When I started covering the startup ecosystem in Africa, I kept hearing one word over and over again – disruption. An innovation is described as disruptive if it creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances. In other words, this is a battle between startups and corporates.
We discussed this last Thursday during the maiden edition of the Innovation Village Chat Series. Our guest, Benjamin Benaïm, Founding Partner at Seedstars, noted that corporate companies and organizations in Nigeria are aware of the fast pace at which disruption is approaching their space and the smart ones are seeking ways to remain relevant and to stand the test of time since the lessons of Kodak and Nokia’s failure to innovate are still fresh in everyone’s minds.
The fear of being left behind is compelling corporates to be getting involved in several things that the startups are doing. Some of them are launching marketplaces, investing millions of dollars in ecommerce while others are competing with startup founders that are producing different forms of solutions. The smarter ones are engaging the stakeholders like Seedstars to seek spaces for them to play in.
“We’ve worked with corporates at different platforms and levels and we’ve realized that education of corporates is a very important point. They need to be better organized and better geared to collaborating with startups. Presently, it’s like corporates are fairly isolated and protected from the disruption but disruption is coming and it is coming really fast,” Benjamin said.
He noted that money is really needed to quicken the much anticipated disruption in Nigeria’s ecosystem – this is a place where he corporates have some cards to play since they are the ones with easier access to funds. According to him, corporates are setting money aside to invest in innovation so that they can also be beneficiaries of the disruption but he said it goes beyond making money available.
“Obviously if you are in an ecosystem that doesn’t put a lot of money on its startups, then the startups are very likely to remain small. But if you have big money being put on startups like Alibaba’s over-a-billion dollar investment in a Chinese startup, you begin to see more disruption,” he told our live chat audience.
“Corporates need to be aware and it’s going to come faster than they think and some of the programs we will be looking at is to have special weekend for corporates to develop their entrepreneurial skills and willingness to work with startups.”
Spaces for corporates in Nigeria’s disruption
He said corporates can get involved by identifying startups that can either use their technologies or add value to their businesses.
“We can help them identify startups that can adequately utilize their expensive technologies and we are also helping corporates to identify startups that can add value to their businesses. We also build and co-develop companies with corporate partners. Corporates need innovation and they know that if they don’t innovate they’ll become the next Kodak and they will stop growing which means they are dying,” he said.
