Category: Business

Read Adedeji Olowe’s take on business, business models, and other transformational topics about business in Nigeria, Africa, and the world.

Mum, AI took my job

AI’s expanding capabilities, from personal assistants to image recognition, pose questions about job security. Then there’s the scary part, the prospect of AI inventing other AIs. Will this lead to more widespread job displacements?

Recently jobless, I took to trolling the internet for good inspiring stories and I fortunate to bump into a long form on George Hotz inventing a self-driving car. George is of internet fame when he was the first to successfully hack an iPhone and then made a mess of Sony. That’s then.

There are many ways to skin a cat, at least if you can kill the cat first. But then automating self-propulsion isn’t a piece of cake. Planes have been flying themselves for over 84 years but all because danfo drivers don’t fly. Come to terra firma, somewhere around Abule Egba, and it’s a different ball game.

The best known name in the game is Google and they have been plugging away at this for years. Meanwhile African bad boy, Elon Musk recently released a patch that allows a Tesla to drive itself on the highway.

Summary, it costs zillions of dollars and millions of years to do build a working self-respecting self-driving car. Really?

George has turned all this on its head. In October of this year, he invested $50,000 ($30K of this was for a brand new Acura ILX 2016) and presto out came out a decent self-driving automobile. In 2 months? You must be kidding me.
This is where it starts to get interesting.

George’s approach is totally different from others. Instead of programming every conceivable rule and regulation of how to drive and what to expect (let Google come to Obalende!) he taught the car driving like the way I could teach my niece. Many things have made this possible – advent of deep learning, cheap computers, sensors, etc.

The bit I love is his bet against Musk.

So what has AI got to do with losing your job? Well, truth is AI can be taught to do many things. They already power simple things around you – SIRI, Cortana, Google search, image recognition, etc. What happens when it can be a perfect secretary, equity trader, physician, customer service officer, proofreader – correcting my numerous typos?

There is a lot it can do or may not do. The scariest for me though, would be when AIs can invent other AIs. Then, I’m sure that damnation would be an understatement.

Digital "Fluffy" Banking

Digital Banking seems to be the new buzz word these days. I love buzz words; they are necessary distractions in the agonizing world we live in.

But what’s digital banking? Nobody seems to know. Just like those mischievous boys in the bible – customer service we know, value for money we know but what the heck is digital banking?

A thousand definitions exist but basically everything points to a fancier electronic banking services.

Maybe people need to understand what we customers need.

We don’t need pretty names or fancy titles. We don’t care if you are a tier 1 or tier X bank. We don’t care if you are a boutique bank and cater for some fancy niche. We don’t think about innovation. We just want the damned services to work and you not to fleece us while at it. When things go wrong let us know. When our money is missing return it before we squeal. When we visit your branches or call, treat us like royalty.

You want to know what customers really want? Check here.

Damn it! Do you guys get it now? To hell with electronic and digital banking.
My bed has 3 wrong sides and just a good one, which incidentally is the side against the wall. I couldn’t get off from that good side this morning.

WhatsApp will eat MTN’s dinner

I visited WhatsApp, a close friend, last weekend and I saw him preparing for a large party but the interesting bit’s that he’s gonna serve MTN’s dinner to his other many friends.

Ok, that’s some unwitty joke but hey, I hope you caught the drift.
Some events over the last few months have shown me that the next 2 years may be quite scary for MTN and its colleagues. When you are making $2.6B profit a year, you may feel like part of the Greek gods just don’t forget Nokia and Blackberry.

International Calls Made Easy with WhatsApp

I get to do some travels once in a while. Roaming your phone can be a dog of an activity as it could be so expensive. Before you call me cheap, just imagine what N80 per SMS in Ethiopia means to someone who has never been a minister of petroleum. Rebtel has been a good companion over the years but sometimes the call quality can be very bad. At first I thought maybe because it’s VOIP but then calls to other countries were clear and never cut off. Apparently it seems our Telcos route their roaming calls through some Pentium PCs. You can’t be too sure of these things. My visit to some roaming-charge-friendly countries finally convinced me that our Telcos are rats.
Then WhatsApp call came along.

I didn’t know how good it was until when someone called me on it and I forgot that it was a WhatsApp call. It was clear and best of all free! Nowadays it has become my default calling mode whenever I hop on a metal bird out of the madness of Lasgidi

Local Calls Made Easy with WhatsApp

One of my annoying colleagues has an annoying habit of calling me annoyingly on WhatsApp. Until, wait, the calls are clear! I mean as bad as the Nigeria data network is, the calls are as clear as normal calls and best part, absolutely free!

The Hungry Future

  • What if the WhatsApp call catches on like Blackberry in Nigeria and everyone defaults to it?
  • What if WhatsApp creates a local gateway that allows termination of normal voice calls?
  • What if MTN’s voice income bottoms out?

Some Annoying Things about WhatsApp

Back to your desks, brethren!
 

Telcos to the Mobile Money Rescue

The Central Bank recently relaxed the rule on Mobile Money (MM) participation by giving out telcos invite to the party. Yes it’s a party but then everyone’s gone home.

Specifically telcos are now allowed to be Super Agents, which means they could use their thousands of retail touch points to serve MM customers. But unlike what most people are clamoring for or what some think CBN did, telcos cannot operate MM systems, they cannot accept deposits or give loans.

While we may want to quickly apply a generous dose of cane to CBN’s butt, we should for once understand their position and what it portends to the industry.
The problem, in my own opinion only, is that telcos cannot serve two masters and with some of them so powerful and rich, turning them to banks (banks collect deposits, :-)), is creating a monopoly. The NCC, a very strong regulator, is the umpire for the telcos while CBN patrols the financial sector. Trust me, nobody wants to mess with both of them.

Should that be allowed to happen, who controls who? What happens when CBN issues a counter memo to what NCC has issued? What about deposit insurance? If a telco is doing well providing voice and data services but tottering under banking related issues, can CBN move in and take over to prevent an implosion?
What about very large telcos that are like industry to themselves?

MTN is the obvious example here. While they control just about  62,813,111 active lines as of June 2015 which is 42% of 146,486,786 nationwide, data from other sources such as banks suggest that 75%+ of customer main lines are from MTN. Their 2014 $2.6B profit is a testimony to that. I believe that such a single entity controlling the bulk of telecoms and banking would simply be impossible to manage.

Another thing is CBN simply takes a more serious, no-nonsense approach to regulation. While getting hit by her stick might be painful, the disciplined stance has been of benefit to everyone. As we speak, there are clear laws by CBN barring banks from entering into the telecoms market. Oh, there are wider rules barring banks from doing anything apart from banking. #EnoughSaid.
This takes me to another point – what made the original efforts to skid of the track?

Transaction Charges
MM transactions are expensive for the target market and sincerely there are no feasible means of making it cheaper. There are no incentives for agents to cash in and cash out for free. If this is the case, how will it be different when telcos are super agents?

So you ask, how are banks able to do cash in and out for free? It’s simple – banks make money from lending the deposits they have. Click here to know a bit about banking. Unfortunately the advantage of float isn’t available to MM operators (MMOs) whose settlement accounts are ring-fenced. Visit the CBN website to read about guidelines of MM operations and pay attention to article 9. Don’t worry, you won’t lose your mind from reading it, it’s actually in next-to-everyday language.

Interoperability
MM died slow and painful deaths because they simply can’t connect to each other even though the CBN mandated it. Today everyone takes it for granted that you can easily zap money from Bank A to Bank B using common standards (NIBSS and QuickTeller) but try to do that for MM and you are out of luck. Try to move funds from Bank A to MM B, and you may get slapped. NIBSS has fixed the major interconnection issues but maybe its 3 years too late, maybe not.

Cash Out
Today you don’t think twice before using any random ATM of any random bank. After all, the worst is you get wacked with N65 from the 4th adulterous transaction on an amorous ATM. To do that with MM is just almost impossible as there isn’t any national standard for ATM cash out that’s bank agnostic. InterSwitch has been working on something for eons but as the target customers are dumping MM in droves, there hasn’t been any incentive to roll it out across all banks. And by the way, if that ever happens, MM customers will pay N100 per transaction as against free for ordinary bank customers.

Shopping
Whether online or in store, your card is always there to make you poorer. Unfortunately that can’t be said with MM. Even if you had N1B in your MM wallet today, you are probably going to die of hunger as the next restaurant doesn’t have any means of accepting your payment. Oh, if you told them you have N1B in MM they probably will beat you up as nobody will believe you.
Same problem exists online – you can’t pay for anything on all the major Nigerian websites. Paga made some in-roads but then how many people are on Paga and how many online stores even accept Paga? When you are shopping online and you want to pay, you don’t select banks, you merely select UPSL or InterSwitch, Visa, Verve or MasterCard.

International Acceptance
Ok, this is taking it too far. Your MM money dies right there at the airport. Even if you sneaked out through Seme Border, you can’t use it as Cotonou. Case closed.

CBN KYC Tier
I don’t know if this is a problem but according to CBN, banks are allowed to open accounts for everyone irrespective of race, religion or net worth. The target market of MMOs are better served by banks and unless they are cretins, which they are not, they wouldn’t touch an MMO with a 10 foot pole when all they get are hassles, fees and lack of interoperability.

How Can We Fix This?
It shouldn’t be all woes. I believe the Central Bank can fix the financial inclusion problem but it may be tough:

  • Allow telcos to to do MM. All they need do is develop a robust framework with NCC. They may also make the telcos to create Chinese walls between their different operations
  • I know it sounds dull, but CBN may have to wade in and review prices of transactions to allow the business to grow. Cash outs and cash ins should be free but agents to be reimbursed by MMO. Transfer will incur charges
  • Implement a common ATM cash out standards and ensure all banks comply within a reasonable time frame.
  • Implement a common purchase standard on POS and online and ensure banks, merchants and switches comply. Within a reasonable time of course.
  • Tie in the card schemes and make it easy for MMOs and customers to latch on without having to put up their relatives for sale on OLX.
  • Bar banks from having customers at the lower tiers of KYC.

Some of my recommendations sound despotic but then what do you expect from me on a Sunday afternoon?
 

The Rise of Killer Smartphones

It seems Nigerians, like most Americans, are missing out on an interesting revolution happening out there in the smart phone universe. But then, if you stood on a rail track with your Beats headphones on and oblivious of the rushing train, does it make you safer? Or maybe an ostrich, with its head planted in the sand and nice rump in the air, wouldn’t know that it’s about to get bitch slapped.

That was a digression. It seems I can’t keep a conversation without drawing a wonky line.

I remember vividly how Blackberry sneaked on Nokia and ate its breakfast. Then Android + Samsung ate Blackberry’s lunch. Seems Samsung is going to be hungry tonight because two bad ass boys are around the corner, but the demolition promised would upend everything.

Quite a number of smart phone makers are all over the world with most around the middle kingdom but the cachet that Samsung and Apple have over everyone has been selling high-end phones: powerful chipsets, stunning graphics and expensive clothing. Of course, the price of this phone can buy about a third of a Tata Nano.

Here comes in Xiaomi. A recent entrant into the smart phone arena and in a few months have rocketed to number 3, sniffing annoyingly at Samsung backside. It’s on track to sell 100M smart phones in 2015. What’s the trick? High-end phones at knockoff prices. What’s their game? They want to take over the world, that is, do bloodletting with Samsung then come back and earn some money.

You wonder if a business can survive without earning a decent profit? Yes. Amazon!

So far it seems to be working and investors are pouring in more cash than Hurricane Katrina.

This would have been perfectly OK if another Chinese ain’t doing same. OnePlus is just a year old as a company and wants to push out about 5 million phones this year at cutthroat prices but with hope to make money on services.

Of course, the gloomy pictures I just painted is for the like of Samsung to brood over. As far as consumers are concerned, they could slug each other to death.

By the way, when are we getting a mobile phone with 8GB RAM and 48 hours battery?