David Okello - Managing Director, MXA
David Okello – Managing Director, MXA

Guest Post by David Okello, MD of Market Express Africa (MXA)

In this emerging industry, high firm rates go hand in hand with great risk of failure and only one firm out of the three survives the first three years. A study conducted by Market Express Africa shows that Critical growth factors amongst the ICT start-ups in East Africa are mostly financing and customer related variables such as capital at start-up, customer structure and market orientation.

An attempt to understand ICT Consumers in East Africa may seem frustrating at times, especially when looking at the region’s internet penetration rate, it is evident that with such a low rate, the region is not as “developed” as other worldwide regions. Although the penetration rate is still low, there are a number of countries and markets within the region that show a considerable number of people with internet access.

While some ICT start-ups have been successful in raising the start-up funds required to launch their products, it should however be noted that many more have faced exit soon enough due to product failure in the market.Not many upcoming ICT entrepreneurs have sought to test their ideas before transforming them into actual products, a reason why more brilliant ideas/products have failed.

A simple interpretation of a concept test would be “evaluating consumer response before introducing a product to the market”. While Concept testing does not only re-shape and refine ideas to have greater potential for market acceptance, it also indicates concentrated segments of the population to which the product appeals, assesses the relative appeal of alternative product ideas and features desirable to the targeted market segments and provides necessary information for developing the product and its promotion, distribution and pricing.

Concept testing provides insight for designing a more optimal product or service. When made actionable, concept tests allow you to laser focus on your products and priorities. Concept tests have the ability to improve your product, shift your priorities and increase your product-market match.

There are a variety of concept testing approaches, each with different objectives and benefits. A few methods to consider may include New product concept tests, Product modification tests, Migration path tests and Product usability and serviceability tests but all if taken into consideration would lead to greater market impact.