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Two months after nearly cutting nearly 60% of its staff, Konga has been acquired by Zinox.
Every moment is a lesson for entrepreneurs. Here are lessons to learn from Konga recent shut down of operations;
1. Do not operate above your means: According to reports, one of the reasons for Konga shutting down was because Naspers and AB Kinnevik decided not to fund the business again and the cash generated from Konga could not support its operation anymore.
So dear young entrepreneurs, note that long term investors are not readily available; hence you should not depend on investors funds. Instead of looking for investors, focus on building a sustainable business that would grow over a period of time
2. Run an offline/online model: Rather than focus all your resources on the online market, try to diversify a bit and combine it with an offline model. Truth is, Nigeria is still very much an offline market, hence, online payment is not at it’s peak.
3. Focus on Major cities: Nigeria is not that big a market, focus on the cities that have high patronage which gives you higher chances of maximum profit.
4. Encourage pay before service: Scrap the Pay-on- Delivery Model. Encourage your customers to pay for goods before they are delivered, this way you would avoid payment inconveniences (Aka, stories that touch).
5. Pick a Niche: Everyone is in the E-commerce sector these days. If you are not known for a specific product or service, it could be hard to make people buy from you. Even Amazon started as an online bookstore. A chosen niche helps you to focus your best effort on one area of specialization rather than everywhere. It also helps you stand out from the multitude.
A classic example would be: when you are in the market you are more likely to buy
tomatoes and pepper from someone who displays only peppers and tomatoes than the one who sells all food stuff including tomatoes and pepper
It is important to note that entrepreneurship is hard and a serious deal. It should not be a cheap alternative out of unemployment.
We have seen many startups close down due to funding issues. Konga is an example of a ‘war story’ told to enlighten others and inspire future generation of entrepreneurs.
Share your thoughts with us in the comment section.
Written By: Olamipo Adeniji
This is indeed an eye opener for all entrepreneurs. Thank you D.A