When it comes to creating a business that is focused on the customer, few people think to look to Africa for inspiration. But it’s a continent that’s booming and has produced many outstanding entrepreneurs and business leaders such as Mzi Khumalo, Johann Rupert and Sifiso Dabengwa.
Here are three lessons we can learn if we take the time to look at how African startups are building businesses focussed on customer needs; and what drives their customer innovations.
1. Focusing on broad demographics and on the individual
In Africa, problems tend to be supersized. Globally, extreme poverty has been decreasing since 2010. It’s going down everywhere except for Sub-Saharan Africa where according to the World Bank, 413 million people live in extreme poverty – a figure greater than all the other regions of the world combined together.
But at the same time, in many African countries, GDP is rising and creating a boom in middle classes with higher disposable income. Internet penetration is also growing fast. Between 2000 and 2012 internet users grew at seven times the global average. Plus by 2020, it’s estimated that 52% of the population of Africa will have a mobile phone subscription.
Unlike some western startups and even established businesses, many African companies have paid very close attention to the demographics of not just their own country but the whole of Africa. This has meant that when a company is planning anything from a new product to a whole new direction, they have factored in exactly what their future customer looks like.
This is why you see so many smaller businesses such as some fintechs, and agricultural technology businesses, grow incredibly quickly in Africa – much quicker than in the west. They have done their homework and developed carefully targeted products and services that mirror existing and future changing demographics, customer trends and offer solutions that are tailored to individual circumstances.
Farmcrowdy and WeFly Agri are two good examples of businesses that tackle big problems on an individual-customer level. Lack of access to finance and poor infrastructure is a challenge for farmers on a continent with a very high rural population. Farmcrowdy offers a way for individual farmers to access investment through a crowdfunding-style app; and WeFly Agri gives farmers’ access to drones linked to their mobile phone that can monitor huge expanses of land, livestock and crops.
2. Identifying unmet customer needs and going further
Many of the most successful African startups of the last decade have one thing in common – a laser focus on identifying and then fulfilling an unmet customer need, even if the evidence suggests that the solution will not be easy to create.
The challenges that African consumers face are a whole magnitude larger than the kind of problems we see in western countries – and they tend to be hyper-local; varying from one region in a country to the next; from one village or town to the next.
Issues such as water shortages; intermittent access to electricity; poor and remote healthcare facilities and no access to banking are big problems for individual customers but they’ve also proved to be big opportunities for businesses like Safaricom, the parent company of Kenyan social-banking giant, M-Pesa.
Focused on giving access to banking via a mobile app, M-Pesa has evolved to deliver a customer service that keeps customers loyal to the point where it has in excess of 20 million active users per month. But what’s really interesting about M-Pesa is that they have never been satisfied with just providing for a basic unmet need – they’ve pushed themselves to create a great customer experience too.
M-Pesa co-creator, Lesley-Ann Vaughan, says: “We were constantly asking ourselves how we could make M-Pesa a lovable money service experience for our customers. Users remain loyal and love M-Pesa because we created something that matters to them, something that is reliable and easy to use, and ultimately adds true value for customers.”
3. Taking inspiration from hyper-local challenges
When you’re faced with intractable problems such as food insecurity, drought, poor roads and infrastructure, even the visible effects of climate change, it’s easy to imagine that you’d just give up trying to create a business that counteracts some of these issues for customers. But in Africa, entrepreneurs tend to use these huge challenges as inspiration and start by trying to fix things locally.
Everywhere you look, all across Africa, entrepreneurs are taking a local issue and building a successful customer-focused business. Take Lagos, Nigeria-based WeCyclers, founded in 2012 by Bilikiss Adebiyi-Abiola, who was driven to try and tackle the mountains of waste in her rapidly expanding home city. Just 40% of Lagos’ waste was being collected at all, and just 13% of it was being recycled – the rest was lying, rotting in the streets.
The trash was a big challenge but Bilikiss also saw an opportunity to create jobs and income for the city’s poorest inhabitants. Today, the company is so successful that, on current projects Wecyclers will collect 5,000 tons of recyclables by 2020 and serve 500,000 households by 2023. Right now, the business employs more than 200 people, and thanks to partnerships created by WeCyclers, some schools in Nigeria are even accepting empty plastic bottles from parents as payment for tuition.
Customer-centric innovations sometime come from the most unexpected places and it’s worth looking outside our own countries and towards the developing world for fresh ideas and inspiration.