Preston Ideh shares his personal journey, from overcoming initial challenges to celebrating significant accomplishments, providing valuable insights for aspiring entrepreneurs and seasoned business leaders as well. This engaging discussion offers a thoughtful look into the strategies and decisions that have driven Stears to thrive in the highly competitive environment of market expansion.
Interviewer: Busola Dakolo, Head of Communications, Co-creation HUB
Interviewee: Preston Ideh, Co-founder and CEO of Stears
INTERVIEWER
Can you share a brief background of what inspired you to actually become an entrepreneur, and how that actually shaped the vision of Stears?
PRESTON IDEH
It’s a tricky question. I feel like I was pulled into entrepreneurship. I had no idea that I was going to. I always thought that I would find myself in public service or working in government. I thought that I’d get back home after studying and do something great to help the nation. But before I got the opportunity to do that, I practically came across the data problem on the continent. I was exploring some investment options with one of my co-founders. I was just trying to get information on the Nigerian Stock Exchange at the time, and I couldn’t find enough information. I couldn’t find the quality of information that I got accustomed to when looking at UK markets.
At this time, I was in the UK. This quickly turned into a conversation about, well, why don’t we solve this problem? It’s a real one. What made it easy to settle on that was the fact that we saw other companies doing the exact same thing for their markets. Bloomberg, at the time, stood out as a global data provider, regardless of the asset class—public market, private market, private equity, commodities—they had it all. So, our starting point was a very naive view of just building what Bloomberg had and taking it to Lagos. But to solve that, I realized that the process of innovating around an opportunity or problem to find a good solution is the essence of entrepreneurship. Entrepreneurs are the ones who go through that period of anxiety, concern, and doubt and say, “Let’s actually attempt to solve this problem.” So, I was really pulled into it. I don’t think I was drawn to entrepreneurship as an end in itself, but I was drawn to solving the problem, and entrepreneurship was the medium for me to do that.
INTERVIEWER
What were the challenges you faced while you were trying to solve the data gap problems in the early days?
PRESTON IDEH
First of all, there are challenges even today; they never stop. In the early days, narrowing down the problem was probably the biggest issue. Data is such a big issue on the continent, and there’s a lot of data to sift through. Deciding which data to focus on and which customers to serve was a significant challenge. Different entities like DFIs, governments, investors, and schools all had varying data needs. It was crucial to answer which data use case we were going to focus on.
Another challenge was the skills required. It takes a lot to build a data intelligence company. We needed technology, underlying intelligence, data cleaning, and handling legal and regulatory issues. Making all these parts work together was difficult. The early versions of our products were built with a small team, and we had to learn through experience which additional skills were necessary. Fundraising and getting people to believe in our vision was another well-discussed topic. However, the biggest challenge was bringing together all the different components needed to create a product that satisfied our customers.
INTERVIEWER
From which country did you commence operations?
PRESTON IDEH
We started in Nigeria. It was the market we knew best, being Nigerians ourselves. If one of us were from Ghana or Cameroon, we might have started there instead. We chose Nigeria because of the support network and familiarity, which made it easier and cheaper to start.
INTERVIEWER
What made you realize Stears was ready to scale to another country?
PRESTON IDEH
Our customers definitely played a role. They demanded information on other African countries. Our product is fundamentally African, but our customers were global. They needed information not just on Nigeria but across the continent. We were customer-driven and had to look at the world the way our customers did, which meant becoming more Pan-African in our approach.
INTERVIEWER
How did you handle operations in terms of taking care of your customers in Nigeria and the new country you scaled to?
PRESTON IDEH
Our approach was very hands-on and practical. When we decided to expand, we prioritized visiting the new countries in person. For instance, our current Head of Insights and our Head of Intelligence traveled to Kenya as our first new market. We spent significant time speaking with local economists, researchers, and bankers to understand the nuances of the Kenyan market.
Our goal was to determine how different Kenya was from our core market, Nigeria, and to assess whether it would be an easy or challenging market to expand into. Following Kenya, we also visited South Africa. In both countries, we employed a boots-on-the-ground approach, which we found invaluable. This method allowed us to build relationships and gain a genuine feel for each country.
For example, our initial impressions of South Africa were shaped by its similarities to London, which led us to question how Nigeria’s economy could be larger. However, after exploring various parts of South Africa, including townships and suburbs, we gained a deeper understanding of the local economic landscape. We engaged with a wide range of people, gaining insights from both pro-Mandela and anti-Mandela perspectives, which enriched our view of the country.
This direct engagement and relationship-building enabled us to better serve our customers by tailoring our intelligence and research to the specific needs and characteristics of each market. Ultimately, this approach informed our expansion strategy and helped us establish a strong presence in new regions.
INTERVIEWER
Which countries are you currently in?
PRESTON IDEH
We focus on what we call the Big Five: Nigeria, Kenya, Ghana, Egypt, and South Africa. We provide data intelligence on these countries, and we aim have local representatives in each. Egypt is naturally tricky due to the prevalence of Arabic-language information. We currently don’t cover Francophone countries as we lack French speakers.
Kenya is a significant hub for East Africa, facilitating access to extensive economic activity in the region. South Africa plays a similar role in Southern Africa, impacting surrounding countries. For instance, I recently interviewed a South African who mentioned her familiarity with Southern African economies, highlighting their shared economic principles and interlinked currencies, such as those pegged to the South African rand.
East Africa shows interconnected economic activity through Kenya, but West Africa is different. Nigeria and Ghana, despite their famous Jollof rice rivalry, don’t share many economic similarities. Understanding Nigeria doesn’t necessarily provide insights into Ghana, which we’ve learned through our experience.
INTERVIEWER
Could you introduce Stears to an audience that might not be familiar with your company? Please elaborate on your mission and vision.
PRESTON IDEH
Absolutely. Stears is an information company dedicated to gathering and analyzing extensive data and research, both quantitative and qualitative. For example, we might provide data on the size of Nigeria’s economy, which is approximately $2.2 billion, or conduct research to forecast future inflation rates.
Our dedicated Intelligence Team collects this data, which we then make digitally accessible through our platform. We sell access to this platform primarily to private equity investors who are focused on the African market. These investors rely on our data to make informed decisions about private companies across Africa.
In the past, our business model was a bit different. We had a product version that catered to individual subscribers, such as economists, for $10 a month. Additionally, we offered consulting and advisory services, conducting surveys or answering specific questions upon request. However, as a startup, we realized the need to streamline our operations and focus our resources more effectively.
Now, we have combined all these services into a single, cohesive platform. This approach provides clarity and direction, helping us better serve our core customer base. Our primary mission is to make comprehensive data available to investors, ensuring they are well-informed about the local markets. Currently, we focus on five key African markets: Nigeria, Kenya, Ghana, Egypt, and South Africa. By doing so, we aim to support informed investment decisions and contribute to the economic growth of these regions.
INTERVIEWER
Were there any cultural sensitivities you had to pay attention to during your expansion?
PRESTON IDEH
Definitely, yes. This is a nuanced topic, but it’s clear that cultural differences play a significant role. For example, Nigerians are often perceived as more aggressive or driven, while people in other regions might be seen as more relaxed. These differences required us to pay close attention to local customs and behaviors.
In South Africa, the cultural sensitivities were particularly pronounced due to its unique political and economic history. We quickly learned about the importance of understanding local politics, such as the nuances of hiring practices. Questions arose about whether an employee was truly South African or had foreign roots, reflecting the country’s complex identity dynamics. Additionally, we encountered policies like quota systems designed to ensure black representation in businesses, which we had to navigate carefully.
To address these cultural sensitivities, we relied heavily on local expertise. Collaborating with locals who understood the market intricacies was crucial. They provided invaluable guidance, helping us avoid missteps and ensuring our approach was culturally appropriate. Having friends and local partners to advise us was key to successfully integrating into these new markets.
INTERVIEWER
It’s great to hear that you emphasize working with locals rather than imposing your business ideas. I noticed you recently released a report on assessing consumer market potential in Sub-Saharan Africa. Could you share more insights on that?
PRESTON IDEH
Certainly. Our report aims to help businesses understand which markets in Sub-Saharan Africa are particularly attractive from a consumer perspective. We focus on the consumers’ ability to purchase products, which fundamentally depends on their disposable income. If consumers don’t have disposable income, businesses may face the classic issue of identifying a market need but not finding a viable market to sell to.
For example, ShopRite recently had to pull out of some parts of Nigeria due to low consumer purchasing power. Our report provides a standardized, systematic way to assess which markets are ready for specific products, essentially ranking markets by attractiveness. We also profile consumers to provide a nuanced understanding of market dynamics.
People often claim there’s no middle class in Nigeria, but this is a high-level, simplistic view. From a data-driven perspective, we need to explore what constitutes the middle class in the African context. Traditional Western definitions might not apply, so we look at different indicators like income trends and purchasing behavior to identify ‘aspiring’ or ’emerging’ classes instead. This local perspective helps businesses gain a more accurate and actionable understanding of the market potential.
INTERVIEWER
Great. I know you mentioned some key points, but could you provide concise highlights for startups looking to leverage insights from your reports to inform their expansion strategies?
PRESTON IDEH
Absolutely. Here are three main aspects that startups should focus on:
- Strategy Teams: Strategy teams are the primary beneficiaries of our reports. They can use the data to identify the most attractive markets and make informed decisions on where to expand next.
- Executive Teams: Executive teams, particularly in smaller startups where roles often overlap, can also gain valuable insights. Understanding market potential helps in setting realistic growth targets and aligning company resources accordingly.
- Marketing and Research Teams: Marketing teams will find our consumer profiles and market rankings particularly useful for tailoring their campaigns to the local market dynamics.
Sometimes apart from strategy teams, research teams might find particular insights and patterns supporting long-term planning.
Our reports are designed to be comprehensive yet accessible, enabling teams to quickly identify and act on the most relevant insights.
INTERVIEWER
What do you think about initiatives like Let’s Build, Africa! by CcHUB which aims to make markets more accessible for startups looking to scale across Africa?
PRESTON IDEH
Yes, I believe programs like this can be very beneficial, especially if they focus on connecting people. The key advantage is the ability to network, such as an angel investor connecting with startups in Kenya or Rwanda. These connections allow startups to ask market-specific questions and gain valuable insights. Anything that brings people together and expands the African network will be invaluable for scaling and tapping into new markets.
INTERVIEWER
Speaking of future plans, do you intend to expand beyond the Big Five in Africa or even beyond the continent?
PRESTON IDEH
We plan to focus on Africa for a while longer, definitely looking to expand beyond the Big Five. However, we’ll only do so once we have a solid playbook for expansion. The key to successful expansion is having local experts who can effectively tap into new markets. For instance, if we can hire someone in Kenya to help us expand into Uganda and Rwanda, we’ll pursue that. Our expansion will be driven by our capabilities and the demands of our customers. If our customers need coverage in a specific country, we’ll prioritize that. For now, our focus remains within Africa, and we’re not yet considering other emerging markets or regions.
INTERVIEWER
Okay, great. So, on a final note, what key lessons would you like to share with startups looking to scale their businesses?
PRESTON IDEH
I would say, first and foremost, expect to fail the first time around and then get it right on version two. Your initial approach will likely be instinctive, like thinking, “This works in Nigeria, so it should work in Ghana,” only to find significant differences. Adjusting your expectations around success is crucial.
Secondly, work with locals. They are the ones most likely to help you avoid mistakes or recover quickly from them. As a CEO, sitting in one country, you might not listen to local advice immediately, but experiencing it firsthand will make you appreciate their insights. Prepare for version one to fail, version two to be an improvement, and version three to be the real start of successful market entry.
INTERVIEWER
Thank you so much for sharing these valuable insights. It’s been a pleasure speaking with you, and I’m sure our audience will greatly benefit from your experience and advice.