You can only claim to run a business if and when you are serving a steady stream of paying consumers. I unfortunately do not subscribe to vanity metric that would have one count the number of downloads an app got, or some other eyeball measurement, without direct attribution to a sale. Imagine what it would mean for Nakumatt to say a certain branch sees 1.5 million potential customers. Foot traffic counts for naught if they don’t reach in and pull their wallets out. I digress somewhat though.
Many technology businesses, whether web or mobile centered, face the dilemma of which route to take in their quest for the consumer. Some decide to go guns blazing and start their acquisition from scratch and using a combination of good service or product and viral marketing strategies get to see some solid growth in their consumer numbers. Others decide to stand on the shoulders of giants to jump-start their businesses which works well until it is decided they look much better on the ground, at the giants feet – squashed.
The question to create or leverage is best answered by the entrepreneur himself who knows how fast he can adapt within either situation. Industry giants may let smaller companies on for a ride if but to have a market opened up, educated and tested without any spend of the research and development budget. An international example that you may identify with is that of gaming company Zynga, that was afew years back a prized possession in the Facebook partnership book, but now a mix of competition and Facebook opening up more and locking in payments, that spot is no longer reserved. Zynga seeing the writing on the wall went head to build out a platform that could exist independently of Facebook despite the traction and access to market provided by the massive social network.
Locally I can draw a parallel with the crown jewel of East Africa based on latest financial reports – Safaricom and the many technology companies that have built a business on Mpesa, creating tools for SME’s and larger companies alike to better collect revenue with value adds such as business analytics. The new Mpesa platform will probably have some of this if not more functionality, and will readily snuff out competition.
The options available to the entrepreneur are to use capital accrued from the partnership to build out an independent ecosystem, prime themselves for a buyout or pivot out into some underlying business that would make use of the data – both consumer and transactional that they have interacted with. Some situations will make available only the last two options.
The choice is never clear cut but it pays to give it deep thought and integrate into strategy whatever path you choose.