Following an examination on why the Silicon Valley model does not work for Nigerian internet startups, here are 3 crucial pointers for closing the obvious disconnect between startups and their respective markets.
When prioritised, market data analysis can allow a company to explore unimaginable ways of attracting and retaining their customers.
Interestingly, data analysis is not a forte for Nigerian startups. Instead, they rely on vanity metrics as a mechanism to make predictions.
A thorough analysis of sales will go the extra mile in revealing trends and patterns — such as peak shopping days or best selling items — that puts businesses in a commanding position to influence patronage and profit. Imagine what that can do for the eCommerce landscape in Nigeria.
Data always says something about any market. Even a struggling telco or financial service operator can use processed data to offer inclusive solutions. For example, they can determine whether to reach their targeted market using a USSD service (for the sake of simplicity) or deploy their services via an app.
With over a 186 million people, Nigeria’s population is large enough to fuel patronage in the online space. However, statistics from the Nigerian Communication Commission(NCC) show there are about 97.2 million internet subscribers in the country. In other words, at least half of the Nigerian population isn’t online.
In fact, there is a struggle to win customers over. But if the alternative market is equally as large, then the solution is quite simple — think offline.
Ending the first part of its 2017 financial calendar on a high note, Shoprite Holdings Ltd reported full year earnings of of ₦ 3.86 trillion — an indicator of the strength of the offline market. The company’s profit which rose by 12% is driven primarily by sales from Nigeria.
As much as businesses in the IT sector are hard-wired to think that technology is the solution to all problems, they need to take initiatives and move in the direction of the market. Perhaps startups need to realise they are a business before anything else, and this must reflect in their ability to adapt to changing market circumstances.
There’s no telling how vital this will prove in connecting this offline population to the world of IT, and vice-versa.
A year and eight months after operation, Sheriff Shittu announced the sad demise of Showroom, an online furniture marketplace.
Explaining why his business went south, Sheriff pointed to his lack of domain-specific business knowledge. This scenario further reaffirmed the role having domain expertise plays in bridging a disconnect between the market need — especially in a Nigerian environment where founders seem more interested in looking for a gap in the system rather than focusing on their own strength.
Industry domain expertise is a non-negotiable element that shouldn’t be missing in business. While they might survive without it in the first few months of operation, it will be too costly for the business in the long-term.
On January 27, 2021, Techpoint Africa will be hosting the brightest minds in decentralised finance/crypto at the Digital Currency Summit tagged “Building the money of the future” Click here for more details, registration and sponsorship.
Report: Millionaire West African startups” raised over $1.806 billion between 2010 and 2019, 97.9% of which went to Nigerian startups. Get a free overview and 50% purchase discount here.
Listen to Built in Africa, a podcast by Techpoint Africa