“Today, across my network of companies, I directly and indirectly employ around 200 people. 90% under 27. 150 or so in Lagos but hope by 2015 that number reaches at LEAST 1,000.”
May 7, 2013.
“Today I had to
fire retire 13 people.”
October 13, 2013.
What happened in the time between the 2 posts?
“How will this generate income?”
“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.
Lets assume that I have just been given a state-wide license by the NCC to provide state-wide blanket WiFi access, but the problem is this, I need a game changing business model, I am not just into this for the ROI, I am also into this for the rippling effect it would have on the public.
So I have this sudden brain wave, why don’t I provide access to my WiFi network for free to anyone who wants to and generate income from advertising? Sounds crazy? Let me explain, Anyone with a WiFi enabled device would be given a user name and password for free. You fire up your browser and you are presented with an access page where you enter the user name and password given to you, and you can then browse till you drop. So how does the monetization/advertising model come into play here, ok here goes.
You install a browser add-on which will monitor your browsing habits, it already knows your location, age, sex etc. this you would have given before being issued a username and password, it will then present to you unobtrusive relevant, targeted adverts based on your biodata and browsing patterns e.g. you are browsing a sports site and it displays an advert from a sports bar very close to you offering a mouth-watering offer which you can’t refuse.
I feel this will work especially in a place like Nigeria where people like free stuff (e.g. hacked free browsing from TelCo’s), lots of people will use this (a huge source of advertising “eyeballs”) and companies will definitely find this innovate and useful since they would be able to provide highly targeted adverts and get higher returns on advert money spent.
Like the title “utopian”, this might or might not work, but who cares? its utopian and also hypothetical.