Part 3. From Lone Wolf Mentality to Hunting As A Pack

“If you want to go fast, go alone. If you want to go far, go together.”

~ African Proverb

In a low-trust environment that may also suffer from a scarcity mindset, such as in many emerging markets in Africa, the lone-wolf strategy can seem rational for a startup founder. Operating solo might appear to shield the startup from intellectual property theft, competition, or wasted time. However, this isolationist approach often results in missed opportunities for collective action that could substantially benefit individual startups.

Collective lobbying can lead to industry-wide regulations that make it easier for startups to operate and grow. One such opportunity is the ability to influence governmental policies favorably for the startup ecosystem, as was seen with the Nigeria Startup Act of 2022 which came about through a collective effort by the Nigerian tech community.

Furthermore, collaborative efforts extend to engaging with the broader industry. By coming together for events or showcases, startups can more efficiently tap into networks of potential customers or investors, thereby shortening the sales cycle and accelerating growth. This form of collective engagement stands in stark contrast to the time-consuming process of acquiring customers or investors one at a time, further underlining the limitations of the lone-wolf approach. By organizing as a collective entity, startups can drive policy changes, ease regulatory constraints, and open up market and funding opportunities that would have been unattainable for individual companies.

In essence, startup organization and collaboration in a tech industry aren't just good-to-have; they are a superpower that can catalyze an entire ecosystem, fostering rapid innovation and growth at scales that startups in lone-wolf environments could only dream of achieving.

Case Study: The Nigerian Startup Act of 2022

The Nigeria Startup Act of 2022 represents a landmark piece of legislation aimed at creating an enabling environment for startups to grow and thrive in Nigeria. Initiated by collective efforts from the Nigerian startup community, investors, and ecosystem builders, this Act has as one if its stated objectives "to position Nigeria’s startup ecosystem, as the leading digital technology centre in Africa, having excellent innovators with cutting edge skills and exportable capacity." The passage of the Act was a landmark victory which shows the benefits and power of a collaborative approach. Here are some of the major benefits of the Act for the Nigerian tech industry.

The Nigeria Startup Act of 2022: Unpacking the Benefits for Startups

The Nigerian Startup Act of 2022 provides a comprehensive framework aimed at nurturing the startup ecosystem in Nigeria. Below are some key benefits that Nigerian startups stand to gain from this Act:

Financial Support:

1. Startup Investment Seed Fund: Access to a dedicated fund to provide seed investment to qualifying startups.
2. Credit Guarantee Scheme: Startups can access loans more easily due to a guarantee scheme that reduces the lender's risk.
3. Tax Credits for Investors: Individual and institutional investors investing in startups will be entitled to a 30% investment tax credit, making it more attractive for investors to support startups.

Ease of Doing Business:

1. Fast-Tracking Registration: Agencies like the Corporate Affairs Commission are mandated to expedite the registration of startups.
2. Crowdfunding: Startups are allowed to raise funds through crowdfunding intermediaries and commodities investment platforms licensed by the Securities and Exchange Commission (SEC).
3. Regulatory Sandboxes: Eligible startups can participate in regulatory sandbox programs, reducing the obstacle faced by startups in licensing and providing a safer and more controlled environment to test new technologies and business models.

Intellectual Property (IP) Support:

1. IP Registration: Assistance in registering intellectual property rights, including patents and trademarks, both domestically and internationally.
2. IP Legal Support: The Act allows for assistance in instituting legal action for infringement of intellectual property rights.

Technology Transfer:

1. Simpler Technology Transfer: Registration for technology transfer will be eased for startups, and applicable fees will be discounted.
2. Technical Assistance: Support in commercializing research results.

Fintech and Regulatory Support:

1. Special Fintech Licensing: Simplified licensing procedures for fintech startups.
2. Regulatory Liaison: Startups will be given the opportunity for interactive sessions with the SEC and Central Bank of Nigeria (CBN), making it easier to adapt to new rules and regulations.

Listing on Stock Exchanges:

1. Eligibility Requirements: Assistance for startups seeking to list on the Nigerian Stock Exchange or other similar platforms, thereby gaining access to more significant capital.

Incubation and Acceleration:

1. Accelerator and Incubator Programs: Establishment of and collaboration with existing programs to foster startup growth.
2. Information Portal: An online portal will be made available to provide all necessary information for startup development.

Foreign Investment Support:

1. Investment Repatriation: Foreign investors in startups are guaranteed the ability to repatriate dividends or profits and liquidation proceeds in freely convertible currency, making it more attractive for foreign investment.

Recognition:

1. Digital Certification: Startups are 'labelled' under the Act, which could act as a mark of credibility and reliability, thus boosting their profile to potential investors and partners.

Overall, the Nigerian Startup Act of 2022 aims to remove bottlenecks and provide comprehensive support to startups in the country, thereby making Nigeria a more attractive destination for innovation and entrepreneurship.

Fostering Collaboration

The Act also ingrains a spirit of collaboration by necessitating partnerships between government agencies, private organizations, and the startup community. Through a transparent Startup Portal, the Act encourages information sharing, making it easier for startups to find accelerators, investors, and partners. This further reinforces the value of collective action, as synergies are more straightforward to identify and exploit.

Creating a Conducive Environment for Innovation

The Act is not just about easing business processes but also about creating a culture that encourages innovation and entrepreneurship. By reducing the friction in the business environment, it allows startups, investors, and other stakeholders to work together more efficiently towards common goals.

Conclusion

The Nigeria Startup Act of 2022 illustrates the transformative power of collective action. It serves as a vivid example of how industry-wide collaboration can result in a legislative framework that benefits an entire ecosystem. By transitioning from a lone-wolf mentality to a collective one, the tech community in Nigeria has not only succeeded in improving its immediate business environment but has also laid the foundation for future entrepreneurs. This Act demonstrates that the best way to ensure the success of the many is through the collective efforts of all involved. When we go together, we go further.