In any online content business, two things are very critical: quality and focus. That is so as supply remains unbounded which means to monetize anything, only things of value sell. Usually, things of monetizable value on the web have elements of quality and seem niche.  Yes, personalized, differentiated and targeted (PDT) contents will find ways into the purses of customers because in this world, most things are already free. Where you cannot get the P, ensure at least that you have the D and T covered before putting a paywall on that content.

Content, to an extent, is commoditized. If you can find a free tutorial on Youtube or Khan Academy, why buy a subscription to an edtech platform that offers the same solution? The commodification of education is good for end-users and is often why startups have a freemium model as a customer acquisition strategy. To convert free users into paying subscribers, edtech startups need to offer differentiated and targeted content.

The Course Hero and Mystery Science deals show us that edtech businesses are hungry for personalized, targeted content. Course Hero’s acquisition of Symbolab was essentially a deal for more than a decade’s worth of data that captured which math questions students found hardest.

Just think about it, if you are looking for something online, you will see many options once you search on Google. Because of that abundance, you want to narrow to the specific one which meets your niche needs. Any product which can do that at high quality, defined under your context, makes the cut. This becomes exceedingly necessary when you plan to put a paywall in that online venture. Aggregators have aggregated the free contents and users have access to them, and to get them to pay for something related, a new level of value must be activated.

Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.

It is very possible that anything you are offering has a free version somewhere. The implication is that your capacity to meet specific niche needs, at high quality, is what people are paying for. It is hopeless pursuing a paid product vision online without a strategy of creating a differentiated product at high quality.

I invite you to plan to send your team members to Tekedia Mini-MBA. We will begin a new edition on Feb 8, 2021. Early registration has since started. Our goal is to nurture innovators and project champions. We are adding empirical learning in our program with case studies. Transsion Holdings, the makers of Tecno, Itel and Infinix, makes part of our case study handbook; the case is ready.

Innovators are learning at Tekedia Institute Institute. Register today and join.

Google’s parent company, Alphabet, remains dominant, hitting a 14% revenue increase year-on-year despite the high voltage searchlight the United States antitrust suit has beamed on its activities. The company is ramping growth and taking market share across most of its core operating sectors.

The tech giant’s parent company, Alphabet, reported revenue of $46.17 billion for the three months ending in September — a 14% increase from the same period last year — highlighting its continued dominance even while facing numerous obstacles. The company also reported net income for the third quarter of $11.2 billion, blowing past analyst estimates. Alphabet (GOOGL) stock rose more than 8% in after-hours trading on Thursday.

“We had a strong quarter, consistent with the broader online environment,” Sundar Pichai, CEO of Alphabet and Google, said in a statement. “It’s also a testament to the deep investments we’ve made in AI and other technologies.”

But while Google logged great numbers, Apple made it clear that the post-hardware business era has indeed arrived. The iPhone sales slumped 20% but services came to the rescue.

“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” said Tim Cook, Apple’s CEO.

“Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive.

“From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver.”

From Google, we go to Zoom which has also done very well, becoming a bigger company than ExxonMobil: “Zoom, like many other tech companies, has seen an increase in earnings during the pandemic that has pushed its valuation to $139 billion, more than Exxon Mobil’s $138.9 billion. The teleconferencing app witnessed unprecedented surge following COVID-19 induced lockdowns that confined people at home, forcing a shift to virtual life.” That success of Zoom has seen it eclipsed the whole of the Nigerian Stock Exchange (NSE) by a factor of 3! Yes, Zoom is three times more than the whole value of the Nigerian publicly traded companies, including our banks, insurers and everything. Zoom joins Naspers of South Africa, whose combined direct & indirect  value is more than 3x the value of NSE.

At the time of drafting this report, Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value presently standing at $42.1 billion (N16 trillion), using the official exchange rate of N380 to $1.

But while Zoom has captured a lot of value, Skype which began many years before Zoom, has struggled. Indeed, Skype was great in destroying values for the telecommunication sector but was unable to capture any for itself. If you are to make a call from Lagos to London via MTN which could cost you say $10, and you decide to use Skype, there is a possibility that only a $2 data would be expensed for the Skype call. So, technically, Skype has destroyed $8 in the telecoms sector since itself did not capture the $8 which was denied MTN. Of course, you saved your $8 and could use it to buy amala and enjoy zobo drink.

That inability to capture value is the reason why Skype has not fully added value. Skype is currently a business under Microsoft; it bought it $8.5 billion in 2011. Today, no one expects Skype within Microsoft to be close to anything Zoom is logging in the market. Nigeria needs winners and pioneering entrepreneurs as we are severely underperforming as a nation!

In this video, I challenge us to use the One Oasis Strategy and Double Play Strategy to build business models that will ensure that we capture enterprise value even as we create for customers. Skype creates great value for customers but it has struggled to capture most value; so, Skype remains a sojourner, constantly being passed around by buyers and sellers. Do not be like Skype.

Markets are shifting and it is time you ensure that you are in the right domain, and that you are using the right business model in your business operation.