What Africa-focused startups can learn about positioning from Flutterwave and Listerine

Emeka Ajene

Feb 03, 2024

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

This Saturday essay looks at positioning using the examples of American mouthwash maker Listerine and Nigerian payments unicorn Flutterwave.

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The late 19th-century United States was the time and place for snake oil salesmen.

Germ theory was in its infancy, and the predominant theory of disease transmission at the time was miasma theory — basically, you got sick because of bad vibes in the air.

Tonics, elixirs, and a variety of bad-vibe-killing nostrums reigned supreme, promising panaceas for all sorts of problems.

Against that backdrop, British surgeon and medical scientist Joseph Lister, known today as “the father of modern surgery,” went on a tour of America in 1876.

He was one of the few surgeons of his time to buy into the pioneering work of Louis Pasteur showing that micro-organisms — not bad vibes — cause disease. And he traveled to Philadelphia, Boston, and New York to preach his gospel of surgical antisepsis.

“It has been shown by the researches of Pasteur that the septic property of the atmosphere depend[s] not on the oxygen or any gaseous consituent, but on minute organisms suspended in it… Upon this principle, I have based a practice.”
— Joseph Lister

In attendance for his Philadelphia lecture was one Dr. Joseph Joshua Lawrence.

Chemist, publisher, and elixir entrepreneur, Lawrence was inspired to concoct an antiseptic that he would name in honor of Lister: Listerine.

It was marketed, variously, for use in cleaning cuts and abrasions, as an antidote to dandruff and athlete’s foot, as an aftershave treatment, as a cold prevention remedy, as relief for insect bites & stings, as a cure for gonorrhea and dysentery, even as a floor cleaner, and more.

But the product didn’t take off until it was repositioned as a solution for “chronic halitosis” — a then obscure medical term for bad breath. The public was introduced to this new idea of Listerine as mouthwash in a series of advertisements that played on viewers’ insecurities.

The trick was to inflate a common, everyday condition to the level of pathology — and it worked. In the seven years from 1922 to 1929, the company’s revenues rose from $115,000 to over $8 million.

As advertising professor James Twitchell put it, “Listerine did not make mouthwash as much as it made halitosis.”

And today, a century later, the product is still marketed as “kill[ing] 99.9% of germs that cause bad breath.”

Few products have experienced as fascinating a journey as Listerine. But while ‘pivots’ and ‘pivoting’ are popular terms in today’s startup lexicon, positioning (and re-positioning) are not.

If pivoting generally involves changing the products and services a company offers, then (re-)positioning involves (re-)setting the contexts & jobs-to-be-done of existing products.

For Listerine, the same basic formula — a mixture of mint (menthol), thyme (thymol), wintergreen (methyl salicylate), and eucalyptus (eucalyptol) — hasn’t changed since the late 1870s when Dr. Lawrence first developed the concoction.

What has changed is its positioning: how consumers think about it and the problems it solves for them.

“Positioning is a secret superpower that, when harnessed correctly, can change the way the world thinks about a problem, a technology, or even an entire market.”
— April Dunford, Positioning Consultant

Positioning, according to advertising tycoon David Ogilvy, is “what a product does, and who it’s for.” It defines how a product is the best in the world at providing differentiated value to a specific segment of customers.

And it generally changes over time.

The components of effective positioning that define what a company does, why it's special, which customers it can best serve, and which market it intends to win *now*.

Vision, strategy, and positioning are connected concepts — but the relationship between the three is often misunderstood.

A company’s vision might be to digitize all of Africa’s traditional mom-and-pop shops, for example. Its strategy might be to start by giving merchants in Nigeria an app to track transactions (such as credit they extend to customers), after which it’ll layer on the ability for merchants to order inventory, followed by making working capital financing available, etc.

At each step, the company should have different positioning.

It might begin by positioning itself to customers as a simple-to-use digital ledger or bookkeeping assistant, then an inventory restocking platform offering next-day delivery, before finally positioning itself as a full-service financial operating system for business growth.

Unlike an investor pitch that focuses in part on how large a business could become tomorrow, positioning is firmly rooted in today.

Customers pay today’s cash to solve today’s problems — not for tomorrow’s promises.

And so, positioning helps prospects best understand a product and why they should adopt it over alternatives.

It’s a deliberate business choice that can have a massive impact, but it’s often overlooked by young businesses.

On the contrary, young startups often default to positioning themselves to customers in the grandest possible terms. They tell stories about ‘full-service financial operating systems’ to customers who have never heard of their brand and have yet to even adopt any digital business services.

In a sense, rather than conquering specific market positions, these startups are trying to conquer entire industries at once. Instead of targeting problems customers have today, they orient themselves around the possibilities of tomorrow.

Nigerian payments unicorn Flutterwave is an instructive example of positioning done right over time.

Today, eight years since its founding (and after becoming Africa’s most valuable startup), it offers “endless possibilities for all.”

But that wasn’t always the case.

Back in 2016, the company told customers — primarily banks, payment service providers, and global merchants — that Flutterwave was the best choice in the world for them if they wanted to pay and get paid across Africa using just a single API.

Flutterwave homepage, October 2016. Internet Archive.

The company grew its revenues from $5 million in 2018 to $55 million in 2020 and has since expanded its product suite significantly.

Its positioning has continued to change over time — from an initial focus on technology infrastructure to loftier, more all-encompassing language now that the brand is well-known and the breadth of products it offers warrants it.

Instead of trying to promise the world, the best companies, like Flutterwave, use specific positioning to win in particular segments early on.

And as they succeed and expand, they continually adjust their positioning to match the present realities and focal points of the business.

So if you lead an early-stage company, one lesson is to position for the next six months not the next six years. And position for the next meaningful revenue milestone, not the end game where your brand is well established and sits on top of the industry.

And remember, too, this lesson from Listerine: Don’t make mouthwash, make halitosis.

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