The definition of luxury is changing, from one that alluded to expense and quality, to another that now includes sentimental, cultural, moral and ethical considerations. — Magatte Wade
In 2014, Magatte Wade wrote a brilliant article titled “Meaning is The New Luxury”. Very profound but I am sure a lot of African techies missed it, because they felt she was probably only talking about her cosmetics brand. Everything she wrote there also applies to “African tech”. Her new company “Tiossan”, is playing in a $450 Billion American Premium Market. It is located in New York.
I have had several conversations with her about it and I have come out more enlightened about our ignorance. The most expensive luxury to the new rich is “conscience”. They buy into “meaning” because of conscience.
As African techies, we fail to see this market for “conscience” because we keep trying to ape Silicon Valley. The “Changing The World” narrative in Silicon Valley is “meaning”. Ask Elon Musk and Tesla.
We also get carried away with our own emotional narratives without acknowledging the stark reality. In a continent where almost 70% of the population have NEVER had electricity according to the IEA, technology and consumer internet applications are a luxury. Andela’s foreign co-founders probably saw this and they made Andela the first “luxury tech company” selling “meaning”.
Yes, Andela is a luxury company. The people who give jobs to the developers do so not because there are no other alternatives, they do so because they buy into the “meaning” Andela represents. The founders also do not make their services cheap. They charge a premium for this because they get it. Chan-Zuckerberg invested also in meaning. Omidyar, Gates Foundation…. the list is long.
This is why all the recent “where Andela was founded” brouhaha is “meaningless”, pardon my pun. A luxury company has to be where its market is. Diamonds may be produced from the mines of Africa, but Cartier stores in Ajegunle or Soweto, are as useless as a third testicle. Cartier puts its stores where they make sense, where the buyers are. This is irrespective of where the diamonds are sourced. The diamonds have no utility in the rough, only when they are polished that they shine. Only when they are at luxury shops that they command extremely high values as they have now been “branded”.
Even within Africa it also happens. We had to register a South African entity to contract with South African companies. We registered several local entities and employ locals because it “means” something to clients in the countries where we operate.
We keep selling our “African First” identity to those who care and and are conscious about giving jobs to locals. Yes, Swifta is a luxury company too. We sell “African Meaning” to Africans and we only serve the best 10 in every market or industry following our “Wolfensohn Methodology”. I have no regrets and owe no apologies. It is just business. A luxury business.
The Internet has redefined a whole lot. Markets for services have become global and competition has increased tremendously. Those with money can decide to spend it wherever they want and they spend it on those who provide them with the greatest justification. 98% of all tech exits are acquisitions. The probabilities of an acquisition happening to you as a tech company limited by geography are slim to none.
The ultimate sale you will make after your product is your business. If you are in technology, knowing where the potential acquirers are and building a relationship with them is the most important thing you do.
The reality is that, the realization of the magnitude of African problems is wisdom. Scale cannot be achieved without massive investments in infrastructure or partnership with existing infrastructure providers. Rocket Internet got it with AIG + the telcos. Iroko got it with Canal+.
Knowing this, it is important to realize that when you are in the business of selling premium services and products, being African can both be an asset and a liability. It is better to understand your target market and turn it into an asset. You need to know who your market is and build the right narrative for that market. Luxury is ultimately a narrative. Each gem tells a unique story.
Let’s stop deceiving ourselves. Technology is Africa’s luxury…..for now. Those who will succeed, will have the branding and attitude of a luxury business. Ask Magatte’s Tiossan.
