Failed Products or Failed Startup Founders?
Lessons from the Pit: Why Startups Fail and How Founders Can Rise
The startup world is a battlefield strewn with the wreckage of dreams—products that promised to revolutionize lives but vanished into obscurity.
While poor market fit and/or lack of market expansion are often blamed, the real culprit, sometimes, is the founder. Missteps in vision, execution, or adaptability can doom a product before it ever reaches its audience.
When founders fail, the product is going to fail unless it is rescued by another founder (which, in most cases, will not happen).
I am not faulting any founder, because I know building a successful company is not easy, and yes, failure is not a curse; it’s a crucible.
A popular Yoruba proverb says, “The one who fell into a pit teaches others coming behind to be careful.” By dissecting the failures of products and their creators, we can uncover timeless lessons to build enduring ventures with clarity and purpose.
The Game-Changing Products
My fascination with great products began not with their technology but with their ability to transform how we live. Growing up, like many others, I was captivated by Facebook, launched in 2004 by Mark Zuckerberg.
As teenagers, we didn’t care about the code; we were awestruck by its power to connect us to friends, family, and the world without draining our pocket money on SMS or calls.
What seemed to be impossible became possible, and I agree with Peter Thiel that what most people think is impossible are secrets that someone has not discovered yet. Mark discovered the secret to connecting the world with the internet.
In a world where communication was a luxury, Facebook was a revelation. Every ambitious kid dreamed of becoming the next Zuckerberg, becoming a programmer, creating such a big platform, and maybe making tons of money too.
Then came 2go, an instant messaging app built by South African undergraduates in 2007. In Nigeria, it was a cultural shift. If you weren’t on 2go, you were either out of touch or couldn’t afford a “browsing” phone—typically a Nokia or Tecno with internet access.
2go’s gamification—leaderboards, levels, and “Go Credits”—turned chatting into a competitive sport. We’d stay up late, chasing points to flex our status to friends. By 2011, 2go had over 10 million users across Africa, surpassing Facebook’s grip on Nigeria’s youth, per TechCabal report.
BlackBerry Messenger (BBM) arrived with sleek features like pinned chats, but BlackBerry phones, priced at ₦50,000 ($300) in 2010, were unattainable for most, per Nairaland. 2go, running on affordable Java phones, reigned supreme.
The Tech Odyssey
Nigeria’s tech journey sets the stage for these stories. The internet arrived in 1996, a privilege for the elite, confined to dial-up and cyber cafés. The real shift came in 2001 with GSM networks, introducing “button” phones for calls and texts.
By the mid-2000s, “Java” phones—Nokia 6600, Sony Ericsson K750—brought internet access, letting us download music from Naijaloaded.com or play Prince of Persia via sefan.ru.
Nokia’s Symbian, C-series, and E-series, led by the iconic 3310, were cultural touchstones. BlackBerry’s 2009 entry sparked the smartphone era; its Bold and Curve models are symbols of status.
Before this, entertainment meant VCDs, VHS tapes, or radio cassettes. The internet revolutionized access, enabling streaming and gaming. By 2025, Nigeria boasts 103 million internet users, per Statista, fueling a startup boom but also a graveyard for ventures that couldn’t adapt.
The Fall of Pioneers
Being the first to solve a problem can spark dominance, but staying relevant is harder. Of the products mentioned—Facebook, 2go, BBM, Nokia, VCDs—only Facebook is thriving in 2025.
Using 2go or a BlackBerry today would mark you as a relic, a victim of time’s relentless march.
2go’s decline began with WhatsApp’s 2009 arrival.
WhatsApp's clean, no-frills interface appealed to users tired of 2go’s increasingly childish gamification. By 2013, WhatsApp was gaining ground in Nigeria, per Vanguard.
2go’s founders failed to evolve, clinging to a fading model.
A few days ago, I tried to log in to one of my 2go accounts. Because, of course, I had forgotten the password, I was asked to pay $0.40 to reset the password. I can afford it, but this is 2025, and even before now, I have never seen a platform charging for a password reset.
Nokia and BlackBerry stumbled similarly.
BlackBerry’s cameras and QWERTY keyboards outshone Nokia’s Symbian phones, but both misjudged Android’s rise. Nokia had a chance to adopt Android in 2010 but doubled down on Symbian, a decision CEO Stephen Elop called a “burning platform” mistake, per The Guardian.
BlackBerry dismissed Android’s open ecosystem, only to be outpaced by Transsion’s affordable Android phones (Tecno, Infinix), which dominated Nigeria by 2016, per Counterpoint Research.
Microsoft’s Windows phones, backed by its PC dominance, could have rivaled Android.
Good to know: Microsoft and Nokia partnered to dominate the mobile phone market. They shipped good phones, to be honest. I loved my Microsoft Nokia Lumia phone, it was so good that I’ll buy it again if I see it.
But Bill Gates passed on an Android partnership, a regret he shared in a 2023 CNBC interview. The result? Microsoft’s mobile ambitions collapsed.
Hewlett-Packard (HP) mirrors this.
Valued at $9 billion in 1990, HP pioneered the affordable color printer (1991), portable laptop (1993), and all-in-one printer (1994), reaching $135 billion by 2000, per Yahoo Finance. But complacency set in.
Instead of innovating, HP chased consulting and merged with Compaq in 2002, a move Peter Thiel in Zero to One called a sign HP “didn’t know what else to do.”
A clash between engineer Tom Perkins, who pushed innovation, and banker Patricia Dunn, who prioritized financial restructuring, led to stagnation. By 2012, HP’s value plummeted to $23 billion. Its 2015 split into HPQ and HPE left a combined worth under $50 billion.
HP has been disrupting the tech industry way before Dell, Apple, and Microsoft.
Maybe if HP had focused on innovation and Invention, it would be the world’s most valuable company. Currently, the combined worth of HP is less than $60 billion, which is dwarfed by Dell ($85 billion), Apple ($3.2 trillion), or Microsoft ($3.7 trillion)
But for VCDs and VHS kinds of products, fell to technological shifts. Streaming services like Netflix, USB drives, and SD cards rendered physical media obsolete. VCDs killed VHS, DVDs killed VCDs, and streaming sidelined DVDs.
This was market evolution, not founder failure.
Good to know, Netflix started in 1997 as a DVD rental-by-mail service. Their initial business model was built around DVD, but they later innovated and didn’t get killed by the adoption of technology.
Nigerian Startups: Triumphs and Tragedies
Nigeria’s tech scene is a paradox of promise and peril. Paystack’s $200 million acquisition by Stripe in 2020, per TechCrunch, and Flutterwave’s unicorn status in 2021, per Reuters, showcase global potential.
Jobberman, addressing unemployment, was acquired by ROAM Africa in 2020, per Disrupt Africa. Andela, training African developers, raised $200 million in 2021, per TechCrunch. Kuda, a digital bank, hit a $500 million valuation in 2021, per Bloomberg, while OPay, a mobile payment platform, reached $2 billion in 2022, per TechCabal.
Yet, failures abound. PayDay, a cross-border payment app, was initially a success. We used it to pay subscriptions seamlessly. But complaints about missing funds surfaced, amplified by founder Favour Ori’s tarnished reputation from WeJapa, where he faced mismanagement allegations, per TechCabal. Negative reviews and distrust led to PayDay’s 2023 acquisition, effectively its end.
The likes of Chipper Cash, Grey, Cleva, etc., are still operating till date, but PayDay’s life was cut short, thanks to Favour Ori.
Okra, a Nigerian open banking pioneer, shut down in May 2025, per Techpoint Africa. Founded in 2019 by Fara Ashiru Jituboh and David Peterside, Okra raised $16.5 million from investors like TLcom Capital and Susa Ventures, per TechCabal.
Its APIs enabled fintechs and banks to connect customer data, partnering with Renmoney, Branch, and Bamboo. By 2020, API usage surged 175%, per Nairametrics. But Nigeria’s delayed open banking regulations (set for August 2025) and naira depreciation, which inflated dollar-denominated cloud costs, crippled Okra.
Its pivot to Nebula, a naira-priced cloud service, failed to gain traction against AWS and Azure, per Techbooky. Okra’s responsible exit, returning $5 million to investors and offering generous severance, sets a rare example, per Tekedia.
Okra’s failure is not because of the founder or product, but the system doesn’t allow the product to thrieve. Plaid, the American version of Okra, is currently worth $6 billion. If only the system allowed Okra to thrive, maybe it could have dominated the African market.
54gene, a genomics startup, aimed to build Africa’s DNA database but shut down in 2023 after raising $45 million. Founder Abasi Ene-Obong’s vision was bold, but operational challenges, including high lab costs and slow market adoption, led to its collapse.
Dash, a remittance app, raised $32.8 million but folded in 2023 due to internal mismanagement and regulatory hurdles, per Techpoint Africa’s report.
Global Parallels: FTX, WeWork, Theranos
Globally, founder-driven failures echo this.
FTX, once the third-largest crypto exchange, collapsed in 2022 when founder Sam Bankman-Fried was arrested for fraud, costing investors $8 billion, per Bloomberg.
WeWork, valued at $47 billion in 2019, imploded due to founder Adam Neumann’s erratic leadership and overexpansion, filing for bankruptcy in 2023, per Reuters.
Theranos, a health-tech darling, promised revolutionary blood testing but collapsed in 2018 when founder Elizabeth Holmes was charged with fraud for misleading investors, per The New York Times.
Like PayDay, these cases highlight how founders’ failings—greed, hubris, or dishonesty—can sink promising ventures.
Market Realities: Lazerpay and Edukoya
Not all failures are founder-driven. Lazerpay, founded by Emmanuel Njoku, aimed to be a blockchain-based Stripe for crypto payments. It raised $1.1 million in 2022, per TechCabal, but Nigeria’s 2021 crypto ban and a bearish market led to its 2023 shutdown, per TechCabal.
I remember the popular AbokiFX was shut down in 2021 frontally by the government because, according to them, AbokiFX is part of those destroying the Naira currency.
Buycoins (formerly Bitkoin Africa), a YCombinator-backed crypto platform, also folded quietly, likely due to regulatory pressures.
Sometimes, it is market adoption.
Edukoya, an edtech startup, raised $3.5 million in 2021, per TechCrunch. Despite a strong team, Nigeria’s price-sensitive market wasn’t ready to pay for its services, leading to its 2024 closure, per TechCabal.
ULesson, another edtech player, has faded; its once-ubiquitous ads are now rare, signaling adoption struggles.
The Overengineering Trap
Most times, the case is different. Technical founders often fall into over-engineering.
Over-engineering is building a product with more features and complexity than necessary, which can be a significant pitfall for startups.
I am going to use myself as an example here.
My first startup, Realty9ja, later Homesilo, aimed to disrupt Nigeria’s chaotic real estate market, where agents often exploit renters. Inspired by Zillow, we envisioned a platform connecting property owners and renters directly.
I built a WordPress prototype, but it wasn’t enough. I assembled a team of developers, designers, and writers, and we spent over 12 months crafting an MVP. We thought a perfect product would sell itself. After a 2022 ProductHunt launch with just 50 upvotes, the team disbanded quietly.
It was my first time trying to build a startup, ditto for my great co-founders, too.
We are all software engineers, so it was so easy for us to think of a feature and jump on implementing it immediately because, to a carpenter with a hammer, every problem starts looking like a nail. And 30 days a month fly quickly.
The failure wasn’t the idea, and Nigeria’s real estate market was worth it.
Everyone is complaining about dubious agents and is ready to use a platform like Homesilo to escape them. For instance, imagine someone who had experienced the sting of exploitative agents, paying ₦200,000 ($400) in hidden fees for a Lagos apartment in 2021.
And many others, if you do a quick search on Google or Twitter.
The idea was solid, the product was fine, and the team was ambitious, but we were obsessed with writing code and committing to GitHub instead of committing to marketing.
Startups are 80% sales. Even if you have a substandard product and you market it well, you’ll sell.
Revetpay, another crypto startup (which I was hired to work on) trying to be a Lazerpay competitor, chasing every rival feature, bloating its MVP, and eventually did not see the light of the market.
Startup Ideas Best Left as Ideas
Some product ideas, no matter how clever, are destined to remain just ideas, especially in this era of AI and vibe coding.
Some startups fail not because of execution but because the market won’t pay for them or because they’re easily swallowed by giants like Google. Take the PDF summarizer app a friend launched, charging ₦5,000 ($10) monthly. It promised to condense documents for students, a seemingly useful tool.
But why pay when ChatGPT, free for basic use, does the same with a single prompt? Powered by OpenAI’s tech, the app offered no unique value. It folded within months, unable to compete with free AI tools from monopolists dominating the space.
ChatGPT wrappers—apps built atop OpenAI’s API to offer niche AI services—face a similar fate.
In 2024, dozens of Nigerian startups launched AI chatbots for tasks like customer service or tutoring, per Techpoint Africa. Most charged subscriptions, but users flocked to free or cheaper alternatives from OpenAI, Google’s Gemini, or xAI’s Grok.
Google, with its vast resources and data, can integrate AI into Docs, Search, or Workspace, crushing niche players. A 2023 Forbes article noted Google’s AI investments dwarf those of startups, making it nearly impossible for small players to compete on price or scale.
Deepseek, an OpenAI wrapper, is a very clever and successful product. But they Deepseek just don’t wrap, they try to even beat ChatGPT. So, if you’re not going to do it extra-ordinarily, think twice.
Consider Quibi, a global example. Launched in 2020 with $1.75 billion in funding, Quibi offered short-form videos for mobile users, backed by Hollywood giants like Jeffrey Katzenberg. But why pay $4.99 monthly when YouTube and TikTok offer similar content for free?
Quibi shut down within six months, per The Verge.
Juicero, a $400 Wi-Fi-connected juicer, faced similar ridicule in 2017 when users realized hand-squeezing its juice packs worked just as well, per Bloomberg. These ideas sounded innovative, but ignored market realities—consumers won’t pay for what’s already free elsewhere or easily replicated.
Don’t get me wrong, any idea is worth trying; don’t be discouraged. It’s better to test your idea and fail than to never test at all and regret it.
But Ideas must solve unique problems or offer unmatched value.
In Nigeria, where price sensitivity is high—65% of consumers prioritize cost, per Nielsen’s report —startups must differentiate or risk being irrelevant. Facing giants like Google requires niche focus, like Kuda’s low-cost banking, or disruptive pricing, like OPay’s free transfers.
So Why Do Startup Founders Fail?
Aside from market adoption (which can still be a result of founders’ efforts), Founders stumble for six key reasons:
Failure to Innovate: Nokia and BlackBerry ignored Android, resting on past glory.
Overengineering: Most technical founders prioritize features over market fit.
Weak Sales Skills: Great products die without marketing, as I learned painfully.
Unviable Ideas: Concepts like the PDF app don’t justify their cost or survive monopolists.
Premature Quitting: Rejection discourages founders from expecting instant success. It takes years for some startups to take off, but are we patient enough for that?
Regulation: Buycoins, Okra, Lazerpay, etc., are affected by this.
Evergreen Lessons for Founders
Failure is a brutal but brilliant teacher. To build enduring startups:
Stay Agile: Innovate relentlessly, as Facebook did by acquiring Instagram and WhatsApp.
Know Your Market: Okra’s Nebula pivot failed because Nigerian businesses weren’t ready to switch from AWS, per Techpoint Africa.
Prioritize Sales: Invest in marketing early, unlike Homesilo’s code-heavy approach.
Validate Ideas: Test viability before building, as Quibi’s failure shows.
Navigate Monopolies: Offer unique value or lower costs to survive giants like Google.
Embrace Failure: As Reid Hoffman says, “If you’re not embarrassed by your first product, you launched too late.”
The stories of 2go, BlackBerry, HP, PayDay, Okra, 54gene, and Quibi reveal that success demands vision, adaptability, and resilience.
Nigeria’s tech ecosystem, with 103 million internet users and $1.4 billion in H1 2025 funding, according to Semafor, is ripe for innovation.
Again, the one who fell into a pit teaches others coming behind to be careful.
By learning from these pitfalls, founders can build ventures that don’t just launch but last, lighting the way for Africa’s next tech giants.
Don’t be discouraged, we own Africa, and we understand our problems better. Let’s keep building.