The Challenge:
Many African start-ups can relate to the struggle of convincing people that using their solution is more effective than picking up a phone or using pen and paper. The acquisition of customers on any digital solution will quite often come with costs. Educating and sensitising a product within the market, establishing offline customer touch-points and subsidising products in order to attract reluctant adopters has a cost associated. This greatly challenges the expectation that tech start-ups usually design products that can rapidly serve large markets while enjoying economies of scale.
The digital adoption lag in Africa makes it more difficult for start-ups to reduce the cost of serving additional customers as they expand. For African start-ups, growth is often hindered by operational friction and sometimes the ability to fully leverage on the efficiencies of technology is limited.
As someone who is immersed in the tech world, I am often reminded of the realities of the digital divide, this is especially true when interacting with tech solutions for everyday use. For instance, I prefer to use my telco app as opposed to the SIM toolkit when I want to buy airtime and access mobile money services. There are fewer steps required to make a transaction, and I can easily access my contacts when sending money which reduce the chance of user-error before completing a transaction. I remember once attempting to make a payment using my app at a supermarket. I must have run out of bundles because I was unable to initiate any transaction. It took me a while to figure this out and so I struggled with my phone before finally deciding to use the SIM toolkit. The pressure to complete the transaction is usually so high in this kind of situation. I felt even more pressured when some behind me honestly asked:
“Why bother with these apps? I have never understood! They take so much data, every time they want you to download a new one and they eat up storage. Now look these ma-apps are leaving you stranded!”
I could see the rest of the queue almost nodding in agreement and I wasn’t in opposition. Data in Africa is very expensive. In some cases data can account for 18-60% of minimum wages. Overcoming the digital lag is important, but this is very difficult without first tackling the financial burden.
