THE strategy that enabled EcoCash to capture millions of Zimbabweans has seemingly been abandoned in the kombi market. It would appear the mechanism that caused EcoCash’s initial stellar success was not fully understood. Not surprisingly, that aberration from its successful strategy partially explains why EcoCash has failed to penetrate the Zimbabwean kombi market.
Three related innovation strategy phenomena seem to have not been fully understood by mobile money strategists: perpetual betterising (not bettering), disruptive innovation, and sustaining innovation. I beg you to be neither intimidated nor put off by these three ‘big’ terms — they are mere labels for straightforward ideas. If you misdiagnose an investment situation as a disruptive one when instead a sustaining innovation is called for it can mean wastage of millions of investment dollars. Getting categories of innovation right is a must. It’s an unavoidable intellectual exercise.
Perpetual betterising is the idea that among those managing a business, there is an influential group that is consumed by an undying passion for getting better and improved performance results, profit being a prime metric.
The flip side is that there are people who want better products or services. These three concepts link as follows.
To perpetually betterise, either a disruptive or a sustaining solution should be created and deployed. Knowing which market to betterise either by disrupting or by sustaining requires wisdom.
When people do not have enough money or adequate skill to access an existing product or service in a quest to accomplish what they are subconsciously trying to do, anything that enables them to achieve this better is embraced as a welcome and overdue relief. It does not have to be a complicated solution. Something simple or basic will do as long as that simple solution is also affordable. What I have just described is what is called a disruptive solution. A disruptive solution is this: it is a simpler, more affordable, and more convenient solution that is offered to people who either have zero access to an existing expensive and complex solution or grudgingly (or even happily) use an existing solution because they are not aware of a cheaper alternative. Formally put, we say a disruptive innovation betterises people whose alternative is nothing. A disruptive solution successfully competes against non-consumption. Zimbabwe’s most famous disruptive innovations are the now defunct upper-top schools and ZimScience system. More often than not, as a school-going child staying in a rural area, you either went to Upper-Top or stayed at home because your guardian either could not afford or you simply had no access to a traditional secondary school. Chances are there was no lab at your upper-top school. Your alternative to learning science was either ZimScience or nothing. When the only available alternative is nothing, then anything slightly better than nothing is acceptable.
When an existing product or solution gets better and better, and consequently gets more and more complex, and usually more expensive, it is called a sustaining solution. Only the moneyed few can afford that. Resultantly, a sustaining innovation succeeds only when deployed to people who are already consumers of previous versions of the same solution. Sustaining innovations cannot be successfully commercialised at the bottom of a market. Neither can they successfully turn non-consumption into consumption. Formally, we say a sustaining innovation betterises those already better. Our Samsungs and iPhones are sustaining innovations because more and more sophisticated versions of these gadgets are churned out regularly and millions of people upgrade to these newer versions.
Misdiagnosing the kombi market as needing a disruptive payment solution is no small contributor to the apparent rejection of EcoCash there.
EcoCash found people already sending and receiving money. The only way EcoCash would successfully compete in this existing market would be to roll out a superior send-and-receive–money product, not an inferior one. What initially made EcoCash a huge success is that on the jobs that mattered most to millions of Zimbabweans — sending and receiving money – it was vastly superior to formal banks and the bus driver/conductor (metaphor for informal methods of sending money). In fact, sending money is one job and receiving money is the other. Before the advent of EcoCash senders of money either used formal banks or the bus driver/conductor. From the viewpoint of the send-money job EcoCash did much better than banks in that it was relatively cheap and more convenient. You could control the timing and location of sending. You could respond to emergencies quite swiftly. On the receive-money job, EcoCash beat both formal banks and the driver/conductor in terms of convenience — you didn’t need to wait and wait for the bus — you could get your money from your local general dealer at a more convenient time. You could bet your bottom dollar that the money sent through EcoCash would get to you safely. EcoCash conquered by sustaining, not by disrupting.
How the kombi is market then different from the formal banks and bus driver/conductor EcoCash outgunned? A payment job is oceans apart from the send-receive jobs.
EcoCash found commuters already using a system of payment for kombi fares. In such a case you win by sustaining and not by disrupting. A commuter has traditionally been happy to get a coin or a note from his/her wallet or pocket and hand it to the conductor. Asking a commuter to pay his/her kombi fare using a mobile phone is not more convenient than the simple pocket-wallet-to-hand system. It would appear EcoCash entered an existing market with a payment solution vastly inferior to the deceptively unsophisticated fare payment system. EcoCash apparently offered to de-betterise kombi users. People want to be betterised, and not de-betterised. This is what you asking me to do as a commuter when you entice me to pay my fare using a phone: you are telling me to go to my electronic wallet — which implies punching in codes to access the e-wallet menu and then to go through a chain of steps until I transfer the money to the phone the kombi crew is using. I don’t have to go through this when I reach into my pocket and hand my fare to the conductor. Looking at it from the point of view of the kombi crew — they have to endure the loss of time waiting for each customer to pay through this relatively laborious process. It does not make business sense in an industry where small margins of time may mean loss of business at certain times of the day, especially the honey-pot or peak periods. EcoCash lost because it tried to disrupt instead of sustaining.
The first hurdle EcoCash has to overcome in order to raise the faintest of hopes of successfully penetrating the kombi market is to find a way to make the EcoCash system superior to the deceptively primitive pocket-wallet-to-hand payment method. Near Field Communication (NFC) technology could help towards this. Let’s suppose NFC does get the payment done job better than pocket-wallet-to-hand there still remains a big hurdle — the kombi crew. A phenomenon called invisible entrepreneuring surfaced from a formal research I recently conducted based on data from Zimbabwe and South Africa’s commuter taxi industries is an even bigger barrier that will botch a superior EcoCash payment system for kombis.
Chulu is a management consultant and a classic grounded theory researcher. He has published research on business and innovation in an international peer reviewed journal. — email@example.com