Scores of ihubs and technology incubators are attended by thousands of young Africans. Foreign businesses and entrepreneurs are running to the “Rising African Tiger” economy. With all this activity one would think that these new ventures are meeting with overwhelming success. The truth is innovation is a risky business. Most novel ideas are never put into prototype and few prototypes make it to market. Of those that do, less than ten percent are profitable. That is just not the case in Africa. It is a worldwide reality.
Not All Innovations in Africa are Successful
Innovators who have been around for a while, understand the risks. They also fathom the profit that can be had by a successful, innovation in Africa.
What are the characteristics of a successful innovation in Africa?
Factors Contributing to Success
There are many factors that contribute to success. The product or service must be something that meets a real need or answers a problem. It must be something the targeted population can afford to buy. Visibility and availability are important. They cannot buy it, if they are not aware of it.
Most people understand those factors and position their innovations accordingly.
There are two other factors that are prime contributors to success of an innovation in Africa. The innovation must be disruptive or contextualized, or both.
For an innovation to be disruptive it must be a product or service that opens up the market to people who were not able to be in that market in the past. It is not about making a good product better, or more technical or useful. It is about opening the door for people who never thought they could own the tool, product or avail themselves to a service. Most often the barrier that kept them out was price.
An example in West Africa is the automotive sales industry. Just about any vehicle sold on the world market can be found in West Africa. Mercedes, Toyota, Range Rover, they have all been there for several decades. The newest models find their way to Lagos, Cotonou, and Accra. Purchasing one of these new vehicles is only within reach of the small upper class and a smattering of the upper-middle class. Up until twenty years ago, there were few vehicles on the road that were not being used for business. Personnel vehicles were a luxury of the few. Then some smart enterprising businessmen started taking trips to Europe and buying up used vehicles, putting them on ships and sold them in West Africa. Now the used vehicle business is booming. The used vehicles are within reach of a large segment of the middle class.
Disruptive innovations reach down to the under-served segment of the population.
It is a mistake, usually, for a company or entrepreneur to bring their European, Asian or American product to Africa and expect it to be as successful and profitable as it was back home. Without adapting it – contextualizing it – it will not reach its true potential in the new African market place.
Even big corporations like Samsung have learned that lesson. Many of the modern cities in Africa experience periodic power outages. Taking this factor into consideration, Samsung has come out with the Duracool Refrigerator line which have ‘cool packs’ allowing them to stay cool when the power is out. The model is a hit on the continent. (read my expanded article Cultural Fit is Important to African Venture)
Article culled from The Africa Mentor by Richard Chowning
If you are considering venturing into the African market place and need some help thinking through the disruptive and contextualization nature of your product or service, we need to talk. Send me an email or Skype me (my Skype ID is : rchowning).