Mrs. Helen Anatogu, Chief Executive Officer of iDEA Hub, in this exclusive interview with Technology Times takes us into Nigeria’s frontline technology incubation programme sited in Lagos.
Anatogu takes us through the issues that have shaped the Information Technology Developers Entrepreneurship Accelerator (iDEA), the changing startup ecosystem in Nigeria and her resolve to ensure the founding vision is kept alive in an interview with the Technology Times team of Kolade Akinola and Elizabeth Edozie. Photography by Kehinde Sonola of Technology Times.
Technology Times: Can you give us an overview what you do at iDEA Hub and how the journey has been like in realising its vision of creating a space that enables you to grow tech startups in Nigeria?
Helen Anatogu: Idea Incubation Programme is a programme that seeks to support and nurture technology startups and when we say technology startups, it means startups that develop technology or companies who use technology in their operation.
I will give you an example. You might have a company which is developing software and software is a product or you might have a company which is selling cloths, and they dream of using technology platform, e-commerce. So, we work with both.
iDEA was established in the year 2013 at the prompting, I would say, of the then Minister of Communication Technology, Dr Omobola Johnson.
In 2011 we saw a change in the way government looked at the technology sector and for the first time, we had a designated Communication Technology Ministry and we had our first Communication Technology Minister.
Now, at the time Omobola Johnson came into the role, she convened a number of industry forums. I attended one or two of those forums and basically took some feedback from the industry and identified several areas where we could actually start to grow or expand the Nigeria technology sector. One of those areas is in software development, because we have the human capital and we definitely have the intellect to develop software.
And so fast forward 2012, she then put together a committee to say, how do we even start to grow and incubate software companies and at the end of the committee deliberation, the committee said governments around the world, whether you are looking at Israel, India, Tunisia, name it, especially developing countries, have not been very successful in incubating or developing software industry. And so, what most governments have done was to partner with the private sector and either for incentives or some sort of financing, grant funding or enabling policies, to allow the private sector then go ahead to grow the software industry.
iDEA was established in the year 2013 at the prompting, I would say, of the then Minister of Communication Technology, Dr Omobola Johnson.
So, she took that advice on board and then said, ok, we want to set up an incubation programme. So, iDEA was founded at that time in collaboration with the Nigeria IT Development Agency, NITDA. The chairman of iDEA is Dr. Suleiman and the vice chairman is Mr. Pius Okigbo, junior.
In 2013, we entered into Memorandum of understanding (MoU) with NITDA to provide some grant funding for us to basically groom Nigerian technology startups for a period of three years. And now, since we have been established, we have been moderately successful. We have had about 50 startups supported at iDEA. We have about 1500 individuals who have come to iDEA for our various programmes, workshops, seminars and events in that period.
With iDEA startups in revenue and investments, we have raised close to $800, 000 over the period and within our mentor network, we have about 65 mentors.
One of the biggest issues startups or very young companies have in Nigeria is infrastructure, especially technology companies. So, we provide them a space to work in Yaba and also in Calabar, and we provide bandwidth. So, it’s fully networked. It has got fibre coming into the building. We have electricity and the centre here is open till 9.00 pm. We also have coaching. We have staffs here who coach the startups, whether through technical coaching, or entrepreneurship coaching or just business coaching.
We typically have startups here for up to a year and we’ve got the incubation programme which gives people time to work and develop their idea for up to a year and we have got the acceleration programme which is a 16-week of preparing startups to raise investment from venture capital. We have had two graduates now work through their acceleration programme. The latest one graduated in February. All of them are fund raising. Typically, it takes about 12 – 18 months in this environment to raise funds. Although, even when they finish with the programme, we still allow them to use the facilities for a period of time while they still try to raise investment.
“With iDEA startups in revenue and investments, we have raised close to $800, 000 over the period and within our mentor network, we have about 65 mentors.”
Technology Times: What are the challenges you encounter in bring up these new generation of digital entrepreneurs?
Helen Anatogu: I think that one of the biggest issues that we have had, looking at it from an industry perspective, is inconsistent government policies. You need technology to grow an economy. You need technology to really kick-start an economy and we also need government to enable the technology industry to do what they need to do, whether it is through infrastructure or fiscal policy or regulatory policy and even funding.
We had an MOU with NITDA for three years of funding, but they only did it for one year. They provided funding in 2013 and since then, I think in the last three years, out of everything that they committed to provide, they have done less than 30% of that.
“We had an MOU with NITDA for three years of funding, but they only did it for one year. They provided funding in 2013 and since then, I think in the last three years, out of everything that they committed to provide, they have done less than 30% of that.”
Technology Times: What will you say is responsible for that?
Helen Anatogu: I am not even sure actually. In several conversations we have had, they said, oh we are very keen on supporting you, we will support you, and then, nothing happens.
In the last couple of months, we have heard a lot from the present governments about partnering with the private sector. Sometimes, when people start an agreement with the government, there is always that big question: is the government going to follow it through?
I remember at the time when iDEA was starting up, and I was advising and supporting the founders and promoters of iDEA, people were saying, oh you guys want to work with government, do you trust government would follow through? Don’t let this be one of those things that the government says they are going to work on and it falls by the wayside. And we said no, this is way too important. But what we’ve found since then is that priority has changed.
I am not sure that even today and I may be wrong, that government still knows how important technology is to this economy. I have not seen a place where they say, technology is an error, we would focus on. It’s always linked to something else like jobs and all sorts of things, not technology in itself as something that powers government that powers enterprise that powers citizen services, that enables day-to-day living. And like I said, 30% of the funding came through, but regardless, we have kept on with the programme. We are now saying the door is still open to work with government.
And from the private sector perspective, I think the government needs to kind of show if it does want private sector to partner with them, then they would sign agreement and keep to it, because obviously, that impacts on operation, that impacts on commitment to third parties. So, you can’t say to somebody, well, I owe you but I am not going to pay you because I have not been paid.
Technology Times: Could part of the issue be that the former Communication Technology Minister believed passionately in this, took ownership of the entire vision, and was able to successfully facilitate the support that iDEA Hub got. But immediately she left, the new government was no longer interested?
Helen Anatogu: I think that’s part of it. Unfortunately, we are still in a space where government does not see itself as an entity. From a private sector perspective, if I am engaging with the Nigerian government, I don’t really care who the party is or the Minister is. They should be able to continue and build on projects. But I think culturally, which is one of the things that have kept us where we are as a country, we are still in a space where one government starts something and another government comes in and says well, that thing that they started, that was then, I am going to do it all over again.
So, basically, you are continuously running on the same spot because you are continuously re-inventing the wheel rather than building on what previous government has initiated.
And I think part of the issue as well is in some cases, you have Ministers who have a vision and who begin to understand that these are the things that need to get done, but he also must have people who are implementing, who also share that vision.
We started iDEA in 2013, and we got our funding in December 2013. In 2014, we got nothing. In 2015, we got N10 million from government. Now, when you put into perspective, the bandwidth alone here costs N22 million a year with nothing else. And even with the support of the Minister of Communication Technology then, they didn’t seem to understand why it was important to support the next generation of tech entrepreneurs. Why it was important to support people who could actually attract foreign investment to Nigeria and the technology sector.
“We started iDEA in 2013, and we got our funding in December 2013. In 2014, we got nothing. In 2015, we got N10 million from government. Now, when you put into perspective, the bandwidth alone here costs N22 million a year with nothing else. And even with the support of the Minister of Communication Technology then, they didn’t seem to understand why it was important to support the next generation of tech entrepreneurs. Why it was important to support people who could actually attract foreign investment to Nigeria and the technology sector.”
I think that was a little bit difficult. It was almost like banging on a wall and I think it’s still a bit like that’s where people are saying things like maybe it’s the Minister’s personal project. Or maybe she is trying to find jobs for her friends and things like that, which is quite sad when you look at the things you need to achieve as a country.
We have had various conversations even within the iDEA Board if we should continue. I think the general consensus is that this is way too important and when you look at the different things and products that the companies are building, and we know what else is in the pipeline.
It is something that is so important that we can’t let it die because I think that will also dent the confidence. We are now also looking out for more partnership with the private sector. I think that in the long run, with the private sector, things would grow organically.
The conversation we first had with NITDA was a round table thing. From a private sector perspective, private sector will largely concentrate on Lagos and we have seen that from the number of incubators, accelerators and entrepreneurship support programmes that have sprung up in Lagos over the last three years. But from a Nigeria developmental perspective, we need to look beyond Lagos because there is talent everywhere.
Developing software doesn’t necessarily have to be in Lagos because it’s a virtual product. The customers are everywhere. And so, one of the agreements that we had with NITDA was to expand the programme and have incubators in each geo-political zone. So we talked about six starting with Lagos and Calabar.
As of 2015, NITDA was like we are not going to do six, maybe we can do four. Now, fast forward to 2016. We are now saying okay fine, let’s even leave the four. The two that you have already committed to partnering with us, can we still have your commitment. And that has actually not happened.
Technology Times: Take us down what you’ve done in terms of what you’ve seen within the Nigerian technology ecosystem, particularly the youths who are now making the use of technology to address real life problems and come up with solutions technologically for them. What will you say in the last two, three years have been in trend?
Helen Anatogu: Like I said, we have tremendous talents, we have very bright people who come in and learn. Luckily, we have a lot of open online courses where people can sign up for and open training programmes they can do over the Internet.
There is still a long way to go in even getting them to understand the depth of the issues that they are solving or building products to solve. And part of what we do is tried to open up their thinking to say okay, let’s look at these things even closer.
Also, typically, a young person will come in and say I have started working on this product and you asked them that okay, you believe that there is an issue here and there is a product to solve this issue. How many of your potential customers have you spoken to? And you find out that they have spoken to no one. They just think it’s a good idea. They can build it and they go ahead.
Another issue is seed capital. We are in an environment where as students; we don’t have a culture of part-time work like in the U.S. and U.K. And we don’t have enough people that are willing to put down investments, especially at the build stage before the product is actually in the market. Getting seed capital is very hard for young people.
Infrastructure is also a challenge. We know how much bandwidth costs, especially if you are using the normal GSM Telco data plan. It’s quite expensive. But in spite of that, we have very good companies coming through. The incubators have made a difference. So, what we have done is provide a comfortable environment where people can come and work without worrying about Internet, diesel, electricity. And that has made a difference in even how much they are able to do.
You also have a lot of people coming back from Diaspora who have lots of money than the local young Nigerians, because for you to be educated in the university over there, you must have some means somewhere in your network. We are seeing some of those who are also quite successful. You have the big ones like the Kongas and Dealdays, Wakanow, and then you’ve got all these smaller ones which are coming up. I think most of our startups here have local founders who have largely never left this country and have been educated here.
Technology Times: With the model that you are currently running, do you think that the iDEA Hub will be sustainable?
Helen Anatogu: The Hub itself is a startup and so we are faced with all the funding and the ability challenges that any startup would face. Hence, when we talked about funding from the government, we are basically asking for a seed capital. So if you start a business, and you have a committed investor, and before you are able to fully develop and market the product, your investor drops out of the picture, you will have a problem.
So, is iDEA Hub sustainable in the long term? Yes. But does iDEA like any other startup need seed capital? Yes. It does. Now where is that capital going to come from? Now, I think there is a question mark on that. Now, in any other country at our level of development who has tried to push technology incubation, government has provided that seed capital. In some countries, it may be 50%; in some countries, it’s a 100%.
Now, some people you talk to would say Silicon Valley this, Silicon Valley that and I say, when you are not in U.S. We are not in any way close to the development that you find at Silicon Valley. So, Silicon Valley has been able to prove itself. Silicon Valley runs in an ecosystem where the educational institutions do a very good job of incubating startups themselves and therefore, your risk profile as an investor is much lower in Silicon Valley than it is here. So, you can rather make an analogy between Nigeria and Indian or Malaysia or even South Africa, not the U.S.
“Now, some people you talk to would say Silicon Valley this, Silicon Valley that and I say, when you are not in U.S. We are not in any way close to the development that you find at Silicon Valley. So, Silicon Valley has been able to prove itself. Silicon Valley runs in an ecosystem where the educational institutions do a very good job of incubating startups themselves and therefore, your risk profile as an investor is much lower in Silicon Valley than it is here. So, you can rather make an analogy between Nigeria and Indian or Malaysia or even South Africa, not the U.S.”
Technology Times: What plans do you have in preparing your developers to be major contenders in DEMO Africa?
Helen Anatogu: Over the last two years, the startups from iDEA have actually made it to Demo Africa finals, and this year is not going to be any different. Demo Africa is in South Africa this year. iDEA will be working with the Demo Africa team on the West Africa Innovation Competition in preparation for Demo Africa in South Africa.
Technology Times: Between 2013 and now, how many successful startups from iDEA Hub are out there?
Helen Anatogu: I would say that we have at least 10 successful startups. Success can be measured in a number of ways. One, is a startup is making revenue and a startup has raised investments.
We have startups here that are growing organically and are growing through their own revenue such as Eazy Hire, and we have startups that have raised some measure of investment as well. So, looking at it from those two indices, I would say that we’ve got startups that are successful.
Technology Times: What are the criteria to be a developer in IDEA hub?
Helen Anatogu: You have to have the idea for a good product that can sell in Nigeria and also beyond Nigeria. You must be a Nigerian. We don’t work with foreigners.
We may allow them to use a co-working space but we will not actively work with them. What we are trying to do is to build the Nigerian ecosystem. You must be dedicated to your business and you must be driven and also be receptive to our services.
About market potential, you shouldn’t have a competitor in the market. So, you can’t come in here and say I am copying exactly what another person is doing.
So, it’s either you are building something totally new and if not new, it should be very differently from other people. Also, your platform of choice should be mobile. We like e-commerce services and also services that enable SMEs because again, that’s a huge market across Sub Saharan Africa.
“So, it’s either you are building something totally new and if not new, it should be very differently from other people. Also, your platform of choice should be mobile. We like e-commerce services and also services that enable SMEs because again, that’s a huge market across Sub Saharan Africa.”
Technology Times: Where do you see iDEA Hub in the next five years?
Helen Anatogu: I see us still doing what we do. We will overcome the challenges that we are face at the moment. We are looking to expand the programme with additional centres but not in Lagos. I feel there is need for expansion especially, the South West and the South East.
In the long term, we expect that those who have benefited from the service here would enable those who are coming behind. So, I expect that in the next couple of years, some of the startups we have taken equity from in exchange for the service will also be able to give a return of that investment, which then goes back into the programme.
“I know that till today, government has not met up with its funding obligations. So I know the fund came close at $16,000,000. Of that $16,000,000, I think government was supposed to invest $3,000,000 but till today, no one penny has been invested by government. So they basically just ignored their obligations.”
Technology Times: Talking also about investments and when you look at the cultural trend, venture capitalist, angel investors are not very commonplace here. Do you think that the thriving startup ecosystem is changing some of those?
Helen Anatogu: Most definitely. When we started in 2013, at the same, there was also recognition with the government at the time. We need to get people investing in technology startups and somebody needs to take the first step. There is this Venture Capital (VC) Fund called Eco VC Fund and it’s really Nigeria, Africa-focus fund with a portion of its fund really dedicated in investing in Nigerian startups. I think they made investments in three startups that I know of.
I know that till today, government has not met up with its funding obligations. So I know the fund came close at $16,000,000. Of that $16,000,000, I think government was supposed to invest $3,000,000 but till today, no one penny has been invested by government. So they basically just ignored their obligations.
Typically, especially from an investment climate or culture, that does not give people confidence in this environment. You say you want foreign investors to come in, yet when you have a foreign investor who says I am ready to invest in Nigeria and I will set up a fund which is going to invest here. You then don’t keep up with your own side of the agreement. Those are some of the things that are really worrying about how much we as a country are committed to the technology space.