Marketplace Value
“Oga, I just dey stand for one corner by Obalende dey show phone and ask where dem go”
I doubled over laughing - if you know me, you know this happens a lot. I enjoy laughs.
Quick Translation for the non-pidgin speakers: Boss (I wasn’t his boss), I stand in a very busy neighborhood in Lagos (Obalende) and show my phone to people who walk by and ask them where they are going.
Emmanuel, the guy who said this, had come to Uber Lagos office hours to discuss why he wasn’t getting as many customers (riders) as he wanted. Prior to signing up for the platform, he had been an airport taxi driver.
The reason why I was laughing (other than really liking to laugh) is because I could picture the scene and understood why Emmanuel was confused.
Imagine a crazy busy street in Downtown Brooklyn - packed full of people all trying to get to stores, trains, Nets games. Now, make it a little dusty because of sand from the beaches off of the African Atlantic coast. Then, take away the street lights (they’re there, but no one cares) and any semblance of paying attention to lane markings. Finally, make it 3-4 times more people on the street than you’ve ever seen in Downtown Brooklyn. That, friends, is Obalende.
And, in the middle of all these people, imagine Emmanuel, waving his phone at strangers, and asking them to get into his car to catch an Uber. There’s not even a place to park in Obalende, so even if a stranger agreed to take a ride, they would have to follow him to his car (sketch), download the Uber app (what), and request a ride (bruh).
Marketing, customer acquisition more specifically, can be painful, and as someone whose job it was to grow uberX as fast as possible in Lagos, I understood his pain. But, I also knew he was going about things the wrong way. To Emmanuel, Obalende was the place to find customers because he needed people in his car and there were thousands of people in Obalende.
What he misunderstood is actually MOST of the value of a marketplace - attracting the right people and getting them to trust you enough as a supplier to pay you money - is exactly why he didn’t need to harass people for customers.
This point is often lost on people who haven’t tried acquiring customers before, but Emmanuel understood as I explained it, that it is very difficult to convince random strangers to get into your car and pay you money to take them somewhere. As it should be.
Until Uber and others came around, it was damn near impossible. Customer acquisition, in general, is HARD, but it is even harder when the service you’re offering might be kidnapping.
Because marketplaces acquire customers on your behalf and convey trust of your service, not only did it become possible to convince strangers to ride in your car, it became normal. There have been billions of these stranger trips, deliveries, sleeping in beds, borrowing/buying clothes, on and on.
Marketplaces have made it possible to monetize assets and labor by changing the dimensions.
I wrapped up the conversation with Emmanuel with the things that marketplaces are best at and why they are worth anything at all.
“Don’t worry about finding customers - we will do that for you. We get people to download the Uber app and we prompt millions of them to use it all the time”
“Here’s a map of the hotspots where we see the most demand and when to be there. Follow the map and keep providing good service and you’ll get customers.”
That statement is the essence of Internet marketplaces, and maybe even the Internet. The value is in the marketing and matchmaking.