The Background
I am being deliberate about not naming the company. The investors know who they are. The team knows. Some people in Nigerian tech know. But the company's name is not the point of this story and I have no interest in harming the individuals who were on the team.
What I want to share is what went wrong so that other founders can avoid it.
We raised $1.1M in a seed round in 2022 for a B2B logistics software platform targeting Nigerian SMEs. We spent 24 months burning through it and shut down in early 2025 with approximately $80,000 remaining, which we returned to investors.
What We Built
The product was real and technically functional. We built software that helped small and medium logistics businesses — freight forwarders, trucking companies, last-mile delivery operators — manage their operations: job tracking, driver management, invoicing, customer communication.
The problem was real. These businesses were running on WhatsApp, phone calls, and physical paperwork. Digitising their operations would have saved them significant time and reduced errors.
The product worked. The market didn't adopt it at the speed we needed.
Mistake 1: We Raised Money Before We Had Product-Market Fit
This is the foundational mistake from which all others followed.
We raised $1.1M having signed 12 paying customers at approximately $50/month each — $600 MRR total. We told investors we were "pre-product-market fit" and the capital would help us find it.
This framing was wrong. "Pre-product-market fit" should mean "we're close and capital will accelerate the final steps." It should not mean "we need capital to discover whether our product solves a problem people will pay for at scale."
We were in the second category. We used investor money to run product-market fit experiments that should have been run on our own capital first.
Mistake 2: We Hired Too Fast
Within 4 months of closing the round, we had 14 employees. Engineering, sales, operations, customer success, marketing.
At 14 employees with $600 MRR, we were spending approximately $65,000 per month in salaries alone. We had less than 18 months of runway from day one.
The hiring was driven by several wrong motivations:
- Pressure to show investors "growth" (headcount is not growth)
- The feeling that more people would solve problems faster
- Status (having a team felt more like a "real company")
The reality: 14 people working on a product that hadn't found product-market fit created 14 different theories about what the product should be and diluted the focused experimentation we needed.
Mistake 3: We Optimised for the Wrong Metric
Our primary sales metric was "logos" — number of companies signed. This was a vanity metric because we were signing companies but not successfully onboarding them.
A company would sign. We'd celebrate. Then the onboarding would be slow, the product would have gaps for their specific workflow, and within 90 days they'd stop using it — while technically still being a "customer."
Our real metric should have been "active customers" — companies that were actively using the product weekly and getting value from it. If we had tracked this honestly from month 1, we would have seen that our product was not sticky and addressed the retention problem much earlier.
Mistake 4: We Avoided the Hard Conversation With Investors
By month 14, we knew the business wasn't working. The customer acquisition was slower than projected. Retention was poor. Our unit economics were broken.
We didn't tell our investors clearly. We sent updates that emphasised positive signals and minimised negative ones. When investors asked how things were going on calls, we focused on the pipeline and the upcoming "big deal" that would change everything.
The big deal never materialized. The pipeline converted at a fraction of what we projected.
When we finally had the honest conversation at month 20, our investors were frustrated — not primarily because the business had failed, but because they felt they'd been misled about how bad things had become.
The hard conversation we should have had at month 14 would have been painful. It would also have allowed us to either pivot meaningfully or wind down with 6+ months of remaining capital, giving us more options.
What I Would Do Differently
1. Stay scrappy until you have product-market fit. Don't raise $1M and hire 14 people. Find 10 customers who love your product first. Then raise and scale. The $1M was a pressure accelerant on a product that wasn't ready.
2. Track active users obsessively. The metric that matters most for any B2B SaaS in the early stage is "do customers actually use this and does it solve their problem." Measure this weekly.
3. Have the hard investor conversation early. Investors have seen many companies fail. They have seen many more fail because founders didn't tell them the truth early enough. An honest conversation about what's not working opens up options. Hiding the problem closes them.
4. Hire for specific problems, not for scale. We needed to solve product-market fit. We hired for scale. This was backwards. Hire the minimum people to test the core hypothesis. Add staff when the hypothesis is proven.
5. Validate willingness to pay at higher prices. $50/month from Nigerian SMEs was too low to build a business. We needed $200–$500/month from larger operators or to find a different segment. We never tested higher price points seriously because we were afraid to lose customers.
The Outcome
The investors lost most of their money. The team lost their jobs. I spent 6 months working through what had gone wrong before I could see clearly enough to think about what to do next.
I now run a bootstrapped consultancy doing approximately $8,000/month. Not glamorous. Sustainable. Building the next product from the revenue that produces.
The $1M startup taught me everything I needed to know to build the smaller thing correctly.
