Congratulations on your much deserved win @Startup weekend Lagos. While you bask in the glow of your win, let me hit you with some questions before you get a tan.

1. Data: your app is basically useless without the data of artisans. So how do you intend getting the data of artisans seeded into your app? And please don’t tell me artisans would do the profile creation themselves (I can see you have a form for that) you know why? Most of the artisans who are your target demographic are either illiterate and/or wont be interested in creating a profile on your app without them really seeing what value that adds to them i.e. monetary. And if you want normal users to create and rate profiles of artisans they have used, what would motivate them to do so? Whats in it for them to go through the whole process?[1]

2. Business Model: Although your app is quite innovative at least in our local web space, but I cant for the life of me deduce how you intend making money from this app unless you want to go down the very well beaten path of Google adsense? [2] Provided you can generate enough traffic to cover hosting cost and other sundry costs with that, then I wish you guys luck.

P.S: I would be monitoring your progress over time.  Congrats again sir.

Notes

[1] A very thought-provoking tweebate was the cause of this blog post and the major thing that was debated was how artisans details would be created on findjimoh.com and who would do the creation. Leaving that power to either the artisans or people who use the artisans would be a major fail, because you would be giving them the power to determine how fast your app would grow and how useful it would be to other users. At least in the beginning, do the seeding yourselves.

[2] Regarding your business model, a little bird just whispered into my ear that you intend making money whenever any artisan is recommended. I really don’t know how that would work. But a simple way I feel you can make money is by having a short code that anyone could text a requirement and have the top ranking artisan that matches that query sent back in response.

For their business model, they charge a 1% transaction fee, which is pretty low, but my only grouse is their one-off integration fee of #50,000. To the developers who might be able to afford it, it’s not expensive but to other who might not, its extremely prohibitive. for me, i would advise that the fee be scraped[1] for the following reasons:

1. Barrier of entry: This one-off fee would probably be the number one and major reason why most developers or interested parties wont sign up for their service.  For a new company with no track record, they should make adoption of their service as painless as possible and scraping the sign up fee is one way to do it.

2.Economy of scale: they should focus on getting as many adopters as possible. if they drop the one-off fee and increased their per-transaction fee to 2% or simply dropping the per-transaction model entirely and adopting an overall transaction fee of 2.75% similar to Square’s model, it would still make economic sense because the more adopters they have, the more transactions they would process and they more revenue they would be able to generate via transaction fees.

Right now, I am very excited about eyowo’s  service and would be keenly watching how it goes with them.

Notes

[1] Most starts ups here in Nigeria are probably generating little or no revenue talk less of even being ramen-profitable. So every single penny counts to them. So the very idea of splashing such an amount on integrating a payment gateway might not seem such a wise one. But if it was free??? then adoption rate would shoot through the roof.

Disclaimer: I am in no way involved with eyowo.com.

Why have all the projects launched at Garage48 startup weekend gone under?

What are the tangible effects (apart from social networking) of all the tech meetups that have taken place in recent times?

Why do developers here in Nigeria complain about lack of funding for the failure of their projects to take off?

Why hasn’t any tech startup in Nigeria been able to harness the huge potential market of more than 150million people?

Why is it that up till now, there is really no example of a successful home grown, bootstraped tech startup?

Why are there 24 mobile money operators and 2 major epayment switching companies but no local epayment system for the web that really works?

And last of all, why I am blogging instead of working on my projects?

Google wasnt the first search engine

Twitter wasnt the first microblog

Facebook wasnt the first social network

The ipod wasnt the first personal music player

The iphone wasnt the first phone or first touch screen phone.

What really made these products and services successful is the way they were implemented.

Google had the PAGERANK algorithm

Facebook had the “WALL”,

Twitter had its 140 character limit

THe iphone and ipod had “Steve Jobs” (no, seriously, they had a superbly made hardware combined with even better software which the Japanese portable players popular at the time and other phone makers didn’t have). All they did was to take something and add an innovative twist to its implementation which made it seem “original”.

This means in Nigeria’s tech scene, you can take an already tested idea which would be locally relevant, tweak it to create a breakout product or service and you would come out looking like a tech star. Example:

1. Instead of creating a Twitter clone, why don’t you create a fully mobile “Twitter” which works with sms. You “tweet” by texting a 140 character message to a short code and your followers receive you “tweet” from that short code. Your business model would be sms advertising based. [1]

It doesn’t really take much to be “original” all you have to do is to copy. So please go ahead be a clone.

Notes:

1. Something like this already exists in India called Gupshup and its very huge in India and most importantly its profitable.

1. My Phone or My Wallet: Why cant my mobile phone be turned into my wallet? that would allow me use my mobile phone airtime to buy stuff both on the web or offline i.e. in the real world? In other words, why cant I go to a site xyz.com, select stuff I want to buy, check out and be presented with a payment option where I can enter my mobile phone number and PIN and have the total cost of my purchases deducted from mobile phone airtime? So whenever I load credit on my phone, it would be the same as funding my account without actually having an account. Or why cant I go to a local market buy stuff and send a text containing my phone number, PIN, cost of what I bought and the traders phone number to my mobile money operator and have the trader’s account credited with the cost of what I bought? This idea would require you hobnobbing and doing some serious ass kissing to the major TelCos. Nigeria is going to go cashless, whether you guys like it or not, so the earlier you jump on the train with real innovative solutions the better, because that man called Sanusi “wont back down”.

2. eCommerce for Dummies: Since you guys are untested without a track record and your sector is new, it would make much sense if you make the barrier of entry as low as possible to website owners, eCommerce merchants and other people interested in using your solutions. And please scrap the dumb idea of charging a sign up fee, think solely of transaction volume, i.e. charge a cut on each processed transaction, so the higher the transaction volume, the more revenue rolls in. This business model could be likened to a company that gives out shaving sticks but charges for shaving blades or makes its printers free but sells ink and toners. The bottom line is you getting your foot into the door and taking the whole process from there.

I know you guys came into the market on the premise of doing money transfers and the likes, but there are now 24 of you, would it really hurt if just one of you could really be creative and turn the whole industry on its head by tweaking a little the terms of your license by offering a web payment gateway? Since the “big for nothing, monopoly seeking” companies like INTERSWITCH et al have been caught napping in that aspect? The sector is in dire need of innovation and is the number one reason why Nigeria’s tech industry is still in a comatose state.

P.S: I had an interesting conversation with someone today and he asked me a thought provoking question:

“If you implement something like Paypal here in Nigeria without a CBN license, would they send you a ‘cease and desist’ or would they just arrest everyone involved and throw them into jail?”

So, CBN Guv….what would you do if a train of young unlicensed tech innovators ran head first into this sector? what would you do? what???

1. Property leasing/letting/rental: In a city of more than 9 million people, getting a property for lease or rent in Lagos is like going through the proverbial eye of the needle. It doesn’t just make sense that in the 21st century I still have to go through some semi illiterate middle men called “Estate Agents” with their exploitative charges and fees, before I can get a property to lease or rent. I don’t see the reason why I cant do the whole process of searching, viewing and paying for a property via the web. This sector is hot and needs a startup with excellent implementation to just “nail” it.

2. News and information services: Why I cant get real time, localized news and information via the web or by sms kind of beats me. For example, why do I have to get stuck in traffic on Ikorodu road when FRSC or LASTMA can just send me alerts and advice me on alternative routes to take? Why do I also have to get stuck in between the cross fire of rampaging thugs in Fadeyi area on my way back from work, when security forces like the police can alert me and advice me to steer clear of the area? I surely would not mind paying for a service like this. [1]

3. Web payment gateways: This sector is a no brainer but the players in this sector are either bereft of ideas or have some sort of hidden agenda. There cant be innovation in the sector if developers are not making money from what they are doing. I do not see the reason why we can’t have our own “Nigerian Paypal” since Paypal has refused to come to Nigeria. The only very high barrier to entry of anyone interested in going into this sector is CBN’s bureaucratic bottlenecks and red tape bullshit before you can get licensed. But its hot and ripe for innovation.

Notes

[1]. Disclosure: I am working on something in this space.

To whom it may concern. I, Aito Ehigie Pascal (Pystar) who used to go with the moniker ”Computer Hacker”, now wishes to be addressed as a “Code Writer”. This action was necessitated by the improper user and bastardization of the word “computer hacker” especially by main stream media and the attendant negative impression it makes on the minds of those who don’t really know the true meaning of the word.

All documentation, opensource projects, blog posts, forum comments and code repositories remain valid. Github, web2py and web2py groups, python.org,  stackoverflow.com et.al please take note.

1. Payment gateways: Its so difficult and expensive integrating payment gateways from companies like “Interswitch” into a website[1] and with the16 just licensed mobile money operators, who don’t seem to care about the web but are more concerned about mobile to mobile and mobile to offline, cash transfers. I dont see the industry “blowing up” anytime soon. If its so hard to get your money from customers as a website owner via the web, why would anyone want to develop one? Whenever I go to any of the so called Nigerian “e-commerce” websites, I select stuff I am interested in, click on “checkout” and I am presented with a bank account number where I am to deposit money before I can get my stuff, I am like, jeez!!! whats “e-commerce” about this? How do you expect me to pay in money into the account of an untested company when I could just go to a supermarket or store, select what I want, pay for it and get my goods instantly without any stories? As an analogy, Nigeria’s music scene is so huge today because most people who go into music have this hope that they might just “blow” and make it “big”, because they can see others making big money in the industry. So in the mean time, we better be prepared to seeing little or no innovation and lots of clones of Facebook and a myriad of “SIMPLEMACHINE” forums in Nigeria’s Tech space, just as we have lots of people in the music industry who have no business being there [2].

Notes
[1] In 2004, I did some research and found out that it would cost upwards of #150k to integrate Interswitch web payment gateway into a site. #150K in 2004!!! How many web devs could afford splashing such an amount on just a gateway, minus other day to day running costs? I dont know how much it would cost now, anyway. Dear Interswitch et al, there is more to epayment channels than just ATM’s and POS machines and with the new CBN’s cash withdrawal policy, people, like it or not would be forced to use epayment channels, please “don’t drop the ball”. But if you guys do, which I strongly suspect you will, any of the new mobile money operators should please do to you what Google did to Microsoft in the Web Search Industry.
[2.] Although we have some gems in the Nigerian music scene, like 70% of them there now have no business being near a microphone. Terry G, I am looking at you!

“Can it stay afloat?”

“Is this economically viable?”

These questions and more are what I get tossed at me whenever I pitch a new idea or project. To the average Nigerian startup founder, the most likely answer to such questions would be “Google adwords/adsense”, which is the most popular ad network in the world today. Since a business model based on advertising might not be the best option for some startups, I have listed below some business models that Nigerian startups can adopt.

1. Subscription: This means charging users of your site right from the very beginning. This requires a lot of gumption and courage as most would be users might not be so well disposed to paying for a service that has not yet tried and tested. Also most web users have been spoilt by the FREEMIUM model which is the most popular business model on the web, hence it would be extremely difficult to get those kind of people to pay for what you have to offer. The success of the SUBSCRIPTION model depends on some factors:

(i.) Your Product: Can your product offer enough value to would be user’s to convince them to pay for it?

(ii.) Means of Payment: How easy is it to pay for your service? In a place like Nigeria, where e-commerce and e-payment platforms are either complacent or not interested in offering mobile/web payments, this can be a huge challenge.

2. Incentive Marketing: This business model involves offering discount coupons to users as an incentive to using your website. The income generated from this is shared between you and the merchants/advertisers.

3. Affiliates: This is a variation of the advertising model, and it works by having the website owner advertise goods and services for merchants, thereby providing customers to such merchants and taking a percentage of the sales generated.