Tooling technology for SME’s

Small and Medium sized enterprises the world over are backbone of the economy yet many times have the odds stacked against them on many fronts. Big enterprises often have a technology arsenal at their disposal whether playing in agriculture, manufacturing and even services. In this arsenal you will find Enterprise Resource Planning platforms, Customer Relationship Management portals among others, unique to the industry. The total cost of ownership has been very prohibitive in the past with vendors such as Oracle, Sales Force and SAP creaming the market on deployment and annual license fees. Continue reading Tooling technology for SME’s

A primer to mobile value added services in Kenya

An addressable market of over 30 million is sure to attract the attention of many entrepreneurs, and indeed it has. The mobile value added service industry in Kenya generates billions in gross revenue annually, making bank for mobile operators, licensed providers and third parties who leverage connectivity infrastructure offered by the providers.

The nature of the business model is revenue share, meaning on any given transaction revenues are split either two or three ways with a bulk of the revenue for many services going the operator’s way based on the cascading volume model adopted.   Continue reading A primer to mobile value added services in Kenya

The mobile ecosystem gravy train

Without a doubt the most awaited corporate report this month was that of local mobile operator Safaricom, and the results did not disappoint and pointed to the evolving and cash rich ecosystem that is mobile.The factors that lead and will continue to lead bottom-line growth for those invested in one way or another in mobile are in plain sight for the discerning. Continue reading The mobile ecosystem gravy train

The changing dynamics of the conversation economy

Conversation powers everything, from business, government, wars and everything in-between.  It would therefore suffice to say that he who controls the tools of communication or leverages them well will find both power and fortune.  Telecommunication companies have been in the sweet spot as far back as markets will remember, more so after the switch to mobile. That enviable position has over the last few weeks seen a growing number of well-heeled messaging suitors, flush with cash – from their own innovative monetizing strategies or high value buyouts shaking the cash cow foundations. WhatsApp’s  $ 19 billion buyout, Telegrams benefit from the visibility, Rakuten’s  $ 900 million spend on Viber, Line from Asia with a + $200 million annual revenue rake. Mxit’s continued growth among many other services taking a swipe at the telco billions. Continue reading The changing dynamics of the conversation economy

4 key factors will determine Kenya’s transit wars: the billion shilling opportunity

Heavy investments in infrastructure – road and rail, in line with Kenya’s Vision 2030 point to the opportunity present; directly in the building of the physical and indirectly through the numerous other dependent ecosystems. Google in a partnership with Equity Bank on the Beba Pay service, Safaricom with their yet to be named in-house service – having registered over 1,300 matatus and taxi’s , VISA, Mastercard and most recently Uber – “a venture-funded startup and transportation network company based in San Francisco” have identified the lowest hanging fruit as the transit consumer and with good reason.

A mix of environmental and market issues make for a juicy proposition. Governors are busy raising parking fees, making sojourns into any city or town center more prohibitive costwise,  traditional taxi ranks are being converted to more profitable parking slots and the “cabbies” relegated to the central business district peripheries, consumers are opting to live further and further away from business centers driven by cheaper housing options,  the adoption of mobile money with numbers pegged at two thirds of Kenya’s adult population and most importantly the move by government , through the National Transport Authority to shift to a cashless public transport system with an ambitious  July 1 2014 switch over.

There are 4 factors in my option that will determine who wins this game.

The Economic Survey 2013 values Kenya’s road passenger transport business, which is dominated by matatus, buses, motorcycles (boda bodas) and three-wheelers popularly known as tuk tuks, at Sh205 billion.This means that providers of electronic payment systems, stand to potentially earn upwards of Sh 2 billion annually assuming a transaction processing fee of 1% for payments. – Business Daily

I would personally peg it at between 2.5 and 3.5% :-) based on an opportunity I am currently pursuing.

Focus

The potential in the transport segment is enormous and it requires singular focus from any entity choosing to dive in. For deeper insights into why focus is important and why current linkages for emerging players makes sense, here is an interesting read – Uber Might Be More Valuable Than Facebook Someday

Autonomy

Singular focus bundled with autonomy will allow the market leader to build a platform that plays well with everyone creating a symbiotic ecosystem. Any innovation that then happens outside it will therefore still be beneficial and of positive impact to the bottom-line. This may mean that certain players will have to spin off their services as independent entities, but maintaining the roots that will offer competitive advantage.

Service experience

We saw the impact of service differentiation in the pre and post “Michuki Rules”, where customers would pay a premium for a better service experience, which then was well mannered touts, clean vehicles, comfortable seating.  On this leg, innovation on the service experience will be key and I foresee bundled offerings to suit varied client tastes and expectations plus wider fulfillment channels and not just chasing after the promise of NFC – Near Frequency Communication. We will also see service level agreements become a key differentiator.

Some numbers to chew on

Leaked: Uber's Internal Revenue and Ride Request Numbers
Allegedly Leaked: Uber’s Internal Revenue and Ride Request Numbers – via ValleyWag

Business Model

Will one bill based on distance or time?  What of traffic – that will need one to cover longer distances to arrive on time or cause trips to take more time than “logically” justifiable? Are service bundles that allow for a seamless consumer experience possible? My take is that we will see adaptive business models that cover different use cases and service experiences.

From the regulatory perspective, it will be essential for the Government to follow up this directive (the move to cashless public transport) with adequate legislation that will underpin what is for all intents and purposes a very significant shift in the approach to revenue collection and accountability for public transport services in Kenya - Mr Nzioka Waita,Director, Corporate Affairs Safaricom

Clearly the tech fades into the background when looked at in this light, but it forms the backbone any new service that seeks to change the face of people transport. This will be a most interesting ride.