The journey to a million dollars can start in Ikot-Ekpene, a town in southern Nigeria famous for its palm oil, kernels, yams, cassava, taro, corn and raffia. As a child, Mark Essien watched his father, a graduate of the social sciences with no vocational training, build makeshift machines for communal use, such as excavators to pump sand out of the river. A proclivity to build was sown in Essien. It bore fruit decades later and thousands of miles away, in Germany, where he was attending university.
Essien got a job as a night watchman. He had to closely observe the bodily movements of a paralyzed man, which could possibly be fatal. During these long nights, Essien taught himself computer programing. He soon developed a file-sharing software that was bought by Bertelsmann Media, a German multinational mass media corporation. Essien was also hired by the company. Soon, his skills were in high demand. He made a living, and financed his university studies, by selling software to Orange SA (then known as France Telecom), Walt Disney and the United States Armed Forces. Soon, he got bored.
“I wanted to get out of buying and selling software products and move into start-ups. Start-ups are a different beast,” Essien says placidly while sitting in his office, a recently remodeled colonial building in Yaba, a suburb in Lagos.
This time, in between wrapping up his Bachelor’s degree and waiting to begin his Masters’, Essien, in collaboration with friends, launched a start-up based on iPhone apps. This was around the time when the iPhone was first introduced to the world. The business performed fairly well, but Essien sought a new challenge and handed the reins of the start-up to his co-founders.
He was looking for a bigger challenge – one that would allow him to play a role in the technology space on the continent. In January 2012, Hotels.ng became this challenge. The online business was formed as the infant tech industry was taking off in Nigeria, and in Africa. In a few years, a content streaming service, a flight booking platform, online malls, car dealerships, real estate directories and more have sprung up in Nigeria. Hotels.ng joined their ranks, providing online solutions for people in need of temporary accommodation in Nigeria, from Ikot-Ekpene in the south, to Sabon Gari in the north.
Hotels.ng was started with financial contributions from family and friends, as well as Essien’s personal money. Starting the business was easy, making it a success would be more difficult.
“We were very lucky that we had some capital available and we were able to raise it pretty quickly. We were able to raise $75,000 after three months of operations,” says Essien.
Usually, start-ups are not this fortunate. It is believed Essien had an unnamed investor when he launched. However, in the tech ecosystem, local investors are still hard to find. Essien thinks this is because they are not seeing other investors make massive returns. He also doesn’t think much of those running start-ups in the country today.
“Investors don’t invest in ideas, especially in Nigeria when there’s so much execution risk. Every start-up has been done somewhere else successfully so the idea is good but can the person build it? I don’t think enough smart and resourceful people are in the start-up space.”
It would seem Essien doesn’t belong in this category. A few months after launching, he was made an offer by Jason Njoku, founder of successful content streaming service, iROKOtv, and start-up incubator, SPARK. He turned it down, stating he wouldn’t need investment for the next six to twelve months as he had enough from his first seed round.
“There’s a philosophy I have that every start-up should follow. You must be able to build a business with what you have. If you are dependent, your business will be vulnerable. I’d rather take no money than take bad money,” says Essien.
Hotels.ng managed to grow independently and, in 2013, Essien decided to sell 35% to SPARK for $225,000. This year, Hotels.ng raised $1.2 million from the Omidyar Network, the investment vehicle of eBay founder Pierre Omidyar, and EchoVC Pan-Africa Fund, a seed-stage technology fund.
The investment was a result of a six-month search, involving 60 to 70 investors who were interested in Africa. Essien insists, however, that the investment is not a magic wand and while some problems will disappear, bigger ones will take their place.
“Scaling a company up is extremely difficult. I have gone from me and one guy, to me and 49 people. You have to build structures, management. We need to understand what it means to have regional offices across Africa. We are going to start in Ghana. The stage we are in the market is still early. We have a bit of leeway to be slow on things. When you are faster than the market, it’s the quickest way to kill your business.”
Essien makes an interesting comparison. Before YouTube, there had been a number of video file-sharing platforms that were just as innovative. However, there was no global internet penetration to support their success. There were not enough people online, or even aware, to enjoy these sites. YouTube came at just the right time. Essien believes Hotels.ng must perfect such impeccable timing.
Although Essien’s journey, and that of his start-up, has only just begun, he knows where he is going.