Three lessons to learn from the early days of Nigeria's IROKO

As a pioneer navigating the early consumer internet space across Africa, IROKO's 2010-2016 journey offers insights for founders, operators, and investors alike.

Afridigest provides ideas, insights, & analysis for startup founders, operators, and investors across Africa and beyond.

Today, I revisit a previously published piece on Nigerian subscription-video-on-demand platform IROKO. This post contains a brief behind-the-scenes look at how the article came to be, as well as actionable insights for founders, operators, and investors.

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When I returned to Nigeria seven or so years ago, one of the first ecosystem events I attended was a December fireside chat with some ‘senior men’ of Nigerian tech.

L-R: Ayodeji Adewunmi (Co-Founder & then CEO, Jobberman), Sim Shagaya (Founder & then CEO, Konga), Jason Njoku (Founder & CEO, IROKO), and Tayo Oviosu (Founder & CEO, Paga).

(Excuse the quality of my camera.)

I thought at the time that IROKO, an SVOD platform for Nollywood content, had struck arbitrage gold: its costs & expenses were largely in Nigerian naira while it generated dollars & pounds from sales to the African diaspora & others abroad. So, I found it curious that Jason Njoku, IROKO's Founder & CEO, spoke then about IROKO's new strategy of deprioritizing overseas markets to focus on African ones.

“When I think of the future of IrokoTV, I can only really see Africa and specifically Nigeria as our big markets…Africa is no longer the future. Africa is now.” — Jason Njoku in 2014

A few years later Harvard Business Review published the article, “Africa’s New Generation of Innovators,” which spurred me to revisit IROKO, leading to an article that examined the company using the lens of push vs. pull strategies and market-creating innovation as described by the now late Clayton Christensen & his co-authors.

Actionable insights from the article

Credit: Cesno

If you don't have time to read the full piece, here’s what founders, operators, and investors can learn from the IROKO story:

• 𝗕𝗲 𝘄𝗶𝗹𝗹𝗶𝗻𝗴 𝘁𝗼 𝘁𝗮𝗸𝗲 𝗯𝗼𝗹𝗱 𝗯𝗲𝘁𝘀 𝗯𝗮𝘀𝗲𝗱 𝗼𝗻 𝘆𝗼𝘂𝗿 𝗰𝗼𝗻𝘃𝗶𝗰𝘁𝗶𝗼𝗻𝘀.

Early in IROKO's history, the company generated millions of dollars annually from a free, advertising-supported model. At a time when paid subscribers represented just ~5% of its customer base, it made a high-risk, bet-the-company decision to discontinue its free option and move entirely to paid subscriptions. Similarly, later on when African consumers represented just ~2% of its paid subscriber base, IROKO's management team made an unconventional, high-conviction decision to reorient its business away from Western markets towards comparatively low ARPU African markets. Audentes fortuna iuvat.

• 𝗩𝗮𝗹𝘂𝗲 𝗰𝗿𝗲𝗮𝘁𝗶𝗼𝗻 𝘀𝘁𝗲𝗺𝘀 𝗳𝗿𝗼𝗺 𝘂𝗻𝗶𝗾𝘂𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀.

When looking at customer data in the early years, the IROKO team noticed something peculiar: the viewing habits of its African subscribers were vastly different from that of subscribers in Western markets. The team ultimately identified that the key drivers of this variance were the high cost, poor quality, and mediocre availability of broadband data in its African markets; the lack of access to reliable & affordable internet data emerged as one of the company's largest challenges. In response it built features that allowed African customers to download content for offline viewing, aggressively sought out technical solutions for data compression, prioritized development for the Android platform, and launched a kiosk & agent network that allowed subscribers to download content in person without using broadband data.

• 𝗘𝗺𝗯𝗿𝗮𝗰𝗲 𝗲𝘅𝗽𝗲𝗿𝗶𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻, 𝗲𝘀𝗽𝗲𝗰𝗶𝗮𝗹𝗹𝘆 𝗶𝗻 𝘂𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁𝘀.

Paraphrasing 20th century Nobel laureate economist Friedrich Hayek, "[Entrepreneurship] is always a voyage of exploration into the unknown." For IROKO, a pioneer in Africa's consumer internet space, the early days were filled with unknowns, known and unknown, that pushed the team to stay nimble and experimental. As readers, we can all learn from the various twists and turns in IROKO's story over the years to: develop a large portfolio of experiments, look for ways to reduce the costs of experimentation & time to learn, seek out early information about likely outcomes, double-down on what's promising while quickly correcting course on what's not, and to, above all, stay alive.

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NB: The article was originally published five years ago and there have been many fascinating developments in IROKO’s story during that time. Among them is the recent news that the company aims to go public sometime this year. Expect a second part to the IROKO story to be published here on Afridigest later this year.

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AUTHOR’S NOTE

I’d love to hear from you. What are your thoughts on the IROKO article and what companies would you like to see similarly examined? Leave a comment or contact me on Whatsapp, slide in my Twitter DMs, or send me an email.

As always, thanks for reading ✌🏽
— Emeka