Building for Africa

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Building for Africa (draft)

I: Cultural aspects

1. Respect & Family ties

 In most African cultures,

family is incredibly important⁠

. It impacts every aspect of life, from communication, trust, finances, support, friend groups, and much more. As a female friend recalls: “I message my mom every morning to say Good Morning. I didn’t do it for 2 days, and she showed up at my house to check in on me. When I told her I was busy and apologised, she climbed back in her car and went home.” In Urban South Africa the concept ‘

Black Tax⁠

’ is used to describe the ways in which first generation black professionals are obligated to the family through remittances.

  What it changes: Finding ways to accommodate or leverage these ties can give you a huge advantage, e.g. to build a referral program focussing specifically on language around family instead of friends, or make family sharing or money transfer easier.  

Word of mouth⁠

is a very important way to reach new customers.

2. “Oga” (big-chief) Culture

 A key aspect of the high levels of respect for seniors is the Oga Culture (meaning “chief”) or “Big Man syndrome”. This is where the person at the top of a company holds almost all authority and dictates all strategies down to the team. Often the team is just there to implement and report back. In South Africa it is called the ‘  Grootman Culture’ - typically to refer to men of higher social and financial status. There is great respect for these men, whether justified or not, and it strongly extends into celebrity culture and politics.

What it changes: Modern first-world approaches in design thinking like collaboration, co-creation or ‘anyone can come up with the solution’ completely break down in unexpected ways because of this. We see it often in startup founders whose actions speak very differently to their slogans and words and struggle greatly when their opinions are challenged. Another founder I worked with did not think like this and tried to throw suggestions and brainstorm with his team - the problem is they took everything that he suggested as an ‘order’ which caused chaos of scattered activities and much frustration for the founder. Regardless of his perspectives, he had to adapt to his team as this can cut both ways.

Andy Obuoforibo⁠

has

written on this⁠

before about how to manage up through it.  

3. Lack of trust

 Particularly

in West Africa⁠

, but to a

lesser extent elsewhere⁠

, there is a strong

general distrust of new technology⁠

being a scam or used in nefarious ways. Users typically don’t freely offer their personal information and if they use a payments app, they will only process very small amounts for payments even if that incurs more fees. Apps that “steal data” (i.e. use background refresh and updates that use up data) are quickly deleted and never used again. Often mobile web is preferred because they have more control. Ironically, the shortage of trust means that the trust that is given is highly concentrated, which creates huge leverage for existing brands and creates a big barrier to the adoption of innovations.

  What it changes: You should expect HUGE drop-offs during a signup process for a new app if you ask for any form of “sensitive” information - this could even be something as innocuous as an area code or address. You need to add as many layers as you can to reinforce trust: add well-known banking/payment logos to the footer of every screen, hide certain fields like you would a password (Highly recommended even for BVN business registration numbers), if it was a referral to display the name and info of the referee, and to ask for the minimum information to take any action. Social sign-ins are useful, but not used as widely as to rather use different logins for everything. The aspect of “data stealing” is often addressed by zero-rating the app by either adding it to the likes of internet.org or reverse billing the data through a VMNO so that the company pays, not the user.  

4. Low propensity to pay

 The number of Africans who spend more than $10/day is

remarkably small⁠

. This breeds a culture of visibly flaunting wealth but being very frugal in reality. There is a

parallel here with India⁠

, where you can get very high daily active users (DAUs), but the revenue per user (RPU) and recurring revenues (MRR) are very low. Users will find ingenious ways to bypass paywalls, share logins, or pay with single-use disposable cards to avoid it where possible. In most cases charging anything will cause a significant reduction in adoption. This applies

specifically to digital payments⁠

or purchases, and the caveat to this is fees, which are generally less sensitive and comparatively high.   This is changing though, with

COVID being a catalyst⁠

in users adopting paid apps as well as the recent farce by the Nigerian government to forcibly limit cash supply around their election.

What this changes: You usually need to develop a business model where the user and the customer are different people and the person using your app daily is not the purchaser. Ad models and data plays only work at incredibly high volumes, so we often need to focus on up selling other products (often insurance or loans) to make a business model viable. Even for loan products, there are

often few consequences⁠

for low repayment, particularly with light-touch applications, or intentional default (where a user takes the product with no intention to ever repay.)

5. Everyone is a business and has a side hustle.  

Africa is home to millions of informal small business owners, with most operating as sole proprietors and no formal business registration or bank account. In Nigeria alone, 34 million of 39 million business are

considered informal⁠

. The informal sector accounts for over 80% of employment in Urban Africa. Drawing a distinction between funds that are spent on stock vs school fees, for example, is almost impossible as there is no distinction in record keeping. Goods and products move ‘hand to mouth’ through the system with a minimal build-up of physical or financial assets for collateral. Many people who work full time still run businesses on the side - with a great example being telephone farmers in Kenya who are urban professionals but run a farm remotely via their phone and on the weekends. Having multiple jobs or income streams is the norm, not the exception.   

What it changes: This makes business vs personal banking products almost impossible. The blended loan products usually are not underwritten much by tangible assets.  

6. Regional nuances & perspectives 

Any broad stroke claims about cultural nuances should be taken with a pinch of salt - these included. They are better seen as macro-level trends and slight cultural bases than hard and fast predictable rules. Having said that, beyond the common characteristics mentioned, there are regional nuances in perspectives and behaviors that will help you to be aware of when launching the same product in different regions. Note also that these are heavily skewed by the regional powerhouse (Nigeria, Kenya, South Africa and Egypt) and that other countries in each region may differ.  

West Africa:

Big hustle culture, Gov won’t deliver, you need to look out for yourself, bombastic, optimistic, high energy. plenty of Francophone, lower attention to detail.  Nigeria

exemplifies⁠

this attitude.

What it changes: Building trust in your products is critical. Partnerships with existing brands can help a lot. Consumers are quick to shift and will always find ways around your paywalls. Value prop needs to be delivered cleanly, and hard sales are required.  

East Africa:

Reserved, respectful, won’t really speak their mind, hard-working, polite, friendly, data is cheap.  (

Report⁠

)

What it changes: You need to be very intentional about getting valuable insights through customer interviewing as you’re unlikely to get root causes. Slower to adopt a product and slower to leave. Mobile-only strategies work well.  

Southern Africa:

Entitled, huge market disparity, conservative, “hang on to what you’ve got”, less urgency, Don’t mess with the status quo, strong corp and finance. 

What it changes: The high inequality means you must be very intentional about targeting the right market. The top end is very characteristic of US/EU markets (albeit very small) and can be a great initial testing ground. Lower-income consumers are significantly harder to sell to and slow to adopt new products. With a solid judicial, financial and corporate environment it can be a very stable place to build a company, but that also makes it hard to grow significantly. Most markets are oligopolies of incumbents.  

North Africa:

Hard-working, lots of hustle, very competitive, calm, wheeler-dealers, primarily Muslim, lots of Arabic, sophisticated (much 2nd time, many execs) global focus 

What it changes: You need to move fast, and tight customer feedback loops are critical. Design for Arabic and English in your interface from the start (left-to-right and right-to-left.)

⁠

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