Two of the most difficult technology sub-sectors to make money are ecommerce and ride-hailing. They look increasingly easy to start but once you begin, you will realize one thing: accumulating leverageable factors is hard, and attaining efficient marginal cost positioning largely hopeless. So, what great companies do is to use those vehicles as one oasis and quickly activate double plays where they can capture value. Without AWS, Amazon would not be a $1.54 trillion plus business, if it has relied only on ecommerce. 

Ecommerce is hard especially in Africa where marginal cost challenges make it an offline business. Yes, if the cost of logistics still dominates the transaction/distribution cost, making the operations bounded by geography, it is nothing truly online. As I noted years ago in the Harvard Business Review, we have a long way to go before we can fix most of the frictions in the sector. My summary is that ecommerce is a wasteful venture at this time in Africa unless you have free money to be throwing at it before things improve. And do not call it an online business because there is nothing in it that is truly online: serving an extra customer does not end with a click. It costs real money to reach that person in an area with no postal services.

So, the news today is that China’s Didi Chuxing is coming to Cape Town, South Africa to battle Uber and Bolt. As we already know, most local ride-hailing companies in Africa have exited or severely diminished. They have struggled to make money and without unlimited funding treasury, mainly possible in China, Europe and US, most pivoted.

DiDi South Africa is part of the world-leading transportation platform DiDi Chuxing, which offers a full range of app-based transportation services to more than 600 million users across Asia, Latin America & Russia.

DiDi South Africa understands the challenges communities and the transportation industry face with the evolution of urban mobility (rideshare) and as a result is committed to creating the freedom and convenience to go places, open up horizons and give access to new experiences through our platforms.

Our mission is driven by a dedicated team, who understand the operational landscapes of the rideshare industry. DiDi exists to help South Africans move freely and to unlock their potential and that of the cities they live in. 

Ride hailing has limited IP-anchored moat and requires massive scale to trigger the virtuous accelerating returns. If you have options, do not waste time on it, unless you are using it to support a one oasis which you want to remain a category-king (think of Innoson Motors starting one in Nigeria)! But as a pure play business in Africa, it looks dimmed as Uber, Bolt and now Didi converge.

Those companies know what they are doing: I have called it geographical positioning where if Amazon invests $1 billion in India, Wall Street investors add $20 billion market cap for its Indian exposure even though it may not be making money therein. Jumia did the same when it battled Konga as it ramped up expansion in Africa, while losing money, and over time, investors stopped funding Konga, because they felt that Jumia had won! Typically, having access to that truckload of money is not common for most African startups. So, that makes such a playbook challenging: you do not need a business where after raising $400 million, you will still need more money to show results!

I have predicted that by 2030, up to 80% of richest Nigerians would come from one core sector. You can extrapolate that to continental Africa. We have entered the app utility  era in Africa, an economic Cambrian moment; new vistas are being unlocked daily. This Saturday, at Tekedia Mini-MBA Live (7-8.30pm), our Zoom session will focus on Building Modern Investment Portfolios in Africa. 

Within an academic scene, we will examine how the empires of the future would look like. This is not going to be BUY this, Sell that. Rather, we will discuss market systems under the academic purity of pursuit of knowledge, biased with practicality!

If you have registered for Tekedia Mini-MBA edition 5 (June 7 – Sept 1), and want to join, please tell Admin to send you access. For prospective members, you can register here and join us.

Good People, early bird registration for Tekedia Mini-MBA edition 5 (June 7 – Sept 1, 2021) closes soon.  There are many benefits including having immediate access to our books and free course at facyber.com on different tracks of cybersecurity. Tekedia Mini-MBA is an innovation management program.

It runs online with thrice weekly live sessions, anchored by leading business leaders from global and local companies you admire. This Saturday, I will anchor one on “Building Modern Investment Portfolio in Africa”.  Ask our members, our sessions TRANSFORM.  I have got people who have prepaid for 5 years like Emmanuel S Akintunde.

Click to register for our self-paced program (it will not affect your work schedules as everything is recorded and archived); cost is $140 or N50,000 per learner.

Former Vice President of Nigeria, Atiku Abubakar, has dropped one of those lines he does regularly: “What this government must realise is that the unprecedented insecurity Nigeria is facing is the result of youth unemployment”. The man who is certainly going to contest for the Presidency again is making his mind known. But do not be carried away, Nigerian politicians are the same: once they get to power, they wipe their brains. Because they know that the citizens have short memories, and that means no consequences at the polls -reelected irrespective of job score sheets – all the nice theories disappear.

I hailed Prof Yemi Osinbajo the day he spoke in Washington DC as he explained how a Buhari Administration would fix electricity in Nigeria. Today, it is evident that after 6 years, Nigeria will continue to scale darkness.

People, hoping for any politician to fix Nigeria now is a malaria dream. The playbook needs to come from outside because the problems are now very complicated. As I write, Boko Haram has started sabotaging power infrastructure in some parts of northern Nigeria. If they follow that playbook, expect a severe economic distortion that will re-shape every aspect of Nigeria.

Sources said the insurgents planted explosives on each leg of the tower, which they detonated at about 6 a.m.

On Wednesday, jubilant residents of Maiduguri were seen in a video that trended on social media as they celebrated the return of electricity after nearly two months of blackout.

The leaders need to do their jobs – and I am hoping the media houses will push more. The nation is dying!

And with the paucity of funds, we continue to ramp up government involvement in sectors that ought to be left to private sector, with the latest being the ill advised $1.5 billion so called rehabilitation of the Port Harcourt Refinery that has failed to turn a profit for years.

— Atiku Abubakar (@atiku) March 28, 2021

“This will not only free the government of needless spendings but also clean up the infrastructure mess in the petroleum downstream sector,” he said.

“In a situation where we are simultaneously the world headquarters for extreme poverty, the world capital for out-of-school children, and the nation with the highest unemployment rate on Earth, there is a very real and present danger that we might slip into the failed states index,” he warned.

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When you ask anyone in front of you this seemingly simple question: what do you want? You might think that the answer would come quickly, in straightforward manner. But to respond to this simple question, people will form an arc, and sometimes a full circle, all in a bid to convey what they want!

Why is the answer not coming off so easily? Lack of CONFIDENCE! When your life’s story contains a good dose of misfortunes and disappointments, fear takes root in you, so even to say your name, you become weary, because you don’t know where the next bad news could come from.

The man knew that he would like to walk, but having experienced too many near misses, he felt that narrating his ordeals before hitting the main point could boost his chances, and luckily – he clinched it, albeit for a different reason.

Perhaps the best gift we could offer those around us or who come in contact with us, is to restore their confidence, once they recover it, most would excel without further assistance. A lot of people had been shouted or harassed into submission, to the point that they can no longer say their mind, without first getting approval.

Confidence is in short supply in many people’s lives, making them uncomfortable in their own skins.