How to turn $20m to $19bn in five years

March 26, 2014 by Dr. Anderson Uvie-Emegbo

Dr. Anderson Uvie-Emegbo
| credits: File copy

It is no longer news that WhatsApp has joined the Facebook family. For a company that made $20m the previous year, how did its valuation become $19bn? Where did WhatsApp get it right and what are the product development lessons for us?

Inaugurated in 2009, WhatsApp’s promise is simple – ‘chat on your mobile phone whenever, with any of your contacts irrespective of their location in the world or mobile network. After signing up, it accesses your phone contacts and displays all contacts that are already on WhatsApp. You can chat, exchange multimedia files and much more.

No frills and no long statements of “faster than fast, super reliable, unbeatable and all those bogus claims that are difficult to believe and hard to demonstrate”. By December 31, 2013, in one of its blog posts, it claimed to send 54 billion messages for about 400 million users daily.

The best form of marketing

The best form of marketing is a great business. How much advertising did Facebook, Skype, WhatsApp, Apple or Google do before many of us jumped into the bandwagon and became users? It is called the law of value. People will gravitate towards the place, product or service that returns the best-perceived value for their time, effort and resources. The BlackBerry Messenger service needed no second introduction when it came. Delicious food is its own greatest advert. Are your products and/or services up to the standard consumers need or is yours making up the numbers?

Are you comfortable with your current product development and service delivery approach? Are you a monopoly? Please think again as change and innovation comes in waves and no monopoly is sustainable. Are you planning for the next disruption to your business and product line?

A few years ago, professional taxi services were introduced in Nigeria. Did you ever use any of these? Has your patronage dropped, remained the same or increased? Where are they now?

Enter a simple mobile application powered service, “Easy Taxi” that connects taxi drivers and discerning consumers who want a reliable, convenient, fast and affordable service. I was sitting in a cab one day when I saw that the cover of the headrests of the seats had the name and logo, “Easy Taxi”. The driver was quick to introduce the service to me. He alongside other drivers had registered this new mobile taxi initiative. Easy Taxi has an app that allows users to book and track the cabs in real time.

Downloading the app from the Google Play store, it required that I switch on the location tool on my phone. As I launched the app, it located my position on Google Maps and brought out the details of a taxi close to where I was. I could see the position of the taxi on the map relative to mine. It also indicated how long it would take the taxi to get to where I was (10 minutes). It displayed the driver’s details (first and last names, mobile number and photo) and taxi details (plate number, model & colour).

The way it works is that each driver who signs up to the service has a location-enabled smartphone that can tell his/her position relative to a customer’s position. As soon as a customer launches the app, it displays the customer’s request and current location in real time to all the drivers within a particular radius of the customer’s location.

It displays the details of the first driver to accept this request to the customer. The customer sees this notification and can abort the taxi. Even at that, the Easy Taxi team immediately calls to confirm the request and advises on pricing.

Once the deal strikes, the driver clicks on a link within the app to indicate that the ride has commenced. The customer also gets a notification confirming that the ride is in progress (already boarded?). At the end of the ride, the app prompts the customer to evaluate his/her experience of the ride.

Some of these drivers have previously worked for one or more professional cab services firms. In their view, Easy Taxi is a win-win relationship that offers them dignified value for their time. Some of the drivers claim to get two to five referrals a day. With various branded items in their cars, they have become mobile advertising channels for Easy Taxi.

Easy Taxi model’s uses a “Click and Brick” (CAB) approach. Using their mobile app (Click), they act as brokers connecting customer and cab physically (Brick). For this service, it collects an agreed percentage of the taxi fare from the drivers based on the pre-agreed cost of each trip.

Easy Taxi handles marketing and customer service while the drivers handle logistics and last mile fulfilment.

Easy Taxi states that it has over 90,000 registered drivers in 26 countries and 98 cities. Its Android app has been downloaded over one million times and has a rating of 4.4 (out of a possible 5) by some 58,000+ users as at March 24, 2014. In Lagos, it is successfully exploiting the broken professional taxi hire system.

How simple is your promise?

Great businesses have simple promises and keep them. If the value is difficult to explain or understand then maybe it is not a value after all. If the product or service is unable to create stickiness among its current user base, then maybe it is time to rethink what’s on offer. An a la carte meal will never be a buffet!

WhatsApp’s promise is “Simple. Personal. Real-Time Messaging”. Easy Taxi’s promise is that “Get a Taxi in 3 clicks”. Simple Promises. Happy Customers…Money in the Bank. The challenge as always will be whether they can sustain this momentum. Only time will tell.

Somewhere out there, the next Easy Taxi or WhatsApp is waiting in the wings to take on your product(s)/service(s). What is your innovation strategy?