The play by the banks to become holding companies, at the surface, makes a whole lot of sense. The market is quite unforgiving with the valuation of banks – they are treated as legacy and there is nothing exoteric about what a bank can do – so the valuation is harsh.
Startups, on the other hand, are a pandora's box: it could turn out to be a banger or a banger; whichever banger you want to throw.
Hive out payments out of a typical bank, the valuation of the existing mothership wouldn’t budge but the new PayCo may become a unicorn.
Well, that’s what the theory looks like. Until you discover that what makes startups successful has nothing to do with the structure but more with the DNA of those running these companies.
Do the Nigerian banks’ leaderships have the DNA to run these companies like startups? My guess is just as good as yours – nope. So most of them will struggle to get what they are looking for:
They won’t be able to attract or hold smart talent
They won’t know how to create a creative and enduring culture that drives ownership
They won’t be able to compensate well, especially young but fast-growing talent
They won’t be able to make decisions quickly
They won’t be able to take risks
They won’t know how to partner
They would be overburdened by board members that don’t know what the business is about
The play by the banks to become holding companies, at the surface, makes a whole lot of sense. The market is quite unforgiving with the valuation of banks – they are treated as legacy and there is nothing exoteric about what a bank can do – so the valuation is harsh.
Startups, on the other hand, are a pandora's box: it could turn out to be a banger or a banger; whichever banger you want to throw.
Hive out payments out of a typical bank, the valuation of the existing mothership wouldn’t budge but the new PayCo may become a unicorn.
Well, that’s what the theory looks like. Until you discover that what makes startups successful has nothing to do with the structure but more with the DNA of those running these companies.
Do the Nigerian banks’ leaderships have the DNA to run these companies like startups? My guess is just as good as yours – nope. So most of them will struggle to get what they are looking for:
They won’t be able to attract or hold smart talent
They won’t know how to create a creative and enduring culture that drives ownership
They won’t be able to compensate well, especially young but fast-growing talent
They won’t be able to make decisions quickly
They won’t be able to take risks
They won’t know how to partner
They would be overburdened by board members that don’t know what the business is about
And they would be regulated to death