Many months ago, I postulated in a Harvard Business Review article that African companies that do things Google, Facebook and other digital ICT utilities do must follow one playbook: find ways to collaborate, NOT compete, with them. I wrote thus – “A good strategy could be to find ways to position startups to build on the existing infrastructure of these ICT utilities instead of directly competing with them.”
Interestingly, the ad man, Sir Martin Sorrell, who built WPP for decades uses the same playbook: he embraces Google, Facebook and the ICT utilities in his new company S4 Capital. This is how TechCrunch summarizes it: “Much of that approach centers on partnering with, rather than trying to compete with the giants of ad tech, including Facebook and Google, precarious as that arrangement can be”.
Other current tech clients include Apple, Salesforce, Microsoft, LinkedIn, Uber and ServiceNow, which, according to Sorrell, treat S4’s creative and strategic marketing professionals as extensions of their internal marketing teams.
Firewood, for example, will embed teams within companies like Google to “understand the client as well as possible,” Sorrell says. As he explains it, “We don’t compete with [these companies]. We service them; we work with them. If we’re being crude about it, we’re resellers for each one of them. They don’t want to get into the service business.”
There is wisdom in what the former WPP is doing – it is simply foolishness to try to match the marginal cost advantages Google and Facebook have. But building services on top of their infrastructures can help any startup thrive. You do not go into a new community and begin to setup your own electricity and water boards, you simply rely on the existing ones therein to get your light and potable water. See Google and Facebook as the electricity and water boards of the current digital era: build and partner with them, over trying to compete as your chances, in Africa, do not look good.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
---
Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.
We can only have one Facebook, one Google, one LinkedIn, etc; if any them collapses, another entity will take over, but only ONE platform can dominate each segment at a time.
The network effect applicable on these giant digital platforms makes it impossible to have two giants per segment, even users cannot bring themselves to do so; it’s disconcerting too.
So to survive within their territories, you can build on top their platforms, work with them or work for them. That doesn’t mean you cannot set up small versions for your village people or a particular niche; but if you want to go global, just make sure that you are not directly competing in their domains.