This morning, I wrote a short piece in the Forum on the potential acquisition of 9Mobile (former Etisalat Nigeria) by Glo. 9Mobile is expected to be sold by Dec 31 2017.
Meanwhile, Guardian thinks that Globacom (the operator of Glo) will likely win the 9Mobile (nee Etisalat Nigeria) bid to become the largest mobile operator in Nigeria, ahead of MTN come Jan 1 2018 when the 9Mobile bid concludes. This will be a big dynamic change in the $70 billion telecom market in Nigeria.
It generated great comments in the LinkedIn community. I will quote one of the comments below:
Prof, do you equally see Globacom manage 9mobile as effective as if it had otherwise endured the temporary challenges and found its own feet or found another foreign buyer. I and several others using 9mobile are already developing cold feet knowing it could soon be managed by Glo given the antecedent of poor network services and its attendant consequences. I actually dumped my Glo sim to buy Etisalat then.
This is my feedback on LinkedIn (unedited):
Absolutely but Glo has fans because it is affordable. I use Etisalat because in my opinion it is the best. But always remember as I wrote few days ago that GREAT Product must have context. That is why we drive Toyota and Honda when there are Bentley and Alfa Romeo . One makes crappy product many want and another great product, no one affords. Quality is an illusion when not bounded by price.
Minimum Viable Quality
As I noted in the conversation, there is an illusion on quality. While quality is critical, it is very important that you do not lose focus by trying to build a business where quality has no correlation with cost. I am not sure that the latest Apple Mac Pro that goes for $5,000 is a desktop machine. Apple certainly does not expect that product to be sold to the (desktop) mass market, and specifically to the developing world. The new Mac Pro is a great machine with capabilities that exceed performance of some server systems. Yet, anyone that imports it to Lagos to resell will struggle. Sure, it has a great quality but the cost does not make sense.
The fact is this: any product quality that does not correlate with cost (or value derivable) makes no sense. I have designed accelerometers (motion inertial sensors) where my employer gave me diverging product specification targets: one version was for $0.60, another for $260. The one for $0.60 was made for toys while the $260 was engineered for use in pacemakers (heart monitoring systems). In the cheap one, it was a very crappy product that was built to last for weeks. But in the expensive one, knowing a human life depends on it, it was designed never to fail with many redundancies and checks.
Without the cost context you can think that the cheap one was a poor job. It is indeed not a great quality product but that was by design. That is what the market for toys wants because the kids rarely use them for days before they are discarded. It is a mass market product which has to be affordable to make sense. That does not mean that you cannot make very expensive toys only few can afford. But what is the purpose? Put a $260 XL in a toy which would be dumped within days?
The deal is this: the construct of quality has no meaning until the price of the product is put into considerations. I always ask entrepreneurs to build for the Minimum Viable Quality (MVQ) bounded by the product target price which market will respond. You can build rockets to fly around the world: that is an engineering possibility. But does that make a business sense if no one can afford it? Ask the makers of Concorde for answers.
That brings me to Glo and 9Mobile (nee Etisalat NG) services: Glo continues to grow with its highly affordable service while 9Mobile struggles even with better service but at higher cost. I am not saying that you do not have to pursue the best possible quality you can. My point is that any quality metric without a price construct is meaningless.
I know that Eko Hotels is a great place in Lagos but the price is huge. I can get a cheaper hotel for half the price in Ikoyi. If I rate that cheaper hotel with the same standard of Eko Hotels in my mind, I have not done justice to the review system. Etisalat NG could have delivered the best service but only few afforded it while Glo produced a service, not necessarily great, but widely affordable. The markets responded and Glo got ahead, at least it survived, while the remnants of Etisalat NG will become extinct on Monday.
A product Minimum Viable Quality (MVQ) is that version of a new product which allows a team to sell the maximum amount of products to customers with the least effort and at the best optimized price even when delivering value. That is where you need to build as you launch your product, and even at product maturity, do not deviate from it.