In a recent Techeconomy X (formerly Twitter) space session, Tosin Adesina, Senior Sales and Partnership Manager at Big Cabal Media thoroughly discussed the challenges faced by startups, exploring shutdowns, layoffs, and valuable lessons learned.
Tosin Adesina, with his wealth of experience, shed light on key aspects of startup management, offering insights and practical advice.
Understanding Startup Challenges: Funding, Markets, and Regulatory Hurdles
Tosin Adesina highlighted funding as a primary challenge for startups, emphasising the substantial costs associated with operations, technology, and talent acquisition. He pointed to the need for startups to create scalable solutions and carefully choose markets. “When you see a market that’s not explored, don’t think that founders are lazy. Markets can be good on paper, but exploring them without adequate funds might lead to significant challenges,” Adesina stated.
Adesina cautioned against assuming that untapped markets are easy wins, as operational costs and unexpected challenges can quickly arise. He stressed the importance of thorough market research and adaptability to customer preferences.
He also noted the high operational costs involved, from hiring top-tier talent to covering licenses and software expenses. Adesina said, “You can have the best engineers, the best solution, but without funding, startups can’t scale.
“Your money goes into operations. A story on how a startup made a lot of revenue can break today and everyone thinks they are rich, but a lot of operational costs go into bikes, licenses, software purchase, and a lot of things.”
Regulatory challenges, especially in regions like Nigeria, are a significant barrier to startups. Adesina pointed out the potential impact of government policies, citing examples of businesses facing regulatory obstacles, such as the crypto industry in Nigeria.
“For a place like Nigeria, regulatory challenges are a very big challenge. People who have invested a lot of money in their business might not want to move outside Nigeria due to regulatory challenges.”
Managing Unexpected Challenges: Layoffs and Lessons in Resilience
The conversation seamlessly transitioned to unforeseen challenges and their management. Discussing layoffs, Adesina explained the importance of clear communication, transparency, and humanity when making difficult decisions. He shared a personal experience where layoffs were communicated openly, providing insights into the reasons behind the decisions and even offering financial support to those affected.
“Communication, transparency, and humanity are important when downsizing. Layoffs should be communicated clearly, and support, such as financial assistance, should be provided to those affected.”
Tosin Adesina also discussed considerations and strategies involved in handling workforce reductions while maintaining company culture. “Laying off should not be risky; it’s part of the business,” Adesina explained.
Striking a Balance: Financial Stability and Scaling Operations
On the issue of financial stability and scaling operations, Adesina reiterated the importance of keeping cash flow strong. He advised startups to focus on selling in the right market to ensure sustainability. “You must keep your cash flow strong; profitability comes from serving a hungry market,” Adesina asserted, offering practical advice for startups walking through economic uncertainties.
Learning from Setbacks: Transparency, Communication, and Humanity
Adesina shared further insights on setbacks, emphasising the lessons learned from challenges. He reiterated the importance of transparency, communication, and humanity in building resilience. “Transparency, communication, and being humane are the lessons that contribute to a company’s success,” Adesina noted, drawing from his experiences.
Digital Innovation and Adapting to Change
Discussing the ever-changing technological space, Adesina explained the necessity for startups to innovate continually. “Innovate or die,” he stated, pointing out how adapting to changing technologies and market dynamics is essential for survival in the digital age.
Understanding Customer Behavior: Key to Success
The speaker stressed the significance of understanding customer behavior as a fundamental challenge for startups. He advised businesses to listen to their customers, citing examples of companies that failed due to poor customer service. “Listen to your customers; if they’re not interested, nothing else matters,” Adesina remarked, highlighting the critical role of customer feedback in shaping successful businesses.
Guidance for Startups in Turbulent Times
As the session neared its conclusion, Adesina offered valuable advice for startups facing challenges. He urged entrepreneurs to focus on their numbers, highlighting the importance of revenue generation. “Keep going, keep revenue flowing; that’s the first step to staying afloat,” Adesina concluded, providing a pragmatic approach for startups facing turbulent times.
Building Strong Teams: Unity in Diversity
In the final segment, Adesina stated the importance of unity within startup teams. He highlighted the collaborative nature of startup environments, where every team member plays a key role. “Startups function as one; unity is the only thing that makes things work together,” Adesina concluded, bringing to light the collective effort required for startups to thrive and grow.
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