How Hiring Mistakes Destroy Nigerian Startups
In September 2024, Vendease laid off 68 employees. Five months later, they cut another 120 (44% of their remaining staff).
The food-tech startup had raised $30 million and built a team of 270+ people. They brought in a CFO who earned $15,000 per month and other senior executives who commanded ₦5 million salaries. Revenue grew 600% in naira, but once converted to dollars, the growth was almost flat. Their cost structure stayed dollarized. Their revenue didn’t. The expensive team became impossible to sustain.
By April 2025, co-founder Tunde Kara was recommending they shut down entirely.
Vendease’s collapse wasn’t about product-market fit. Restaurants needed their service. The model worked. What killed them was building the wrong team at the wrong speed for the wrong economics. They hired as if the next funding round was guaranteed. It wasn’t.
This is how hiring mistakes kill Nigerian startups. Not slowly, through gradual decline, but suddenly. The money runs out, and you realize you’ve built a cost structure your actual business can’t support.
The Scale of the Problem
Vendease wasn’t alone. Between 2023 and mid-2025, Nigerian startups laid off 1,581 employees. In the first half of 2025 alone, 416 people lost their jobs as companies restructured, pivoted, or shut down. These numbers reveal how quickly hiring mistakes in Nigerian startups compound. For detailed post-mortems on failed Nigerian startups, we’ve analyzed what went wrong and why.
The pattern is clear: startups hired aggressively between 2020 and 2022, assuming venture capital would keep flowing. They scaled teams for growth they hadn’t proven yet, brought in expensive talent they couldn’t afford long-term, and built operations that required everything to go right.
When the funding environment changed in 2024, reality hit. The companies that survived were the ones who hadn’t over-hired. The ones that collapsed were often profitable in naira terms, growing in user numbers, solving real problems, but drowning under salary costs they could no longer justify. This hiring pattern is just one of many reasons why startups fail in Nigeria.
This article breaks down the specific hiring mistakes that kill Nigerian startups and shows you how to avoid each one before it kills yours. This is Part 4 of our series on why startup teams fail in Nigeria. If you haven’t read the pillar article, start there for the full context.
The Overhiring Trap (Plus the Expensive Talent Mistake)
Here’s the typical pattern: You close your Series A. Investors are excited. You’ve got ₦5 billion in the bank. The first thing everyone asks is: “When are you scaling the team?”
So you go from 15 people to 50 people in six months. You hire a CFO from Paystack for $15,000 monthly. You bring in a Chief Growth Officer from Flutterwave at ₦5 million. You build the marketing team, the customer success team, and the operations team. You start hiring for a future you haven’t earned yet.
You assume the next round will come. You build a cost structure that requires aggressive growth to justify. You create salary expectations you can barely meet now and definitely can’t meet if growth slows. Understanding your startup burn rate becomes critical, but most founders ignore it until it’s too late.
This is exactly what happened at Vendease.
After their $30 million Series A in September 2022, they scaled aggressively. By 2024, they had 270+ employees. The expensive senior hires made sense in theory. These were experienced operators who’d scaled similar businesses before. The CFO would tighten financial controls. The senior executives would bring networks and expertise.
But here’s what nobody talks about: expensive talent from big tech companies often need structure your startup doesn’t have. They’re used to clear processes, defined roles, and established playbooks. When they arrive and discover you’re still figuring things out, they struggle.
The first layoff in September 2024 cut 68 people. Five months later, they cut 120 more. By then, the CFO had reportedly left because the company couldn’t afford his salary anymore.
The broader data confirms this pattern isn’t unique to Vendease. Globally, 74% of high-growth startups fail by scaling too soon, according to research from Startup Genome. Series A startups in 2024 are 20% smaller than they were in 2020, per Carta data. The market has learned: lean teams survive longer.
Why Nigerian founders fall into this trap:
The pressure to “move fast” is intense when funded competitors are hiring. The Silicon Valley playbook doesn’t account for naira volatility. Hiring someone from Google or Paystack signals legitimacy and impresses investors, but prestige often trumps actual fit.
What actually works:
Revenue milestones should drive headcount, not the other way around. A good rule: reach ₦10 million in monthly revenue before you hire your 15th employee. Prove the model works at a small scale before scaling the team.
When you do hire senior talent, look at tier-2 companies, not tier-1. The person who was #3 at a mid-sized fintech often has more relevant experience than the VP from Flutterwave and costs about 60% less. They’re usually hungrier too.
Design your business for capital efficiency from day one. Ask yourself: if we never raise another round, how do we reach profitability with current capital? That mindset forces different decisions about hiring, salaries, and growth speed.
Culture Fit Disasters
While Vendease was collapsing from overhiring, another Nigerian startup was imploding from a different hiring mistake: keeping toxic leadership too long.
Bento Africa raised $2.3 million and positioned itself as an HR-tech game changer. The company would revolutionize payroll and employee management across Africa. On paper, the vision was solid. In practice, the CEO was destroying the company from within.
Ebun Okubanjo, Bento’s founder and CEO, created a workplace culture described by employees as hostile and unpredictable. People were fired over Slack messages with no explanation. Meetings escalated into shouting matches. Those who questioned decisions were removed without warning.
In 2022, after enough complaints, Bento’s board removed Okubanjo from all “people-related decisions.” Co-founder Chidozie Okonkwo took over as CEO. But in September 2022, Okonkwo resigned citing personal reasons, and Okubanjo returned as CEO.
The problems continued. By January 2025, the entire 10-person tech team quit after protesting unpaid salaries. Okubanjo resigned on January 30. By February 2025, the company had temporarily shut down operations.
But the damage had started earlier. High-profile clients (Paystack, Moniepoint, Helium Health) had already left in 2024. They’d seen the operational chaos and didn’t want their payroll tied to a company that couldn’t keep its own house in order.
Bento’s collapse teaches a brutal lesson: in a 10-person startup, one toxic person is 10% poison. In a 50-person startup, it’s 2% poison. The smaller you are, the more every individual’s culture fit matters. A toxic leader turns every new hire into a future exit.
Nigerian-specific culture clashes:
Nigeria adds specific layers to the culture-fit challenge. Corporate mindset versus startup chaos is real. People from banks or multinationals expect 9-to-5 schedules, clear role definitions, and established processes. Startups don’t have these.
Returnees from abroad often bring different work expectations. They’ve experienced certain workplace norms overseas and expect them here.
Age and respect dynamics create tension when a 28-year-old founder manages a 45-year-old employee who expects deference based on age rather than role.
Then there are connection hires. Your uncle’s friend’s son, who “needs a job.” Family or church pressure pushes you to hire someone you know isn’t right for the job. Now you can’t fire them without creating family drama. They underperform, the team resents the favoritism, and you’re stuck.
Why founders don’t fire fast:
Nigerian relational culture makes firing feel like personal rejection rather than a business decision. There’s fear of seeming harsh or heartless. “Maybe they’ll improve,” optimism keeps founders waiting. This founder psychology around difficult decisions often determines which startups survive.
The data shows founders typically know within 30 days when a hire is wrong, but wait an average of six months before acting. That five-month delay is your most expensive mistake, not just in continued salary, but also in opportunity cost and damage to team morale.
What actually works:
Hire for values first, skills second. Use trial projects before full hiring, then back it up with good cultural interview questions: “Describe a time you succeeded with zero guidance,” or “What frustrates you most about disorganized workplaces?” Their answers reveal whether they’re startup-compatible.
Set up 90-day probation with clear milestones. Fire fast when it’s clearly wrong.
The brutal question every founder should ask monthly: “If this role were open today, would I hire this person again?” If the answer is no, you already know what to do.
Hiring for Tomorrow’s Scale Today
While some startups over-hire across the board, others make a more targeted mistake: hiring for scale they haven’t proven yet.
In January 2025, MAX (Metro Africa Xpress) laid off 150 employees “amid EV push.” The transportation and logistics startup had hired aggressively for their electric vehicle expansion before proving the model actually worked at scale in Nigeria’s challenging infrastructure environment.
Chowdeck, the food delivery startup, cut 86 people in early 2025 (68% of their contract staff) after “operational improvements”. Sabi, the e-commerce startup, laid off 50 people while “narrowing focus.” Both companies had hired for volumes and scope they couldn’t sustain.
The assumption is always the same: “We need the team in place to scale when the moment comes.” The reality is different. You’re burning six months of salaries on people who have nothing productive to do. High performers leave because they’re bored. You create bureaucracy before you need it.
What actually works:
Hire for proven demand, not projected demand. When you have so much customer volume that your existing team physically cannot handle it anymore, that’s when you hire. Not before.
Use contractors and freelancers for variable work. Need someone to handle customer service during a product launch? Hire a contractor for three months. If the volume sustains, convert them to full-time. If it doesn’t, you haven’t committed to permanent overhead.
The rule is simple: if removing this role would immediately stop critical work, then hire for it. If removing the role would just mean other people pick up the slack, wait.
The Nigerian Hiring Traps
Beyond the universal hiring mistakes, Nigerian startups face specific traps shaped by relationship-driven culture and local context.
The reference checking problem is acute in Nigeria’s relatively small professional networks. Everyone gives friends as references who won’t give honest feedback. Trial projects solve this better than references ever will.
Overselling the opportunity happens when you’re desperate to fill a role. You exaggerate the potential: the equity will be worth millions, we’re about to close a huge round, you’ll lead this entire division.
The new hire arrives with completely misaligned expectations. When reality hits, the round doesn’t close, the equity isn’t liquid, and the “division” is just them and one intern. They leave within three months. You’ve wasted three months and need to restart hiring.
Not being honest about constraints is related. You hide the chaos during interviews. Don’t mention the daily power outages, the salary delays last quarter, the fact that everyone sometimes works on weekends, or the limited benefits package.
You hire someone expecting stability. When reality hits, they quit.
Common Hiring Mistakes in Nigerian Startups: The Practical Framework
After reviewing dozens of failed Nigerian startups and talking to founders who survived, a few practices consistently separate the companies that hire well from those that don’t.
The trial project framework changes everything. Instead of relying on interviews and references, pay someone ₦50,000 – ₦150,000 to do a real project for one to two weeks. Watch how they work. Do they communicate proactively? How do they handle feedback? Can they make progress with ambiguous instructions? This trial-based hiring approach reveals culture fit that interviews never can. The cost is tiny compared to the millions you’ll waste on a wrong full-time hire.
Hire for adaptability over credentials. A first-class degree means nothing if the person struggles with independent execution. The hungry B+ player who figures things out beats the entitled A+ player with the wrong attitude every time. Early-stage startups need generalists who can wear multiple hats. Look for people who’ve built something in Nigeria before, understand the constraints, and have demonstrated grit.
The 90-day milestone system creates clarity. Before someone starts, define clear deliverables for days 30, 60, and 90. Have weekly check-ins throughout, not just an end-of-probation surprise. By day 90, both sides know if it’s working. This also makes firing easier when it’s not: “We agreed you’d achieve X by day 90. It didn’t happen. Here’s your notice.”
Fire fast, but with dignity. If you know by week two that something is wrong, act by week six. Document everything: missed deliverables, attitude problems, performance gaps. Follow Nigerian labor law: provide one month’s notice or pay in lieu of notice. Have the exit conversation: clear, kind, firm. Explain what didn’t work. Wish them well. Move on.
The harsh reality is that keeping the wrong person longer hurts everyone more. The founder, the team, and even the person who’s clearly struggling in a role.
Remote-first as a competitive advantage. Don’t limit your hiring to Lagos and Abuja. Great talent exists in Ibadan, Port Harcourt, Enugu, and smaller cities, often at 30-40% discount compared to Lagos rates.
This also reduces your Japa risk. People in smaller cities have a better quality of life and are less desperate to leave Nigeria. Consider diaspora contractors for specialized work: Nigerian developers in Europe or North America who work remotely at rates below local market rates but above Nigerian salaries. Remote hiring has proven effective for startups globally, and Nigerian startups can leverage this advantage.
The tools exist to make distributed teams work: Slack, Zoom, and Notion. Being distributed is now normal, not a handicap.
Build “stay” equity structures. Use four-year vesting with a one-year cliff minimum. Acceleration should only trigger for acquisition or IPO, not resignation. Make equity feel real to your team: share regular updates on valuation, explain what their stake could be worth if the company succeeds. Create a culture of ownership in which everyone knows the numbers and understands how they affect outcomes.
The Hiring Audit: Three Questions
Every founder should ask themselves monthly:
About your team: Is there anyone you wouldn’t hire again if their role were open today? Is anyone miserable but staying for the salary?
About your process: Are you hiring for today’s needs or for future needs you haven’t identified yet? Can you afford each person’s salary for 18 months with no new funding?
About your courage: Is there someone you should fire but haven’t? How much is that delay costing?
The answers tell you everything you need to know.
What Vendease Teaches Us
Vendease raised $30 million and burned through two mass layoffs in five months because they hired like the future was guaranteed. They brought in expensive talent commanding Silicon Valley salaries. They built a cost structure that required everything to go right: steady naira, continued access to funding, uninterrupted growth.
When the naira devalued and the funding environment tightened, their entire model collapsed. The team that made sense in 2022 became unsustainable by 2024. By April 2025, a co-founder was recommending that they shut down and focus on paying off liabilities.
The lesson isn’t “don’t hire.” Every startup needs people. The lesson is: hire the right people, at the right time, for the right reasons, with economics you can actually sustain.
The hiring mistakes in Nigerian startups we’ve explored here aren’t inevitable. They’re predictable, avoidable patterns that kill otherwise viable businesses. In an environment where funding is scarce and getting scarcer, where naira volatility can destroy dollar-denominated economics overnight, where infrastructure costs remain high, and where competition for talent is fierce, these mistakes aren’t just expensive. They’re often fatal. Understanding the broader Nigerian startup ecosystem helps founders anticipate these challenges.
Get hiring right. Your startup might still fail for other reasons: bad timing, wrong market, strong competitors, and regulatory changes. But at least you’ll fail with a team that gave you the best possible shot at success, rather than a team that drained your resources and left you unable to execute.
Help Us Build Better Startup Teams in Nigeria
At PlanetWeb, we analyze failed startups and successful pivots to help Nigerian founders avoid expensive hiring mistakes and build teams that survive funding winters.
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What’s your biggest hiring challenge right now: knowing when to fire someone who isn’t working out, affording senior talent without overspending, or avoiding connection hires that hurt your team? Let us know in the comments.
Next in this series: Part 5 explores leadership transitions and why founders struggle to scale themselves as the company grows. Preview: When the founder becomes the bottleneck.
Previous: Part 3 – Co-Founder Conflicts: The Pivo Lesson
Start here: Why Startup Teams Fail in Nigeria (Pillar Article)
