Although not justifiable, the reasons for this are numerous. We feel if we patronise African-made products, it’s could be that our data with those tools won’t be safe, or some cable could break, or one customer agent (who coincidentally is a cousin) could know I take loans from PayLater and probably announce it on the family Whatsapp Group if we ever have a disagreement.

So an average Nigerian would prefer having personal data on Google Map than Lara.ng, or business details on XERO to Accounteer.

However, the focus here is, particularly on SaaS startups. A lot of sales team of Nigerian SaaS startups are finding it hard to break even and meet sales target in Nigeria. Especially those into the B2C kind of sale. Check out African SAAS products doing pretty fine, they are mostly B2B. You know why? Because they have the run-way money to sustain operations (many of them have raised some levels of external investments). Before I continue on this point, I need to note that we are all heading nowhere if “digital inclusion” is not one of our core agenda in the tech ecosystem (a personal opinion).

And speaking of digital inclusion, Nigerian Tech Ecosystem needs to begin seeing it beyond the founders,  executives, idealists, investors or media, and create a big space for the “un-digitised”. I mentioned this at the recent NG_HUB opening by Facebook and Cc_HUB.

Let’s take a walk back to the initial article context. From my experience commercialising SAAS products, I have mostly had to create some synergy or personal network with the buyers/users before I could drop the price tag. To be certain that it wasn’t about me not me not knowing my aces, I recently decided to shift from the sales to advisory team of an upcoming SaaS startup. As anticipated, the feedback from the new sale’s/marketing team was exactly same. Unfortunately, It’s pretty much a common dilemma of Nigerian SAAS startups operating in the B2C space.

Although Nigerian SaaS startups get to finally make headway, it takes a great deal of energy and consumes time, where trust is absent. The big question is; how many startups have the runway cash to stay so long in build trust?

At the onset, users will often bombard Nigerian SAAS startups with questions like “Why should I start using you”? I don’t know you and you want my business activities to be flowing through your portal? Where are your servers? How often do you backup? Does government have access to your portal too? What if the Federal Government demands access to our information from your portal and I could go on and on (Personally, I can’t actually count the number of times I have had to answer this).

A Possible Way Out

Despite how real and daunting this challenge is, there’s a solution. To make headway, any upcoming or striving SaaS startup needs to leverage the strength of collaboration with cooperates, other startups, and big ventures. The success story gets sweeter via collaboration than competition.

Let’s take a real-life scenario. If XYZ number of people already trust an already existing brand, and you collaborate with that brand, at least, 50% of the XYZ will trust you easily. Successes around partnerships and collaborations surely roll over to the end user.

From the look of things, this is the best way to survive the “no trust zone” the Nigerian business environment presents. Running from this reality is one of the fatal mistakes Nigerian SaaS entrepreneurs, enthusiasts, and implementers alike will continue to make if not tackled heads on.

An, here’s another reality check. Though Samsung and Apple seem like fierce enemies in the market, Samsung is still the company manufacturing Apple products’ screens. That is the power of collaboration. While it leaves the end user arguing about brands and comparing which is better than the other, the brands make money from either of their decisions.


About the Author

Lanre Ogungbe is a Business Development Strategist who is delighted in thinking about abstract ideas and writing on a variety of subjects.

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