Otto Beseka Isong is Founder & CEO of Akwajobs.com. He’s also a leading business development strategist in Silicon Mountain.
Product-market fit is a common concept in the startup world. While widely applied in new high-growth companies, it hasn’t caught on in Africa yet. Otto Beseka takes a dipper look at what it takes for startups to hack the market in Africa.
Building a startup in Africa is a venture left only for the mad. Yes, I mean the mad. Sane smart kids with engineering qualifications should simply join the likes of MTN, Dangote, Afriland First Bank, etc and deliver maintenance to legacy systems. But if you’re one of the mad ones, then know you must get your ethics hacked, the market hacked and hacking of many infrastructures (soft and hard). That’s the only way out. Never mind, the investors don’t yet understand. Soon, they will. It’s only a matter of time.
Hacking of personal ethics (ambition and learning)
Tech startups aren’t for the average guys. But every outlier is a product of the masses. The average African, at least Cameroonian, is a modest individual.
We have modest ambitions. To play safe. And do what everyone else is doing.
One of the first requirements for building a startup is to know that you can’t be an average guy. It doesn’t suffice to be the smart one. The kind of outliers we need in Africa to build tech startups are those who are ready to break away from the masses and create ambitions that are bigger than the largest Cathedrals or Mega-Churches in African cities.
My friend and partner Mambe Nanje Churchill has this ambition of serving more than 300 million African professionals.
That’s the kind of ambition the average Cameroonian doesn’t want to have. Even the smart ones are afraid of such ambitions. Given that we’re in the same marketplace, it will be unfair to air my own ambition now. But mind you, I am not a modest African. As a student in high school, the things that moved me were on the edge of scientific discovery and technological development.
I started an online payment system (Pursar) with the ambition of processing a huge chunk of commerce in Africa. Some years back, while doing a gig in Guinness Cameroon, my superior asked me what my ambition was. After telling me his, which was “to become the FD (finance director) in a blue-chip multinational.” I told him mine is to “build and own a blue chip technology company from Africa serving the world.” He’s smart, and he thought I was crazy.
The maths of ambition
As a startup founder or in the process of starting up a technology company, you have to ask yourself if your ambition is big enough. 10,000 per week is a good number, but 100 million is good. What of 1 billion? I think it makes more sense to start thinking in terms of multiples of billions to get your mind ready for billions. In terms of billions, 10,000 becomes 0.00001 billion.
What will 100 million be in terms of billion?
0.1 billion, of course!
Now, imagine you have a system that runs only 1,000 queries per week. How do you envision this in terms of billions? What do you do to erase the zeros after the decimal point? When you start seeing your figures in terms of billions, you attune yourself to a universe of billions.
There are other aspects of the personal makeup that you can and should hack. One of the best ways to hack ourselves from bad habits (habits that hinder our progress towards a given direction) is to learn.
Read lots of books and articles to gain insights into what others have learned and put forth for you to learn from. To know what stops you, you’ll need to introspect, identify the bad habits and develop routines that flush these out — hacking.
Hacking the market
A market is made up of people/companies playing one of two roles: customers or competitors, while the government sets the regulatory framework for participants to act accordingly. In Cameroon, which can be a microcosm for most of sub-Saharan Africa, the government’s regulatory stance is derived mainly from the Napoleonic code.
This code implies the government has laws for everything, even those that are non-existent. As such, it makes it impossible to innovate without being burdened by compliance and regulatory issues, most especially in industries that come with such by default.
Customers, on the other hand, have a way of always wanting solutions/products that are better, faster, cheaper, etc than what’s available in the marketplace. But their habits formed around the processes of the existing solutions/products make it harder for them to switch.
Adopting the 10x ideology
I believe it’s for this reason that seasoned product designers and developers have advocated for the 10x ideology. Which simply means new solutions/products should offer at least 10 times the value of existing solutions/products. The 10x value provides the incentive to accept habit changes in favor of the new.
In building Pursar, the fundamental element of our strategy was built on the idea of “free money transfer.” But then, money transfer in Cameroon was an expensive process. It became an industry with giants in the likes of Express Union, Express Exchange who threatened the value propositions of traditional financial institutions like banks and credit unions. The money transfer giants were only stopped by the disruption caused by telcos with their mobile payment offerings.
The idea of free money transfer was to create a mass market appeal to a product — online payment — that stood little or no chance against the money transfer agencies. Free money transfer back then was a market hack that affected both customers and competitors. Had we the chance to play it out, we would’ve had some interesting stories to tell.
A startup shouldn’t be operating solo
As a startup entrepreneur, your product doesn’t exist in a silo. It is part of a vibrant ecosystem of players including but not limited to partners, competitors, customers, providers, government agencies, etc.
The rules of the game are quite clear for most industries, but entrepreneurs can still bend and in some cases, break those rules. If you have to thrive in a cutthroat marketplace which offers little opportunities to upstarts, then you have no choice but to bend and sometimes break some or all of the rules. Don’t worry about collateral damage. Even if you do nothing, there will still be collateral damage. As long as you offer 10x or more, damn the tuxedos.
Hacking underlying infrastructures
Is there no online payment system?
Find a way to receive payments from consumers. At www.akwajobs.com, we do this through forms and mobile money. It’s laborious, but it serves the purpose.
Is there no affordable delivery system?
You may have to invent your way out of it. Jumia Cameroon currently powers its own deliveries in Douala and Yaoundé. There was no other way of going about this given that using existing delivery systems would have made their offers very expensive.
Is the company registration process costly when you don’t have money to keep body and soul together?
Delay registration and work with people who understand why. One way of delaying registration but still working within legal limits is by registering with a hub and using their registration to enter into business contracts. ActivSpaces in Cameroon provides the template for such collaboration.
A startup could also get into a contract with an established company to use their legal cover so that they can get into contracts in the name of the company.
Internet speeds aren’t the best?
Develop data compression technologies and deliver only the essentials. Almost every entrepreneur knows the story about MP3. But it still serves as a good base on which entrepreneurs can turn constraints into opportunities.
In startupland, hacking is the norm
It takes a hacker to build a startup. But it takes a much more determined and innovative one to build it in Africa. If you’re one of such, know you’re made of an indomitable spirit. Do what you must do for yourself, the market and the infrastructure. It’s going to be a hard nut to crack, but cracking it is worth the effort. I hope you now understand why I said this is a venture for mad people.
These obstacles have held back many investors. But what most of us see is that these obstacles give room for entrepreneurs to create and capture enormous value. Imagine what would’ve happened if we had successfully implemented the “free money transfer” model with Pursar. Also, because of these challenges, the hockey-stick model of startup growth isn’t very evident. But for every startup that hacks its way through the team, market and infrastructure, the hockey-stick model of growth becomes a reality