It’s safe to assume “Yabacon valley” is the leading technology cluster and startup ecosystem in Nigeria. What with the likes of Paga, Konga, OLX, Andela…. I could keep going till this page is full.
But there comes a time when a startup grows big enough and can not only walk on its feet but can do moonwalks and backflips. That’s when you begin thinking of expansion.
Chances are you want your startup to one day be an international player, not just a local champion. Which means, expanding and leaving the Yaba “nest” is inevitable. Definitely, one of the things you’ll consider when expanding is the market. For example, if a significant percentage of your customers comes from Ibadan or Port Harcourt, it’s a no brainer where your next stop will be.
Nevertheless, expanding your base of operations out of Yaba, or anywhere for that matter, is not a simple case of “go where the money is”. The move, if done right, is also an opportunity to control your budget. That’s if you consider the right variables.
So what are these variables?
Well, first on the list should be talent. Are you going to be relocating some of your team members into those new cities? That has its implication on cost and performance. Not everyone would want to relocate. Some may need more incentives which means the company spends even more money. So, the availability of talent in your new location is something you should consider. I don’t know how they work but I think headhunters and talent scouts can be helpful in this aspect.
Besides, a programmer or engineer working in Port Harcourt will be cheaper than a programmer in Lagos. I don’t mind being corrected on this though.
Internet is also important. After using the fibre optics of the Yaba hub for months/years, it can be disorienting to go back to other local ISPs. You want to do a thorough combing of available options in the new region to fish out the best possible service for the new office. Otherwise, you’ll be left arguing with your team about why their emails are taking forever to deliver. And you can kiss video conferencing bye bye.
Finally, the granddaddy of them all: rent. Every startup founder I’ve met has had a nightmare or two about not being able to make the rent. (I’m talking about office rent not house rent. Your personal troubles aren’t really anyone’s concerns, are they?) You want to get a place that is affordable, yet central enough to maneuver the new area. It’s a given that the more you move away from the business district, the cheaper rent gets, but how far away can you get? You want to be in the centre of activity so you’re not left out of the information loop. Which is why 90% of all ad agencies in Nigeria are in Ikeja.
But you also want to watch that budget.
At the end of it all, this thing is a cycle. As more startups congregate at a new place, the increased activity has a ripple effect on the economy, which eventually raises the cost of living in the area. And before you know it, you’re expanding out again.
And the world continues spinning round.