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What startups in Lagos and Hamburg have in common

For Nigerians it's heavy traffic and unreliable technology, for Germans it's red tape and risk aversion - but startups in both countries are grappling with lack of funds and skilled staff.

Lola Olusola has come to the Social Media Week in Nigeria's business capital Lagos to network. She has just taken part in a podium discussion on women in technology companies. Now she is busy shaking hands, giving out business cards and meeting people.

In December 2013, the 31-year-old founded ella.ng, a website selling women's clothes in Nigeria. The idea for her business came to her when she was working for a company selling handbags in the UK. There, she worked as part of a team of five, who contributed 55 percent of the firm's turnover - despite there being 200 other people working in the company.

"So, I was like, there is an opportunity here, and tech is growing so, why not just come to Nigeria and see what you can do?"

Different continent, different problems

Roughly 5,300 kilometers (3,293 miles) to the north, Miriam Bundel is also busy networking at the Social Media Week in Hamburg - the event is being held in seven African, Asian and European cities at the same time.

Bundel has joined a discussion on whether working in a tech startup environment is harder for women than it is for men or whether all entrepreneurs are facing similar problems, regardless of gender.

Along with two partners, she founded shelfsailor.com, an online platform that allows you to find private storage space, for example in other people's lofts or cellars.

Startup founder Nigeria Lola Olusola
Copyright: DW/A. Kriesch

Olusola's biz idea: Selling women's clothes online

Bundel's start-up is just a few weeks old and faces the usual obstacles. "The biggest problems at the moment are that our team of three is doing this on the side," Bundel told DW. "We also lack the funding to make this our full-time job. So, we're looking for investors or venture capitalists to support us."

Aiming high in Hamburg and Lagos

Bundel and her colleagues are looking to expand abroad as quickly as possible, so securing capital is key. How to do that is one of the central themes at the multi-location Social Media Week.

In Lagos, Olusola is also aiming high. She wants to achieve a customer base of 10 million and plans to sell 100,000 items of clothing. She says the market is certainly big enough - Nigeria is Africa's largest economy, with more than 170 million people living there. Poverty is widespread in rural areas, but in larger towns and cities, a growing middle class is eager to spend.

Finding skilled staff

But for now, the Nigerian entrepreneur is facing several challenges. The heavy and chaotic traffic in Lagos regularly affects deliveries. It is also hard to find workers with the right skills.

"E-commerce and technology is growing but we don't have a generation of people who are trained," Olusola, who employs four people, told DW.

Startup founder Miriam Bundel
Copyright: DW/A. Drechsel

Finding startup money has been no easy task for Miriam Bundel

German startups also face this problem. Heide Peuckert, product manager at a software firm in Hamburg says "it's very difficult for small companies to find staff at all, as you have to try and keep them for quite some time."

She says Germany will have to change its employment laws to be able to compete internationally, especially in the startup scene.

Another issue that entrepreneurs talk about a lot at the Hamburg Social Media Week is the lack of skilled workers, particularly IT specialists - whether in Hamburg or Lagos.

Ugochi Ugbomeh, for example, struggles to find staff despite mass unemployment in Nigeria. She is one of the founders of Tranzit, an app-based business offering taxi and other transport services. She has also worked in the UK before returning to Nigeria to start the company.

Startup founder Ugochi Ugborneh
Copyright: DW/A. Kriesch

Making the best of Lagos' traffic chaos: Ugochi Ugborneh

Technology and the fear of failure

But Ugbomeh's business profits from traffic chaos in Lagos.

"The main obstacles for business here are - because it's very tech-based - the network issue for our drivers, they say we don't have network on our phones. Passengers say we can't track the drivers properly. It's a general problem in Nigeria," Ugbomeh told DW.

In the World Bank's current Doing Business Report, Nigeria is in 170th position with regard to the business environment found on the ground. Germany, by comparison, ranks 14th.

In terms of infrastructure, technology standards and legal safety, Germany is in a better position than Nigeria. But at the Social Media Week in Hamburg, Sina Gritzuhn, notes that in Germany people tend to ignore what challenge it is to found a startup. It's a tall order, and mistakes can be made in the process, Gritzuhn stresses. She adds that when people fail to get a startup off the ground, they're often stigmatized.

"You can still get on your feet again and continue, it's a constant learning process."

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