Steve Babaeko
Babaeko… 10 years of executing X3M Ideas
Ten years ago, Steve Babaeko resigned from 141 Worldwide (now Nitro 121) to set up X3M Ideas, a Lagos-based digital advertising agency that was listed in 2017 as one of Nigeria’s fastest growing communication agencies. Today, X3M Ideas is among leading advertising agencies in Nigeria, with presence in a number of African countries. In this interview with The Guardian, Babaeko, who is the current President of Association of Advertising Agencies of Nigeria (AAAN), spoke on the X3M Ideas dream, the journey so far and future plans.
Ten years ago, you started X3M Ideas, how has the journey been so far?
Honestly, it has been an incredible journey. At the time I made that move, I looked confident on the outside, but inside, I was scared. I remember nights I look at wife, not knowing the problem I have brought to this family. The truth is this, to every great man, there’s a great woman who has helped him to achieve. I knew I couldn’t afford to fail and even if I failed, I had earned the right to try to succeed.
For me, it has been an adventure; we started with about seven people, but now, we have extended beyond Nigeria. Right now, we have 200 employees across the African continents in our employment. It’s been an incredible journey against all odds. I feel very thankful to make it this far.
At the time you started X3M Ideas, you were doing quite well in your career; you were also active in the music industry. What really spurred you to set up your own agency, what was the drive at the time?
Eleven years ago, if anyone had told me I would own my own agency, I would have slapped the person; it was totally not in my plan. I’m grateful to my boss, Mr Akinwunmi, who gave me the opportunity to become Creative Director at 141 Worldwide. I really appreciate that opportunity, because I wasn’t just a creative director; I was a business/creative director. I was involved in the business; I had seven years tutelage of learning how to run a business.
But by the time I turned 40, I started to think about my life; I was having fun, I was going around, shooting commercials, the best commercials. I was working on some of the exciting brands at the time. I started to think, ‘is this my entire journey or is there opportunity to do more, to push the boundaries? When my history is written, are they just going to say he was a Creative Director and that’s it?’ I felt strong there was an opportunity to push the boundary.
In any case, you must also understand I was not in the drivers seat. Even some of the crazy ideas I had that I believe could work, I didn’t execute them. Eventually, how do you prove to the world that these things can really work? You prove it to yourself first, not even to any one. The mainstream thinking in the country at that time is, ‘don’t give your business to creative to run; they know nothing about business.’ But I wanted to show the world that as a creative person, I could be a creative entrepreneur.
Ten years after, I’m not sure we have too many people left to prove that point; it’s crystal clear now. If for ten 10 years we could come from behind to the top, I don’t think there’s any point left to prove.
Five years ago, you had the vision of taking the brand outside Nigeria. Where exactly are you now? How far have you gone with the expansion?
Across the continent now, we are at about six to seven locations; that’s where we have physical presence. But by proxy, we cover about 14 locations. The whole of Southern Africa, we run campaigns there. We are gradually moving to East Africa. Our next five-year plan, I promise you, we are going to be more than just a dot on the map as we continue to grow.
Two choices that we have to make; it’s either to sit down as Nigerians and wait for foreign big countries to take us to Africa, in which case, it will be Mongo Park discovering River Niger. Or as Africans, we are going to stand up and say, ‘lets put our money where our mouth is.’ If any foreign partner likes what we are doing and wants to join us on the journey, we are more than happy to work with them. But we are not going to wait, we are building a truly African network.
The benefit of doubt is we are almost ratified. We are establishing a platform for our brothers and sister to be able to sharer in our success story; we are exporting talents, developing local talents in each market we have operation. We are also creating economic opportunities for our stakeholders and shareholders in those countries. It’s a beautiful thing to see that an African is spearheading this business relation within the communication and creative sector.
Globally, Nigeria is not such an interesting brand in terms of perception. How are you dealing with that in your expansion project across Africa?
Martin Luther king said something about not judging me by the colour of my skin, but by the content of my character. I think that’s the only appeal we make to the rest of the world; judge us by our actions. It’s simple to do business in any country; what are the rules of engagement? If you do business in Nigeria and you are not following the laid down rules and procedures governing the space you are operating, you will get into trouble. If you go to India, you must follow the rules.
In some of the market we are for about 4/5 years old, we are doing well; we don’t have any problem. We are not in conflict with the local authorities, because they see our contributions to the society. It has been an interesting adventure for us.
Looking back 10 years ago when you started, what do you consider the toughest part of this journey?
The toughest in this 10 years journey is infrastructure in Nigeria; we could cut down our cost of business by 20 to 35 per cent if we have steady power supply. We don’t, so we invest on generators, which we fuel with diesel. Today, the cost of diesel is going up.
Talent is also a big problem these days with the economic drain we are facing. With the hopelessness that you see everywhere, the younger generation are just tired of being here. You see a whole lot of them migrating abroad; some of the best talents are leaving the country. These are people you’ve trained and invested so much in them, only to hear they are in Canada. Being able to keep your talent in this country has become a challenge.
Access to finance its still a challenge. How do you bootstrap a company from scratch like we did? How many opportunities do you have for capital support? In the industry space, finance is definitely a problem.
Last but definitely not the least is the low level intra-African trade. It’s just being able to navigate between Africa as a continent. Really, we don’t need too much people if we a can create opportunities to do more with ourselves. We can increase Africans contribution to the global duty by at least 3,4, 5 per cent, which will be huge for our own local economies. I think those are the challenges we have faced so far.
We are the biggest economy on the continents; forget all of the other challenges we may have. That’s why some times when they criticize the present government, I feel it’s not just about them. If we look back in the days when foreign policy was strong, we were defending Africa. We were the heart of the ECOMOG; we created stability in Liberia and Sierra Leone. That’s part of the muscle we have; that’s what America will do on their continent, by extension the world. We have a responsibility to be able to lead that fight, to say, ‘lets open up this continent,’ because if we open up the continent, Nigeria will be one of the beneficiaries of the boom that will come from such expansion.
COVID-19 was a major setback for businesses globally, how much did it affect you and how did you manage to navigate the disruptions?
Like our people say, ‘when the beat changes, the dance has to change’. The lockdown period was a different time; we were confronted with a global challenge and we responded to it. As president of AAAN, I led the charge. This is not the time to wait for clients; we were all in Neverland. Nobody had any experience on how to deal with this; it was time to create new moves. Because there were no open markets, digital became a source to reach people. But we kept on going and we thank God we survived it. We don’t know what is coming next, so I think it’s important to always make plans.
Before now, South Africans used to handle most of the jobs in Nigeria. How much have we covered today, in terms of having indigenous companies handle brief in Nigeria?
I think we’ve been able to achieve a lot with legislation. As much as it’s a free market, there are certain rules to follow. We have an agency in South Africa; I know some of the challenges we faced when we tried to operate there. I don’t think this market should be opened for people to just come and hijack; if you want to operate here, follow the rules. Are you APCON registered? There are people who are not registered; the law must hold them accountable. Just the same way all of the market we are opening up, we go there and ask what are the rules; we follow up and comply.
The edge we have over South Africa or any other African country is communication. The major ingredient for creating communication is understanding the culture of the society. I was born here; I grew up here and I understand what the street are talking about. So, if you are coming with your ideas from Europe or South Africa, you are going to fall flat on your dirty face here, because you can’t even compete.
There’s a little bit of resurgence in the industry. The 2020/2021 was not the pleasant of years; it was turbulent for our members and business. The economic indices are going north again. Apparently, we are approaching an election year, there will be spending. Hopefully, the government, every actor in politics, will recognise they need to patronise registered advertising agencies instead of bringing foreigners.
You have this ‘Finding X’ proposition in your operation, what is it all about?
Once you become the master of the game, you develop your proposition. For every brand, there’s an X. It is like a formula, the shorthand for it is X=A+B+C, that is, A is finding the consumer insight B+C is the brand constant’s truth, which is the competitive end. You can then find that X that will help you.
With what you have done in this industry, are you thinking of setting up an academy?
As the president of AAAN, I remember Dr. Biodun Shobanjo muted this idea to set up an advertising academy over 20 years ago. Subsequently, every president that came in after him talked about it. It was our inside joke that every president uses this as a campaign slogan: ‘Vote for me to be president, I will set up the academy.’ It kept going like that until I became president two years ago. I told my council that, if in six month we are unable to set this up, we have failed. I’m so happy to say it has been setup eventually.
Now, we are not just teaching creativity and strategy; we are teaching business philosophy. In a few months from now, we can develop other curriculum. We need to be able to create new talent, build young people; that’s the pipeline to bring them into our industry. The talents that we build, the clients are stealing them from us anyway. So, we need to work faster, especially when most of the talents are running to Canada.
For someone like you that started from the scratch, what do you consider the biggest challenge for young entrepreneurs in Nigeria?
Honestly, I won’t really put the blame on young people. Frankly, quite a number of them have done a lot of successful business in this country. The Flutterwave CEO, they have built unicorn out of this concrete jungle that is our business environment. These youths are eminently successful.
The stumbling blocks stopping more young people from being successful is our infrastructure and policies too. Doing business in Nigeria is not for the faint hearted. We need to create an avenue for a mentorship programme; I think this will help young people navigate obstacles. Young people who are successful still need mentors of older generation; people who have walked through that road. I have mentors I go to for counsel. So, a lot of talents still need help.
Ten years after, where are you taking X3M Ideas?
There are two things that will happen in the next 10 years; either you hear that X3M Group is listed on the Nigerian Stock Exchange. Actually, may be more than one stock exchange on the continent. That could happen; it’s a very strong possibility. Or you hear that we’ve partnered with a major global entity, but I’m not doing affiliation.
When you hear that we partnered, know that they’ve given us a cheque; they have taken a sizeable equity as permitted by the law of Nigeria and they joined us in this journey to expand and create opportunities in Africa. Those are the two things that we know that would happen in the next 10 year, God sparing our lives.

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