Since I have not gotten a detailed information about what transpired, I will be writing purely as an outsider. This post will be based strictly on publicly available information.
To start with, Damilola Teidi the CEO of GoMyWay took an unconventional route of “announcing” that the business is shutting down. This is not commonplace in Nigeria. To be honest, the CEO did not actually announce, they valued their customers enough to inform them that their business will no longer be available. You will expect that this is a no brainer, but alas, in a country like Nigeria, where customers are informed of a “schedule maintenance” hours after the maintenance should have ended, then Damilola’s action should be commended.
As much as I believe that our general attitude to set back or failure should change, I also believe in talking about the lessons from such failures. Nothing happens by chance, there is always a cause. The cause might be related to the entrepreneurs’’ actions or inactions, it can also be totally external. So, it is important to have a dispassionate look at some of these.
So, what do I think about GoMyWay?
On the surface, I expected the business to work, this is because it is trying to digitize an offline behavior! People hitch a ride with drivers they don’t know. This is a regular experience within Lagos. If you doubt me, just try to park at Iyana Oworo (just at the foot of Third Mainland Bridge) on a Monday morning, then you will understand me better. I assure you, at least 20 people will try to get into your car. From a need perspective, a solution like this is required. It gets better with added security layer the GoMyWay also provides. On the surface, I struggled to see how the business will fail, but I observed the following;
Circumventing the Platform
Perhaps, the biggest reason GoMyWay won’t be able to monetize its platform is the fact the users will try to circumvent it. This is same for most platforms. Once the users on the 2 sides have a contact, there is an incentive to always take transactions off the platform.
That is why your Uber driver will want you to cancel the trip after he has gotten to you. The same reason the merchant that delivers you a product on an e-commerce platform will want you to cancel your order after it has been delivered. All these is a bid to ensure that the Platform Providers makes nothing off the transaction. That is why most ecommerce platforms try to fulfill the orders themselves to avoid contact between the customer and the merchant.
However, for GoMyWay this is practically impossible. Once a customer has been matched with a driver going his way, the customer needs not come on the platform again. Both parties will just reach a private agreement on time and place of pick-up every day. The platform is just reduced to a place for introduction, that’s all!
Nationwide Roll Out
This is indeed a tricky point. For GoMyWay to avoid the situation described in the first point, then it is imperative that they find people who don’t go the same way all the time. Probably the reason for the focus on interstate travel.
As this might be an opportunity, it can also be the challenge. This is because of the marketing cost to get everybody across the country on board. The model then magnifies the security concern.
Irrespective of the background check that has been carried out, both the driver and passenger are at risk. In an intracity travel situation, it might be difficult to harm anybody because the route is mostly busy. But in an interstate scenario, the expanse of forest between Lagos and Ibadan alone is a source of worry for both the driver and passenger. I believe this model will struggle to catch on
Initial Roll Out Plan
The business favoured customer acquisition before monetization. This means that the business has been running on investors’ capital for 2 years. Though, it is important to achieve a critical mass before monetization, it is obvious that they had not thought of a monetization plan before launch. I believe it became apparent that it is practically impossible to monetize the platform hence the decision to discontinue operations.
I sincerely believe that lessons from this will be far reaching within the ecosystem. Excitement is not enough, like I have said previously, your technology is not the answer! You must build a business that your customers are able and willing to pay for, if not, the technology is useless.
I wish Damilola success on her future endeavours.