Mastering the Startup Journey: Insights for First-Time Founders

SDS 020: Clarifying First-time Founders’ Pitfalls

Hey! thank you for reading issue 020 of Startup Definition Sunday (SDS).

SDS is the newsletter for founders, bringing you clarity one actionable tip at a time.

SDS arrives every two weeks (you guessed it) on Sundays.

In every issue you can expect:

• 1 Definition of startup jargon

• 1 actionable tip you can implement right away

• 1 article on Africa tech that you should read

• 1 gift for founders

Let's dive in:

(P.S. I'll never sell your information, ever)

Hello there!

It's always such a pleasure to share each issue with you! In case you missed the last one, you can check it out here.

Before we jump into today's issue, I wanted to let you know about something Marge and I started that we think could be useful for founders - bi-weekly office hours to practice your 5-minute pitch.

Our Q3 sessions have come to an end. If you missed the most recent recorded session, you can catch it here.

We'll be taking a break until the start of Q4.

Now, let's dive into today's issue.

I consider being an older brother one of my favorite aspects of my identity.

You see, as the first-born child, you're the one who discovers all the traps of life without anyone warning you about them.

It's a learn-as-you-go experience, sometimes accompanied by tears.

The same can be said for first-time founders.

Who is a first-time founder?

First-time founder: a person new to creating and managing a startup. They may have worked in different roles or industries, but this is their first time leading a company

What common pitfalls do first-time founders face?

Embarking on the risky journey of building a company for the first time deserves applause.

It's important to note that just because someone is a first-time founder doesn't mean they lack experience or skills. They might have significant industry expertise, technical skills, or leadership experience from other roles.

However, the journey of a first-time founder is typically marked by unique challenges and learning experiences that come with launching a new business.

That's why I want to share three common pitfalls I've observed first-time founders falling into, along with some advice on how to avoid them:

Distraction: For every startup, there are numerous areas to focus on. However, this is where many first-time founders stumble. Trying to solve problems for different segments of a specific market right from day one is the quickest way to burnout and failure.

Instead, identify your ideal customer and the most painful problem for them. Focus on that and build a sustainable foundation before venturing into other areas.

Take Moniepoint, for example. They focused on being the best at Cash-in-Cash-out for three years before expanding into other areas. Most successful African startups follow a similar initial focus for at least two years.

Over-estimating Pan-African expansion: The allure of saying “we are in X number of countries”, is like me and baked goods: ‘Why not?‘

It may be tempting to boast about being present in multiple countries, but rushing to expand across Africa can be a graveyard for good ideas. Africa is a fragmented market in terms of regulations, payments infrastructure, and market context.

If your startup must be in multiple countries within the first two years to succeed, you're already putting yourself at a disadvantage. Instead, identify a growing segment of the market and build your business there first.

Playing the wrong game: Investors can be alluring with attractive valuations and promises of "key milestones until the next raise." However, the purpose of a startup was never solely about raising more and more money.

While investors are crucial for scaling the business, their incentives may differ from the needs of your customers. Rather than chasing investor-led high valuations and TechCrunch announcements, focus on customer feedback and growth. Building a startup in Africa is challenging enough, so don't let investors lead you astray.

If you have learned something valuable today, consider joining SDS so you don't miss exclusive sections in future editions.

If you only read one thing this week, read this...

if you're a first-time founder, I highly recommend checking out this article by OPay's President & Co-CEO, Olu Akanmu. It shares 25 best practices on scaling a business that will help you avoid the common pitfalls I mentioned earlier.

Founder's Corner

As an investor, I know how challenging it can be for founders to get noticed by angel investors, especially without the right connections.

That's why I created an inbound form to allow founders to share their decks directly with me. It takes less than 5 minutes to complete. By breaking the mold and providing an alternative way for founders to connect with investors, I hope to help level the playing field.

That's all for today! As always, thank you for being a fantastic reader.

Until we meet again in two weeks, here's how we can stay in touch:

• 🐦 Find me on Twitter

• 💬 Hit me up on Linkedin

• 💌 Email me

• 🚀 Sponsor SDS (Reply to this email)

Let's chat again in two weeks,

Jasiel