The Illusion of Localization in Pure Web Business

The Illusion of Localization in Pure Web Business

You want to start that web startup. You have looked left and right, within Nigeria, and came to the conclusion that no single company was in that territory. So, you extrapolated, I have no competition. Unfortunately, that you wished so does not mean that is the state of things. There is a diminishing abundance that comes with Internet: you are global and local at the same time. So, are your competitors! Because internet is unbounded and unconstrained, most times, a local company faces competition from any part of the world. You need to have that in mind and not judge an idea based on solely if there is a local firm already in that space. And when you start, do not fall under the illusion that growing number of users will fix all problems. Simply, measure what really matters as you grow.

NB: A pure web business is a business where all activities are operationally served within the web. A hosting company is a pure web business since the service is 100% on the web. But an ecommerce (for non virtual goods) is not a pure web business since it has a major offline component which is physical delivery of the purchased goods items.

In this videocast, I discuss what I am calling the Law of Diminishing Abundance of Internet. It is a construct that some companies become poorer even when they are growing in numbers of customers reached.That applies to industrial sectors like publishing and telecoms. The lesson here is that risk in any business model must be examined from the lens of this mirage abundance which Internet has provided in some sectors.


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