by Chi Ibe
Last week’s release of Konga’s performance in the second quarter of 2016 by Kinnevik AB – investors in Konga – invited an outbreak of analysis, both about the results themselves, and what it means for the future of e-commerce in Nigeria.
Kinnevik have a 34% stake in Konga, and have been investors since 2012. The debate has been very enlightening, hence this attempt to bring together the best insights below.
- The CEO of Konga doesn’t know how to talk. Therefore, he should stop talking
So the Twitter commentariat – many of whom actually like Konga, much, much, much more than they do, say, iROKO – talks about the facts, the figures, the impact and the trends from a very important report about your business, which shakes the confidence of people. It makes them wonder not just about your business, but also about what it says about the industry, about the market, and about our economy. Many of them are whip smart reporters on the tech space, some have MBAs from top schools, that enable them snort through BS, and then you come with THIS?
He puts up a post, explaining precisely nothing, using all caps to say nothing, refuting everything with all of nothing and then putting a graph that has no context about what it is measuring, precise timelines, and what it’s supposed to tell us. The problem with many of these tech CEOs is that they watch American visionaries and learn the wrong things. There is a reason Jeff Bezos didn’t respond after the New York Times basically murdered Amazon’s workplace culture. It didn’t fall on Bezos to speak. A high level management staff who knows how to understand, understands Internet culture and – more importantly – KNOWS WHAT THEY ARE TALKING ABOUT, changed the narrative, not successfully, but effectively.
What Shola Adekoya did here did Konga no favours.
- By the way, stop lying to us about why you returned to Nigeria
I couldn’t help but see this section, and it annoyed me: “I didn’t come back from the UK only to take up a nice job, neither did I leave my cozy telecom role to join a great startup like Konga”.
Maybe it’s irrelevant to what we are here for, or perhaps not. Because it’s that kind of attitude that keeps people making bad decisions and sending out LinkedIn articles that insult the intelligence of the public. Why do IJGBs who came to find work in Nigeria always insist that they are making a huge sacrifice? No. You. Did. Not. You came back because the pay in this market is fatter, and the cost of living is relatively lower. You can actually buy a house in Lekki without paying for mortgage the rest of your life, on that salary. The weather is better for you. And you are more likely to become a superstar CEO, and maybe have a track to global relevance in your own country with all the opportunities being opened up by venture capital and FDI.
Please stop selling us these lullabies. Get to work making your companies work.
- When you see ‘Population: 180 million, Addressable Market, xxx’: run, INVESTOR, run!
Uncle, look, if it’s investment you want just come and take it. Don’t look at any vanity metrics. Just invest because your instinct says so. The truth is that our economy is nyama nyama. There are 180 million people but they are not a market. More than 70 percent can’t afford to buy anything tangible. The road networks are terrible, there is no broadband (which is an exaggeration of course, but not really), NEPA takes light 75 per cent of the time, the Fourth Mainland bridge hasn’t arrived, the country is so divided we might as well be 8 countries at once.
The only reason to invest is because there is untapped potential and we are a resilient people, but nobody knows the true nature of the potential of consumer behaviour. We are all just experimenting. Join in the game, but open your eyes. Those margins you are looking for will take some more years, and then some more years before they come; before a savvy, connected generation can fulfill the promise of a mobile-first potential. Anyone who tells you that they can do what BOTH Konga and Jumia (who have about 500,000 customers give or take) haven’t done in over 4 years? They don’t know what they are saying. They are not ready to do the work.
- Jason Njoku is the real MVP
Shebi Jason has been telling you people? He said this in October 2015: “Every relatively large consumer internet company I know in Nigeria has had to adjust their team in the last 18 months. Of course it’s not reported. But those in the know, know. It’s okay.” And he was right. Everybody always wants to predict the death of iROKO, and it has been a blood sport for half of a decade. We understand why Jason is boastful. Jason uses too many F words. In a country with so much poverty, he flaunts his champagne and Business Class seats too wantonly. He has a thin skin. But all of that obscures what is most important: on his blog, he shares. He really shares. He tells you how hard it is, how daft even he can get, what exactly he is doing, how exactly he is doing, why exactly he is doing. And sometimes, he allows snippets into his data. In a country with no data, that is gold. And many start up owners should be deeply grateful. Instead they spend time, from their one bed room apartments, wasting their data celebrating a failure that may never come. Now the data from Konga shows what he has always said: this time is hard for all of them. Be grateful that you have a dollar millionaire who is willing to share ANYTHING with you and stop being a twat on Radar.
- ADVERTISING. WILL. NOT. SAVE. YOU
This is not me gloating, because I know that Sim Shagaya will be fine. Is it not the same man that owned Deal Dey and E-motion, and they packed up and investors still gave him money? There is something he knows. So, this is not me gloating. This is me helping you learn lessons: the lessons that we have learnt from Jumia and Konga on e-commerce, from iROKO on content and from Naij on media: pursuing us all over Google and Facebook with adverts will not convert us into customers. If you haven’t sorted out the real issues affecting adoption of your business or of your product, no amount of advertising on ‘customer acquisition’ will help you acquire us as customers. And if we mistakenly come, the lack of inventory will ensure we don’t return. Fix the hard thing about your project. That’s your job. You can’t escape it.
And a bonus number…
6: Stop opening new e-commerce companies, we are using God to beg you
Nigeria has real problems that need real solutions: Traffic, blood banks, food supply, someone just founded a deeply useful start up to help people find scholarships. Why are you wasting your time opening YET ANOTHER e-commerce outfit doing the same thing all the other 750 e-commerce ants dotting the landscape are doing? We have been saying this for a long time, but you people have refused to listen. Nigeria does not need one more e-commerce platform. There are not enough customers to service those that exist. If you don’t have big pockets, you can’t fight this battle. Or at the very least, find a strategy that deeply and clearly differentiates you from everybody else.
We are using God to beg you: we need you guys to succeed. This is not how to do it.