012 - To Become A Global Product You Must Price Locally
Over the last few months I've been hosting a Virtual Quiz Night Fundraiser through quiznight.org. I was honestly surprised when the quiznight.org domain was still available, and had to grab it, along with the associated social handles of @quiznightorg on twitter, instagram and facebook.
Through these events I've managed to raise USD$5000+, which is just over 500,000KES - KES stands for Kenyan Shilling, which is the local currency in Kenya. The money has so much more power when you convert it to Kenyan Shillings, and use it in the local market, because a small amount of money can go a lot further. For example, USD$15 could buy an individual a nice meal at a restaurant in most cities in America. However that same USD$15 is about 1500KES and is enough to feed a family of 6 for a month. Here's a quick breakdown of what we put into each bag.
| Item | Size | Quantity | Unit Price | Total Cost (KES) | Total Cost (USD) |
|---|---|---|---|---|---|
| Soko Maize Meal | 2kg | pkt 2 | 113 | 226 | $2.26 |
| Soko Wheat Meal | 2kg | pkt 2 | 96 | 192 | $1.92 |
| Kasuku Cooking Fat | 500g | pc 2 | 92 | 184 | $1.84 |
| Red Beans | 1kg | pkt 1 | 125 | 125 | $1.25 |
| Tea Leaves | 100g | pkt 1 | 40 | 40 | $0.40 |
| Kabras Sugar | 2kg | pkt 1 | 220 | 220 | $2.20 |
| Mwea Rice | 2kg | pkt 1 | 340 | 340 | $3.40 |
| Jamaa Bar Soap | 800g | pc 2 | 56 | 112 | $1.12 |
| Salt | 1kg | pkt 1 | 29 | 29 | $0.29 |
| Bag | 1 | 1 | 30 | $0.30 | |
| Total | 1498 | $14.98 |
I hope this breakdown gives you an idea of how big an impact the same amount of money can have, depending on where you are in the world.
Let's focus directly on tech products. 2 weeks ago I wrote a post called From Concept To Code about my hackathon experience hosted by the On Deck fellowship. Our team focused on building a Shopify for Kenya product for two reasons:
- Shopify is too expensive for the average Kenyan
- Shopify doesn't support good MPesa integrations, which is the primary tool that most Kenyans use to make a payment
Diving into the first point that Shopify is too expensive, here's a quick breakdown of their costs. The cheapest plan is USD$29 a month, with an additional cost of 2.9% + 30c per transaction. If someone in Kenya were to sell a bag of flour for KES113 (USD$1.13), the per transaction fee alone would be KES33, leaving the seller with KES79. That's nearly a 30% fee, and doesn't include the monthly fee of USD$29 that needs to get amortized over the transactions as well.
For a product like Shopify, who's mission is to make commerce better for everyone, the only way to achieve that on a global scale, especially in lower income companies, they need to adjust their pricing so that it becomes affordable in local markets.
note: My intent is not to target Shopify - they're just an easy comparison to make. You can run similar numbers and scenarios for most digital solutions available such as Square, SquareSpace, Wix, and even trying to pay for ads through Facebook or Google.
Little Plugs
I like the idea of plugging interesting projects that I see around the internet.
Subscription Management in Jamstack Apps (with Thor 雷神) — Learn With Jason - honestly all of the Learn With Jason videos are great
Bunch of Founders - is a really active Slack community for a group of Underestimated Founders
I've been learning a lot about No Code Solutions, and how tools like Zapier, Airtable and Stacker are great for building really quick prototypes. If you'd like me to share a few articles and projects using them, let me know!
Little Ask
Here's a little ask from me to you - I'm currently at 77 subscribers on my newsletter, and would love to reach 100 by the end of the month! If you find value in my newsletter, please consider forwarding it or sharing a link to aashni.me/newsletter. Thanks!