Dear Fahim Saleh (CEO Gokada),
I’m writing this piece to you so you’d know I care about your brand and I have decided to openly share strategies I feel will help Gokada scale.
I must first say that I am impressed that you had to quickly shut down Gokada because of different reasons, and it was a very wise move. Some of the reasons I think which were not all stated are;
- The regulatory policy
- Technical issues.
I wrote a post a few weeks ago about how it is safer for start-ups to swim in blue oceans and not red oceans because red oceans are bloody. Yes, in the red ocean, it is a battle of money, and who can endure pains for long and who has the better strategy.
Quick analysis – Bigi Cola penetrated the beverage industry through price and is planning to match even with Coca-Cola and Pepsi. That’s a risky move like I analyzed. The reason is simple: in trying to defeat a bigger competitor, you don’t play a price war. You’d go bankrupt. Coca-Cola can declare a price war against them by reducing its price. Coca-Cola owns Fanta, Coke Zero and other brands; it will not die for doing price war.
Let me quickly take everyone back to how Microsoft dominated the computer industry owning 99 percent thereabout back in the 90’s. Bill Gates played a game of price and won even though he was charged to court by other companies for taking almost all the customers and giving them crumbs. He played monopoly. I love monopoly.
Now back to the problem on ground, I was quite happy when I heard about the money you raised and I felt, well, Nigeria is having a good turn only to see news about another ride hailing service O’Ride. For some months now, I have been seeing O’Pay all over Facebook, and I didn’t know it even had anything to do with O’Ride. I am not against any startup, but this is my letter to you and what I think.
O’Ride has the money, ten times more than you raised so it’s very impossible to go heads on with them, and I believe they even have more bikes out there. Can we talk about analysing many things, and see if you need to build a blue ocean strategy and come back fortified. Let’s consider some things: I call it the GOKADA STRATEGY.
This strategy was developed by me in less than twenty minutes, although it took a lot of time to finally put it down on paper. So we have a major bully in the market O’Ride and we have Max.ng as well. What are the key things to write down on board as we strategize? Remember, I’m offering this service openly and can go deeper from here.
- Price: I saw on facebook a few minutes before I began writing that you can get a ride for fifty naira with O’Ride. Now, I am not so aware of how much a Gokada ride will cost but I’m sure it will be more expensive. Let’s analyse the psychology of consumers in ride hailing.
The average Nigerian has seen okada as a cheap form of riding and as a “not well to do” person mode of transport. Let me explain further.
We have Uber, Taxify and the normal Lagos Danfo. A person in the middle class will prefer to take Uber for Danfo seeing it gives this sense of class to him. The same with the top class people.
Danfo bus is not an option for some middle class and low class people.
However, when it comes to bike riding, there’s no class attached to it. Both the top class and the low class see bike riding as bike riding, provided the bike is a neat bike.
Why am I taking my time to let you know this Fahim? It’s because the price war cannot work if we try this approach. O’Ride charges fifty Naira or thereabout and Gokada charges more, everyone will go for O’Ride because there’s no way it distinguishes the poor from the rich. The rich man will not say he will go for Gokada because they charge five hundred Naira and O’Ride charges fifty naira. It’s a bike.
The rich will always want to show off that is why besides comfort being a consideration, they will still use Uber because of class. However, riding a bike has no class, so why still spend so much money when I can always get cheaper ones.. If it’s price, we’d lose customers.
- Convenience: Well, here’s something we can focus deeply on. Both ride hailing services offer convenience with their bikes to customers so I am not referring to the customers angle. I am talking about the part of the riders themselves.
Of late, I have seen O’Ride in the streets of Akure where I reside and I also have seen Max.ng. One way or the other, I am yet to understand what Max.ng is doing in Akure, and the business model, seeing that Akure is a city with people who do not see time as a commodity. The road network is always free. Here’s what I mean: Akure is a city with many government workers, less holdup and simple road networks as well as middle class earners. So what business model could Max.ng be operating on seeing an average person in Akure choose a normal bike even if there’s just a ten naira difference between that of Max.ng and a normal bike? They are not in a hurry like Lagos, places are easy to locate, so having a ride hailing service here is off point except the bikes run at the same price as normal bikes. So, what is the business model?
Same way Uber cannot work in some cities like Akure. One way or the other, I feel they ran because of O’Ride. Funny enough, O’Ride is also here and I was surprised to see them everywhere, and people using it.
Now back to convenience, I have not used this ride services before, and I don’t know how it works, but I noticed there is a mobile app. How easy has it been for the riders to use the mobile app. Matter of fact, how convenient is it for them using phones and riding a bike at the same time.
Here’s my point, “if” a mobile app is what is being used, then there is definitely a need for a better strategy for convenience. I saw a bike man this morning with his android phone trying to swipe even as he was riding. What came to my mind was that he was trying to use the mobile app. He was from Max.ng.
- Safety: The riders are well trained, fine. But how safe is using a mobile device while riding. I do not think it is safe. Matter of fact, it is very risky.
I saw a Max.ng rider trying to navigate his phone with his left hand and at the same time ride. Every ride hailing service is defaulting in this so here’s a chance for Gokada to take the lead. There’s a unique selling point here and I will love everyone to read my piece on unique selling point. Firstly, Fahim, you’d need to make sure all your riders are locals and if you want to make technicalities easier, you get bike men that have been in the business in such areas for some time.
Why did I say that?
One of the burdens locals who have spent some years in such a location will ease off is the fact that they will not need to use navigational to get to locations. While that’s just a light issue anyways, Gokada needs to find a way that will help the riders use their mobile devices to navigate without having to be distracted. They could hire a good product development team that will help connect the Google AI navigator with the helmet or whichever way they can come up with.
While they do that and fix it, it becomes a strength and a unique selling point. Once that is fixed, send creatives advertising agencies to create ads on how unsafe riding are without such a feature and why Gokada should be the choice. Dwell on this as a selling point. Safety should be a selling point.
- Brand Addiction: Why do we use Facebook everyday or Instagram and not some other apps? The apps have some things that make them addicted.
So far so good, I haven’t seen any distinction between these bike services except for the fact that they have different colours so it’s difficult to bring up a brand identity, talk less of a brand addiction. Gokada needs a unique selling point and it is very hard to come up with one but very possible.
What unique selling point will do is that it will help in the game of heart vs hype. I wrote a piece on that and I emphasized that heart always wins in the long run. What does a bike do other than ride?
This is where we need to do a detailed study on the customers and this will be very deep. At this point, I will love to be pessimistic that I don’t see the Red ocean a good place for Gokada.
Gokada should create a blue ocean. Creating a blue ocean will help Gokada create a niche for themselves. Should Gokada just be a ride hailing service or ride hailing service for working class or for the street or for those who want safety? It must carve out a niche.
Fahim, I wouldn’t want your strategies to be to combat O’Ride. Work on how you can fix the technicalities. Besides, I don’t want to talk so much on how you can partner with fintech start-ups as Prof Ndubuisi Ekekwe suggested. That will be on another day. I really believe Gokada can come back better.
Cheers to them.