Snapchat vs Instagram: A Case For Rethinking Your Competition

 

For a moment, let’s assume you run Sheraton Hotel, Lagos, Nigeria. When you think of competition who comes to your mind? I bet your list will look like this:

• Protea Hotel
• Intercontinental Hotel
• Eko Hotels and Suites
• The Blowfish Hotel

 

Nike vs Adidas

Pepsi vs Coke

This is the wrong way to look at competition. Genesis Deluxe Cinema is competing with Silverbird Cinema but it’s also competing with my grandma’s late night stories. Pepsi is competing with Coke but also competing with Eva Water, all the countless sachet water brands, Five Alive Juice, Dansa Juice, Chivita Juice, etc.

Your competition is NOT linear. Quit thinking of competition as if you’re still living in the Industrial Age!

When a commercial bank in Nigeria think of her competitors, I can tell you for free that they think majorly of the other 20 commercial banks. A little thought, if at all, is given to Merchant Banks not to talk of the Non-Interest Islamic Bank.

 

Industrial Age Competition vs. Information Age Competition

 

Industrial Age Competition:     Linear

Information Age Competition:  Random. Haphazard. Zigzag. Global

 

Mobility was limited during the Industrial Age. Not so limited now.

We live in an inter-connected, inter-dependent world.

 

When my friends come into Lagos, Sheraton Hotel is competing against my house because I could have them come over instead of them going to Sheraton. In terms of food, it is also competing against my kitchen as well as all other restaurants and the local ones called “Buka”

 

 

In case you are yet to notice, Instagram just wagged a war against snapchat. Snapchat is a social media company that allows you to take pictures and make videos of yourself and your life. You post it to your “Stories” so your friends can view/watch them however crazy they are. You need not worry so much because it will all disappear after 24 hours. They won’t be able to save them.

Instagram allows you to upload your photos and videos for anyone to see. It doesn’t disappear. This means that if I don’t want my photos and videos viewed and commented on by everyone and if I want them to automatically disappear after 24 hours, I will have to sign up on Snapchat.

Few days ago, Instagram decided to change the rules of the game by introducing their own “Snapchat” called “Instagram Stories”. You can take photos. Make videos and post them on your “Stories” for your friends to view and it will automatically disappear after 24 hours. There is still the “regular” Instagram profile that you used to know. And now you have Instagram Stories (A.K.A Snapchat).

 

Instagram has more subscribers than Snapchat. Don’t forget that Facebook who owns Instagram has over 1.5 billion subscribers. This gives Instagram access to massive amount of subscribers’ data. I don’t expect Snapchat to die immediately but I smell danger. People will not just abandon their Snapchat account simply because Instagram has introduced Instagram Stories but I hope, all along, someone at Snapchat has been thinking of Instagram as their competitor? If not…

 

As companies and as employees we all need to broaden our view and definition of Competition. “Only the Paranoid Survive” — Andy Grove, former CEO, Intel Corporation.

 

By the way, I just deleted my Snapchat account which I only signed up for two weeks ago. 

 

Let’s continue the discussion:

Twitter: @simplyazodo

Facebook: Nnamdi Azodo

nnamdi.azodo@gmail.com

 

 

 

 

FINTECH REVOLUTION: What Traditional Banks Can Learn From The Demise of Kodak- Part I

As recently as 40 years ago, Kodak had 85% US market share for camera sales and about 90% of photography film sales. A former banker, Eastman George, formed the Eastman Kodak Company in 1888. After 88 years of practically “owning” the photography industry they saw no need to reinvent themselves. To those running Kodak then, you and I today will still be taking photos with their cameras and needing their films, chemicals, papers and then wait for days to see the photos we have taken! 

To Generation Y and Z children, that is unthinkable.

The shortsighted executives running Kodak then dismissed the threat of digital camera as insignificant. Ironically, Kodak were the first to develop digital camera in 1975!  So, what happened? The executives believed they were too big to fail. They also feared that it will cannibalize their core business. 

Fast-forward >>>>>> 

Between Jan 2004 and Jan 2009, Kodak had cut about 20,000 jobs. As at 1996, Kodak’s revenue was almost $16bn. Compare that to their revenue of $1.79bn as at 2015. In Jan 2012, they filed for bankruptcy. On Sept 3, 2013, the company announced that it has emerged from bankruptcy albeit unrecognizable. They have had to make tough choices including the sale of many of the core businesses they were trying to protect from the cannibalization of digital cameras!
Today, Kodak as we used to know it is dead! The simple reason for its demise is not adapting fast enough  to technological trends and market demands.

Would the fate of Kodak today  be the fate of the traditional banks in the next 10-20 years?

A lot of the traditional banks today are not paying attention to the threats of FinTech companies (Fintech is the emerging industry relying on the use of technology to render financial services).

A 2014 survey by Accenture reported that 39% of respondents aged 18-34 said they would consider a branchless bank. This is 2016 and I have no doubt in my mind that the figure has increased significantly. Presently, I work for a bank (at the headquarters) but hardly visit any branch even though one is in the same building with me.
The primary business of banks which is financial intermediary is already being encroached upon by many Fintech companies. As at 2015, about $34bn has been raised through crowdfunding (crowdfunding is a form of alternative finance where people raise money (in the form of a gift or loan) for a project or venture they believe in usually via internet driven media. 
Warning Signs to the Traditional Banks

I will give you just a few of the warning signs that most of the traditional banks are ignoring at their own peril. 

1. Branchless Banks– Atom Bank in the UK has been licensed and is already operational as a branchless bank. This model has significantly lowered their operating cost thereby allowing them to offer better deals to the customers. This is the future of banking!

2. Crowdfunding– As earlier mentioned, a lot of money is already exchanging hands through this medium. For many of the sites, you post your project and people offer to either lend of give you money; usually in exchange for a gift (e.g. a free copy of your book) or at an interest (usually lower than that offered by banks). http://www.kickstarter.com is the leader in this space.

3. Savings– So many companies are already allowing you save money easily powered by the internet. Nigeria’s http://www.minisavings.com allows you to save money with them. What they have done is to take the traditional savings model of the people (known as esusu, ajo, etc) and digitized it! This is sort of banking the unbanked that the traditional banks are neglecting.

4. Investing– Companies such as http://www.wealthfront.com offers automated investment services combining financial expertise and leading technology. Their tagline is “The most tax-efficient, low-cost, hassle-free way to invest”. Someone in the big offices of the traditional banks should be worried. 

5. Assets Financing– Qufenqi is a Chinese based asset financing company that allows people to make purchases and pay in instalments. Their new product called “Quzu” allows users to pay their apartment rent in instalments! 
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Questions? Comments? Whatever… please, use the comment box below 

Or contact me personally…
Twitter: @simplyazodo

Facebook: Nnamdi Azodo

Email: nnamdi.azodo@gmail.com  
Watch Out for the Part II of this post next week; Thursday July 28, 2016… Make it a date!

INVESTING FROM A BIBLICAL STANDPOINT

Oct 11, 2013| 12:00 GMT| Investing From A Biblical Standpoint| https://azodo.wordpress.com | DO NOT MISS IT!!!