How these African founders approach customer acquisition

Every year new tech companies are started, and founders worry about how to grow their companies. According to Paul Graham, “The only essential thing for startups is growth. Everything else we associate with startups follows from growth”.

In 2019, reports put the startup failure rate in Nigeria at 61% and according to the World Economic Forum, only 8% of African startups make it to the Series B stage of funding. The difference between the startups that fail and those that survive is growth.

There are different metrics for measuring growth for startups including monthly recurring revenue, profit, or customer churn. But one of the most important is customer acquisition. On the Zero to Scale series, we spoke to a number of founders to see how they acquired customers in the early days of their startups.

By building communities

Before launching Kippa, Kennedy Ekezie-Joseph, CEO of Kippa, and his cofounder took a trip around Nigeria trying to figure out the pain points of merchants for whom they were building.

They built a community from the people they met on the trip; “We took the contact details of everyone we met on our trip and we added them to a Facebook community and every day we would send out a bunch of content, very important things ranging from how to price your product, to how to sell online using WhatsApp, we invited guest speakers to have live sessions,” Kennedy said.

“For a lot of these business owners, it was the first time they were receiving that level of attention from a third party that wasn't interested in selling anything to them. We grew that Facebook community from 100+ people when we created it to over 50,000 people before we launched. Most of the early users of the Kippa Product came from there.”

In the beginning, when HealthTracka set out to acquire customers, Ifeoluwa Dare Johnson, CEO of HealthTracka created a list of her contacts and started cold calling them.

“We were bootstrapping so we didn't have money, I had a book where I had written the names of everybody on my contact list and I was calling them. Some of them only accepted to show support, others referred other people,” she said. When they had exhausted that source of customers, they turned to target communities where they could offer value. “We began to look at the communities where people who need our services are clustered. For example, we offer pre-wedding tests, If you want to get married, you should know your genotype and your blood group. So we began to look at communities like churches that enforce tests.”

By leveraging partnerships with other companies

Etap has leveraged partnerships with other companies with mutual interests to help drive customer acquisition. Last year, Nigerian mobility tech company, ETAP partnered with MTN Nigeria to reward Nigerian drivers for maintaining good driving behaviour.

According to Ibraheem Babalola, CEO and founder of ETAP, the partnership paved the way for the growth of both companies. “As MTN began to remain more of a technology company rather than a telecoms company, partnering with companies like Etap began to look more interesting. What if we could give additional value to MTN customers? For example, if you're an MTN customer, ETAP won't use your existing data when accessing the app.”

“We want to connect our customers to exciting products and services that enable the best experiences, and this partnership with ETAP aligns perfectly with this mission,” says Adia Sowho, Chief Marketing Officer of MTN Nigeria.

By utilising their network and expertise

In acquiring customers, Identitypass, a Nigerian digital compliance and security startup, leveraged the ecosystem knowledge and expertise of its co-founders.

According to Obi Ebuka David, co-founder and CTO of Identitypass, to really get started on a solution to a problem and scale it, there are three Es; Exposure, Experience, and Expertise.

Out of the co-founders of Identity Pass, each person has their share of these Es.

“Before we started, Tolu Adetuyi (co-f0under at IdentityPass) was with Moniepoint (formerly TeamApt), and I was with Appzone group. Appzone has a platform that powers over 150 microfinance banks and provides solutions to all commercial banks in Nigeria. My other co-founders in the business space had a couple of conversations both with government and private entities, so all four of us coming together, it was easy to identify who had a problem we could solve,” David said.

“In that way, we got our first, second, and third customers. Because we had a network, we knew the companies and the people in those companies looking for our solutions.”

Customer acquisition when done right can be a huge driver for startup growth, and strategies like building communities, networking, and collaborating with companies with similar goals can help startups acquire new customers and retain existing ones.

Also Read: How do these African founders hire and manage talents?