I actually had a long conversation on whatsapp after Jason published that thread because Jason is someone I know. And I can vouch for his integrity anywhere....even Antarctica.
So I reached out to understand exactly what he meant. My interpretation is as follows. #Thread
So I reached out to understand exactly what he meant. My interpretation is as follows. #Thread
https://twitter.com/OoTheNigerian/status/1487454114103627781
1. On Focus
Many of the start ups that have grown exponentially in America would have not done so if targeted solely for the African Market because of the limited amount of disposable income.
Many of the start ups that have grown exponentially in America would have not done so if targeted solely for the African Market because of the limited amount of disposable income.
Therefore I understood the "focus" point to mean that one may have to convince American investors around a strategy of "wide" as well as deep.
For example, bookings.com targets mainly Western markets. And its a site where bookings can be made for hotels.
However, the institutional void that exist in developing or emerging market may require a "wider" strategy.
Take the case of the Indian equivalent of booking.com, Oyo hotels. Oyo is wider than bookings in a whole number of ways.
Take the case of the Indian equivalent of booking.com, Oyo hotels. Oyo is wider than bookings in a whole number of ways.
1. The company invests in capex,hires general managers to oversee operations and customer experience,
2. OYO set up 26 training institutes for hospitality enthusiasts across India in 2019
3. OYO rents co-working spaces out like a mini-we work
4. OYO also has an "owambe" business for rent out wedding halls and events/sports venues.
4. OYO has built some entire hotels themselves and invests in hotels also giving the hotels money for linen, toiletries, pest control & bathroom fittings to their specifications.
5. OYO has even built its own hotels from scratch and invests in most of its hotel partners buying them linen, toiletries, pest control services and bathroom fittings to their specifications.
Bookings is literally just what it says on the tin. A hotel booking site. Nothing else. You click. You book. You pay. The end.
It's common to hear people in start up land say that Americans do A/B testing whilst the Chinese do A/Z testing. Again on focus. It maybe be necessary to develop a wider lens in emerging markets.
For example Pinterest, has become a multi-billion dollar company doing mainly one thing, being a social media company.
Whereas Chinese social media giant Tik Tok is launching a chain of physical restaurants/ghost kitchens.
The holding company model. Again because of the institutional voids it maybe necessary to have multiple profit centres. Toleram the largest producer of noodles in Nigeria is one of the largest logistics companies also.
When they discovered that thw logistics didn't exist to transport their noodles to over 30,000 last mile customers across Nigeria, they started a logistics company. .
This logistics company now serves their own needs, but also the needs of other FMCG's converting what would have been a cost centre into a profit centre
Then finally M&A. This may also have to be an earlier consideration.
Spending investors money on things other than what they gave it to you for can land you in jail. Don't try it!
But working with your investors to outline a data driven approach to creating multiple streams of income within your technology business through M&A, "going wider" or backward/forward integration can be a Catalyst for growth.
Want to understand more about backward/forward integration?
What my video here:
What my video here:
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