Disrupting Africa: implications of the digital revolution for disruptors

Technological disruption is transforming markets and societies across Africa. This opens up huge and still largely untapped commercial potential for domestic and international businesses. In my last article, I talked about the implications of technological disruption in Africa for mainstream businesses. But what do disruptor businesses need to be aware of and how can they capitalise on the potential of the digital revolution? 

One size fits none

Western models won’t work in Africa – the lack of legacy and pace of change mean that Africa is already beginning to leapfrog other continents. Similarly, no model can be transferred intact from one African country to another. Successful disruptors have developed business models that serve specific market needs and recognise the differences in regulation, market structure and consumer preference in different parts of Africa.

Look beyond technological innovation

Software solutions and other technological advances won’t work on their own. The real key is developing an effective business model and ensuring customer relevance. African consumers are crying out for home-grown content on their digital channels, for example. But content delivery needs to take account of the generally limited availability of wi-fi and use of old style ‘brick’ devices.

Think about where you fit in

Some disruptors have been able to carve out new markets from scratch. But most successful African start-ups have slotted themselves within gaps in existing markets and been able to develop revenues by speeding up delivery or broadening access. A clear case in point is the use of mobile data to verify location and support loan applications. As mobile and Internet of Things connectivity take hold in Africa, this data, rather than the devices and equipment that feed it, could become the real money spinner.

Think scale before it’s too late

Many successful start-ups have been built on the platforms created by parent companies or joint venture partners. But as businesses expand, they may begin to outgrow the original platform or find that it prevents them from moving into new markets. It’s therefore important to look at how to build up growth capacity and market reach further down the line, though new partners, standalone structures or separation and Initial Public Offering (IPO) from the parent business.

Expect resistance from vested interests

Large established players can be expected to push back against regulation that enables new entrants to take away market share – or even make their own business model obsolete. Partnership may be the only way to gain market access for now, but once up and running, you can begin to convince policymakers that the innovation and competition you offer is in the long-term interests of the market.

In my next article, I’ll consider the implications for policymakers of Africa’s digital revolution. In the meantime, why not read PwC’s full report on these exciting issues, Disrupting Africa.