The Business Case For Building Mobile Apps in Nigeria

The Business Case For Building Mobile Apps in Nigeria

I’ll start with this – do you really need a mobile application for your business? And do you know why you need one?

If you run a product development and application development agency, I expect you to roll your eyes after seeing those two questions and face this article with a bias perspective (that’s if you haven’t already left this piece to go read something else). I don’t really blame you, if I ran a multibillion dollar energy firm built solely on petroleum, and my son tells me that one day Elon Musk will completely disrupt the transportation industry (which was responsible for 45% of U.S. demand for petroleum in 2019), by making electric cars ubiquitous, I don’t think I’d be very happy myself. I have a relative who doesn’t believe the next energy transition is electric, he believes it is gas. He works with a leading indigenous oil and gas company here in Nigeria. For the sanity and safety of his job, he has to believe that.

The truth is this; innovation isn’t borne out of herding and crowd think, but more from the ability to take an objective bird’s eye view of a situation, and proffer meaningful solutions to the issues on ground.

Habituation occurs when we get so used to a thing or a process that we begin to see it as normal – regardless of how friction filled the process may be. Lagos traffic is horrible in your first month, by the twenty fourth month, you’ve gotten so used to it that you may even begin to define driving for hours in soul drenching traffic as a sign of diligence.

The purpose of this piece is to step back a little, and have a clearer view of what is really going on.

The Mobile App Industry

The mobile application industry is booming globally. Google through its Google Playstore generated a little over US$38 billion in revenue in 2020, second only to the Apple App Store which brought in around US$72.3 billion in revenue during the same period.

According to Statista, the Google Playstore recorded more than 102 billion app downloads in 2020, while the App Store recorded 39 billion app downloads in the same time period. Americans approximately have an average of 80+ apps installed on their smartphone devices.

In Nigeria, the picture may not be too different. The democratization of technology has resulted in among many other things; the proliferation of mobile applications.

Almost every serious business either has a mobile application, or is seriously working on developing one.

The reasoning behind this is really simple; it is easier to buy spaghetti from the shop opposite your compound (mobile app), than to walk to the front of your street (website) to do the same.

As much as the gradual ubiquity of mobile applications is commendable, a clear picture of its true value proposition (and shortcomings) is key to helping leaders and firms build and design more meaningful offerings.

Why Do You Really Need a Mobile App?

The ideal answer to this question is because everyone has one. A lot of African businesses play “follow the leader”, or “catch and copy”. Due to an over reliance on concepts like competitive intelligence and the likes, we now have two kinds of businesses in African tech – Moses (the firms who set the pace), and the Israelites (the firms who throttle along).

In business you ideally want to be one of the Moses firms (they usually have better market caps, and revenue numbers), but it takes more than wishing, hoping and hiring McKinsey to do so, It takes a deliberate approach to building innovative products and services – services that reduce user frictions and make life simpler for your users. It takes a focused approach that has a clear plan that objectively recognizes what is best for their business and what is not, it takes being distinct and rejecting crowd think.

Why Build an App

Proximity

The first major and key reason for building a mobile application is proximity. Like I mentioned earlier, I’d rather buy from the shop in front of my house, than walk a longer distance to make the same purchase.

Distance is a product layer that Ecommerce disintermediates [sic] by bringing a purchase directly to your door step as against you having to go out to get it yourself.

A Mobile app creates the same perception of proximity – instead of the two (or possibly more) level interaction of opening your mobile web browser and inserting a website link into a dialog box, with one click you can immediately appear in the mobile application interface of the app you want to utilize.

Your innovation approach as a digital technology business is to consistently find ways to reduce (and keep reducing) the interaction layers between your product and its users. In the past we drew patterns and wrote passwords to unlock our smartphone’s (horrible user experience), today with Touch ID and Face ID, unlocking a smartphone is simpler (and faster) than A,B,C. Literally.

However, mobile apps still have their challenges. Downloading a Mobile application you intend to use regularly is a feature you admire, being ‘Forced’ to download an app you know you will really use only once is a bug you loathe.

In other words, how frequently a user intends to use your product will determine whether they consider being ‘forced’ to download the mobile application as a bad user experience or not. Ideally speaking, the average tech savvy person will spend a disproportionate amount of time just scrolling through Facebook or Instagram without a clear mission other than recreation.

When you decide to use an app that frequently, being forced to download it doesn’t feel that bad, but a solution you need, but not on a recurrent basis may not be that meaningful to you as a mobile application.

However, a good number of users may not bother; they may opt to downloading your app once, using it for the purpose intended, and leave it lying dormant in their app menu for months. In a case like this, you have an app, Google may even tell you you have 5,000+ downloads, but as far as the usefulness of that application is concerned, its value proposition is somewhere close to zero.

It’s true that some users may use it occasionally, and a small portion may do so frequently, but considering the amount of money, time and engineering talent you spent developing that mobile app plus the accompanying CAC (Customer Acquisition Costs) and your projected user LTV (Life Time Value) is that really the kind of engagement you consider a meaningful return on investment? I think not.

Data

The second major reason you should build a mobile app is because of data.

In the twenty first century, the most powerful business is not the one that has the largest machinery and biggest production plants; it’s the one that has access to the most meaningful data.

Any business running without meaningful data is a blind business.

Data helps businesses mimic omnipresence, and create the perception of God. In other words, data helps businesses gain a clearer picture of the space they operate in, empowering them to build more meaningful and valuable products/services.

As much as customer surveys are important (and they are), nothing is as valuable as having real time data on how customers interact with your solution informing your product design. People say a lot of stuff, but when the rubber hits the road (or as my pastor says – “.when jungle mature”) people tend to do something entirely different from what they say they’ll do.

Some months back, I read the postmortem of an edtech startup outside the bay area that was building a solution to help streamline communication between educational institutions, teachers, parents and students. As much as the founder had solicited customer feedback before building his solution, they ended up failing because they didn’t perform enough product testing (the part where you get real hands on data on how a user will interact with your product), and they fell prey to the ” Anchoring Effect”. Apparently the vast majority of people they surveyed said one thing, but went ahead to do something else.

A mobile app with meaningful and active in app interactions is one of the easiest ways to gain access to valuable consumer data. Nike’s SNKRS app is a very clear illustration of this example. Nike SNKRS app is designed for zealot Nike fans, the kind of fans that can literally wait in queues to buy limited edition sneakers (something I cannot imagine myself doing).

Nike uses micro data from in app interactions to inform new product developments and lineups, giving it a supposedly upper hand against its competition. Nike has a market share more than 3x its closest competitor Under Armour, and is worth more than 15x its market cap. Nike is clearly the Dangote Cement of Sneakers.

Interactions

Unless you’re building all those funny mobile apps that monetize primarily through in app ads (like my Bible app which I find pretty annoying), you want to find a way to increase in app interactions within your mobile app. The value a mobile app brings to the table may be negligible if it has to rely on users having a one-time need to launch it, especially if it isn’t a fintech solution.

Ideally, you want a solution where users launch your app and spend a good amount of time within the app interacting with your solution (not complaining about how some button doesn’t work or the app froze, or cursing the engineers that built it).

In practice, I doubt if all apps can do this, but those that can will definitely be able to extract more value than those than can’t (a fully Google advertising dependent business model is a lousy business).

One approach to this could be building a community. Communities are built around similar goals and aspirations. My model for building a community is very simple: find a meaningful pain point that a good number of people share, make a very big deal out of it, position yourself as the sympathetic guy that cares, and push your solution (community) as a way to solve that problem. This isn’t too different from what LinkedIn influencers like Hyacinth and the likes do – they make job searching look like it’s the biggest problem in the world (even though it is to an extent), position themselves as the sympathetic party, and position their content as a kind of solution to that problem. They create content people want to read – like how they hired a guy who had no experience, or gave someone unlimited time off because they care about their employees, disregarding the adverse effect this may have on their business. In other words, these guys don’t make content, they sell hope – and a lot of people need hope.

Community building is a key strategy to increase in app interactions.

Why you shouldn’t Build a Mobile App.

If your solution will benefit from unrestrained access of any kind (people who have smartphones and people who do not), then building a mobile app may not be a very potent game changer.

Remita by Systemspecs is a very good example of this. Remita is responsible for routing and processing all transactions in the Federal Governments TSA initiative. If you need to make any kind of payment to a government affiliated parastatal, you will in one way or the other need Remita. All the people who use Remita are definitely not tech savvy, and may likely not own a smartphone. If Remita created a value proposition around how making those payments directly from its mobile app would be a better and simpler solution for smartphone users, that would be great (and if successful, a powerful user acquisition strategy), but I don’t know if they do, or have been successful at it.

Although I don’t have any data to validate this, I want to believe that most Remita transactions occur on a computer, more specifically on a computer, in a stuffed Cyber Café/Business Centre, with one small standing fan. Remita is a largely disintemediated and platform agnostic solution, so having a Mobile App (not necessarily a bad idea), may not necessarily be a game changer.

Conclusion

Identifying and understanding the main interaction and experience points of your business is key to finding out what kind of solution can create meaningful value for your users.

Building a Mobile app isn’t necessarily a bad idea, but it may not always be the most strategic thing to do, especially if you’re getting it just because everyone has one.

 

Inspired by the Holy Spirit

 

P.S: if you run a startup that needs product development and design services, idea validation, or any other innovative product and strategic approach to taking your market, you can say hi to my team at Charisol Tech, we’ll definitely have something for you.

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