Majority of the startups in Africa today building consumer products are built on-top of an “API stack” that enables them to run their service 24/7.
Gokada isn’t just Gokada, Taxify isn’t just Taxify, Wallet.ng isn’t just Wallet. It’s Google Maps for direction(s), Youverify.co for identity check, Paystack for payments processing and Africastalking for SMS.
Today, the best route to go-to-market is to piece together composite of API stack from companies which let you as an organisation concentrate on your unique value-add rather than reinventing the wheel.
API Stack = All the tech blocks used to build a product
Breaking down my thesis
When you’re building a product, you essentially require two main layers which are Infrastructure and Features of which are composed of many different building blocks depending on what you are building.
On Infrastructure layer
The technology blocks that are used to create the foundation of your product like Security, Identity, Monitoring, Analytics, Payment etc.
On Feature layer
The Feature blocks is used to build the layer that users interact with are search, in-app messaging, social, user management, text editor etc.
Infrastructure layer as API is where the next gold mine is in Africa and it’s a winner takes all market, unfortunately!
Infrastructure as a service
Let say company XyZ is building hypothetical awesome product called “capriFun” which offers its users a way to search and book for activities to do.
For them to build this, they will need to build a search engine, a referral system, photo sharing, an activity dashboard, in-app messaging, a booking system and a payment system etc.
If we wanted to build this product 10 years ago we basically need to hire talents for every layer i.e payment expert to build this in-house . This is why it was not uncommon then for technology companies in Nigeria to have their own physical servers i.e Interswitch
So, where is the money? 💰
The unbundling of code that developers view as ancillary but it’s non-core to their business is a massive opportunity. For example, very few companies will enjoy building their own payment processing technology.
It’s a challenging, technical area that generally isn’t core to the organisation. This created a huge opportunity for companies like Paystack (Disclaimer: I work at Paystack) and other developer-focused payments companies to obviate the need to internally develop these layer.
After Payment Infrastructure as API, what’s next?
“we can’t predict the future but we can create it”
The best strategy for any budding entrepreneur looking to build the next breakout company out of Africa is to identify areas of development that can consume large amounts of time and expertise but where building better technology doesn’t deliver a core benefit to the organisation.
Our world is becoming more programmable, requiring much more rapid product velocity for the best companies to keep pace.
Building in-house infrastructure is no longer the right route for organisations even the most sensitive ones — creating a massive opportunity to mon💴tize this need (remember: create a need for massive market)
The result for the rest of us will be faster development cycles on all of our favourite products and opportunities for other entrepreneurs to build useful services quickly out of the gate.
Let’s go Live! 🚀
Thanks to Suru and Ebot for reading drafts of this.
