Alexander Oswald: Why Kenyans Do It Better (Full Transcript)

Full transcript of mobile marketing manager Alexander Oswald’s TEDx Talk: Why Kenyans do it better at TEDxVienna conference. This event occurred on November 3, 2012.

Notable quote from this talk: 

“It’s obvious, because nobody wants to queue up, so you just order, you get a bag, you pay, or you might have already paid through M-Pesa. That works fine. I’m queuing up every time; and I hate it.”

 

Alexander Oswald – Mobile marketing manager

Thank you very much for having me here. I maybe have the surprising title of “Why Kenyans do it better,” but relax, it’s all cool; it’s just that we need to rethink our mobile solutions.

It’s not maybe that the industry is a little bit crazy or the stock market, we all know that, but maybe also our approach when it comes to a mobile solution is a little bit distracted from the users.

I’ve worked 10 years in this industry. I thought I knew a lot. But actually, I had to travel to Kenya to really understand what the problem is.

We simply went there because our daughter is 9 years old, and my wife said, “You know, when I was 9 years old, I was on a safari for the first time, and it was really an impression I never forgot my whole life. So why don’t we take her there?”

Which we actually did, and we slept in this tent. It’s an outstanding experience, I can tell you. Because there are no fences around the camp. There are just some guards, walking up and down. If you want, you can ask my wife in the break how it is when an elephant stands next to your tent during the night, and the husband has the idea, “I have to go to the toilet.”

But it was really great. We saw all the animals. Go there in July, it’s the best time; although we’ve seen the big five, we were very excited. For my daughter, the most exciting experience was a pink hippo. Which is fair, I mean, pink hippo is really rare, and I liked it, and I think it will have also to do with the color.

But when you spend five days with a guy in a car, our driver, Steven, you get to learn from each other, you chit chat about this and that.

One day, he received a text message. He obviously was very happy about getting this text message. He immediately started doing phone calls while driving through the green.

When I asked him during the break, “What happened? You seem to be very happy,” He said like, “Yeah, yeah, yeah, my daughter passed an exam.”

You have to know, he is working two months, seven days a week, then he gets two weeks off. Then he drives 800 kilometers to his family to see them.

I said, “That’s nice. So your wife keeps you up-to-date with what’s going on.” He said, “No no no, the school.”

“Ah, OK, so the teacher is texting you.”

“No, no, the school; I know everything. If my daughter doesn’t attend school, I get a text message.”

OK. Full stop now.

Again, I’m living in one of the top 10 richest countries in the world. I have spent 10 years in this industry. Sorry for the words: I have absolutely no clue if my daughter goes to school, or what her grades are, and if she passed an exam. We think we are one of the most highly developed markets in the world.

We have a mobile phone penetration beyond 120%. If you think today, in terms of marketing solutions, an app is the state-of-the-art. Most big companies and also smaller ones, either they are already implementing or at least they are considering to have a mobile solution, they will think about an app, which makes absolutely perfect sense, according to my knowledge after 10 years.

Why? Because 40% on average now – and please, this is not exact market research, I round it up or down to make it a little bit more visible today – but on average 40% of all smartphones in Austria which are sold, of all phones, are smartphones. In Germany, it’s 25%.

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So, this is really a highly-developed market. But if you start developing an app, and you make this decision, it means you can only reach 40% of all users; 60% gone. OK. It’s OK.

But then, your mobile agency or developer will say, “But we need to make decisions. You cannot have an app for all. We need to make a great app, an exciting app. We need to make decisions based on operating systems. Most people have no clue about operating systems, so they may well ask you, “What do we do?” I say, like, “Yeah, we take the most popular one. That works for everyone.”

OK, you take Apple iOS, which has, on average, 20% market share in a 40% smartphone market, which means, like, you can only reach 8% of all users in Austria, any more. OK, good.

Now, there is the next thing: not all of your customers will have these kinds of smartphones, in our case, an iPhone. But let’s be generous. You’re in a great industry.

We’ll say your customers have over the average income. So 50% of your customers have an iPhone. Lots of managers and other ones in there. Great. So you can still reach 4% of all users in Austria.

Unfortunately, nobody has a clue that your app exists. Nobody has ever heard about it, and there are half a million or more apps in the Store, so the chance is that they find you is rather rare, but your business works great, you have a lot of marketing budget, so you decide you really spend a 6-digit amount, on promoting your app.

Let’s assume you have one of the smartest agencies in Austria, and they really do an exciting job, and together with the CRM program, it works great. Twenty five percent of all people download your app, so every fourth one, and trust me, that would be a really good value. One percent of all users in Austria.

Now they have downloaded it, but sorry, bad news, according to a latest study, 28% of people who downloaded an app don’t even open it once. So at the moment, we are at 0.72% of all users in Austria. I think you got my point a little bit.

So, to put it in a nutshell, what was surprising to me, when I was in Kenya, and again, 10 years in this industry, and if you ask me or anybody else in this industry, what do you think the hottest topic in the next three years will be? Mobile payment.

Everybody is working on that. We will dominate everything, and everybody is going to pay through their phones. Now I’ve been to Kenya. 40 million people are there. Many people would consider it a developing country.

Remember, 40 million people are living there. 14 million people in Kenya have a mobile payment solution.

Now, who’s now the stupid one? They don’t need to have everything. The most simple, “stupid” feature phone is enough. They do it based on text messages. Simple text messages.

The great thing is, because it’s a developing country, many people don’t have bank accounts; they don’t need a bank account for their mobile payment solution. Very smart approach.

So how do they get people money?

They send it via a text message to another person, and believe me, in places where you would never imagine that something like this could be, you find this, “The M-Pesa agent,” “Pesa” is Swahili, and it means simply “money.” So it’s a combination of text messages and a kind of Western Union outlets. And that enables people in the middle of nowhere to send money to other people, or get money.

Cool! I live in the top 10 richest countries in the world, I cannot pay except for parking. But it’s a fair point.

After this safari, we went to the hotel and then we learned that most people never leave the hotel. They spend their entire time at the pool, because outside of the hotel are these very bad people called “beach boys” that are just trying to sell you something.

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We got to know some of them, especially one guy in the red shirt, Jubo. Don’t think they can run around wherever they want. They need to get a license and it is restricted to a certain area in front of a specific hotel. Otherwise, there’ll be a chaos on the beach, so it is really structured.

I spoke to this guy. They don’t bite. They actually are very nice. He spent six years in school, and we had the whole conversation in German, because he said he loves to talk to tourists. Impressive. And he told me also about it.

From him I learned, and I read it later, that only 700,000 people in Kenya have a health insurance, as we know it. Which means 39 million don’t have health insurance, which is a big problem.

When we spoke about it, he said like, “Yeah, they have it,” because he can always save money, and send it to a virtual account; and that virtual account can be used for everybody. So his sister can use it, his little sister, his mom can use it, his grandpa.

He can go to a hospital, which is of course subsidized, but he gets medical treatment there. When his little sister needs something for school, he can order it. He orders it in shops which don’t even have electricity, but the shop owners, with my orders, can set up virtual stores, where other people can order stuff and tell they will pick it up at half past five, when they are going home.

It’s obvious, because nobody wants to queue up, so you just order, you get a bag, you pay, or you might have already paid through M-Pesa. That works fine. I’m queuing up every time; and I hate it. That you have an example, there are these three outstanding women, who created over a weekend – a weekend – for a startup competition, a solution called “M-Farm,” which allows again, based on mobile phones, that farmers learn at which market their crops are needed and which price they will get.

If they want to sell to a bigger company, they can do group buying or group selling based on mobile phones. I cannot do group buying at the moment. But that’s a fair point. And of course, in these countries, they suffer. So Kilimo Salama, for example, puts up this.

Once a farmer signs up through a mobile phone, for an insurance, for his crops. Now again, this is the middle of nowhere, there is no electricity, but it doesn’t matter, because it’s solar powered. The company comes, puts up this solar-powered station which measures the soil, the weather, the rain, and everything. And if it’s too dry, guess what? He gets automatic payment on his mobile phone from this insurance company.

Now, I have never received an automatic payment from any insurance company, but that’s a different one.

Now, what I’m trying to tell you is that my impression is, after ten years in this industry, that we just have one problem in our top ten richest country in the world, which is: we have too many resources. The scarcity of the resources there brings the best out of people. To me this is, in a certain way, I admire them for what they are doing, but on the other side, I am a little bit scared, because, believe it or not, in five years, it could be possible that we need to go to Kenya, and ask them for consultation on mobile solutions. And that is something, I think, we should consider our approach today.

Thank you.

 

 

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