__Finding your place in a new industry: A case study
What do you do when you realize that there is a big change coming which can disrupt, change or put you out of business completely? We all know that everything is going digital, right? But what are you going to do to be a part of this game?
Let me give you my own example: I’m in a good business which for 20 years has generated millions in revenue and profits from #Voice calling, but as the number of Smartphones grew I also knew that people were moving to #Data calling through services like WhatsApp and Facebook, who don’t share their own profits from advertising with the mobile network operators whose networks they use.
Our core business was “flat-lining” and growth was now slow!
My key people started to work on a strategy to counter these changes to our business model. This started more than 10 years ago. Fundamentally, we decided to become more a “technology” company, and less a “telecommunications” company. Words like “fintech,” “smartech,” and “on-demand services” became popular in our leadership discussions.
Our businesses like Cassava Smartech, Liquid Telecom, Africa Data Centres, Vaya Africa and Sasai Global were all part of this response. Fast Forward: We tried to to focus on things where we thought we had some competitive advantage. In entrepreneurial circles they call it “pivoting”. I pivot a lot.
Don’t be surprised if you never heard about it before. It’s not a #Consumer business, it is called an #Enterprise business or B2B. It only sells its services to large businesses and not to the general public.
__This is a pivot from Telcom to Tech!
We knew that the new players like WhatsApp, Uber, Netflix, Instagram and Facebook had one thing in common: They consume #Data big time! And not the kind of data on your mobile phone—TERABYTES! So, if you can’t beat them, enable them…
Yes, we wanted to make it easier for them to come into Africa. We would provide them what is called #Digital infrastructure. We spotted four areas:
# Fibre optic data highways
# Payment gateways — Sasai
# Cloud storage
# Edge networks (we will discuss this another day!)
Some experts in the tech space have actually called ADC the smartest move I have made in recent years!
Well, remember I didn’t do it on my own! I have very good #People, and they told me it would be easy for us to do DIGITAL INFRASTRUCTURE to support many of the world’s leading global #CLOUD COMPUTING players.
The entry point into the data centre industry was Nairobi, Kenya where ADC is the largest data centre in sub-Sahara Africa, outside South Africa. Known as the East Africa Data Centre, it is huge and houses some of the biggest companies in the tech world operating in Africa, as well as banks.
Our biggest data centres are in South Africa, and these are almost 10 times the size of the East Africa Data Centre. One of our data centres will eventually consume 40MW of power. This is more than some capital cities in Africa, which is why we have our own power company!
Like so many other businesses, I have had to develop ADC with partners, mostly financial partners, which means I don’t own it 100%. This is a capital intensive business that demands hundreds of millions of $USD per project with returns taking many years, so I’m cool with owning less, as long as I own the vision. Known as a “carrier neutral centre” ADC is now easily the leading data centre company in Africa! And expansion to several countries across the continent is in progress…
Let me tell you something: Anyone who uses a Smartphone in Africa, moves through our digital infrastructure at some point in any given day!
Please list below the #five key take-aways for you as an entrepreneur from this case study. Also read the comments of others.
Meanwhile do me also a favour this week: Download or update your Sasai App, explore it and if we meet the mark, give us a 5-Star rating. I would not ask if you had to pay for it.
What do YOU see?
Remember: “Pivoting is not the end of the disruption process but the beginning of the next leg of your journey”. (Jay Samit)
Image caption: Africa Data Centres facility in Nairobi
Strive Masiyiwa is the founder and Executive Chairman of the Econet Group. He serves on several international boards including Unilever, and the Global Advisory boards of the Council on Foreign Relations and Stanford University. A board member of the Rockefeller Foundation for 15 years, he also serves as Chairman of the Alliance for a Green Revolution in Africa (AGRA). He is a co-founder of the Carbon War Room, Pathways for Prosperity, and the Global Business Coalition on Education. He and his wife, Tsitsi, co-founded the Higherlife Foundation and are signators of the Giving Pledge.View all posts by Strive Masiyiwa