When I was starting my electronics business, I sent hundreds of business plans to investors, no help came; none wanted to hear about hardware business in Africa. Then, I stopped writing business plans and started working on Business Models, using small savings from scholarship support. One model I arrived for Africa was partner-driven strategy. With that model, you can enter markets without raising money as partners will help you fund the products, and also distribute them.
Loci which I announced here on Saturday now has hundreds of Partner applications. If these Partners place orders and we fulfill them, our products will be in the market. Magically, we will not need to raise any single kobo except the development cost which is largely minimal.
In Q2 2019, our business will launch a platform-anchored hardware product, named Loci, engineered for both consumer and enterprise markets. As a company built on partner-first go-to-market strategy, we are looking for partners across Africa.
Our solution will work in the following sectors: security, transportation, logistics, and general mobility. This product is coming out of a real market friction I faced when I visited Nigeria in October 2018. So, we do think many are experiencing the same challenges. Hence, we want to hit the market with a solution, using available proprietary technologies we have already developed in Zenvus.
The biggest challenge in hardware business is that it works on scale. Most times to get that scale, you raise tons of money which means you have huge inventory risk. I do not follow that path: I rather invest in the engineering and innovation and ask my first-level customers to INVEST in the product. Those customers are the partners.
Using that model, we can be in 30 countries without having to raise any money from investors. The partners do the business development, marketing, etc. We simply create contents, documents and systems to support them. Sure, we share the gains with them, and we are very generous in that space.
To all the potential partners who had sent emails, team will revert. We are still asking for partners to send emails and indicate interests (contact us here). The opportunity we are addressing is huge and the product we have is superb. It would be great moments for everyone: we want to work with you all.
First, thank you all the prospective partners who have applied to work with us on Zenvus Loci. This is highly appreciated. Interestingly, I am using this process to teach our young hardware entrepreneurs a business model lesson: investors rarely fund hardware startups in Africa. Over the years, I have developed a strategy to get products to market. That strategy is partner-driven strategy.
By the time we are done with this process, we will have all the funds we need for production run. Then, once we produce, we ship to partners who then distribute the products. Magically, the products are in the market even though no capital was raised in the usual way.
The key thing is building trust and relationship so that partners can give you a window to deliver. Without that, it would be challenging since electronics is a volume business. You need volume to reduce unit cost and when you do not have access to tons of capital, you struggle. But an alternative exists: do not eat alone, and if you have that philosophy, help will come.
I have said this always – the best investors are CUSTOMERS. They can give you money to build a business if your vision is great. Besides product innovation, business model innovation is catalytic.