The Future of Dotcom Imitators in Africa.
 | Disclaimer: This Posting does not refer to anybody nor does it describe any body I know of. It was just a mere opinion on what I see and try to explain. Please bear in mind that opinions are just what they are, they do not necessitate facts and thus they should be taken with a pinch of salt if they are not in accordance with your beliefs. |
Tapping back to history from the gold rush in 1848 California, to the Dotcom craze during the 90s. The influx of prospectors, adventurers or even dreamers streaming from every nuke and cranny,was really something that had a mark in history but then again here we are in the year 2005, people still Never learn.
Today we see the ever increasing rise of different websites ranging from social networks, to on-line shopping malls in Third world countries especially from the African region. The main motivation behind all this is the websites they see when they browse the net, and they quickly assume that this websites are really making huge amount of profits. They go and build a similar website based on the concept.The pathetic issue here is that this websites are located in the Developed part of world and the market is for the developed market !!. And really most of this imitators do not really know what a simple word like E-commerce means. Or even to go into the extreme of understanding the marketing concepts, and then mastering it, and developing ever changing marketing techniques to suit it. Well so to say its just easy, get a website on-line, register a domain, and start selling, or start running forums and maybe probably the regular income would just stream in.
How many even know that a canonical “dot-com” company’s business model relies on network effects to justify losing money to build market share, or even mind share, through giving their product away in the hope that they could eventually charge for it. (It’s worth noting that Amazon.com and other successful survivors of the era (*.com crash) proved this strategy sound in the long term, for a small few.) Many raised cash through public offerings on the stock exchanges, with stock often soaring to dizzying heights and making the initial controllers of the company wildly rich on paper.
Well from what I know Amazon the no1 when it comes to on-line shopping in terms of price and recognition is still owing banks huge amounts of money. Now the question is do they even make profit? From what I can tell No. So first of all, from what I understand about on-line businesses is that you have to know the market, then study it, then you can then develop ever changing ideas from that based on market trends, and besides you have to also get a source for investment to get a professional set-up to ensure that you have a grip on the market.
Now how many African on-line portals, are really up to that standard? I can really count them with my finger tips, maybe in Nigeria (shopforless.com) and a few others . Yet you still see young lads building up portals, hosting it, and wasting a lot of money hoping that they would earn a regular income through that (Well we the hosters get to earn from that :p). The future I see is a future of regret and withdrawal. But then again who knows?. I just hope that if its the later they don’t burn badly.
The bad thing about this issue is that several millions are wasted on this so called portal projects yearly. Portals are only meant for coporate image in africa and not cuz there is real time data to realy display. well its still good news for african web developers!
Comment by dabar — 4/14/2005 @ 6:58 pm
Well its a scenario of the gold digger vs the gold pan seller. Either ways the gold pan seller makes the money (*whether the gold digger gets to dig a gold or not). But then again the gold digger only makes money when he luckily strikes gold, otherwise he doesnt.
Comment by kazey journal — 4/14/2005 @ 7:35 pm
Is the future completely bleak for imitators? What are the issues that make them failures? Don’t we think takling the key problems associated with an African dot.com could be the all we need? As long as we have needs that could be met through the purchase of goods, I think there is hope. We should understand that some developed nations today started out imitating the developed…
Comment by Jangbalajugbu — 4/15/2005 @ 12:58 am
They is really no straight answer to your question, because for me to say something about the future, I have to see the future, and i cannot see the future. What I am actually saying is that the market is young, and education is needed before any further steps can be taken.
The key problems such as security, payment gateways etc? but is this the only problem present? or likely to be encountered? Imitation is good if its done the right way. As i said and would repeat. Education is the key.
Comment by kazey journal — 4/15/2005 @ 1:27 am
Yes, I am a young lad. Yes, I spend money hosting sites like www.mobilenigeria.com and www.nairaland.com. Yes, I intend to make a steady income from the Internet. Not just that, I intend to pay other people’s salaries through what I am doing.
Kayode, I wonder why you relate with me since people like me are obviously stupid and clueless.
Anyway, if you’re a Nigerian and reading this comment, please visit out www.nairaland.com, register, and invite all your friends who live in Nigeria! That’s all I ask. Thank you.
Comment by Seun Osewa — 4/15/2005 @ 6:09 am
Well I don’t remember mentioning names in my blog nor even any identity, and besides it was my opinion on what I see. It does not really have to please anybody. You don’t believe in what you are doing then its up to you. Don’t raise unnecessary assumptions, conclusions or even deduction on what I said based on what i think.
By the way I wish you all the best with your forums. I am not an enemy to progress, I just advice, see what is wrong and try to correct it based on the limited capacity and means I have. So No offence Seun. It has nothing to do with you.
I am in no war with nobody and besides, I promise you I would not go against your instructions. Its your territory, and once again all the best in your ventures.
Comment by kazey journal — 4/15/2005 @ 6:43 am
Blog War I
Comment by dabar — 4/15/2005 @ 6:08 pm
Immediately I saw the title of this blogg, i knew it would be interesting reading.
To start with, I run a web hosting company with at least 90% of our operations done online. in addition, I run a few more websites as a hobby.
Kazey has a point. For example I happen to have met some of these fly-by-night dot.com guys who are forever telling people that they can earn N750,000 in a month from the internet. While it is possible (but at great cost), it interests me to observe that NOT ONE of these guys preaching this “gospel” that I have met own a car to their name. Not one of them is financially stable.
In my opinion, rushing online blindly is a terrible thing. We have people setup portals on our servers and the nex year they do not renew – it was dead before it took off. My experience with a lot of people is that most online projects in Nigeria fail. I have a few articles on this issue at http://www.gosmartmobile.com if anyone cares to take a look.
Having said that, I definitely believe that we must redefine our values and change our attitudes to business if we will make anything substantial off the internet. It will take a lot of clear and smart thinking, plus those thoughts must be followed through with precision.
Comment by AYA — 4/18/2005 @ 2:28 am
AYA,
This blog entry does not deserve any amount of credit. I don’t know why the rest of you guys don’t see this. Maybe because you’ve not built ‘portals’ before. I’m going to have to do a sentence-by-sentence critique when I have the time. I just don’t have the time now.
Here’s the thing. Rushing online blindly is not such a terrible thing. Some of these “expensive web portals” you are talking about were built by students in their spare time; they may not have spent more than 6,000 naira on the projects. Kayode Muyibi alone wasted more money online than 10 average “portal” builders in Nigeria. Where is your nigermarket?
The Internet is the cheapest place to make mistakes and learn from them. How much does it cost to register a domain? I have enormous respect for Nigerian “portals” that are still trying to figure out how to make money (although I have every intention of pushing them out). How much does it cost to host a domain? Compare that to how much it costs for a market woman to rent a shop!
Many Nigerian web projects are simply underfunded. Nothing more, nothing less. I have a 24 hour Internet connection in my home (now). But there are people trying to run websites by buying night browsing at cyber-cafes! I am inclined to be proud of them, even though I consider them as competitors.
It is unfair of a rich Malaysian kid like Kayode to take a broad swipe at all of us in a public blog like this. I’m going to do a sentence-by-sentence refutation of this post in my blog very soon. I am right this time.
Comment by Seun Osewa — 4/19/2005 @ 3:21 am
Well my personality does not have anything to do with this !!. And by the way you mentioned i wasted money? Well i did not waste money, i just had to pay for expenses here and there, its a normal part of the business ordeal i taught
and i am not afraid of spending more and more. Besides this is not even the issue 
Seun 
what i was saying was basically if i can refer to the posting, i was talking about “IMITATORS” that had know knowledge of what they were doing. i am not an imitator besides. Infact i do not fall in that category at all.
Your statistics infact is too far fetched. And besides maybe next time when you decide to attack peoples personality based on their opinions, you really need to get your facts straight. Really, as you said i have lost money in nigermarket? that is really funny. But then again what is the ratio of what i have lost compared to what i have gained generally?. And what is the relation of this to what i am talking about?
And besides come to think of it this is my Passion, this is what i do for fun if you may call it that, not my livelihood or where i dream to make millions from. This is what i do? so Seun i must say you are really being too reactive and emotional about the whole thing. I repeat again this posting has nothing to do with anybody. Its just and opinion and please treat it like one.
And besides remember to send me a link, when you decide to post in reply to this topic on you blog. I would love to read.have a nice day.
Comment by kazey journal — 4/20/2005 @ 8:11 am
Now, it does look like you two (kayode and seun) know yourself from somewhere, and it looks like there are things about yourselves you know that I do not know. Which makes the trade-off between you beyond me.
I have responded to the write-up as a casual bystander, objectively and without prejudice. Leave me out of your private wars.
Now, having said that, back to issues. In my opinion, most Netpreneurs in Nigeria get into online businesses without acquiring the necessary knowledge needed to succed. As a network administrator, i know of “webmasters” on our service who do not know the difference between disk space and monthly bandwidth, those who do not know the difference between transfering a domain name and changing webhosts, and many more laughable matters.
The internet itself makes those pieces of information available free – and yet these “netpreneuers” do not know!! There can be no excuse for that. Seun said “The Internet is the cheapest place to make mistakes and learn from them”, and I agree, but some mistakes are not necessary – especially when the Internet itself has made the remedy available.
You also said that rushing online blindly is not such a terrible thing. I disagree. Each time some netpreneur starts a portal that fails, whether he realises it or not his credibility is dented. Chances that those who were aware of the first project will take him serious the next time get slimmer. Personally, i wouldn’t take him very serious. I know many others who would do the same as myself.
Unless there is some other info or data i am missing, I stand by my original response.
Comment by AYA — 4/29/2005 @ 7:30 pm
AYA,
You are right that I and Kayode have a personal dispute! I’ve called it off. My post was not croticising your post.
I stand by my statement that rushing online blindly is not such a bad thing. If you must fail, fail in an envoronment where your failure will not make you broke. Fail to try again.
You said, “Each time some netpreneur starts a portal that fails, whether he realises it or not his credibility is dented … Personally, I wouldn’t take him very serious.” In an environment where failure is not tolerated, there cannot be progress. You know the country with the highest dotcom failure rate? The US. Look how bad their economy is compared to ours! The same dotcom frenzy that led to the “dot bombs” is what got companies like Google funded in the first place.
People will go to a site that satisfies their needs whether or not the owner has failed before. Someone who has failed before is more likely to know what to do to get people the next time. And if you must fail, fail online. Fail in an environment where you can gain experience without going broke.
A lot of portals have given up hope of making money, but they are still there, still alive, still helping people and if tommorrow they figure out a way to make money I am more likely to buy from them. They haven’t ‘failed’ in my book. They’re hanging in there until they figure this new thing out. I like that.
Comment by Seun Osewa — 5/1/2005 @ 7:26 am
An example is nigeria-friends.com, which used to charge a subscription fee for people who want to meet old schoolfriends, and after some time decided to cancel the subscription fee!
Comment by Seun Osewa — 5/2/2005 @ 8:28 pm
uhm this has turned out to be a real interesting post and i sure have learnt alot. also it’s cool to know that the you finally took the decision to write this post after a chat we had about webhosts.
anyway keep on blogging big. i’m feeling your stuff that i just had to llink you on my blog. peace man!
Comment by TRAE — 5/3/2005 @ 8:20 am
This is really really interesting.
Well, for a start, I must say that Kayode was too pessimistic with his assertions. The scenerio today, or the future for that matter, is not as bleak as you want folks to believe.
It does not matter whether you are in Africa or not, whether you are imitating or not, what matters is your business model and how disciplined you are to follow basic business principles.
Bottomline is, you have to do this right, to get it right.
If I were a gold digger in 1848, I would use the best scientific methods available to search for gold, and not wild hypothesis. I would never take a step because others are taking it. I have to be convinced on why and how I should do it, study it properly, and then approach it in the best way possible.
There is no hiding the fact that running business via the WWW in Africa is tough indeed. First is Electricity. Nigeria for example, has the largest population in Africa, but is grossly underserviced with electricity. Computer hardware and software in expensive in Africa since they have to be imported mainly from outside Africa. Africa has the lowest Internet penetration in the world. Lowest literacy level. Consequently, if you are a web developer, who would you be selling to?
Well, I have said all there is to stay. It is not that bleak for Africa. There are success stories of ‘web entreprises’.
Failures of web entreprises elsewhere (Europe, Asia, America) are so many.
I, Ajao, believe there is a better future for Africa, and would not rest on my oars. I would do my best to leave an indellible mark in the sands of time.
So long…
Ajao
Comment by Ajao — 5/8/2005 @ 12:15 am
Thats the same thing a lot of people say. Well am i a pessimist? hahah well ok. Quite funny!! “what matters is your business model and how disciplined you are to follow basic business principles.
“. I think its like even referring to a simple scenario of entering a market with competition. Planning, and doing exactly what your competitors are doing!! following the same basic model….. I guess thats why there is the collapse of atleasst 80% of newly established businesses yearly.
They all planned, followed the pattern and yet they collapsed. Well they planned and failed. I wonder why? Maybe the problem was instead on the why theirs? it was the “i can do it if someone else has done it” just like you are saying by planning. Man we are not in the 80s. The business world we have now is something entirely different, whether it be online or in the normal world. Yet the future is still the question? How worse would the scenario get?
Comment by kazey journal — 5/8/2005 @ 2:24 pm