This week, the headlines in the entrepreneurship circle have been a study in contrasts—stories of soaring success and the sobering reality of failure. On one hand, we have the remarkable tale of VFD Group, a side hustle that defied the odds and blossomed into a conglomerate with investments in various sectors. On the other hand, there’s a string of startups, both at home and across Africa, that managed to secure substantial capital but eventually faltered. These two divergent narratives offer a compelling juxtaposition, shedding light on the unpredictable nature of entrepreneurship and the critical factors that distinguish winners from those who stumble along the way.
The Genesis of VFD Group: A Leap of Faith
In 2008, a group of friends with 9-5 jobs embarked on a remarkable entrepreneurial journey by pooling together 2.5 million naira from their savings. Their goal was simple yet audacious: to start a side hustle that would eventually allow them to bid farewell to their conventional employment. Among the visionary individuals in this group was Nonso Okpala, the Chief Financial Officer at Tony Elumelu’s Heir Holdings. Little did they know that their initial venture, a microlending business targeting the underserved population, would evolve into the VFD Group—a conglomerate with diverse interests spanning finance, real estate, hospitality, energy, and more.
Entrepreneurship as a Gamble
Reflecting on missed opportunities, one of the friends who did not invest observed that starting a business and becoming an entrepreneur can be likened to a gamble. Many individuals, at different junctures in their lives, wager their savings and hopes on their belief in an idea, hoping to strike gold. Yet, for every success story like VFD Group, there are countless others with equally compelling ideas, resources, and education that do not achieve the same level of success. This reality underscores the elements of luck and timing in entrepreneurship.
The Reality of Success
It’s crucial to recognise that not everyone is cut out to be an entrepreneur, and not everyone will achieve success in that realm. Instead of succumbing to the pressure of starting a business or being labelled a CEO, individuals should take the time to identify their true calling and focus on honing the necessary skills and experiences. The entrepreneurial journey is not one-size-fits-all, and not everyone is meant to embark on it.
Elon Musk, Mark Zuckerberg, Larry Page, and others celebrated as titans of industry are the fortunate few who won the jackpot in their respective fields. Many equally talented individuals made similar attempts but did not achieve comparable success because success, in many instances, is a confluence of factors beyond one’s control. Thus, embracing one’s uniqueness and strengths is paramount to personal and professional growth.
The Perils of Bandwagon Entrepreneurship
In the same week that the VFD Group celebrated its success, the world also witnessed the downfall of several startups that once appeared promising. Startups such as Dash in Ghana, 54gene, Sendy, Lazer pay, Zumi, and Kune, despite raising substantial funding rounds, eventually faltered and faded away. These instances serve as cautionary tales of entrepreneurs who fail to recognise their strengths and build on them.
Some individuals are inherently better suited to be managers, followers, or career professionals, and that is perfectly acceptable. Instead of blindly following the trend of quitting paid employment and diving into entrepreneurship, aspiring entrepreneurs should conduct a thorough self-assessment and align their pursuits with their true calling.
VFD Group: An Inspirational Success Story
The VFD Group’s transformation from a humble side hustle to a flourishing conglomerate is a testament to the power of vision, perseverance, and adaptability. This homegrown Nigerian conglomerate has achieved remarkable milestones, holding a 12% stake in Piggyvest and other fintech companies, being listed on the Nigerian Stock Exchange with a market worth of N55 billion, and having investments in over 40 companies.
One of the most remarkable aspects of the VFD Group’s journey is its consistent dividend payouts over the past five years. In 2022, the company reported a remarkable 125% increase in profit before tax, reaching N8.8 billion. This impressive growth was driven by an 87% surge in gross earnings to N33.8 billion. These financial achievements are a testament to the dedication, innovation, and business acumen of the founders and their team.
Key Lessons from VFD Group’s Success
The story of VFD Group offers several valuable lessons for aspiring entrepreneurs and business enthusiasts:
1. Believe in Your Vision: VFD Group’s founders had a clear vision from the beginning and believed in it passionately. Their unwavering commitment to their goals helped them overcome early setbacks.
2. Adapt and Evolve: The group started with a microlending business but expanded into various sectors, demonstrating the importance of adaptability and diversification in business.
3. Embrace Diversity: VFD Group’s diverse portfolio of investments highlights the benefits of exploring multiple avenues within the business world.
4. Consistency Pays Off: The company’s consistent dividend payments and impressive financial growth underscore the importance of long-term commitment and steady progress.
5. Know Your Strengths: Not everyone is meant to be an entrepreneur, and success can be achieved in various roles. Self-awareness and skill development are critical for personal and professional growth.
The Harsh Reality of Startup Failures
While the VFD Group’s success story is inspiring, the world of startups is also replete with cautionary tales. This same week, headlines featured startups that had raised substantial capital, both at home and abroad, but ultimately met their demise. These startups, once the darlings of investors, serve as stark reminders of the volatile nature of the entrepreneurial landscape.
Dash in Ghana: The Rise and Fall of a Unicorn
Dash in Ghana was once hailed as a unicorn, having raised an impressive $86 million in funding. With grand ambitions to revolutionize ride-sharing in Africa, Dash garnered attention for its aggressive expansion and innovative approach. However, despite its promising start, Dash faced insurmountable challenges and ultimately had to cease operations, leaving investors and employees in the lurch.
Read also: VFD Group targets N12.5bn from Rights Issue
54gene: The Genetics Startup That Lost Its Way
54gene, a genetic research startup based in Nigeria, managed to secure $45 million in funding, making headlines as a frontrunner in African biotech innovation. The company aimed to tackle critical health challenges through genomic research but struggled to translate its lofty ambitions into tangible results. Internal issues and external challenges led to its downfall, serving as a stark reminder that funding alone cannot guarantee success in the startup world.
Sendy, Lazer Pay, Zumi, and Kune: The Fading Stars
Sendy, Lazer Pay, Zumi, and Kune—these startups, despite their early promise and significant capital injections, ultimately succumbed to the unforgiving dynamics of the market. They faced competition, regulatory hurdles, and changing consumer preferences, highlighting the importance of adaptability and a deep understanding of the business landscape.
Lessons from Startup Failures
The stories of these failed startups underscore several critical lessons for aspiring entrepreneurs:
1. Funding Is Not a Panacea: While raising substantial capital is essential for growth, it is not a guarantee of success. Startups must complement funding with effective execution and adaptability.
2. Market Dynamics Matter: Understanding the market, competition, and regulatory environment is paramount. Failing to navigate these complexities can result in even the most well-funded startups faltering on their journey to success.
The Role of Innovation and Execution: While a groundbreaking idea can set the stage for success, it is consistent innovation and effective execution that sustain a company over the long term. Many startups, like VFD Group, initially started with a unique concept but continued to evolve and adapt to changing market dynamics.
Resilience and Learning from Failure: Startup failures are not the end of the road; they can be valuable learning experiences. Entrepreneurs who bounce back from setbacks often emerge stronger and more resilient. The ability to analyse what went wrong and make adjustments is a crucial skill.
The Importance of Market Research: Dash in Ghana, 54gene, Sendy, Lazer Pay, Zumi, and Kune may have raised significant capital, but they also serve as cautionary tales of the importance of thorough market research. Understanding customer needs, preferences, and market trends is essential for long-term success.
Strategic Partnerships and Team Dynamics: Building the right team and forming strategic partnerships can be the difference between success and failure. VFD Group’s ability to assemble a talented and motivated team contributed to its remarkable journey.
Conclusion: The Entrepreneurial Odyssey
The entrepreneurial landscape is a dynamic and unpredictable terrain where success and failure often coexist. The story of VFD Group’s remarkable journey from a side hustle to a thriving conglomerate serves as a beacon of hope and inspiration for aspiring entrepreneurs. It reminds us that with vision, perseverance, adaptability, and self-awareness, it is possible to overcome challenges and achieve extraordinary success.
However, the failures of startups like Dash in Ghana, 54gene, Sendy, Lazer Pay, Zumi, and Kune are equally important as they provide valuable lessons on the intricacies of entrepreneurship. These stories emphasise that while funding is crucial, it is not a panacea for all challenges, and success requires a combination of factors, including innovation, execution, resilience, market research, and effective teamwork.
In the end, the world of entrepreneurship is not a one-size-fits-all journey. It is a multifaceted landscape where each entrepreneur’s path is unique. Aspiring entrepreneurs must not only be prepared for the possibility of failure but also understand that setbacks can be stepping stones to future success. The stories of VFD Group and the startups that faced adversity remind us that in this journey, the only way to truly fail is to give up. Success, after all, often emerges from the most unexpected places, and the entrepreneurial odyssey continues, marked by both triumphs and tribulations.