It Take More Than An App To Build a Business

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This a nice piece from Fisayo Durojaye on how to build new businesses, I hope you find it interesting…

Investor: Can you share your idea?

Entrepreneur: I want to revolutionize the transport system in Lagos. I want to “disrupt” all these danfos

Investor: So how are you going to achieve this disruption?

Entrepreneur: I am building an App, to be downloaded from Google Play Store. People will then be able to order mass transport buses right from their location. Then we would have disrupted to system before they wake up!

At this point, I flipped! An App? really? to change the face of Lagos public transport and potentially scale to other cities across Africa. Really? Just an App! Clearly, this entrepreneur just knows how to build Apps and not businesses.

Your App on its own is definitely not the answer to any problem! Your App on its own solves nothing.

We must start from the beginning, by asking the right questions. What is the problem I am trying to solve? In fact, is there a problem? If you are not convinced about the existence of a problem, then there is no point building anything! Once you establish the problem, then you can try to find a solution to it.

Again, you have to understand the market context. In Nigeria for instance where there are 143mm active mobile telephone lines users, and 91.5mm mobile data subscribers and 28.4% internet penetration. If you are building a mass market product, then a smart phone app is definitely not your best approach. You might want to consider a text or USSD based solution.

Don’t jump for joy yet, because a USSD solution has its own inherent challenges. If you want a single code that works across all Mobile Network Operators (“MNOs”), then you have to navigate the bureaucracy at NCC to get your USSD code. If not, then you have to approach each telco, ask Aunty Adia.

Additionally, in an era where consumers are forced to learn various USSD codes for different things, including airtime recharge, checking airtime balance, mobile data subscription, bank transfer, checking bank balance, all sorts of short codes to call customer care etc. I dont want to be bordered learning an additional code all because I want to order rice from the restaurant down the road!

If you understand these, then you will know that your App is not the answer.

Let’s even assume that you have a great app. Your app will have to be installed on a smartphone. Most smartphones in Nigeria are cheap and basic, hence cannot take too many apps. The most essential apps in most phone — Whatsapp, GTB, Gmail, Opera mini, Bible or Quran depending on how vain the person is, you can manage to see SnapChat or Facebook, Candy Crush or Temple Run. Thats all! There is absolutely no space for your App!

I am sure it is very easy to build a hotel booking platform. The technology is not out of this world. The programmers are available, all you need are PHP Stack programmers! However, your work starts after building the platform and no hotel is listed. You can ask Mark Essien about the effort it takes to sign on a single hotel. After signing on a few, you then have to convince me to book hotels on your platform! Why should I? You will then try to lure me with discounts. 2 ways discounts work, you might convince the hotels to give discounts based on the potential volumes of transactions the hotel will get from your platform (Good luck proving that) or you bear the loss! Either way, it is not a simple task.

The same thing goes for every app or platform — Konga, Jumia, Gloo, Paystack, Paga, Flutterwave, IrokoTV etc. The App is never the answer! So, don’t rush to building one. You must be sure that the people you are building the product or service for are willing and able to pay for it before building anything! A lot of startups have gone before you, pivoted several times and still died!

In 2017 alone, hundreds of well-funded startups have failed. TechCrunch profiled the top 10 of them;

Top 10 Most Funded Startups to Fail in 2017 — TechCrunch

With the amount of money these businesses have raised, you would have expected them to succeed, however, they did not! Jawbone raised over N300bn, yet failed. This further validates that funding cannot make a bad/outdated product good!

As entrepreneurs, we must think of our product, the market context, the target market and the ability and willingness to pay, the cost of operating the business amongst other things.

Happy entrepreneuring!

 

(medium)

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