Jason Njoku, CEO of iROKOtv, reflects on the company's experience with streaming Nollywood content in Africa. Despite investing over $100 million, Njoku believes that the streaming model wasn't the right fit for Nollywood in Nigeria. Instead, he thinks that content, channels, and distribution were the key to success.
Njoku shares that with the economics of the business in 2018, iROKOtv could have shut down and had a fantastically profitable business. However, he was a believer in the streaming model and walked away from millions of dollars in personal liquidity to pursue it. He notes that he could have reached the same conclusions with $5-10 million versus the $100 million+ that was invested.
The CEO's experience has taught him the importance of being cautious with fundraising. Njoku advises founders not to over-raise, citing his own expensive lessons. He also shares his experience with Obi from Kobo360, whom he advised not to raise too much capital during a brutal price war. Njoku notes that the unit economics and payment cycles were brutal, and capital wasn’t going to dramatically change the market dynamics.
Njoku's experience has given him a keen eye for unit economics. He can now glance at a startup's financials and determine its chances of long-term success. The CEO's story serves as a reminder of the challenges of operating in Nigeria, which is currently a massive drag on Multichoice's business.
The largest pay platform in Africa, Multichoice, is currently being acquired in a $2.8 billion deal. Njoku's story highlights the importance of understanding the market dynamics and being cautious with fundraising. He emphasizes that it's essential for startups to have a deep understanding of their unit economics and market dynamics to ensure long-term success.
Key Takeaways:
- The importance of understanding unit economics and market dynamics
- The challenges of operating in Nigeria and the impact on businesses
- The need for caution when fundraising and the dangers of over-raising
- The value of experience and lessons learned in the startup journey
Implications for Startups:
- Startups should prioritize understanding their unit economically and market dynamics
- Founders should be cautious with fundraising and avoid over-raising
- It's essential to have a deep understanding of the market and its challenges
- Startups should focus on building a sustainable business model rather than relying on excessive funding.
By sharing his experience, Njoku provides valuable insights for startups operating in Africa and highlights the importance of understanding the market dynamics and being cautious with fundraising.
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