African Businesses Fail Because They Don’t Know Their Competitors

One of the big mistakes I see entrepreneurs make is the fact that they don’t know who their competitors are, hence, they don’t even know the unique selling point to compete with.

I woke up 5am this morning and began to ponder on so many things and why my first company failed in the Ed-tech industry.

The first thing I realized was that I was able to identify who my competitors were and it was a bug advantage to me while bootstrapping.

The Ed-tech industry is simply the merging of the education industry with technology. That’s all.

When I looked at other Ed-tech startups, I saw reasons why they wouldn’t even move an inch and I’m not being pessimistic, I’m just stating facts.

In the Ed-tech industry, a lot of startup founders identified their competitors as Udemy, Coursera etc.

That was what I identified my competitors as when I first started until two years later when I perfectly understood how African businesses operate, then I realized I was shooting wrongly.

Our competitors were not big platforms like Udemy, Coursera or Skillshare, our competitors were two different types.

1. YouTube

2. Friends

If you pay attention today in Africa, you’d realize people learn mostly through YouTube (free) and through friends (free, then paid).

I have learned on YouTube more than I have learnt on any other platform in my entire life. I have also learnt from friends who teach me for free then recommend me to platforms I can learn, either free or paid.

While we’re struggling to look for how to block startups like Udemy and Co from reaching our target customers, we are so blind to the fact that our same target customers are running to friends and YouTube.

So, what business model do the two types possess that makes people run to them?

I’m not going to explain it here but I’d move quickly to another example.

The second example is the e-commerce world and how I was able to see a business model of an e-commerce platform targeted at Africans.

This e-commerce platform went as far as listing Alibaba as its competitors. That would have been fair if it was 2050, but not 2020.

The biggest competitors of e-commerce platforms are local stores around. Local electronic stores to be precise.

Why is this really important to you as a business?

Well, I believe if you’re an entrepreneur that looking to scale with your business, then you’d know that understanding how your competitors operate is a huge determinant of how you’d succeed in that industry.

You might want to innovate from what they do, or disrupt the model, but you must first understand the mode of operation, else, you’d keep jabbing helplessly and aimlessly.

The real truth remains that African businesses scale more using traditional channels than digital.

I mean when we’re talking of large scale not some few millions. I have studied this, observed it and finally cannot argue any further from the real truth.

The big question you may want to ask is How Do You Identify Your Competitors?

Well, it’s not so difficult, but it’s not pretty easy. First thing you need to do is to let go of hype and face reality.

Who is really making money in the industry, not who looks like they’re making money.

In Africa, hype has affected how we classify businesses or rate them. You have to pay keen attention on who is making the real money then understand how they go about it.

If you do, that part is solved, then we can talk about how you can take advantage of the knowledge and innovate or disrupt with it.

If you’d love me to make a video on this, drop your comments in the comment section.

Ajayi Joel.

Climbr provides contents from world class entrepreneurs to serve as a blueprint for your success journey.