He is smart and articulate. Jason Njoku was and is one of the inspiring stories of Nigerian tech startups.
But the market and the competitive landscape is not always predictable. It is brutal, chameleonic and unstable. If the current state of IrokoTV is anything to go by, then Jason should be commended for his resilience and doggedness. He has kept fighting the market, changing strategy from four screens to two screens, to one screen and now TV and video download model.
Just last quarter of last year, Iroko Partners Limited, Jason’s company launched Iroko World on StarTimes payTV platform. This is a sound decision. Afterall, IrokoTV has the largest catalogue of African movies (mostly Nollywood and Ghanaian films.). While the company has not given any statistics on its library, the position is clear.
Video streaming has seen huge investment across various continents. Netflix has the global appeal. But it took the company many years to make the move and go global. Netflix is struggling to keep its growth up. Its huge bet on going global is looking like a mirage. However newcomers often times open up themselves to the globe. The challenge with this is that business projections, anticipation of demand, bandwidth and market outreach efforts makes smaller startups burn capital fast with no impact on bottomline.
IrokoTV had struggled over the years. Going local with Iroko World is a good move but an exit out of a business do lofty but very challenging. The African market for VoD is still very tiny. The diaspora market can not really be measured. As a lesson, you need to win local before you win global. This argument might be punctured by people who look at startups that scaled faster than expected, but data do not lie. Such startups were local champions before they became global.
The truth is- IrokoTV was not yet winning the home ground. It only started trending. YouTube viewers made it trend. The usual hype that follows startups in Africa who later die a slow death should be looked into.
About four years ago, Jason wrote on his blog that “you need a lot of cash” to build a viable startup. This is a fallacy. Cash do not make a startup become a success. It is the market, circumstances beyond the powers of the founder as well as timing. Cash is just a tool. Twitter has spent billions of dollars and it is not anywhere near profitability. Rocket Internet’s Africa Internet Group, AIG, owners of Jumia is in a net debt of USD 125 million. The company is only predicting when it will break even.
As an advice from Jason himself, please read this:
A spreadsheet isn’t a window through which to view the future.
— JasonNjoku (@JasonNjoku) May 17, 2016