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Convenience is over rated.
Everyday, there is a new startup promising to help you do something more conviniently. We have to do this because that is what businesses are built on. Making things easier.
However, not all things should be made more convinient. The difference between the previous level of difficulty and what you propose should be large enough for the user to be willing to pay.
The true cost of convenience
You have to factor in the opourtunity cost and make sure that the total cost is worth the convenience. That total cost is what people subconciously measure when deciding between two options.
monetary cost + oppourtunity cost = true cost
- Should I buy a laptop OR a phone?
- Should I buy a car OR a plot of land?
- Do I buy new clothes OR new shoes?
For most people, every choice competes with a lot of other things. A lot of really important things. Make sure that your “convenience” is important enough to trump most of this.
For exampe, let’s assume for a moment that everybody in Nigeria has an extra 100k each month.
- More people will go to cinemas, beaches, clubs shows. Concerts will be a thing.
- Gadgets like smartphones, wearables,
- Convenient services ike Uber will be in much more demand
The lack of disposable income makes the oppourtunity cost is even higher than usual. Make sure the convenience that your startup delivers is really really big.
If not, you have a very narrow customer base which comprises of the people in Nigeria, with enough disposable income that for them, the oppourtunity cost is negligible.
The average city dweller in Nigeria earns between 30k – 200k a month, and he has to cover the following;
- Clothes, shoes perfumes, creams, e.t.c.
- Recreation (movies, events e.t.c)
- Debt (perhaps)
Now you build an gaming app and hope that this individual will spend 10k monthly? Or you want him to subscribe to a home security system for 50k a month?
It won’t happen.
When you think building a startup in Nigeria is great because of our 170m+ market, remember to build something that they will pay for.
Build a necessity.
Don’t expect me to pay for an app that helps me pick the clothes to wear (if you have a lot of users, advertisers may pay though). Even if I do sign up, as soon as I face any sort of financial difficulty, it’ll probably be the first thing to go.
If you PROOVE that you can help find people jobs A LOT faster, people will pay, because getting a job is a necessity to most.
If you build something that puts significant money in the customer’s pocket and it will probably go viral. Classic case, MMM.
This image I found on a Mark Essien site really sums it up.
Also published on Medium.