Break away from a friendly giant to build own network
You can only claim to run a business when you are serving a steady stream of paying consumers. I, unfortunately, do not subscribe to vanity metrics that would have one count the number of downloads an app got, or some other eyeball measurement, without direct attribution to a sale.
Imagine what it would mean for Nakumatt to say a certain branch sees 1.5 million potential customers. Foot traffic counts for naught if the people don’t reach in and pull their wallet.
Many technology businesses, whether web or mobile-centred, face the dilemma of what route to take in their quest for consumers.
Some decide to go guns blazing and start their acquisition from scratch, and, using a combination of good services or products and viral marketing strategies, get to see some solid growth in their consumer numbers.
Others decide to stand on the shoulders of giants to jumpstart their businesses — which works well until they decide they look much better on the ground, on their own feet.
Adapting fast
The question on whether to create your own network or leverage an existing one is best answered by the entrepreneur — who knows how fast he can adapt within either situation.
Industry giants may let smaller companies on for a ride to have a market opened up, educated and tested without them spending on research and development.
For example, gaming company Zynga, which was a few years back a prized possession in the Facebook partnership book, went ahead to build a platform that could exist independently of Facebook despite the traction and access to market provided by the massive social network.
Locally, I can draw a parallels with the crown jewel of East Africa based on latest financial reports, Safaricom, and the many technology companies that have built a business on M-Pesa, creating tools for SMEs and larger companies alike to better collect revenue with value-adds such as business analytics.
The new M-Pesa platform will probably have some of this if not more functionality, and will readily snuff out competition.
The options available to the entrepreneurs are to use capital accrued from the partnership to build out an independent ecosystem, prime themselves for a buyout or pivot out into some underlying business that would make use of the data — both consumer and transactional — that they have interacted with.
Some situations will make available only the last two options. The choice is never clear-cut but it pays to give it deep thought and integrate whatever path you choose into strategy.
Mr Njihia is CEO of Symbiotic | Twitter - @mbuguanjihia
