I made 3 trips to Nigeria and Africa this year to roll out my technology. So many people have been asking me to give them some insights into what my technology is about. I had promised to respond in time. Today, I am going to provide insights from what I learnt during this project. I am doing this here because I see there is a wave of conferences and workshops going on all over Africa from people who claim to understand entrepreneurship. On careful observation, I learnt these are just motivational speakers. Most of them never developed any technology or have a running large scale business. Given that we have a lot of work to do to get things going in Nigeria (a very big market), I am using this opportunity to set the stage for those who actually have something to offer but need a road map for taking off.
Proof of Concept [POC] and proof of Value [POV]
When you develop a product or idea, you normally go through various processes of validation and verification. This is when you just want to prove that the product works. This is proof of concept. Proof of concept is not enough to convince yourself or an investor that you have a viable product. Proof of value is important. Some people call it MVP (Minimum viable product). In effect, it answers the question – is your product solving real problems for somebody? This is what separates an idea from a product; a product from a business; a business from a corporation; and a corporation from an industry. In POV, you are to show how people use your product/service and are able to say it brought them from a position of pain to a position of happiness. POV takes time and usually costs more money than POC. However, without POV, you really don’t have a business that is worth pursuing. This is what investors like to see. They want to see data that shows how this product has solved the real problem. This data can be revenue reports or merely standard reports meant to satisfy a specific business/reporting requirement.
Scope and Advanced product Requirements
Usually, products developed abroad worked where they originated. Their POV and POC have been performed in those regions. This is not the case in Africa. In Africa there is no electricity. This means your system must account for power fluctuations and outages. This, unfortunately, adds cost to your product. Also, support requirements are different because in the regions where these products have been deployed, there is usually an abundance of technical expertise from the maker and industry to bring the product/systems back when they are down. At the various airports in Nigeria, there are broken down security scanning and climate control systems. These systems may just be in need of a simple fuse to get them back to work. Unfortunately, the expertise to determine that the issues are just simple fuses, happen not to be handy. Therefore, systems/products developed in Africa must account for support.
To account for the above, it is important for any system integrator or service provider get enough elevated permissions in the technology stack, to allow for tweaking and enhancements to reduce the support costs and cover additional requirements for Africa. For instance, a new interface can be developed for a system or product to meet the support needs of Africans. This can be in the form of additional documentations in simple language or additional cost effective UPS (Uninterrupted Power Supply) systems. If a manufacturre did not provide enough interface for the system to be customized to suit the needs of African markets, the system will not work.
Costs are not As you see it
When these products/systems are built abroad, they were based on a cost model. Bringing this product/services to Nigeria/Africa has been done in a way that did not account for income parity. The makers of these products want to sell to Africa as if they are selling to the rich countries. A standard controller in EU costing $3000, is also to be sold to Africa for $3000. No one has ever considered that in Africa, these products/systems should be $300. This finding accounts for how people say Africa is not developed. It is not so much that Africa do not know these technologies and what they can do. The issue is that these manufacturers are not willing to reduce the cost of these products or remove features not needed in Africa, in order to allow Africans get access to the technology. Countries like China and India have been bridging that gap. However, their efforts have not yielded the right results because they are not really empowering the entrepreneurs in these African countries. India and Chinese makers are merely setting up shops in Africa.
Cost is critical and happen to be one of the inhibitors of scale. When dealing with one client with 10’s of sites, cost is not an issue. This is usually to give the client a competitive edge. But when dealing with large scale deployments, costs will be an issue.
Merchants are Spoilt
You may have setup your business to expect merchants to pay for access points or terminals. This is a problem because the drive in Africa is to go cashless. Therefore, the providers (like banks) are giving access points like POS to merchants free. They are also in the business of driving usage. When cash is mopped up via electronic payments, the merchants let the service providers hold value for at least 24hrs. The providers use/trade this money and generate profits. This means that banks and providers are even willing to give loans to merchants for the purpose of driving usage, Therefore access points (POS) are not usually an issue. Therefore, the business model abroad, which expects merchants to pay for access points (POS) will not work in Africa. merchants just tell you they will not pay for it. You now need to refactor your business model to allow banks and providers chip in for covering cost of terminals or POS. OR you give it to merchants outright. The sad news is that if merchants don’t carry your technology, it will not get to the hands of users.
Credit is Different from Cashless Economy
We often confuse the drive for cashless economy with credit. Credit is what actually drives consumption. Assuming that when people pay electronically or with mobile phone, they buy more, is nonsensical. What makes people buy more is not electronic payments but credit. Credit is when you can get something without paying for it right away. In Arica, debit is the most common. Therefore, if your business is assuming that people use credit cards, that is not true. What people have is debit cards or EMV (Europay, Mastercard and Visa) cards that are backed by debit accounts in banks.
No Paypal or Offshore Payments
You may be surprised to note that in Nigeria, people are not able to pay for goods from outside. Now, several reasons have been provided for this. The most common one is that there is a lot of advanced fee fraud going on. This makes sense because even if the credit card processor is not losing money, the cost of investigating these frauds is enormous. Therefore, you have to bear in mind that there is a huge and untapped market for any organization that can make it easy for users abroad to buy goods from Nigerian sellers. This will be my next project.
Providers and Partners may be your biggest source of Innovation
As an entrepreneur, you will be accused of being too passionate about your ideas. The danger in this is that you may misconstrue the intention of your partner to make your product easier to adopt, as an effort to kill your idea. You can start by assuming (and rightly so) that these partners most probably worked on your idea before and gave up on it. Therefore, when you are pitching, be mindful of the fact that you should avoid the mistakes they have already made. A provider, as a partner, likes to know that you know what they know and can deliver a solution like they do. Therefore, they would be happy to see that they are not incurring additional research costs to get to where you are. When the above is ascertained, the provider wants to know how you will address the other issues they already arrived at. In one case, a provider/partner advised that a proprietary app should not be pursued because the provider had one that suffered similar fate. The players would not allow your technology to make theirs useless. Therefore, the provider suggested that the value proposition be to allow other applications from various players to use the specific business function your app is using. This means you will be a provider supporting other platforms. Using a glass-half-empty approach to look at this matter, you will conclude that it will kill your brand. Using a glass-half-full approach, you will be happy that your system will now be adopted by major platforms. The value is in the fact that if your application could only generate say 100,000 users with a large promotional cost, it will now be available to over 20,000,000 already existing users with near zero promotional cost.
The above is what providers bring to the table as partners. Therefore, you must be a listener more than a preacher. Even as you have an already established product, avoid the temptation to talk too much about what the product has achieved but what the product can do. This allows providers to get creative and own the product.
Do not write Business Plans because they will be Unrealistic
Instead of writing business plans like any other cheezy show man, consider asking for meetings. Use emails to communicate product capability. During meetings, engage partners to understand where their main pains are. For each pain you will take out with a requirement, ensure a formal product feature documentation is produced and communicated to meeting stakeholders. In doing this, you would be defining what the product will do and owning the intellectual property at the same time. When I was doing a masters research program at Civic hospital Ottawa, on Biomedical Engineering, the medical interns told me that the way I was discussing problems and documenting it was how General Electric, Siemens and Medtronics engineers interviewed the doctors. They said, usually after 6 months, the interns and doctors are invited to trade-shows for new technologies. They discovered those technologies were actually solving the exact problems the doctors and interns discussed with the manufacturing engineers.
The above means that the opportunities to create products that will sell happen to be endless. What needs to be developed is an eidetic memory. This is when you are able to visualize a solution and communicate it to people as if it already exists. It has not been proven if this capability is hereditary in creative people or developed over time. I know I have it and get bored when conversations don’t lead to products or systems. You need to develop this capability.
By Isidore Onyeako