The contemporary conversation on technology makes it look like the world of atoms and the old-age industrial economy have all gone. Yes, digital and specifically online will rule the future, and software will eat and save the world. But if you look deeper, you will notice one thing: the bulk of wealth in places like Nigeria and Africa in general remains offline. And the richest in these areas are old-school businessmen who continue to pursue the boring entrepreneurial pursuits of the industrial economy. Sure, online will come, but it will not happen tomorrow! You must work to capture value today even as you prepare for tomorrow’s redesign!
Statistically, you are more likely to be richer on CASH in Nigeria if your business involves the boring domains of the industrial economy (shipping, logistics, farming, manufacturing, real estate, food production, cement production, etc) than running all-online business. So, while the digital’s online promises the future, today, the opportunities remain on those physical platforms which power economies. People pay premiums for those offline engines of economies.
For all the excitements about Meta (Facebook), Apple, Google, etc, remember the boring builders like Warren Buffett: “Warren Buffett-led conglomerate saw net income of nearly $36 billion in the second quarter, and an overall profit of the same amount….Berkshire Hathaway finished the second quarter with $147.4 billion in cash and cash equivalents, which is a near-record.” Yes, in 3 months, one company’s profit was Nigeria’s annual budget – and he does not have an app!
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No matter what you do in Nigeria, if you do not have a PHYSICAL (offline) playbook, you will likely not do very well. The best fintech companies in Nigeria are those with strong physical-space strategy despite the apps store and websites. The best logistics companies have human elements at strategic hubs despite their apps.
Simply, if you think you can win by just launching an app or having a website, you are dreaming, because every business is local, and today, the physical space remains the pulse in Nigeria, as the best customers are not yet online at scale. Sure, the students will give you downloads, but to have alerts in the bank, you need to go offline.
Berkshire Hathaway on Saturday posted its highest-ever quarterly operating profit of $10.04 billion, a 7% increase from a year earlier. The Warren Buffett-led conglomerate saw net income of nearly $36 billion in the second quarter, and an overall profit of the same amount. Its insurance businesses, including car insurer Geico, were a big driver of the quarter’s successes, and helped offset losses in some of the company’s other divisions — such as the BNSF railroad, which saw a 24% overall profit drop thanks to lower consumer-goods shipments and price competition from the trucking industry. Berkshire Hathaway finished the second quarter with $147.4 billion in cash and cash equivalents, which is a near-record. The conglomerate repurchased $1.4 billion in stock in the second quarter, which is a significant drop from $4.4 billion in the first quarter.
Go Offline and find those customers! At the meatspace (physical space), you will find the entities required to expand your user base. At Offline, you will discover clusters to onboard thousands of users, instead of just one client at a time. Offline is the real world; the online is simply an extension when it comes to Africa. Have an offline strategy.
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Those who are comfortable on the digital spaces largely do not have the economic power yet, the wealth is still resident within the older generation, and wealth transfer takes longer time than before, because people live longer now. For the digital economy become mainstream here, you have to give it at least another 30 years, to enable today’s young people to amass significant wealth.
It’s demographic economics, not really about enthusiasm or digital lifestyle. The money remains offline.