“DO’s Magic Quadrant for Africa,” aka DMQA Framework(clean vrsn). Next quadrant for deep dive into its characteristics is the “Anything Can Happen” quadrant. Stay tuned. 
So, here goes the deep dive for the "Anything Can Happen Quadrant," or Quadrant D by implication. The general attributes of this quadrant are the following:
Business Model Characteristics:
Pure Software/Software Heavy: software products that A.) require little to no agency of any human being from the company in order for the consumer to interact with, either in the way the consumers...
Pure Software/Software Heavy: software products that A.) require little to no agency of any human being from the company in order for the consumer to interact with, either in the way the consumers...
...become aware of the product, buy it, use it initially and/or in continuing to use it and B.) ab initio, 100% required ONLY the input of software engineers--and the software they produce--in the “manufacturing process” of the end product.
The degree of software purity determines the gradient between the upper and lower horizontal borders of this Quadrant D that the product lies vertically within the Quadrant.
At the most upper areas of Quadrant D are social media, search, user-generated-content apps, etc. They're usu software products you've used repeatedly for years for which you've had little to absolutely not one single interaction with any employee at that company till date.
They are also products, at the point they attained Initial Scale, have userbase: employee ratios in the millions or revenue:employee rations in the 10s to 100s of millions. Think Instagram with a little more than 10 engineers at the point it was sold to FB for $1Billion...
...or WhatsApp sold @ $30B+ to FB w/ a little >50 engineers as entire staff. You also have the deliberately bootstrapped versions of these, where you've 1-3 employees catering to 10s to 100s of millions of users and pulling in 10s of millions of dollars of revenue annually.
Think Plenty of Fish raking in $10million+/annum at the point it sold to Match.com at ~$600million, staffed only by the founder and 3 customer support agents. Or BuiltWith, quietly raking in $10million/annum staffed only by its founder.
One other characteristic of these are that they can only be started by a software engineer/software engineers. That’s why Winklevoss brothers couldn’t start FB even though they'd the idea arguably b4 Zuckerberg, who was then able to “steal” it from them, build and launch same.
Closer to the lower border area of this quadrant are products that require a higher quotient of non-engineering people in “the manufacturing process” of creating the product itself or in “the delivery process” of extending, selling and supporting it to users.
Think non-user-generated content products such as Netflix, in which human beings ~100% of its product “manufacturing process” but software is used 100% in “the delivery process.”
There are others who have a varying mix, sometimes an almost equal mix, of human beings and software in BOTH their manufacturing and delivery process e.g. IrokoTV.
I estimate IroktoTV, like Netflix, is 100% human in its product manufacturing process and ~50:50 in its human:software ratio for its delivery process, as its Go-To-Market is primarily and largely outbound/sales driven--not inbound/marketing driven, unlike Netflix.
MARKET ATTRIBUTES
The market attributes here are exactly the same as I have described in the deep dive tweets for the Death Zone A Quadrant.
The market attributes here are exactly the same as I have described in the deep dive tweets for the Death Zone A Quadrant.
They are products that targeted at large populations of consumers, ideally mass market, including the bottom of the pyramid market. If it includes the bottom of the pyramid market, it will tend to be closer to the left border of this Quadrant D than to its right.
If it excludes the bottom of the pyramid market, i.e. more specifically for the middle-class consumer market, it will tend more toward the right border of Quadrant D on the horizontal gradient of this quadrant.
The ratio of the degree to which it serves the BOP market: Middle Class market is the degree to which it tends toward the left or right of the vertical borders of the Quadrant on the horizontal gradient.
COMPETITION:
Observe that I had indicated that the competition for in the Death Zone Quadrant A is Mimetic
Observe that I had indicated that the competition for in the Death Zone Quadrant A is Mimetic
Competition is the MOST interesting and characteristic thing about this Anything Can Happen Quadrant D as it relates to the African market, which is exactly where it gets its name “Anything Can Happen” from.
Mimetic competition in the Death Zone is very much bonded w/in geographical parameters of Continent, Region, Country or State, largely because the products being sold in the Death Zone usually have a high content of atoms compared to the products being sold in this Quadrant D,...
...which are mostly 100% bits and therefore have no continental, regional and national bounds, except as may be impinged upon by national regulatory requirements, think GDPR in Europe and Chinese Firewall, which has kept the FAMGAN companies largely out of China.
However, such are almost completely absent in Africa. Consequently, founders in this Quadrant D always have to be looking behind their backs at the possibility of being squashed by market entry of The FAMGANs into Africa.
In fundraising, you’d expect the question “What will prevent a FAMGAN from killing you WHEN they enter Africa?” to feature continually. They have more to fear from global competition than from local competition once they attain Initial Scale. Founder's DREAM's an exit to FAMGAN.
It is for this reason that it is not strange therefore that you essentially don’t have any successful social media startup from Africa in this quadrant: they simple have no protection against the “network effects” and “winner takes all” advantage of The FAMGANs in this quadrant.
Consequently, you will tend to see most of the African players in this quadrant very close to the lower border line zone of this Quadrant D and absolutely not one single one of any repute can be found in the upper borderline zone of this quadrant.
Finally, any founder w/ intentions of attacking this market in such a way as to genuinely have a good chance at succeeding, IMHHO, has no business being an AFRICAN startup. Go and STAY in Silicon Valley, hire their engineers there, think global from Day 1 + deny your Africaness!
This here is the clean blog version of all that I have threaded so far in above foregoing tweets.
TL;DR
DEEPLY understand customer needs & build products that solve the MOST painful of those needs for the LARGEST market segment in a Quadrant that MOST allows the MOST +ve unit economics attainable in a SCALABLE manner HARD for others to copy.
No more, no less! HCF+LCM!
QED😎
DEEPLY understand customer needs & build products that solve the MOST painful of those needs for the LARGEST market segment in a Quadrant that MOST allows the MOST +ve unit economics attainable in a SCALABLE manner HARD for others to copy.
No more, no less! HCF+LCM!
QED😎
I’m tacking this thread👇🏻 to the foregoing to make it look like the single stream of thought that it is.
