Hello! My name is Ezeani which is Igbo for "King of the Land". Yes, I am Nigerian. No, I'm not a scam artist. Now that we have that out of the way, let me tell you a bit about myself. Through the use of technology, I intend on building products that will add value to my fellow Nigerians/Africans either living the Diaspora or on the continent. During the day I assess risk for one of the world's largest banks, and whenever I'm not burning the midnight oil in the office I am a Wantrepreneur. The goal is to one day soon drop the "want" and graduate to a full fledged Entrepreneur. This blog chronicles my journey... PS: Take it easy on me, I'm not much of a writer.
So my first post on my newly revamped blog is actually a guest post by one of my favourite investors on the continent. Pule Taukobong is one of the few investors who 1.) does what they say 2.) actually invests and not just talk about it. He has been a huge help to myself and many...
Earlier today a buddy sent me a message that started with this:
According to Sim, local fulfilment services have been unable to keep pace with the growing volume of Konga shipments, leading Konga to the conclusion that it must create its own logistics infrastructure, a service called Konga Express.
The above statement led to a regurgitation of conversations we have had over the years. These discussions were about whether or not there truly is a logistics problem in Nigeria as many people and startups in the country will have us believe.
Just in case:
Sim - Sim Shagaya (@simdul) is the CEO and Founder of Konga.
Konga - Konga.com is Nigeria's equivalent of Amazon.com. Konga recently closed a $40 million USD round of financing to further grow its presence in the country.
To be clear, I don't believe there is a logistics problem in Nigeria. Could there be areas of improvement? Of course! But to say that logistics is a serious problem that needs to be solved is overly dramatic. I think we spend to much time looking for formal means of doing things in the country when we all still very much live in an informal environment.
On July 2, 2012 I posted this in a group I'm a part of within Facebook:
I'm thinking out loud here. Mark Essien wrote a post about logistics and came up with a viable way to do it in Nigeria albeit capital intensive. Recently, I have been hearing a lot about logistics & delivery in Nigeria these days and I always wonder why is it an issue? CEO's of startup companies going into e-commerce of physical goods have you asked yourself the following questions?
1) How are the folks in Alaba and Onitsha Markets for example moving their goods? (They dont just have their goods on site, they have other locations as well)
2) Do your consumers really need to have the product delivered to their home? If the product is being sold to them at a much cheaper rate than anywhere else in the country, will they be willing to pick up the goods from a location within 10, 20, or 30 km from their homes?
3) Can the existing road transport network be used? Every town has a major car park easily accessible to people, are there ways to partner with road transport operators?
4) How much is it to use DHL or FedEX? (Have you actually called them to find out? If not, talk to Saheed Taiye Adepoju he has)
5) How are goods generally moved around the country?
Are we quick to rule out the existing infrastructure because they are not sexy enough? Are we putting ourselves out of business before we even start the business?
I dont know much, but it seems to me like we are parting putting the cart before the horse here. You dont have to own the full spectrum of things. Start with your core, which is e-commerce and build a brand leveraging the existing infrastructure in place. It may be messy or unreliable but it works and if you generate enough business you can force your vendors to improve things on their end as you will be a significant source of revenue for them.
People's opinions have not changed much since the post, including mine.
For the past two years I have traveled back and forth to Nigeria from the United States, flew domestic within the country (Nigeria), used the road transport network and finally relocated to the country early this year. What I witnessed over time was that all the major road transport companies such as Agufore Motors, Autostar, Ekene Dili Chukwu, to name a few offer car park to car park delivery of parcels and letters for a fee. A "car park" is basically the location from where the transportation company operates out of. Passengers go to the car park to board the vehicle that will transport them to their intended destination. To add some context, pretty much every major city in the country has a car park. I also found out that most of the domestic airlines transports parcels and letters both formally and informally. (Formally, you go to the airline and ask them to transport the package to the destination Airport. Informally, you ask you buddy to take a package for you on their next trip to a specific destination.)
So what do we have here? Let me illustrate it for you.
Illustration drawn by me, not a 5 year old!!
E-Commerce Company ABC receives an order and makes it available for delivery. A local logistics vendor picks up the package from the ABC Co's warehouse and transports it to the Transportation Co's Car Park or to the Airport.
Transportation Co loads the package in their aircraft or vehicle and transports it to the destination closest to the customer.
Transportation Co drops the package off at their cargo holding area for pick up by the customer or a local logistics vendor who will deliver the package to the customer's residence.
Customer awaits delivery of the package by the local logistics vendor or has the option of going to the Car Park or Airport to pick up his/her package.
So who are these vendors I speak of?
Local Delivery Vendors (Lagos, where most e-commerce companies are based out of):
Trans Nationwide Express aka TRANEX (http://tranex-ng.com)
Quo Courier and Logistics (http://www.quonigeria.com)
360Delivery (http://www.the360delivery.com)
Tranzit Deliveries (http://www.tranzit.ng)
Anyone who operates a Keke
Anyone who operates an Okada
Plus a boatload of companies that offer similar services in Lagos
Keep in mind, some of the companies mentioned offer nationwide delivery but may be cost prohibitive or not as reliable when delivering to certain destinations.
Local Delivery Vendors (rest of Nigeria):
Anyone who operates a Keke
Anyone who operates an Okada
Courier and Logistics Co's that operate in the area
Outside of Lagos, it gets a bit more difficult or should I say expensive to have items delivered to a customers home depending on where the customer resides. If the customer resides within a 5 kilometer radius from the Car Park/Airport it's not so bad, but the further out you go the customer should assume they will be pay a premium for it. It is for this reason that I am all for having pick up points. The customer can go to the Car Park or the Airport and pick up their delivery. I know I would.
I'll digress a bit and tell you a story. A couple of months ago I went to Onitsha and bought a 50" LCD television that I wanted to use at our family hotel. After purchasing the television I hit a snag. It could not fit in the vehicle I came with. No matter how hard we tried, that bad boy was not going to enter the car. While I was standing there sweating bullets and scratching my head, one dodgy looking chap came up to me and said I should put the TV on an Okada and the Okada rider will deliver it to the hotel for me. I scoffed at the thought and asked for someone with a pickup truck. When the pickup truck arrived, the driver basically told me that I should pay him an arm plus two legs. I guess he looked me up and down and thought he found his cash cow for the day. To my disappointment, no amount of haggling with the guy worked. So I called for the Okada, who charged me 2,000 NGN (two thousand naira) to deliver the television. By then there was a crowd and everyone including the person I bought the television from was assuring me that nothing will happen to the television and it will arrive in tact. Eventually I gave in and the television was placed on the Okada and off they went.
Long story short, I got back to the hotel and 30 minutes later the Okada and the television arrived as promised.
We all know the transportation companies and airlines we have so there is no need for me to go into further detail about them.
The key here is pricing. I find it hard to believe that after acquiring the assets necessary to operate your own fulfillment service your prices will be cheaper than the existing players in the space. Unless you plan on subsidizing the costs and using the service as a loss leader. In that case, by all means go right ahead.
"Loss Leader"
a pricing strategy where a product is sold at a price below its market cost[2] to stimulate other sales of more profitable goods or services. - Wikipedia
In the case of Konga, they believe they are outgrowing their current vendors at a fast pace, which requires them to go into the logistics space. I will like to know who those vendors are. Did their biz dev guys hit the streets and try to negotiate deals with the folks who are already directly or indirectly in the space? Did they talk to the union of Keke operators? How about the union of Okada operators? I don't believe they did.
Hey, maybe someone will make life easier for these e-commerce companies and build a "logistics" company on top of the existing network. A logistics broker, if you will. No huge capital outlay, just the power of building/sustaining relationships and negotiating. Determine the most popular routes and negotiate rates to come up with the most competitive prices in the market which of course will include your margin.
Where there is room for improvement in the Nigerian logistics game are areas that rely heavily on the use of technology. Everything is still very much paper based and there is very little automation. Scheduling, Tracking Systems, SMS Alerts, etc will be great value adds.
So, does Nigeria have a logistics problem?
Disclaimer: I have NO experience in the logistics space. These are just super high level thoughts I had and decided to post it on the blog. Especially since I haven't posted on the blog for a while now.
I will love to know your thoughts and if you are an expert in the space and live within the region, please provide me/us with some industry insights. Thanks in advance.
Hotels.ng is about two years old now. In the first year, it was just a website - no business built around it. It started off by me purchasing lists of hotels. The entirety of hotels that were available in any known dataset that was available in public or in any government archive was about 1500...
After the first 6 months of furiously building Hotels.ng, things started running on their own. I was no longer an essential part of the process. So I took a 2 week holiday in Germany. That holiday was super-useful in discovering the parts of my process that were not working well...
How has it been building a tech startup in Nigeria? Everyone always on the outside tries to show how their startup is doing awesome and taking over the market and all what not, but that’s not how it is on the inside.
Decoded Lyrics: A Music Lyric Site Dude? Like Really? SMH
Most of the time I have available outside of slaving away for “The Man", is dedicated to Decoded; which I founded late 2012.
Decoded on a foundational level is a music lyric site dedicated to African music.
I’m pretty certain the last statement got some of you chuckling. But before you dismiss me or Decoded, I think it’s only fair for you to continue reading this post for the back story at least. Hopefully this will help you understand why I do what I do, and possibly learn from my mistakes.
Music and Me
There is a certain effect music has on me. Once I get immersed in a song, that’s it, I have no idea what’s going on all around me. That is why most of the companies I have attempted to build were or currently are in the music space.
Image Courtesy of Ken07
Before I get into Decoded, I think it's best that I briefly touch on the other music "startups" (I use the term loosely) I founded over the years.
If there is one thing I hate, it's listening to the radio. Why should I have to listen to the same song 100 plus times a day? This irked me so much I had to do something about it, hence the birth of UrbanCast Radio in 2005.
Simply put, UrbanCast Radio was a Podcast (they were big back then). At the time, there were a couple of decent podcasts I subscribed to, but there wasn’t a single one that did it for me in the Rap, Hip-Hop, R&B, and Reggae space so I decided to start one.
UrbanCast Radio was born out of necessity as well a passion and love for certain genres of music.
When I started UrbanCast Radio I knew I didn’t want to feature the artists or songs that were already on heavy rotation in the airwaves, so I decided that each episode of the podcast would consist of 12 - 13 carefully curated songs performed by independent artists. Selecting the 12 songs out of hundreds that were sent to me on a regular basis was the hard part. The rest wasn't too bad, I was an “On Air Personality” for WJTB Geek Radio in my undergrad years so I could easily host each show, plus I had the technical ability to put together the episodes on my own and submit them to Apple for syndication. I also built a website so folks who didn’t have an iPod could go and download the MP3 version of the podcast. The site was as basic as they come, but it served the purpose. People could go and download the shows, which was the main draw. There was also a chat type box on the page which I should have just called "spam box" since all it did was attract spammers from far and wide.
UrbanCast Radio lasted for a little over a year. It had a fairly decent following (500 or so people) from all over the globe including Japan, but it was being run by just me. Eventually work, school and life took precedence which resulted in its death.
Lessons Learned:
It's extremely hard to build something on your own. Looking back, had there been someone else taking the journey with me who also held me accountable either in the form of a mentor or cofounder, UrbanCast Radio may or may not have flourished (I'm leaning towards may have flourished). One thing is certain, I would have taken it more seriously and not have treated it as a hobby. There is a reason why majority of the most successful startups were built by more than one individual.
Passion is not enough. During the time, I had a full time job and I was pursuing a masters degree so it was fairly easy for me to put activities related to UrbanCast Radio on the back burner. There was never a doubt about how passionate I was about helping to expose new artists to the world and I loved the process of creating each show. However, since it wasn't immediately paying the bills I was all to quick to walk away. There is more to achieving success than being passionate about what it is you are doing.
Keejul
The first time I heard Tuface Idibia's African Queen (sometime in 2006) I fell in love with the song. It had such a profound effect on me, the message was just too powerful and made me proud of all the "African" women in my life (I digress).
By the time I heard the song I had transitioned from buying compact disks to purchasing all my music via iTunes and some *ehem* questionable *ehem* sources. So the first thing I did was to go straight to iTunes to look for the song. I don’t know what I was thinking. Call me naïve, but I was just hoping the song would be in the world's largest digital jukebox (my opinion) and I would be instantly gratified. Nope. No such luck. I tried my best to game iTunes search to see if the song would come up:
"Tuface" (results = fail),
"2Face" (results = failing),
"African Queen" (results = you are still failing)
"2, Face, Africa, Queen" (results = my friend, are you daft? FAIL)
With no luck on the iTunes front, I navigated to Napster, Kazaa, and a number of torrents to search for the song to no avail. I couldn’t believe it. How could it be? SOMETHING HAS TO BE DONE!
Hence the birth of Keejul in '06/'07. To put it simply, Keejul was going to be the African iTunes. A place where Africans in the Diaspora would go to get the music they had no other way of obtaining unless they told someone to purchase the album(s) on their behalf and send via folks who were on their way back from visiting their respective countries.
In an attempt to build out the minimum viable product (MVP), I engaged a firm in India to do the work. That was a disaster. Three firm's later (all based out of India) I had a somewhat functional MVP that I showed some of the big wigs within the Nigerian Music industry at the time. I must have done a good job at pitching to them because in a very short period of time I had acquired the rights to distribute a fairly decent catalog of music from Nigerian and South African record labels. This included pretty much the entire Premiere Music catalogue, a top tier Nigerian record label which some may say is equivalent to Motown Records in its hay day, that was the home to some of the greats such as the late great Osita Osadebe, Onyeka Onwenu among other Nigerian legends.
All in all, things were looking good. In the excitement of what is was to come, I started laying the foundation to a version of Keejul that would allow folks residing in Africa to purchase the music of international musicians at an "affordable" price. This started with me meeting with an executive at Sony Music and leaving with a contract giving Keejul a la carte access to the entire Sony Music catalogue of music. Thought that was awesome? Here's the kicker, the cost of a FULL ALBUM was going to be $3.50 USD MAX, exclusive (at the time) to Keejul. Imagine being able to buy a Celine Dion album for just $3.50? You couldn’t tell me nothing! I was On Top Of The World like D'Banj. Then I received the technical specs from Sony and how much it would cost me to integrate Keejul with their systems. I was immediately humbled sha. Who cared? I know I didn’t. Full steam ahead!
Building Keejul was no small feat. It was going to be a robust platform that was mobile ready. But I had issue after issue with the developers I was working with. It was around this time I started going grey. It got to the point I was like fudge this, I'm going to launch with what I have. What happened? Users couldn’t even successfully complete the registration process. Defeated I immediately took the site down and went back to the drawing board.
Keejul never took flight. All I had to show for it was wiped out life savings and 50lbs of weight gained from eating comfort food. Oh, and grey hair!
Lessons Learned:
It's EXTREMELY hard to build something on your own. Yeah, I know. Clearly I had not learned from my UrbanCast Radio days.
If you are a not so technical founder (like me), go out there and earn yourself one! Someone who could at least build out the first iteration of the product. The benefits of this are clear.
If you are going to outsource development be ready to basically build your product by mocking it up in its entirety prior to sending it to the folks to build. Don’t expect to get anything more out of them than you have already provided. Heck you have to jump through hoops sometimes just to get what you agreed upon in the first place. In short, you pretty much have to write lines of pseudo code. In the absence of this, you will not get what you are looking for. It doesn’t matter the number of assurances you receive. Take it from me, on a number of occasions I have wanted to choke folks through the computer screen. Don’t say I didn’t warn you.
Don’t try to do to much all at once. I tried to pretty much build a huge platform with a lot of bells and whistles when all I could have done was have something built that simply allowed folks to purchase and download the music of their choice. As time goes on and your product starts to see traction then you can start to build in new features based on your users needs as well as their interaction with your product. The key is to be laser focused on the things that made you want to build the product in the first place. Everything else is just noise.
Decoded
Back to the matter: Decoded
After Keejul, I decided to take a step back, give the CPA (Certified Public Accountant) exams the attention it needed and focus on my career. I knew I would still come back to do something in the music space but I was not sure in what capacity.
Over the years, digital sales took a huge hit due to illegal downloads. Alternative models of distributing music digitally, on the international front, have come up like Deezer and Spotify which requires you to subscribe for a completely ad free experience and an a la carte access to a huge catalogue of music. Locally (Nigeria), people pretty much did not buy music instead they would turn to the blogosphere or YouTube to get their fix. You also had the likes of Iroking, Spinlet, Gbedu.FM, and to some extent NotJustOk and TruSpot in the market vying to achieve the seemingly unachievable which is getting folks to BUY the music in digital format. With this in mind, it was clear to me, that if I was to add value to the ecosystem I will have to provide a seemingly free service to the fans while in turn being of added value to the musicians.
Late last year I happened to read about a company that turned the music lyric space on its head and made it cool again. That company is Rap Genius. As I navigated through the site I was amazed by what I saw. People actively interacting with and having conversations about the music, as in, taking the time to decipher verse by verse what an artist is really trying to communicate to his/her audience. When I say people, I don't mean a small group of people, I mean millions of people. #insane #mindblown
This inspired me. I listen to and I am a fan of a lot of music coming out of the motherland. Many of the songs I listen to, I have no clue what the artist is saying because it's in a language that is foreign to me, take for example my favorite song of 2013: KHONA by Mafikizolo featuring Uhuru.
From my RapGenius experience I realized that I may have stumbled upon the FOUNDATION of a platform that was free for fans to experience but still added much needed value to the artists, regardless of whether they are mainstream or an independent musician just getting their feet wet within the industry.
A place where anyone can go and view the lyrics to their favorite song of the moment in its original language as well as the translation in other languages such as English and French.
A place where fans and artists can interact with the music online in a manner normally reserved for more intimate offline settings.
A place where fans can come and discover some of the most amazing talent the world has ever seen.
A place known as ...... DECODED.
They say the third time's a charm
A Startup's Marketing and Community Plan According to Doug Crets via Twitter
Earlier today, Doug Crets had a "hashtag" chat with the folks over at Bizspark about a startup's marketing and community building plan and its importance to an Angel Investor.
I asked a couple of questions, and still have more questions as a result of the chat. But I decided to embed it in a blog post because I figured some of you may find the information as beneficial as I have. Plus it gave me the opportunity to test out Twitter's new "Custom Timeline" feature.
The tweets are ascending so you will have to scroll to the bottom and load more tweets till you get to the beginning of the conversation. I think you just have to click "Load More" twice, but this may vary.
Every new year, most people have a new year resolution of going to the gym more. I am no different. Like most people, I decided to act on this resolution in the summer. To track my gym time, I used foursquare checkins.
Foursquare has badges that reward certain achievements. Since I…
This is a good post. African startups, can learn a thing or two from this. I can see easy appetite (http://easyappetite.com), Hotels (http://hotels.ng), and Drinks (http://drinks.ng) to name a few benefitting from properly executing a flavor of this.
Let’s take Drinks for example. Their community builder, spots a tweet about a random person celebrating their birthday in Lagos. Drinks, sends the person a tweet wishing them well and then asks the person to follow them for a “gift”. Information is exchanged and a couple of days later, the person receives a bottle of “Riverstone” with a card that reads “Happy Birthday, from your friends at Drinks.ng!”
What do you think will be the consumers reaction? How will this benefit Drinks?
I will like to get your thoughts on this.
FYI, we are assuming the “random person” consumes alcohol.
If you are Nigerian or have Nigerian friends you probably know that we (Nigerians) consider ourselves to be "Pundits" in various areas of interest, mainly Politics, Football aka Soccer, and Business. For those of you that don't know what a Pundit is, according to Wikipedia, a Pundit is someone who offers to mass media, his/her opinion or commentary on a particular subject area on which they are knowledgeable (or can at least appear to be knowledgeable), or considered a scholar in a said area. Personally, many Pundits, especially those on the FOX Network do a better job at appearing to be knowledgable than actually being the same but thats a story for another day and not the point of this blog post.
As I was saying, Nigerians are naturally Pundits, I'm yet to meet one who is not "knowledgable" and/or passionate about one area of interest or the other. For me, my areas of interest include, business & technology and it's intersection from a Nigerian/African perspective, along with Apple, Inc, among other not so important things. In my family, the areas of interest are Politics, Nigeria (holistically), NBA, NFL, and occasionally Religion. Only problem is, I wouldn't consider myself a Pundit in any of those areas so I tend to be the not so loud one in the room. Naturally, the inner Pundit in me is constantly looking for opportunities to shine so I decided to write my opinions in the form of blog posts. This brought about the birth of the "If I Were The CEO" series. Every once in a while, I will put myself in the shoes of CEO's of African Tech Startups and attempt to articulate what I would or would not do differently to grow the said company. This is more of a mental exercise for me than anything else, as it forces me to research, analyze and draw conclusions. All of which, will hopefully help me with my current startup Decoded Lyrics (I'll be writing more about Decoded over time in different blog posts).
Note: This blog post is coming from a self proclaimed "Wannapreneur", take it for what you will.
The inaugural company in this series will be IrokoTV (http://www.irokotv.com). I love the IrokoTV story and I for one have been a "closet" advocate of the company for what it has done to help boost Nollywood and Nigeria as a whole.
Recently I read a post on Jason Njoku's (founder of IrokoTV) blog (http://www.jason.com.ng) about following their users offline which resulted in IrokoTV going into the DVD distribution business. This was my reaction:
Jason has a "Fuck Global. Go local." mindset. No problem, Nigeria has over 165 Million and Africa as a whole has over one Billion people so it makes sense. Or does it? Physical distribution of movies is no easy feat in Africa and requires a significant capital outlay just to get started. The "Pirates" have it on lock. AfricaMagic is the HBO/Showtime/Cinemax of Nollywood movies and then you have the Idumota and Iweka massive. Why Why Why? Well in Jason's words:
"There are 170Mn in Nigeria of which there are easily 50Mn Nollywood movie fans in Nigeria alone. Africa represents >200Mn addressable audience according to some statistics. Approximately 94% of Nollywood’s $500Mn yearly revenues comes from vcd sales. So we followed our customers offline into the world of VCD’s and DVD’s. The little experiment will be big experiment by the months end with almost 1,000 stores across JoBurg, Soweto, Lagos and London carrying our beautifully packaged DVD point of sales displays and DVD’s inventory. I expect this to be a million-dollar a year business by 2014."
If I were the CEO of IrokoTV, I will not be making a DVD distribution play. Instead, I will focus all my efforts on completely OWNING the Diaspora aka Global Market and secondly, building the foundation for owning the African Market in the next 5 years or so as broadband Internet access becomes more ubiquitous and affordable for the blue collar Nigerian.
IrokoTV vs. Globalisation
A couple of weeks ago, the family had brunch at my brother's place. Our family (30 plus people across over 8 households) brunches are well known in these parts and occur damn near every Sunday. I'm usually the late one, so once I arrived I was greeted with, "… ehen, did you bring any movies with you?" The movies that are being referred to are Nollywood movies. You see, our family consumes Nollywood movies like no man's business. To be fairly conservative, at least $30 is spent on a weekly basis at the local Nollywood distributor by my Mother alone, talk less of my Aunts and Uncles. That about $120 a month, IrokoTV is $5 a month. Do the math. By the way, if you think I'm stretching the truth with regard to the amount of money being spent on Nollywood movies here's a break down. One DVD costs $5. The average Nollywood title comes in 4 parts which is usually distributed on 2 DVD's. So in order to complete a Nollywood Title, you have buy 2 DVD's which equals $10. $30 equates to only 3 Nollywood Title's which is not that much for the empty nesters and soon to be empty nesters who don't have much to do after work or have already retired.
Anyway, my answer to the question was "I'll be right back". I jumped back in my car and drove not to the local Nollywood Distributor but to my place and picked up my AppleTV, and my iPad. When I got back to my brother's place, everyone looked at me with confusion. "Where are the movies?", in which I responded "don't worry". In less than 10 minutes, approximately 20 people were watching "Oga On Top" on my brothers large flat screen television. What did I do? I connected my Apple TV to my brother's television and wireless network, then pulled up IrokoTV on my iPad, picked a movie and streamed it to my Apple TV via AirPlay. What followed surprised me, after a couple of minutes of ooooh's and aaaah's, I was inundated with questions. "How did you do that?", "What website is that?", "Can you spell it again?" and the kicker, "WHAT, you only pay $5 a month?" Yes, I am a paying subscriber of IrokoTV.
This is when I realized IrokoTV does not completely own the African Diaspora market.
The only folks that knew about IrokoTV in the living room that day other than me were my younger cousins. Everyone else was completely clueless. Why does this matter? Well, my younger cousins have no problem watching movies on their smartphones or their laptops. They are still students though, so you already know they will not be paying for their viewing experience. To make sure, I verified whether or not they paid for the service and they do not. My parents, aunts and uncles on the other hand will do no such thing. They will much rather sit back on their couch when they get home from work, turn on the television and watch the movies on the big screen while eating dinner and drinking a glass of red wine. For that convenience, they are very much willing to pay "only" $5 for it. Remember, this is in comparison to paying about $30 a week or so for the DVD's. I don't think this is unique to just my family or Nigerian households. I actually meet more folks of Haitian and Jamaican decent at the local Nollywood Distributor than I do Nigerians.
In a recent Financial Times interview, Jason stated that IrokoTV is on track to generating "$5 million in revenue in 2013". He also states that there are about 30 Million Africans in the Diaspora in which "only a subsection will watch Nollywood movies". This tells me that IrokoTV has not captured up to .5 percent of the 30 Million Africans in the Diaspora as paying subscribers. How do I know this? Well, 300,000 people paying $5 monthly equates to $1.5 Million a month which is $18 Million a year. If IrokoTV is on track to making $5 Million this year, they are not at the .5 percent mark when it comes to capturing the African Diaspora Market. Keep in mind, I am looking at paid subscriptions alone, I am not taking into account revenue made from advertising.
What would Ezeani do? (WWED)
As I mentioned earlier in this blog post, there are a couple of things I would do differently if I were in Jason's shoes.
Diaspora
Roku
Remember my story of using my AppleTV in combination with my iPad to watch a Nollywood movie on my brother's television? Well that process, as a Nigerian will say, was "LOOONG" and also quite expensive (AppleTV = $99, iPad with Wifi+3G = $799). The likelihood of folks making that type of investment for "just" the ability to stream Nollywood movies on their televisions is pretty slim. As much as an Apple Fanboy as I am I would not even recommend it.
Enter the Roku. As the hypothetical CEO of IrokoTV, in addition to what is currently being done, I will have my development team build an IrokoTV channel for the Roku streaming media player (http://www.roku.com) as a priority. There is no fee for joining the Roku Developer Program or for publishing a Roku Channel.
The cost of the Roku ranges from $49 to $99 depending on the one you purchase. But once you make the purchase you have access to over 700 channels. Nigeria's NTA included. But developing for the Roku alone is not enough to increase IrokoTV's revenue. Time to hit the streets and put the word out there.
I remember when Western Union sponsored pretty much every Nigerian event I attended while I was teenager. I'm fairly certain, they are enjoying the dividends now. Nigeria's Minister of Information, Mr. Labaran Maku, stated that in 2012 Nigerians in the Diaspora sent close to $22 Billion back to the country. Yeah, Western Union should be doing ok.
Taking a chapter from the Western Union marketing book, I would have the IrokoTV Marketing and Sales folks take on the arduous task of converting folks into "advocates". As studies show that social networks are made up of joiners (83%), sharers (15.4%) and advocates (1.5%). Advocates are the folks that will spread the word and convince almost everyone in their network to purchase the Roku and subscribe to IrokoTV. The team will also be required to attend events, local community meetings, as well as make house calls if need be. Every once in while, I will have a Nollywood star make a "surprise" guest appearance at one of these events to talk about the benefits of IrokoTV.
This will be a completely offline undertaking, online display ads are clearly not cutting it as you can see from the screen shot below.
In addition to what I mentioned above, I will also purchase X number of Roku's which will be used to create IrokoTV "Starter Packages" to promote IrokoTV if you will:
IrokoTV Starter Package A: Free Roku 2 XD plus 1 month free on a 9 month subscription to IrokoTV+
IrokoTV Starter Package B: Free Roku 2 XD plus 2 months free on a 12 month subscription to IrokoTV+
IrokoTV Starter Package C: Free Roku 2 XD plus 3 months free on a 24 month subscription to IrokoTV+
I chose the Roku 2 XD because not only does it work on virtually any television (analog & digital) it also supports 1080P HD video and has built in wireless all for the price of $69. Therefore the Cost To Acquire (CTA) one customer who signed up for the IrokoTV Starter Package C will be $84 ($69 Roku + $15 3 Month Free IrokoTV+ access). Revenue made on the costumer will be reduced to $36 ($120 revenue from 2 year subscription - $84 CTA), which is not much, but that's assuming the lifetime value of the costumer is only $120 (2 years) which is not likely. $5 being deducted from an account every month goes unnoticed most of the time. And this is also assuming there is no discount for purchasing the Roku in bulk. Heck, a good biz dev executive may be able to get the Roku's directly from Roku for free or at cost making an argument to the folks at Roku that this is a means for them to enter a demographic that they normally would not be able to reach. Most importantly, IrokoTV will have earned themselves a bunch of advocates who will serve as "unpaid sales executives" for the company.
Referral Programs
IrokoTV currently offers a 10% discount to folks who signup for 6 months and a 15% discount to folks who signup for a year. I would get rid of the discounts and instead offer users months free for getting users to subscribe to IrokoTV+ a la Hulu+. Remember, we are trying to capture the market so we need create advocates, ambassadors, etc. as well as incentivize our users to bring other users into the fold. Here is an awesome deck on Building an effective referral program.
Social Gifting
We all know a thing or two about gifting. Gifting is a regular part of our lives. Birthdays, Weddings, Graduations, Just Because, what ever the reason, gifting is an integral part of our social lives. The web is catching on and giving users the opportunity to "Gift" their services to loved ones, friends, concubines, etc. As I was doing some research for this blog post, I learned Hulu now allows you to gift subscriptions. Genius!
Taking from another chapter of Hulu's marketing book, I will also look into giving users the ability to gift IrokoTV+ subscriptions to others. I know my Mother will love me more for the length of the IrokoTV+ subscription. It's also a fairly low cost gift at $159 ($99 Roku 3 + $60 IrokoTV+ one year subscription). Whenever my Mom turns on the Roku and starts to watch a Nollywood movie, she will remember which son bought it for her. I reckon she may call me every night just to say "Dalu Nna M" (Thank You My Son). Absolutely Priceless.
In the process of me gifting a one year subscription to my Mother, IrokoTV has earned a new user who most likely after one year of enjoyment will not hesitate to continue the subscription.
As an aside, social gifting via the web is not going away, and I recommend any consumer facing startup to find ways to build it into their product. The benefits are pretty self explanatory. Facebook has even joined in on the action after their acquisition of Karma a few years ago.
Note: In 2007, I and 2 other co-founders worked on a startup up that was to offer social gifting on top of Facebook. The venture failed, but what I see today validates what we were trying to do. Maybe we were ahead of our time? I'm kidding, the start up was an accident waiting to happen. Maybe one of these day's I'll share the experience and lessons learned.
Go Local
Early on in this stupidly long blog post I mentioned that as the CEO of IrokoTV I will make some infrastructural investments to lay the foundation in anticipation for the broadband internet boom in Africa which is on the horizon. Here are my thoughts on that, I'll keep it brief. Just something to think about.
By the way, if you are still reading at this point. Thank You! My sincerest apologies for the torture you have been put through.
Data Centers
In order to reduce load times and improve buffering speeds, I will look into investing in a small to mid size data center that will be located in Lagos or somewhere in Nigeria. This will not be a cheap undertaking but I think the super technical folks reading this will agree the benefits out weigh the costs. By having a local datacenter with the sole responsibility of hosting IrokoTV content you are improving the time a movie loads from when the user presses the play button. Right now, a lot of African startups host their content in California, Texas, New York, London etc. This comes at a price of slower load times. There are companies out there like Rackspace that offer packages powered by the Akamai Content Delivery Network (CDN) which helps speed up page loads. CDN's store content at various locations across the globe, so when a user visits a site the content is pulled from the server that is geographically closer to the user which in essence reduces the time to load the site. IrokoTV currently uses the Akamai global CDN. You can learn more about the Akamai global CDN here.
To leverage the cost of operating the data center, the facility can be shared with other companies that are part of the Iroko Partners Portfolio as well as members of SPARK.
Video Compression
Video compression is probably more important than investing in a Data Center. The smaller you can make a file without degrading its visual and audio quality the better. There are folks out there who's life work evolves around reducing the number of bits and bytes in a media file without compromising the quality of the file. This is important to everyone across the board
User: The smaller a file, the quicker it loads and the less bandwidth it eats off the users monthly allocation. That is the reason why the Opera Mini browser is widely used in emerging markets. The good people at Opera built a browser that "uses up to 90% less data than other web browsers". Unfortunately Opera hasn't done this for Video and Audio, to my knowledge.
IrokoTV: The size of a file is in essence directly proportionate to the cost being paid to the company hosting the files. The larger the files the more being paid in storage fees and the more being paid on bandwidth being used when the files are being streamed and vice versa.
I'm not saying IrokoTV should invest in a R&D facility dedicated to working on media compression. Far from it, instead, I would scour the globe looking for folks who have been able to achieve this however marginal and license the software.
Advertising
I will end this blog post touching on advertising briefly.
According to Compete.com, IrokoTV had 236,152 unique visitors in the United States alone in July 2013. This is a decent enough number to get advertisers and not rely heavily on an Ad Network.
Every time I watch a movie on IrokoTV I see ads that are similar to the ads I see when I watch something on YouTube. Where are the demographic specific ads? Western Union, Arik Airlines, Guinness, Heineken, Mercedes Benz, Diamond Bank, Shell, etc.? Heck, where are the Ads from SPARK companies? Hotels.ng and ToLet.com.ng should definitely have Ads in the mix for the folks they are targeting (there has to be an accounting play in there somewhere RE: SPARK Company Ads).
As you know, by relying less on AD Networks and increasing advertising obtained from an internal team, revenue generated from advertising should increase. You can also leverage the AD Network to supplement what ad spots you have not been able to sell.
If IrokoTV doesn't currently have a team dedicated to bringing in advertisers I will put them together and have them hit the streets. Boots on ground baby!
#OKBYE
There you have it. A mental dump on what I would do if I were the CEO of IrokoTV. Easier said than done, but it's a start. Keep in mind, I am basing all of my thoughts off of data found on the web. I don't personally know anyone that works or is affiliated with IrokoTV in any way and I do not have access to any of their data that is not already publicly available. For all I know, the team has assessed everything I mentioned in the post and ruled them out for various reasons based on validated data, a+b testing, SWOT Analysis and whatever tools the Ivy League MBA's on IrokoTV's team leverage (Jason, mentioned the Ivy League MBA's a bunch of times in posts, I'm just too lazy to look for the links. I just want this blog post to end dammit).
As I stated earlier, I'm proud of what Jason has been able to achieve with IrokoTV to date and will like to see IrokoTV grow into a media juggernaut that not only supports Nollywood, and Ghollywood, but other African Nations as well.
I wish Jason and the team all the best.
Cheers!
Update:
Jason tweeted a response to an African Tech Elder Statesman, Victor Asemota about Roku.
@asemota @Ezeani I love ROKU. Between that and my smart tv it beats anything mobile everyday. http://t.co/kqigBJMt8r worth a read.
— JasonNjoku (@JasonNjoku)
August 17, 2013
In summary the folks at Roku in all their wisdom partnered with aka struck a deal with Dish Network to bring the DISHWorld service to the Roku platform. DISHWorld is a new streaming service that primarily focuses on international programming. The partnership gives Dish Network the exclusive rights to distribute foreign programming on the Roku. As a result of this, most foreign channels on the Roku have been kicked off . The only way they are allowed back on is to go through Dish Network. From the tweet above, Jason went to Dish Network in 2012. So far no IrokoTV on the Roku, so you can pretty much draw your conclusions on how that meeting went. I wonder how much Dish Network paid the folks at Roku for the ability to serve as the "Middleman" if you will? You can read more about the partnership here.
Does this update render half my blog post irrelevant? Not really.
I recommended the Roku because of it's price, versatility and ease of use. Perfect for the not so technologically savvy. There are still other options out there:
D-Link MovieNite Plus ($68): An AppleTV look alike that supports apps and channels. Reread everything I noted about the Roku, this time replace Roku with D-Link MovieNight Plus. I was not able to find information on who to develop a channel for the device at the time of this post.
AppleTV ($99): Apple has been long rumored to be opening the AppleTV to developers in a move that will bring apps (channels, games, etc.) to the device. This has not happened yet, so for now it's a waiting game for IrokoTV.
Video Game Consoles ($299 & Up): IrokoTV can develop a channel for the PlayStation, XBox, or NintendoWii, The problem here is, you may end up fighting with the kids for who gets to use the console and for what.
Smart TVs (couple of grand): IrokoTV can develop an app for Smart Televisions which are all the rage now. Samsung seems to own this space at the moment, so developing for Samsung will be the best option. What are the chances of folks buying new television just to watch IrokoTV?
Ok, I agree, it doesn't look to good now. But wait there is one more, this is where innovation comes in and the tech of tech startup comes out to shine:
XBMC: XBMC is a free and open source media player and entertainment hub that can be installed on pretty much any device. Users are able to play videos, music, and other forms of digital media from local and network storage devices as well as the internet. IrokoTV can develop an Add On channel for XBMC and do one of two things. Either, chose an existing streaming media device that runs a flavor of XBMC such as the XIOSMedia Player and costs $99. Or work an OEM streaming media device manufacturer and build an IrokoTV branded set top box. Imagine an irokoTV branded streaming media device! That takes care of your Global and Local market in one swing.
The point of the Roku recommendation is to get people to think outside of the box in a sense and consider the alternative to what is existing now.
The cheapest option of them all is to create a "How To Get IrokoTV On Your Big Screen" page on the IrokoTV website. On this page, how to guides will be posted for the different ways to get IrokoTV off the desktop or mobile device and in to the living room. IrokoTV can start off with the most common devices people own as well as list devices people can purchase if need be with links to where the purchases can be made online.
There you have it, some additional options I would consider if I were the CEO of IrokoTV. The rest of the blog post still stands.
Running (or looking to run) a consumer web Startup with a presence in Africa? Just make sure your product runs flawlessly on this device!
At first glance it's easy to confuse the phone in the image with the Blackberry Bold. In short, the age old adage of "looks can be deceiving" is quite apt when it comes to this device. The phone looks pretty good, it's physically solid, and has a FM radio. That's all I can say about the phone that is positive. As much as this phone looks like a Smart Phone it's a far cry from one. The phone doesn't even have a wireless chip for Pete's sake. Words cannot describe how much I dislike this device. I digress. That's not the point of this post. If you haven't figured it out by now, the device in question is the Nokia X2.
In my recent trip to Nigeria, I spent a month shuttling between Lagos, Enugu and my home town in Anambra State. I travel to Nigeria regularly so I will not be expressing my "shock" at how ubiquitous the mobile phone has become. Instead I will like to point out that most of the folks I interacted with had the Nokia X2 in their possession. This was the first time I came in contact with the device, so I took my Cousin's and started playing around with it. Let's just say it was a very painful experience. Why would anyone be using this device? I decided to ask questions and do research.
I quickly learned that the phone's popularity in Nigeria had more to do with perception than with the phone's capabilities. The phone is relatively cheap, it looked like a Blackberry, you can browse the web and you can play digital music on it. SOLD, to the conductor on the right, the day laborer on the left, and the domestic staff in the back of the room. Everything else didn't matter much. I lie, the camera is equally as important but at a whopping 0.3 mega pixels don't expect to be blown away by the quality of the images. In the end, if you don't have Blackberry Bold money, you get its cheap knockoff the Nokia X2.
The Nokia X2 is classified as a "feature rich" or "feature" phone for short. Feature phones are considered low end handsets that lack all the bells and whistles of a smart phone but have far more functionality than the traditional mobile device which is only able to make phone calls and send text messages. For a quick intro into the world of feature phones you can start from Wikipedia (http://en.wikipedia.org/wiki/Feature_phone)
According to the folks at Opera (http://www.opera.com) the Nokia X2 is one of the most popular devices in Africa as of June 2012. Let's take a look at where the phone ranks in Cameroon, DRC, Ghana, Kenya, Nigeria and South Africa.
Cameroon (Republic of Cameroon)
Population: 20.03 Million (as of 2011)
Top 10 handsets
Alcatel OT-606 Chat
LG KS360 Tribe
Samsung SGH-E250
Nokia C3
LG KP500
Nokia N72
Alcatel OT-800
Nokia 2330c
Nokia X2-01
Nokia 2700c
Democratic Republic of the Congo
Population: 67.76 Million (as of 2011)
Top 10 handsets
Nokia C3
Nokia_2700C
Nokia X2-01
Nokia 2330C
Nokia 5130 Xpressmusic
Nokia N72
Nokia 2220
Nokia 2690
Alcatel OT 800_ver1
Nokia C1
Ghana (Republic of Ghana)
Population: 24.97 Million (as of 2011)
Top 10 handsets
Nokia X2-01
Nokia 2700c
Nokia C3
Nokia 2330c
Nokia C1
Nokia N72
Nokia 5130 XpressMusic
SonyEricsson K750i
Alcatel OT-800
SonyEricsson W810i
Kenya (Republic of Kenya)
Population: 41.61 Million (as of 2011)
Top 10 handsets
Nokia X2-01
Nokia 2330c
Nokia C1
Nokia 5130 XpressMusic
Nokia 2700c
Nokia C3
Nokia 2730c
Nokia 2690
Nokia 1680c
Nokia C2
Nigeria (Federal Republic of Nigeria)
Population: 162.5 Million (as of 2011)
Top 10 handsets
Nokia C1
Nokia X2-01
Nokia 2700c
Nokia C3
Nokia 5130 XpressMusic
Nokia C2
Nokia N72
Nokia 2690
Nokia 2330c
Nokia 200
South Africa (Republic of South Africa)
Population: 50.59 Million (as of 2011)
Top 10 handsets
Nokia 5130 XpressMusic
Nokia X2-01
Nokia 2700c
Nokia C3
Nokia 2330c
Samsung SGH E250i
Nokia X2
Nokia C1
Nokia E63
Nokia 2690
From the above you can see that the Nokia X2 ranks in the top 3 handsets for all of the countries with exception to Cameroon where it takes the 9th spot. Personally I consider Opera's State of the Mobile Web reports as the Holy Grail and you should too. In June 2012 alone, more than 200 million people used the Opera Mini and the Opera Mobile browsers. That is a large enough sample set to make Opera an authority on anything that relates to mobile web use, especially in developing nations which accounts for a significant share of Opera's users. For more information on mobile web use in Africa, you can view Opera's State of the Mobile Web, June 2012 report here: http://business.opera.com/smw/2012/06/
On a side note, Nokia owns the African Continent and has for a very long time. But IMHO, the corporation's physical presence on the continent is lacking. Please correct if I'm wrong.
If you truly want to compete in Africa, you need to be accessible to the masses. And at this point in time, the masses all have feature phones. Don't bore me with statements like
"I'm going after the Blackberry demographic"
"I'm going after the iPhone demographic"
"Cheap Android phones are coming"
People using those phones have in their possession the technological capability to now go to web sites that most people in the first world use and love. That being said, unless you plan on competing side by side with behemoths like Facebook, Twitter, Yahoo, or YouTube to name a few, you need to embrace the feature phone and make it your female dog. Don't believe me, ask Vytas Paukstys the co-founder and CEO of Eskimi (http://www.eskimi.com). In a fairly recent discussion I had with him, 90% of their 5,101,127 users in Nigeria alone (as of December 10, 2012) access the site from a feature phone.
Hopefully by now, it is clear to you that you will need to make sure that your product is optimized to work flawlessly on the Nokia X2 or any other feature phone for that matter. The best bet is to get your hands on a couple of these devices and test your product on them as you build.
