MIH Media Lab - Start-up Lifecycle
Wed, 29 July 2009
by Justin Hartman, MD, Afrigator

Building a successful startup
The really, really top secret strategy...

Some coolness...
Largest social media aggregator in Africa
July 2007:
#20 of 31 top non-US startups to watch worldwide
by Business 2.0 (money.cnn.com)
September 2008:
Partly acquired by the MIH Group - $$$$ :-)
December 2008:
One of the Top 10 International Products for 2008 by
ReadWriteWeb & featured on New York Times (nytimes.com)

Business Lifecycle
How is this defined? What’s important to know?

Business Cycle
Start-up Growth Decline Renewal
Research & New knowledge
Revenue Climbs Dry Rot occurs
Development and skills
Commercialising New services &
Declining Sales Culture transformation
a product products developed
Develop business and Profit margins
More employees hired Leadership change
marketing plans plummet
Collaboration and Debt growth
Find investment Innovation
Partnerships formed year on year

Afrigator Website Growth
810% Growth (Sep 08 - May 09)
Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09

Finance Lifecycle
Show me the money. Or at least how to get it!

Finance Cycle
Angel / FF VC, Mergers/Acquisitions
Bootstrap Strategic Partnerships
R Seed Round Late Stage
E
V Public
E Early Stage 4th
N VC Exit
U
E 3rd
2nd
1st
TIME

Growth Strategy
Business is dead without growth.
How do you achieve sustained growth?

McKinsey Growth Pyramid
The McKinsey model argues that businesses should
develop growth strategies based on:
Operational Skills
Privileged Assets
Growth Skills
Special Relationships

Seven models to achieve growth
1. Existing products to existing customers Increase sales frequency & loyalty
Initiatives to drive an increase
2. Existing products to new customers
in customer base
Risk model to sell more products to
3. New products and services
existing and new customers
Use of distribution channels as
4. New delivery approaches
a source of growth
Geographic expansion is the most
5. New geographies
powerful but also most difficult
Acquire competitors and
6. New industry structure
consolidate the industry
Use the skills of the business
7. New competitive arenas
in other industries

Applying the models
The results of applying the McKinsey Growth
Pyramid at Afrigator.

Afrigator Unique Users (#1 existing customers)
513% Growth (Sep 08 - May 09)
Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09

White Label (#2 existing products, new customers)

Jun 07
Jul 07
Aug 07
Sep 07
Oct 07
Nov 07
Dec 07
Jan 08
Feb 08
Mar 08
Apr 08
May 08
Jun 08
Jul 08
218% Growth (Sep 08 - May 09)
Aug 08
Sep 08
Oct 08
Nov 08
Dec 08
Jan 09
Afrigator New Blogs (#2 new customers)
Feb 09
Mar 09
Apr 09
May 09

Gatorpeeps (#3 new services)

Mobile Channels (#4 new delivery approaches)

African Penetration (#5 new geographies)
Country % Growth
South Africa 5%
Egypt 2,499%
Nigeria 769%
Morocco 4,004%
Algeria 4,051%
Kenya 66.63%
Tunisia 956%
Tanzania 12%
% Growth is calculated as a percentage between the total unique users from (Jun 07 to Aug 08) against the
total unique users from (Sep 08 to Mar 09).

WIP (#6 new industry structure)
Um... it’s a Work In Progress
No acquisitions on the cards just yet!

Adgator Network (#7 new competitive arenas)

Our bottom line
Is still volatile but looking positive.

Budgeted Revenue vs. Actual
Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09
Budgeted Actual

To Summarise
Develop the right business plan and model upfront
Research and get outside input
Fund your start-up yourself then get investment as
soon as you gain some traction
Innovate by solving real problems
Your growth strategy and implementation is going
to be critical to your success

Afrigator - http://afrigator.com
Adgator - http://adgator.co.za
Email - justin@afrigator.com
Blog - http://justinhartman.com
Twitter - @justinhartman
afrigator.com