This is the third of the three ideas I had committed to share in response to Gbenga Sesan’s challenge. The whole ideas thing came out of my Clone Wars series where I had claimed that there are enough local problems to use technology to solve rather than creating copies of technologies that don’t necessarily solve anything. I seriously love Twitter, but it doesn’t in and of itself solve any problem. However, a whole slew of things have been built on top of it that solve a variety of problems.
On to today’s idea. EBay is one of those unique web-based businesses that was profitable from day one. EBay’s original business required very little infrastructure because what it did was connect buyers with sellers and take a cut of the transaction for providing this connection. This brokerage model is an excellent one that many have tried to replicate the world over.
You and I both have stuff we would like to sell off and make some cash from, but the problem in Nigeria is that we generally don’t trust each other, and unfortunately we have good cause for this lack of trust. As I wrote in a post last year, my very first attempt to sell something on eBay itself was hijacked by someone trying to dupe me in Surulere. This kind of issue makes it hard for people to do commerce with strangers online in Nigeria and those who have tried to replicate eBay type systems have had it really difficult. First Naija for instance, seems to be depressingly empty despite appearing to be well implemented (though I don’t actually have any information as to why it is empty). BidNigeria (see their “about us”) also looks interesting, but time will tell how it does.
EBay works in the US and similar societies because it is relatively easy to locate people and bring the weight of the law down on them not because they are intrinsically more honest. People (for the most part) are more trusting in these societies because broken trust is easier to punish. Where people are duped, it is because the people they sold to or bought from have succeeded in presenting a false identity or false location information. Ironically, the SIM registration thing may actually be a tool that could be used to address that here in Nigeria, but that’s not the solution I’m looking at.
The solution is fairly simple, and as one of the speakers at BarCamp Nigeria 2010 pointed out the banks, faced with a similar problem, have worked out a solution. Banks require all new customers to be validated by an existing customer. This, known as the “web of trust”, is based on the fact that if I trust you, then I can probably trust the people you recommend. It’s a bit more involved than this, but at the core, this is what it ultimately is.
There are various ways to implement this. One of the most obvious is to use the social graph that exists in systems like Facebook. Your relationships on these platforms are based on existing real world relationships (at least they are if you have been judicious in who you “friended”) and you already know to what extent you can trust the persons you are connected to. Another option is to build your own social graph specifically for this product – in effect, building your own social network. There are other possible ways to do this and smarter people than me are already working on it. Either way, build your auction or peer-to-peer sales solution connecting people to people they already know and they will already have data as to whether or not they can trust the buyer or seller.
Let me close this series with this thought, I am conscious I am giving away ideas that could be used to build businesses, but I am doing it for at least two reasons. First, the ideas are not particularly unique, earth-shaking or even very original. Look around, someone somewhere is already implementing them in one form or the other.There really is nothing new under the sun. Secondly, and more importantly, ideas are not worth very much. Really they are not. We’ve heard the old story about the cemetery being the richest place in the world because ideas are buried there. Yes and No. An idea is only worth as much as its execution. No more. Coke, Pepsi and Dr. Pepper are essentially the same idea. It’s the execution that makes the difference. The iPod is synonymous with MP3 players, but Apple did not invent the idea. Yet their execution gave them most of the market. Great executors don’t always originate ideas, but they do them better than everyone else. Many VCs won’t do NDAs (non-disclosure agreements) with startups who are just pitching ideas, because the very next startup is going to pitch the same thing at them. They also don’t sign up many startups until the startup can show that they can out-execute the other guy doing the same thing and differentiate themselves.
I am not suggesting that you shouldn’t protect your business plans, designs, specifications, or algorithms. They are all work product, but ideas themselves are a dime a dozen. Most importantly, when you share an idea, the idea itself can grow in the sharing and you get something more concrete and more doable from the conversation. Yes you risk someone stealing your thunder, but if it is so easy to implement, it may not be worth your time anyway. My final word is this: as much as we compete, we need to collaborate as well and sharing ideas is the first step towards that.
