Creating Legacy Startups in Nigeria: Building Organisations That Outlive Their Founders

Over the past decade, Nigeria’s startup ecosystem has experienced remarkable growth, positioning the country as a leading hub for innovation in Africa. Between January 2015 and August 2022, Nigerian tech firms raised over $2 billion in investments, surpassing other African nations in total funding secured during that period.

 

Flutterwave, Paystack, Andela, and Moniepoint have become synonymous with innovation, scale, and global ambition. They’re solving uniquely African problems with world-class execution and putting Nigerian tech on the global map.

 

Beneath the surface of Nigeria’s booming startup success, a quieter challenge persists: Many companies remain overly dependent on their founders. The vision, strategy, and culture often revolve around a single individual or a small founding team. While this founder-driven approach can drive rapid early-stage growth, it poses a long-term risk. What happens when that founder steps back, down, or away?

 

The objective measure of success is the ability of these startups to evolve from founder-led ventures into lasting institutions. Sustainability depends on strong systems, clear structures, and leadership that extends beyond the founding team. The future of Nigeria’s innovation story will be shaped not only by its entrepreneurs’ brilliance but also by its startups’ capacity to thrive long after their founders.

 

This article explores why many Nigerian startups struggle to survive beyond their founders and outlines practical strategies for building lasting institutions. The goal is to show how businesses can move from founder-led energy to sustainable structures that support long-term growth and resilience, much like Phillips Consulting has done over the last three decades.

 

Why Most Startups Don’t Survive Beyond the Founders

Here are some of the key reasons why startups struggle to outlive their founders:

 

1. Overdependence on the Founder’s Vision and Drive

Founders are often the heartbeat of the startup. Their charisma, hustle, and relentless energy drive everything, from raising capital to recruiting talent to crafting the brand’s identity. However, when the company’s DNA is too tightly wound around one individual, it becomes difficult for others to step in or scale the vision sustainably. The founder becomes a bottleneck rather than a catalyst.

 

2. Weak or Nonexistent Corporate Structures

Many startups operate informally for too long. There may be no defined organisational chart, clear reporting lines, or minimal accountability mechanisms. Governance frameworks like independent boards, financial audits, or legal compliance are seen as “big company” luxuries rather than essential foundations. This informality can work in the early days, but it becomes a liability as the company grows, especially when the founder steps back.

 

3. Lack of Succession Planning

Very few Nigerian startups think long-term about leadership succession. There’s often no plan for who takes over if the founder exits unexpectedly, whether due to acquisition, burnout, or personal reasons. Without a clear leadership pipeline, the company is left rudderless at the most critical moments.

 

4. No Institutional Memory or Strategic Continuity

Startups that don’t document decisions, processes, and knowledge leave themselves exposed to loss of direction. When everything lives in the founder’s head—or in informal WhatsApp groups—there’s no continuity. New leaders come in blind, and team members are left guessing. Companies that endure create internal systems that preserve memory and guide future decisions even as people come and go.

 

Startups that fail to address these issues risk becoming cautionary tales, brilliant ideas that never grew into sustainable institutions. The challenge and opportunity are deliberately building companies that thrive beyond individuals.

 

Lessons from the Giants: Case Studies in Longevity

While many startups struggle to scale beyond their founders, some companies—globally and across Africa—have shown it’s possible to build institutions that thrive through leadership transitions. These case studies offer valuable insights for Nigerian startups aspiring to longevity:

 

1. Flutterwave: Pioneering Longevity in African Fintech

Founded in 2016, Flutterwave has become one of Africa’s leading fintech companies, processing billions in payments. Despite being founder-led, the company has developed a leadership structure to ensure growth stability. Flutterwave’s governance includes a diverse board of fintech experts, legal professionals, and analysts, who help navigate complex regulatory environments. The company also focuses on leadership development and strategic planning, ensuring internal growth and smooth leadership transitions.

 

2. Microsoft: A Blueprint for Leadership Transition and Institutional Resilience

Microsoft’s smooth leadership transitions from Bill Gates to Steve Ballmer and later Satya Nadella demonstrate the impact of strong governance and deliberate succession planning. The board ensured stability, while Nadella’s shift toward cloud computing and AI reinforced the company’s long-term vision. This example underscores how structured governance, leadership development, and strategic foresight enable organisations like Phillips Consulting to sustain relevance and adapt to changing markets.

 

Bridging the Gap: Challenges to Longevity and How to Overcome Them

While the ambition to build companies that outlive their founders is compelling, Nigerian startups face specific challenges that could hinder their journey toward longevity. At Phillips Consulting, we’ve worked with companies navigating these very challenges, helping them transition from founder-led ventures to resilient institutions.

 

• Limited Access to Patient Capital: Venture capital remains the dominant funding model in Nigeria, but it often pushes startups toward rapid growth at the expense of sustainability. A recent report by TLP Advisory shows that 51% of Nigerian startups struggle to secure funding, with many citing currency volatility and limited investor access as major barriers. To address this, founders should look beyond venture capital by attracting impact investors and development finance institutions that support long-term growth and resilience.

 

• Leadership Gaps and Talent Retention: As startups scale, leadership gaps widen and retaining top talent becomes harder. Many skilled professionals leave for higher-paying roles or to launch their own ventures. Research highlights that Nigeria’s IT sector faces a shortage of skilled professionals, intense competition for talent, and limited advancement opportunities. To overcome this, startups must invest in leadership pipelines, create opportunities for cross-functional growth, and introduce equity or profit-sharing models that keep talent invested in the company’s long-term vision.

 

• Regulatory and Legal Uncertainty: Nigeria’s regulatory environment is dynamic and often unpredictable. Startups face frequent changes in tax rules, sector-specific laws, and compliance requirements. According to the TLP Advisory survey, 58% of Nigerian startups view regulatory inconsistency as a key threat. The path forward requires proactive legal engagement, adaptive governance structures, and a commitment to compliance from the earliest stages.

 

• Infrastructure and Economic Volatility: Founders also contend with Nigeria’s chronic infrastructure gaps, ranging from erratic power supply to unreliable logistics. Economic instability, especially foreign exchange volatility, adds further strain. TLP Advisory found that currency instability ranks as the second most significant barrier to startup growth. To manage these risks, startups should diversify suppliers, build financial buffers, and explore multiple revenue streams to avoid overdependence on a single market or system.

 

• Cultural Resistance to Structure: Many startups resist formal governance, seeing it as bureaucracy that slows innovation. Yet without structure, companies remain fragile and over-reliant on founders. Building accountability systems, documenting key processes, and fostering a culture of transparency turn governance into a growth enabler rather than a constraint. By framing structure as a foundation for autonomy, founders can align their teams around long-term goals.

 

• Leveraging Technology: Technology remains a powerful enabler for Nigerian startups. Cloud-based solutions can reduce dependence on unstable infrastructure, while automation streamlines operations and frees teams to focus on growth. Startups that adopt scalable digital systems early are better positioned to withstand shocks and compete globally. Strategic technology partnerships also provide access to tools and expertise that would otherwise be out of reach, strengthening resilience over time.

 

Actionable Strategies for Building Legacy Startups in Nigeria

At Phillips Consulting, we’ve lived the journey from startup spark to long-standing institution. Over three decades ago, we began as a founder-led consulting firm with a small team, bold ideas, and an even bolder vision. Today, we continue to serve clients across sectors with the same agility, but with the wisdom and structure of experience. Our story isn’t unique; it’s just intentional.

 

For Nigerian startups looking to build companies that endure, here are the foundational principles we believe in not just as theory, but as practice.

1. Build Governance from the Ground Up

Governance is often seen as a barrier to speed, but in reality, it is the foundation for growth. Nigerian startups that set up boards or advisory structures within their first two years create accountability, attract investor confidence, and ensure strategic input from experts. Even small teams can establish financial controls and monthly reporting routines that lay the groundwork for institutional integrity.

 

2. Develop Leaders, Not Just Roles

Sustainable growth requires leadership depth rather than dependence on a single founder. Startups should identify high-potential talent early, rotate them across different functions, and pair them with mentors who transfer both skills and cultural knowledge. Documenting succession pathways ensures continuity and prepares the business for future transitions without disruption.

 

3. Turn Knowledge into Systems

Intuition and hustle may drive early wins, but scale requires structure. Startups need to document core processes, automate recurring tasks such as payroll and onboarding, and maintain digital handbooks that evolve with the business. Cross-training teams ensures that critical knowledge is widely shared, reducing risk when key people move on.

 

4. Make Culture a Company Asset

Culture is the glue that outlasts the founder and should be deliberately built into the organisation. Defining core values and embedding them in recruitment, performance evaluation, and reward systems keeps behaviour aligned with strategy. Encouraging storytelling, recognising team contributions, and celebrating shared wins foster a collective identity that strengthens resilience and loyalty.

 

5. Align with National and Global Standards

Startups that adopt compliance and international best practices from the outset gain a competitive edge in credibility and growth. Registering with regulators such as the SEC, CBN, or NITDA ensures operational legitimacy, while adopting global ESG standards increases attractiveness to foreign investors. Preparing financial and legal systems early positions the business for future IPOs or cross-border expansion.

 

Conclusion: Building Legacy Beyond the Founder – A Vision for Nigeria’s Startups

The journey from a founder-led startup to a legacy institution is not a linear path. It requires vision, patience, and a steadfast commitment to building a foundation that can withstand time and transition. While the stories of today’s successful Nigerian startups, like Flutterwave, Paystack, and Andela, are inspirational, the future of these companies lies in their ability to evolve into sustainable organisations that outlive their founders.

 

At Phillips Consulting, we have thrived for over 33 years. We’ve seen the full arc of growth from founder-led innovation to institution-building. As consultants working with both new and established businesses in Nigeria and beyond, we understand the pressures founders face in steering startups toward success.

 

From our experience, the key to longevity is in the company’s product or service and in its ability to build structures, processes, and leadership frameworks that ensure smooth transitions and continued success. Creating such an institution is no easy feat. It requires more than entrepreneurial spirit; it demands intentional strategic planning, robust governance, and a commitment to institutionalising knowledge and leadership.

 

As Nigerian startups continue to drive innovation and disrupt industries, we encourage them to learn from companies that have successfully shifted from founder-led ventures to enduring institutions. This journey does not happen overnight, but with foresight, leadership, and dedication to sustainability, startups can stand the test of time and continue delivering value for stakeholders long into the future.