Op-Pieces, Startups

The African techie’s curse – business model or product?

Entrepreneurs are heroes. They get rightly bored of recycling value, and instead opt out or think outside of the system to either disrupt or stimulate it. They successfully deregister from the rat race, and that alone makes them winners.

“A rat race is an endless, self-defeating, or pointless pursuit. It conjures up the image of the futile efforts of a lab rat trying to escape while running around in a maze or in a wheel”- Wiki

Peter Druker (1964) describes an entrepreneur as someone who searches for change, responds to it and exploits opportunities using innovation. Peter Kilby (1971) also recognizes the important role of imitator-entrepreneurs who do not innovate but imitate technologies innovated by others. An appetite for risk, a healthy dissatisfaction for the status quo and an irrational addiction to value creation are common denominators of all entrepreneurs.

However, not all entrepreneurs are business-people, and not all business-people are entrepreneurs. While entrepreneurs can create value building non-profit or for-profit vehicles, the fundamental mandate of businesses and business-people is to create profits. For some entrepreneurs, their motive is to make lives better, and their ventures create value by fostering social change. Others are business people; they have the primary motive of creating profit, and their ventures morph into whatever can achieve that, whether it’s through social impact or otherwise.. Both types of entrepreneurs are essential, and they should never be assessed using the same criteria.

 
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Africa suffers from a litany of social issues, and it places a curse on techie entrepreneurs, most of who have profit-making motives, but are oriented to believe that for their ventures to be noteworthy, they must serve to eradicate or at least ameliorate a social problem. They invest hours of development-time creating that product that will provide on-demand, mobile, offline, everything access to healthcare, or provide access to quick work, reduce poverty or expose corruption etc.

Progenitors and promoters of tech entrepreneurship are also inherently biased towards problem-solving technology and base their assessment of great ‘businesses’ on the depth of social problems they’re solving, while judging entrepreneurs with solely profit-making motives for not matching their ventures to social needs by asking the infamous question “what problem are you solving?” Techie entrepreneurs in Africa whose personal motive is to create wealth now find themselves in another rat race developing solutions to problems even if they have infinitesimal profit-making potential.

 

Business model > Product

For techies trying to create wealth, focus on the business model and let that define the technology and even the industry. If you think there’s an opportunity to cut or replace the middleman somewhere, create an artificial layer of need elsewhere, or offer a ‘fluffy and superfluous’ product people will get addicted to, then build a financial model around it (this could be an exit agenda with traction-loving investors), create a basic product and see if a stranger will use or pay for it at your price-point, then go crazy sophisticating the product… Or you can just get a business co-founder.

For others who are simply passionate about solving a social problem, focus on grasping the scope and design a solution to it, but don’t get frustrated when profit-inclined investors are not as enthusiastic as you are, or when adoption doesn’t translate to revenue. Examining and defining your motives as an entrepreneur will create a clearer path for your venture and reduce fatigue and frustration.

 
[Photo Credit: dno1967b via Compfight cc]

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Numbers guy and accidental entrepreneur. Founder, Numbers.com.ng

4 Comments

  1. Interesting piece. I'd agree that the focus should be on a business model because it's all about execution. If you don't do it well another person can easily replicate your idea/product.

    1. This is a nice one. Techies in Africa hardly look at building business skills, which makes most startups very subsistent and last just a season. .

  2. Interesting perspective. I must however point out that not all problems are social. I am not overly burdened by the need to address the "infamous" question and I do not think it is as common a problem as you suggest. Unless of course you're pitching or in a business plan competition.

  3. This feels like you are talking about a company poised to become the most phenomenal in Nigeria in the next few years ….. Salt & Einstein MTS , something is going on quietly …… The Launch of Y'ello Health Insurance and the signature models tied to it stands it out as Africa's 1st MFS aggregator .Amazing stuff ….

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