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Entrepreneurs looking to grow their business in Africa should not assume that the market in every country on the continent is the same. So, says Brett Magrath, the co-founder and chief product officer of domestic money transfer service Zoona.
“Everyone will tell you that no market in Africa is the same, and as entrepreneurs we don’t always listen to what everyone says, and you think you can kind of take on the world,” said Magrath (pictured above), while speaking at a MEST Entrepreneur Soapbox Session last week (18 May) at the MEST Incubator,
In response to a question that the incubator’s community manager Victoria Jackson had posed on what lessons the founder had learnt around scaling and tackling a number of markets simultaneously, he stressed that “every market is different, it has its own nuances”.
The company currently operates in Zambia, Malawi and Mozambique. In Zambia alone, Magrath said Zoona now has 2-million active consumers (over a 90-day basis), and moves $60-million a month, and has since launch processed over $2-billion of value over its channel.
Zoona has operations in Zambia, Malawi, and Mozambique
“Our errors have always been where we think we know the answer, and we go and either with just the product that we have built — that we think is right — or we go into a market with a strategy that we think is right,” he said.
“So, we launched in Mozambique just about two or three years ago, and we probably invested about $2-million dollars in building up an agent network across the entire breath of Mozambique, to kind of only realise that the main use cases aren’t money transfers — but it’s actually more savings, and credit, and things like that,” he added.
‘Don’t spend a lot of money to prove product market fit’
Magrath advised startups looking to scale to adopt the company’s approach to expansion — to spend as little money as you can to prove the product-market fit first.
Explaining how Zoona conducts pilot trials, Macgrath said the company often picks remote towns to test out its products.
“We normally spend about two months piloting in one town, then we will go into about three towns, often actually taking about three different strategies to each of these towns so we can AB test the different strategies, and then based on what wins we will then take it nationally,” he explained.
He also advised startups that have attained a product market fit to focus on their experience matrix and make sure the products that they have built meet the needs of the consumer.
“Then, look at the commercial component, can you scale it, and build commercial viability? Then go and scale it,” he advised.
Said Magrath: “I think that iterative kind of prototyping approach almost can’t be underestimated. So, even now, we are a nine-year old business in Zambia, but we are now launching our nano-credit offering and will launch it in one town in Zambia.”