The “shared economy” business model (Part 2)
Don’t complain and cry… Instead, imagine!
A young American was visiting Zimbabwe as a backpacker and discovered it was easy to get around because people would give him a “lift” and charge for the ride. He noticed that most people travelled to work using “paid-for lifts.” To an American who spent countless wasted hours stuck in traffic jams, this was revolutionary! He went home and with a colleague decided to launch a “ride sharing” business called Zimride (which was soon acquired by a big car rental company). Thereafter, six years ago he and his partner launched another “shared economy” business called “Lyft” which is now worth an estimated $15bn+. It’s the main competitor to Uber!
Another young man wanted to go into the hotel business but he did not have “enough money” to build hotels. Whilst some would have despaired, he and two friends came up with an ingenious entrepreneurial solution that has helped them build a business more valuable than the biggest hotel groups in the world!
That business, of course, is called Airbnb, a concept used in African cities for decades, probably longer. We started talking about this last week. In my own country, people who do not own their own home often rent space in other people’s houses as “lodgers.” Millions of people in Africa find lodgings in this and similar ways. Like Uber, Airbnb (now considered worth some $37bn only 10 years since its founding) could also be an idea born out of Africa!
Suddenly I can hear a howl of indignant complaints from the “conspiracy theorists,” but this is not the entrepreneurial way to respond. All it means is that, thanks to technology and innovation, there are other similar new opportunities right on our doorstep here at home!
The response is for our own young entrepreneurs to study these new pathways to developing businesses, and re-imagine them to digitize things like our “urban lodging system,” and many other similar situations. The person who digitizes urban accommodation in African cities, will be an African Airbnb… Could this be one of you?
Look around! What do you “see”?!
Come on guys, what do I have to do to wake you up?! Wipe those tears of bitterness off your cheeks simply because you thought you don’t have access to opportunities or capital.
Re-imagine the business model, and find other smart ways to get yourself into business. You could be the next Uber or Airbnb!
# Do you have new resources? Optimize them.
# Do you have used resources? Find a new home for them.
# Do you have resources that are under-utilized? (Say you only use them a few hours a day, or a week, or month, for example… the rest of the time they are idle).
# Do you rather need access to such resources?
The “shared economy” business model allows you to do smart things with very little capital. It allows you to leverage limited resources, skills and/or assets.
I spoke last week about a guy who developed an App to help people find a free tractor in his agricultural community. Another business facilitates “sharing” of big equipment to construction sites, and yet another enables hospitals to “share” expensive hospital equipment.
Cassava Fintech (one of our businesses) developed a business model to help rural people pool their savings using mobile money. A group of young entrepreneurs in South Africa replaced the “Office Messenger” with a (shared) system called Sendr. Companies call for “Sendr” when they need a parcel delivered quickly. This was really cool so I invested! Now I’m going to help them turn every “Okada” (Nigerian motorcycle taxi) into a “Sendr” agent!
Call to Action! The “shared economy” business model is a new pathway to entrepreneurial success. It enables you to solve problems experienced by people every day in your community, country, and even the whole continent. (Or the world!) If you want to have a business which grows rapidly, and does not (necessarily) need huge amounts of capital, go back and look at some problems, and the solutions used for those problems. Ask yourself how you could redesign them using the “shared economy” model.
If the truth be told, everything in Africa is shared. We just have to find smart ways to digitize and monetize! If we don’t do it, then others will come in, study our solutions, and take them home to create Uber, Lyft, Airbnb, and others… And we have no right to blame them. It was there for the taking whilst we were sleeping or crying!
To be continued.
As an entrepreneur, when I see inefficiency in how something is done by someone else, I see opportunity for myself and our business. If every young entrepreneur in Africa begins to think this way, then everything will be disrupted by amazing new businesses that can actually go global. Do some research and tell me about some other “shared economy” businesses already up and running in your own countries, or anywhere really, to help inspire each other. (But if you have your own idea and it’s not yet a business, remember… shhh!)
A few years ago, the European Commission asked the consulting firm PWC to study the sharing “collaborative” economy in countries throughout the European Union. Some of you may find it interesting reading.
What might we find if we commission a study of our own for the African continent, say in the year 2020? You can find the download link to the report at the bottom of PWC’s summary. http://www.pwc.blogs.com/…/european-commission-guidance…
The other day a friend of mine who is a smart philanthropist from India said to me: “Every month more than 1m young Indians turn 18 years old, and enter the job market. Most of them will never find a job the way we understand jobs today. We can only tackle this problem using a revolution in entrepreneurship.”
The reality is that Africa faces the same challenges. Our population is virtually the same as India’s, and we probably have quite similar demographics of young people. It was this more than anything else which made me start writing to encourage young people in Africa to begin an entrepreneurial revolution. If I had my way, every school leaver would be taught how to set up a business, write a business plan, and manage both people and cash flow.
One co-founder of Lyft, Logan Green, was able to “see” in the chaos of an African transport system, a highly entrepreneurial solution that could even be adopted in the most advanced economy in the world. He was a “fast follower” to something he saw in Africa, but he also RE-IMAGINED it for use in his own country’s problems. Now according to a recent article, he’s busy imagining some new ideas (including of course Lyft self-driving cars): “For example, a shared commuting vehicle could feature WiFi, spots for laptops, and a quiet atmosphere. A weekend-getaway vehicle may have a leather couch and a place to store drinks. Another car with a large TV screen could prompt a rider to watch their favorite show…”
Wow! What do you see?!
# Entrepreneurial Policymakers:
One of these days, I’m going to do a series on what I call “Entrepreneurial Policymaking.”
If you are in public service (either elected or civil servant) there is a lot you can do from a policymaking perspective to help drive job creation and prosperity in your country.
Singapore and Dubai are countries that have been propelled to the top of economic tables because of “Entrepreneurial Policymaking”.
# We need policymakers [elected and civil servants] that appreciate the need to create a proper framework and support infrastructure for growth through entrepreneurship!
In Africa, Rwanda and Mauritius are emerging contenders in this approach. I recently had lunch with the new PM of Ethiopia and was amazed by his “entrepreneurial style”. He is capable of turning that country into a roaring lion! I won’t comment further because I don’t want to be drawn into politics by those who see everything through politics.
# We need to create over 10m jobs a year in Africa. We cannot do it without an “Entrepreneurial Mindset” in our policymaking.
This does not mean that we want policymakers to start businesses, and certainly we don’t need more parastatals [state-owned enterprises]! We need to start discussing the type of policies that work, and not recycle old concepts that let us down before, or have failed elsewhere.