Updated: Feb 10, 2020
"The aim of marketing is to know and understand the customer so well, the product or service sells itself." - Peter Drucker
Last September, I met an old friend Andrew, the founder of Apps Africa. We hadn’t met in 3 years and it was great to see him. He was pleasantly surprised to hear KASI is still around kicking! Andrew and I met back in 2016 when I went to Bloomberg HQ in London to pitch what used to be called SOKO Insight, a new kind of data company for a continent known for its lack of reliable data. “It’s amazing you are still around and kicking mate! I know a lot of other start-ups that vanished” Andrew said.
We pride ourselves on being an unconventional start-up from day 1. We took on a challenge that even African governments don’t want to take – to source and provide independent, periodic, reliable primary data on African markets. We believe that Africans can change the world by changing Africa first; that women which make up the majority of our staff should be given more power; that external funding and VC money are not a requirement to build sustainable and profitable companies in Africa; that we don’t need to rush to follow the latest Silicon valley trends; but more importantly that data on Africans and their markets will power the next generation of Africa-based global business champions. So, when you are running a start-up with no external or VC funding, you are so absorbed by survival that you don’t see the time flies.
Here we are in 2020! We have not made big news or a breakthrough with the VC bandwagon. We have not had big features on CNN, BBC or TechCrunch, but we are still around and kicking, paying bills, getting clients, building data products and other features.
In fact, 2019 was another transformational year for our young and exciting existence as a company for many reasons:
1. We made money
Even better, we grew revenue 150% YoY and improved our gross margin. After the launch of our new offering in 2019, including our advisory services tailored for banks and trading companies in Africa, our consumer insights to provide companies data, insights to understand what people like, buy and why and our indicators to provide a new set of market-relevant measures for policymakers, businesses and investors, we booked clients on each of the business lines. 70% of revenue came from our advisory businesses, followed by our indicators and our insights. As we move towards a subscription-based model, we are looking to grow our consumer insights and indicators revenues significantly in 2020. More importantly, we are excited by the opportunity to share our data and insights with more businesses in Africa and elsewhere.
2. More proprietary data, better insights
Last year, we continued to survey Africans every month in our quest to give our customers a competitive advantage with unique and relevant insights on African consumers. We surveyed over 42000 Africans from our core seven markets of Nigeria, South Africa, Ivory Coast, Cameroon, Kenya, Ghana and Tanzania uncovering insights on how they live, what they aspire to and why. After 4 years, we have now conducted over 200000 surveys and collected over 14 million data points.
Our flagship index, KASI Consumer Confidence Index is now published on Bloomberg and Refinitiv platforms making it the first African index to be published each month from 7 countries in Africa. We have now tracked 4 countries during election cycles, major geopolitical and economic events. We provide our users with a unique context in these markets. It is now not only possible to study the impact of these events on mainstream economics, but also to predict future turnaround and investment opportunities. Our research shows that our CCI can be used to predict wage growth, inflation, retail sales, purchasing power, and unemployment rates in some of the markets we track.
KASI Consumer Confidence Index (Bloomberg Terminal)
Our consumer data is richer than ever with over 1000 unique questions asked over the past 4 years in line with our 360° framework that provides our clients a view of the consumer using 4 pillars: Confidence; Habits and behaviors; Health and wellness; and Financial independence. Our clients have access to research data quickly. We are very excited by the next phase of the evolution of our consumer data with the development of our consumer insights portal. I will talk more about it later.
We are providing visual research (eye-tracking) with partners such as Tobii and EyeSee. Very exciting innovation especially in Africa that combines standard research with machine learning and AI and we’ve done work on packaging and digital design in South Africa, Cameroon, Ivory Coast, and Kenya. Visual research offers a new exciting way to research and uncover insights that can result in a massive return on investment for our clients. Simply put, instead of asking a question, we watch respondents interact with your products and tell you not only what they say but what they think and perceive. For example, a small but data-driven change on a diaper package design can result in a 5% increase in revenue over the life of the package/categories. Over the shelf life of the package, it represents significant additional revenues.
3. We ventured into machine learning
A lot of African start-ups claim to be working on machine learning but very few can say they’ve implemented end to end solutions using African data. Well, we did it with a team of graduate students from York University in Canada. Using 30,000 observations from our informal lending index, the team built a predictive model to assist financial institutions in Africa with better lending decisions by monitoring their lending environment (informal) and loan officers to adjust limits, rates, and policies. The model leverages KASI data as training data to learn from the environment and assign a risk score. The cloud-based application will be available in beta in 2020 and we are looking forward to providing a benchmark measure for lending risk in Africa at a time where some markets are flooded with microloans and digital loans with very high rates.
We understand that building a machine learning model that works requires good data. The model itself can’t produce that data. We are well-positioned to innovate and lead in that space as we leverage our growing database. We also understand data privacy is important and must be respected --- even in Africa. That’s why we only use survey data for our models because users are always aware and in agreement when they complete our surveys. If you know a fintech or financial institutions interested in working with us, contact us if you want to test our lending evaluator app!
4. We stood out
In 2019, we continued to be recognized for our work – even making the coveted list of top 30 innovators in Africa from Quartz Africa. We made it to Vivatech in Paris, Bloomberg Media Innovator in Dakar, MedDays in Tangiers and many other forums where our voice is increasingly heard.
We lent our voice to the need for policymakers and leaders in Africa to change their relationship with data and use it as a tool to drive prosperity on the continent. You can’t manage what you can’t measure!
We predicted back in 2017 that e-commerce market size in Africa has been overestimated by 10 – Yes, even challenging McKinsey estimates! Since then many e-commerce start-ups have either closed or downsized. While we believe e-commerce is a good opportunity in Africa, our data shows that the key to winning is not to copy and paste but to really understand consumers and market dynamics to set up business models that work for Africa.