Until recently, I had always thought that tech startup life would be rosy. All you had to do was sit in an office, air conditioning blazing, and you would soon be making liquid cash.
If anything, I have learnt that this hustle is largely offline. Especially in the beginning. The formula is simple. Drive brand awareness to capture market mind share online, but have offline business development to drive actual sales.
The interesting things about this model is that you drive the total number of unique customers upwards with a x% increase month over month while you wait for the market to grow and accept your product online. And because the labour is really cheap, you can get away with an offline sales team that earns nothing but sales commissions.
See below my analysis of some of the internet/tech companies in Nigeria and the offline strategies that have helped them win in their respective industries.
In the early stages, these guys spent a shitload of money on the Google Display Network and Facebook to raise awareness and capture market mindshare. But while they were making all the marketing noise, both companies employed an offline sales force to drive actual sales. These guys were paid a basic salary to cover their logistics while they earned their actual salary via commission from sales they brought. This strategy was coupled with the “customer care girls with fine voice” that recommended other products when confirming your order, and drove sales upward tremendously.
Wakanow were much more aggressive offline in the beginning too. They positioned their sales force in virtually all the local and international airport across the country. Their KPIs were very simple, convince travelers to purchase flight tickets from you, and you get paid a commission.
The moment they decided to focus on the Nigerian market, they used the same formula. They were everywhere (Nairaland, Facebook,LindaIkeji) for a while, but then they reduced their online budget to focus on offline business development. If you walk into any cinema in Lagos right now (I don’t know about other states), a sales rep will approach you to sign up on Iroko. Again, it is very simple — the total number of unique customers will increase with a not-so-expensive cost per acquisition.
I decided to categorize all these guys in one field because they all monetize the same way – they sell advertorial real estate on their platforms (Yes Jobberman sells ads). While they have all made intense money from Google Adsense, they are making way more by means of an offline business development team. They all have an army of “fine girls” that visit digital agencies/brands to monetize their traffic, and it has worked/working for them tremendously well.
Easy Taxi/Uber Nigeria
The same approach, especially for Uber. These guys distributed coupon codes for free rides at every tech event I attended last year. No kidding. Even at an event in France, Uber France was there to give free rides. So I am guessing it’s a global strategy for them.
Last, but not least is my startup, Prepclass. Notwithstanding that we are not in the caliber of the above mentioned businesses, we have realized that we need to take this hustle to the street. It’s quite tricky, but if you can build a cheap offline business development army, you can win. Already, we are present in quite a number of churches in Lekki. But that is not enough. We have plans to take over book stores, shopping malls, salons, and schools (this one should be easy since my partner’s mum owns a big school in Isolo and has contacts).
In a way we have always known that we needed to think more offline, but we were just stubborn and unwilling to leave our chilled, air-conditioned, CcHub life. The good thing is we have learnt and are adapting accordingly. After just one month of trying this strategy, we have seen an impressive increase in customers referred via word of mouth. Hopefully we will also win like the companies I have examined above. Till then, the hustle continues.