2go: SA startup you’ve never heard of crushes Facebook in Nigeria

South African instant messaging startup 2go is getting some good traction in Nigeria. The company is reporting that it recently crossed the 10 million user mark. That’s a significant number seeing as Facebook has managed to attract just over five-million users in the Nigerian social networking market.

The service claims to have more than 21 million registered users in total and is reporting an average of 50 000 new registration per day. Its biggest direct competitor, Mxit reported just over 50 million earlier this year. Nigeria is one of Mxit’s strongest markets, South Africa being its strongest with 10 million active users registered at last count — March 2012. 2go reports 1.5 million active users in South Africa.

2go is considered a quiet South African success story, a seven-person business that’s gone from startup to profitability in four years. That’s without marketing or outside financing. Director Peter Lockhart says the company has been able to achieve this by balancing a focus on what 2go’s users really want – a cheap, easy way to chat and socialise using their mobile phones – with the technical expertise needed to deliver that experience across thousands of different devices.

2go users message each other for free, meet new people and share updates and photos with friends and family. 2go’s mobile currency, GoCredits, enables users to buy content, play games and message each other in in chat rooms.

“Building mobile technology for an African market is tough,” says Lockhart. “Data and SMS are expensive, and our users are price sensitive and savvy. That means we have to deliver an application that uses the absolute minimum of system resources and bandwidth. Our response has been to develop proprietary communications protocols and compression algorithms that minimise the app’s data usage.”

The 2go team had to confront the technical challenge of producing an app that works equally well on all of the myriad feature phones (the company claims to support roughly 800 models) that still dominate the African market. “It’s much, much harder to develop for feature phones than for smartphones, partly because there is such a variety of platforms and operating systems. You need deep technical knowledge. This technical knowledge also extends to our ability to scale the back-end in a very resource efficient manner,” says Lockhart.

While some argue that within 5 years, most Africans will have smartphones, 2go says that its focus on feature phones is fueled by projections from Informa that indicate that non-smart phones will still comprise 85% of the African handset market in 2015.

2go has resisted the temptation to bloat its app with added features, adds Lockhart. “Our users log in and out quickly, several times a day – they want things to be quick and simple,” he says. “We’ve thought through every menu item; every pixel is there because it serves a purpose.”

Lockhart says that 2go takes feedback from its users seriously. “Our target market is not some kind of generic ‘Africa’. We ask what country are they in, what region, what city? 2go really took off in Nigeria when we noticed that our users wanted to be able to chat within their university communities. So we did the research and created a chat room for each university in the country,” he says.

“People want to be asked for their opinion. Many of our users are starved for entertainment and engagement. 31% of our Nigerian users tell us they don’t watch television, but 66% of them spend two or more hours on their phones each day. It’s a very sociable society, and 2go supports that sociability,” he added.

2go also provides gateways to GTalk, Mxit and Facebook. “I use 2go to chat with friends on Facebook and they have no idea,” says Lockhart. “Our whole mission is to make chat easy, cheap and painless, no matter what device you’re using.”

The company recently launched the 2go Ad Platform and 2go Market Research. The 2go Ad Platform enables brands and advertising agencies to target and engage with 2go’s users. 2go Market Research leverages the 2go community to conduct real-time surveys and polls that deliver actionable insights and value to clients.