Catalysing high-impact entrepreneurship to drive Nigeria’s economic transformation
The emergence of the entrepreneurship ecosystem over the last few years has to be up there with the most exciting developments in Nigeria for a while. Across the country and across an increasingly wide range of sectors, we have seen entrepreneurs develop novel solutions to some of our biggest challenges and achieve great success with it.
From eye-catching funding rounds to great innovation stories, the success of these entrepreneurs is inspiring even more people to explore what they can also do and it is essential that we make the most of this opportunity to transform our nation and its economy for good. We need to drive a culture of entrepreneurial leadership and catalyse the powerful multiplier effects that shift economies from the ground up to make the change we all want to see happen.
What is the Multiplier Effect?
The Multiplier Effect is simply the economic cycle of a booming market. It is what happens when innovation increases; creating a domino effect of developments that multiplies the impact of the initial innovation and creates new opportunities for a wide range of people.
In Silicon Valley, the most acclaimed entrepreneurship ecosystem in the world, the impact of the multiplier effect can be seen in how the ecosystem has grown over the years. One example of this is the “PayPal Mafia” – a group of former PayPal employees that worked at the global payments giant at various stages before going on to create some of the biggest technology companies in the world. The “PayPal Mafia” includes Elon Musk – founder of Tesla, SpaceX and other companies, Steve Chen and Chad Hurley – co-founders of YouTube, Reid Hoffman – co-founder of LinkedIn, and many other founders and investors that have played a critical role in the Silicon Valley ecosystem.
Many argue that PayPal served as an incubator for the ideas that developed into these billion-dollar companies, and that the learning and growth that happened at PayPal was critical to the success of these founders. So far, the PayPal Mafia has created 7 unicorns, contributed billions of dollars to the global economy and created thousands of jobs.
As more success stories emerge out of Nigeria, we need to find ways to replicate the impact of the PayPal Mafia to maximise the opportunity we have in front of us. The fragmentation, informality and non-consumption that is widespread across Nigeria has made many sectors ripe for disruption and we need to make sure we are doing what we can to get our entrepreneurs ready to rise to the challenge.
Industry research also supports the impact of the multiplier effect. According to a recent study by Endeavor Insights, founders who had previously worked at organisations that successfully scaled were more likely to scale their own companies. Employees at successful entrepreneurial organizations benefit from intellectual and social capital, including knowledge of certain technologies, company organizational practices, and access to professional and peer networks. The employees who then go on to start their own companies are imprinted with this knowledge, which can help them scale and replicate the success they have experienced.
So how do we make the Multiplier Effect work for us? Here are three quick steps to get us started.
We have to be clear on our “why”
We can all agree that there is a lot of work to be done to drive the progress we want to see in Nigeria. But without a clear definition of where we want to go and why it is important to get there, there is a risk that the desired destination may end up being no more than a pipe dream. Business is often a mix of competing priorities, and without clarity on what is most important, we may end up going round in circles. And there is no time for that.
We have to prioritise long term value creation
It can be easy to only see the challenges and opportunities that are in front of us today but if we are to deliver sustainable economic transformation, we have to build with the future in mind. By leveraging data and technology, as well as learning from what has happened in the past, we can position ourselves to develop solutions that will serve us well in the future.
We have to bring people on the journey with us
As the famous saying goes, “if you want to go fast, go alone. If you want to go far, go together”. One person or organisation cannot do everything that is needed and we all have to play our part in making the progress we all want to see. It is essential that we are intentional about bringing people on the journey with us. This can be our unique way of paying it forward and planting seeds in people and communities that will develop into more success stories in the years to come.
High-impact entrepreneurs are important drivers of job creation and lasting economic transformation. As many others have done before us, we need to catalyse the transformational power of technology, innovation and entrepreneurship to deliver real change and power the development we need.
Faniro-Dada is the CEO/MD Endeavor Nigeria