Mastering Distribution Channels for African Startups

SDS 022: Mastering distribution channels

Hey! thank you for reading issue 022 of Startup Definition Sunday (SDS).

SDS is the newsletter for founders, bringing you clarity one actionable tip at a time.

SDS arrives every two weeks (you guessed it) on Sundays.

In every issue you can expect:

• 1 Definition of startup jargon

• 1 actionable tip you can implement right away

• 1 article you should read

• 1 gift for founders

Let's dive in:

(P.S. I'll never sell your information, ever)

Hello there!

I'm thrilled to share this issue with you! In case you missed the last one, you can find it here.

Before we dive into today's issue, I want to inform you about something Marge and I started that we believe could be beneficial for founders - bi-weekly office hours to practice your 5-minute pitch.

Our Q3 sessions have concluded. If you missed the latest recorded session, you can catch it here.

We'll be returning with Q4 sessions on October 5.

Normally I start this section of the newsletter with an introduction of what I will cover.

Today, I have something different on my mind.

Over the weekend, Ghanaians took to the streets in protest against what they consider to be one of the worst administrations in recent history—#OccupyJulorbiHouse.

This long-overdue uprising is one that I wholeheartedly support. Why?

Because no matter how many actionable tips founders receive, we cannot out-innovate bad leadership and governance. If we are truly going to build the future of Africa, we must demand better from our leaders.

Now, let's dive into our topic for today: distribution channels.

What are distribution channels?

Distribution Channels: the pathways or routes through which a startup delivers its products or services to its customers, encompassing all the entities involved from the point of production to final consumption.

Why is this important?

As an investor in African tech, I review hundreds of pitch decks every year.

One thing I've noticed is that many founders prioritize content creation and paid ads as their primary distribution channels.

There's nothing wrong with utilizing these strategies, but relying solely on them may not be sufficient to build a VC-backed business.

To optimize your distribution strategy, consider incorporating these 3 additions:

Agent-led distribution: Inspired by the success of African startups like M-PESA and Cellulant, the agent model has gained popularity. While content creation may exclude those without reliable internet access, the agent model excels at getting your startup's products into the hands of offline customers.

However, building an effective agent-led distribution channel is no easy task. Startups looking to emulate the success of Moniepoint's agent network must focus on agent efficiency, cost management, and agent incentives.

Check out this article by Afridigest HQ for a comprehensive overview of different uses for agent networks in distribution. 

Partnerships: Africa is a continent built on relationships, and tapping into these networks can be a game-changer. By forging strategic alliances with local businesses, influencers, or organizations, startups can expand their reach and gain access to customers who already trust and engage with these established entities.

Twiga Foods is a prime example of this approach. They identified various stakeholders in the food and agriculture value chain, partnering with logistics companies and financial institutions. These partnerships enhanced Twiga Foods' value proposition and allowed them to reach a wider audience (s/o to my friend Angela for sharing her breakdown of Twiga Foods’ distrbution stragies with me).

For more insights on partnerships, be sure to read this guide put together by my colleague, Sarah.  

Localization and trust building: Many African startups underestimate the difficulty in expanding across African regions. Africa is a diverse continent, with distinct languages, cultures, and preferences.

Adapting your products and services to cater to specific markets can give you a competitive edge. This may involve translating content, customizing user experiences, or tailoring marketing strategies to be more culturally relevant.

Furthermore, localization efforts can help build trust within local communities, establish credibility, and attract more users.

It's worth noting that all three strategies mentioned above are offline-focused. While digital platforms have gained significant traction, there are still segments of the population that lack full connectivity. By incorporating offline strategies, founders can tap into these untapped markets and expand their customer base.

If you have learned something valuable today, consider joining SDS so you don't miss exclusive sections in future editions.

If you only read one thing this week, read this...

Victor Asemota penned a great part 1 to a series I am particularly looking forward to. In this issue, he doesn’t talk about how to be a rich person (sorry).

Why should you read it? Regardless of what you are working on today, there is a unified truth running through this article; building something can be more impactful than selling what someone has built.

Founder's Corner

As an investor, I know how challenging it can be for founders to get noticed by angel investors, especially without the right connections.

That's why I created an inbound form to allow founders to share their decks directly with me. It takes less than 5 minutes to complete. By breaking the mold and providing an alternative way for founders to connect with investors, I hope to help level the playing field.

That's all for today! As always, thank you for being a fantastic reader.

Until we meet again in two weeks, here's how we can stay in touch:

• 🐦 Find me on Twitter

• 💬 Hit me up on Linkedin

• 💌 Email me

• 🚀 Sponsor SDS (Reply to this email)

Let's chat again in two weeks,

Jasiel