There is a lot I did not understand about building a mobile app, first things first I did not know that it is so damn expensive. I had, what I thought was a simple idea to kick start a very innovative business, so I went online to seek for an app developer to help me bring this idea to life. What I found was shocking, I got many responses in my inbox and most of the companies expressed their interest to develop the app, the only shocker was the pricing range. Damn building an app is expensive; I got quotations ranging from R120,000 to R280,000 I could not believe what I saw. So I must pay 200k for an app that even I don’t know if it will be a successful business, this is purely ludicrous, I mean this is the inception phase of this great project. I have not even considered the cost of resources to maintain this app. This is merely a skeleton app that still needs further development after testing and sampling it to the market, the feedback from our potential customers might suggest that a lot of functionalities need to be changed or tweaked here and there.
I want to mention that the mobile app business model is yet to be fully explored in this country. There are many opportunities for platform businesses, a majority of our service offerings are still done in an old conventional manner. There are key elements that make these platform businesses very innovative; firstly they engage the customer, meaning that the consumer can tell the platform of the things she’s not happy about or contrary the things she was pleased about regarding the service. This is information that can help your business grow and improve, we transform data into meaningful information that can be applied to the business model in line with the customer’s needs. This model eliminates the issue of location to access a service and allows independent individuals to interact with each other. We can now seek services literally from anywhere around the globe, the mobile apps break down all regional, country and continental borders, so what this means is that whatever business you build, you can literally test its market anywhere on the globe. So now we can take any traditional South African business, add technology to it and send it out to the world, and the feedback is what brings value to the platform business, now you’ll understand what your target audience wants. But for me the hardest part is marketing, if you cannot get the world to interact with your app then it will fail dismally, and I think this is where most local start-ups fail.
The value chain is pretty much simple for these platform business models, they are multi-sided platforms; which means they allow direct interactions between the customer, the product or service and the business. So, you might not even own a product/service that is on sale, but you provide a platform for that marketplace to interact. The input costs during start-up are high in my experience, so you’ll most certainly need capital investors in exchange for some equity to support the platform in its infancy stage. The operations aspect of this business is data intensive, customer focused and technology driven, and therefore you need to build solid partnerships with companies that can offer these core functions to support the success of your business. The solutions you bring to your consumer are generally intangible, for instance, Uber’s value proposition to their commuters is safety, they have introduced features to their App that can ensure this. If you really think about it they took a very conventional business of taxis, and with the use of technology added a human interaction element to it. Their feedback feature gives comfort to their consumers on their concerns and also allows Uber to grow.
We can use mobile apps to optimize the purchasing of already existing products/services, give consumers a right to give feedback on their experience while interacting with the market, allow seamless electronic payment transactions, and create a database that builds your intellectual property. We can transform the way business interacts with consumers in South Africa.
Written by: Kabelo Motsugi