What we discovered from promoting a blockchain service to African governments • TechCrunch

A significant attraction of Africa is its giant inhabitants of 1.2 billion, which hints at a large addressable market. However what occurs when your target market is the governments of 54 international locations?

In our state of affairs, that was the case. We began Domineum Blockchain Solutions with the intention to assist African governments resolve issues with transport and retaining data.

We knew it’d be onerous work, however didn’t anticipate that getting our first buyer could be essentially the most troublesome half.

It’s typical when getting into Africa to wish to give attention to the large and well-liked markets like Nigeria, South Africa and Kenya. However what we’ve discovered to this point is that there’s a excessive chance that these international locations won’t be your first entry level.

Our first product was a cargo service that tracks cargo origin and motion and determines the contents of products being imported or exported in any nation. We constructed this to unravel the issue of misplaced income as a result of shipments being handed by means of casual backdoor channels.

With our give attention to sub-Saharan Africa, we approached 4 international locations in 2019: our residence nation of Nigeria, plus Kenya, Gambia and Guinea-Conakry.

We began this dialog and didn’t get a considerable response from the 4 international locations’ governments. They weren’t open to attempting out our answer — it was new they usually weren’t acquainted with blockchain expertise. Distraught, we determined so as to add a smaller nation to our record: Sierra Leone.

The Freetown seaport, positioned within the nation’s capital, is the principle gateway for commerce out and in of Sierra Leone, with 80% of commerce passing by means of this port. The port has a protracted historical past as a buying and selling hub and advantages from the nation’s strategically necessary location halfway between Europe and the Americas.

However Freetown isn’t one of many high ports in Africa and even sub-Saharan Africa; a fraction of a percentage point of the world’s commerce cargo flows by means of its ports. The small African nation, with about 0.1% of the world’s inhabitants, exports diamonds, cocoa and low and imports meals, equipment and chemical substances.

Notably, it confronted massive challenges in transport these merchandise in and overseas. A Sierra Leonean provide chain supervisor described this case, “We used to face massive challenges in the course of the export course of. There could be lengthy delays on the port. Our vehicles would arrive earlier than midnight and may very well be caught in queue for hours, even days. The documentation course of was so difficult.”

In response to the World Financial institution, Sierra Leone’s “commerce challenges could be attributed to a number of elements: lack of entry to commerce data; excessive ranges of bodily inspections; a number of charges, licenses, permits and certificates; handbook processes; and the shortage of coordination amongst businesses.” Domineum got down to resolve this.

Our preliminary conversations with the Sierra Leone authorities went nicely. Thankfully, Sierra had developed a five-year plan (2018-2023), supported by the World Financial institution Group, to cut back the time and prices wanted to maneuver items throughout its borders. The purpose is to cut back commerce prices by 10%. After three months of debate, our cargo monitoring system was applied.

In late 2019, we began this partnership, and to this point we’ve been capable of seize $2 million in income that will have been misplaced. The enterprise mannequin is easy: We get a 40% fee out of additional income we’re capable of seize for the Sierra Leone authorities by way of our cargo monitoring system.

It’s typical when getting into Africa to wish to give attention to the large and well-liked markets like Nigeria, South Africa and Kenya. However what we’ve discovered to this point is that there’s a excessive chance that these international locations won’t be your first entry level. A business-to-government mannequin is a troublesome one. There’s lots of politicking that goes into working with the federal government.

What we’ve seen work is to method different international locations and acquire a foothold, then use that as validation that the idea works. With the success of Sierra Leone, we’re hoping to return to different international locations and get a greater reception.

The success of Sierra Leone bought us rethinking the companies we have been providing. The preliminary dialog began with a cargo monitoring service, however then we questioned if we must always provide a special service to international locations that mentioned no at first.

We recognized that land registration was a standard drawback in Africa. Greater than 90% of rural land in Africa is undocumented and subsequently susceptible to land-grabbing. This hampers the expansion of agriculture and different sectors as a result of land is misplaced to different events or taken forcefully by the federal government throughout instances of battle.

We returned to those international locations, providing different companies like land possession registration by way of blockchain. We bought a optimistic response from a state authorities in Nigeria to hold out a pilot program. We’re optimistic that after this pilot part is over, we’ll be capable of seal the subsequent enterprise deal.

What’s it like working with African governments? It’s a smaller addressable market. In case you’re seeking to pitch a services or products to governments in Africa, it’d be useful to remember that your first buyer is perhaps from a smaller nation.

To grab different alternatives, we’ll preserve seeking to broaden to different African international locations with this mindset.

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