A technology executive and Senior Product Marketing Manager at Anchor Software Limited, Omolara Dada, says African startups need to realign their growth strategies to focus on sustainability, efficient use of capital, and a stronger grasp of customer needs.
Dada made this observation during a masterclass at the Africa Startup Festival in Lagos, which attracted startup founders, operators, and growth professionals from across the continent.
Dada said the difficult funding environment facing African startups has exposed the risks of pursuing rapid expansion without strong fundamentals. She noted that many startups in recent years deployed limited capital on aggressive customer acquisition and high-profile marketing campaigns but failed to build resilient business models, leading some to stall operations or shut down.
According to her, sustainable growth requires a disciplined approach to spending and a clearer focus on solving real customer problems, rather than prioritising scale at all costs.
“Growth that is not sustainable is not growth,” Dada said, stressing that capital discipline is now as critical to startup success as innovation.
She emphasised the need for startups to develop a deep understanding of their customers rather than copying global playbooks or chasing the latest growth trends. According to her, founders must invest time in learning where their users spend time, what influences their decisions, and how they prefer to interact with brands.
“Marketing budgets should follow customers, not hype,” she stated.
Dada also cautioned against early over-investment in expensive visibility channels such as television advertising and large-scale out-of-home campaigns. While such platforms may generate awareness, she argued that they often fail to deliver sustainable returns for early-stage companies. Instead, she advocated community-led growth strategies built on trust, relevance, and long-term value.
“Building traction through niche communities, credible influencers, and meaningful engagement allows growth to compound over time,” she said.
Highlighting the broader ecosystem challenges, Dada noted that funding for early-stage startups has remained subdued, with layoffs and shutdowns dominating much of the first half of 2024. These developments, she said, underscore the urgent need for more deliberate and resilient growth strategies.
At the same time, she acknowledged that expansion beyond home markets remains a priority for many African startups. Citing the TechCabal State of Tech report for the first half of 2024, Dada said at least 17 cross-border expansion moves were recorded as startups sought new revenue streams and customers.
For companies pursuing regional or international expansion, she emphasised the importance of careful experimentation, strong local partnerships, and thoughtful localisation of products and marketing efforts. Adapting to language, culture, and local context, she said, is essential for success in new markets.
Looking ahead, Dada encouraged startups to adopt continuous experimentation across marketing channels and formats, leverage artificial intelligence tools to improve efficiency, and tap into niche communities and industry events as cost-effective growth levers.
“In an era of tighter capital and increased scrutiny,” she concluded, “African startups that grow intentionally rather than recklessly will be best positioned to endure and scale.”
