Note: This is an updated version of a post I originally published as a guest post.
One the best marketing strategies in the world is to give away your products for free. Some people won’t agree with this, but you might remember how I proved this in my article on free economy model.
To refresh your memory, I shared several models of the free economy including how the two biggest websites in the world, i.e Google and Facebook, are giving away their services for free to billions of users, yet between them, these companies are worth almost $900billion. The obvious “secret” of this business model is that when you give people free things on your platform, you can ask others to pay to reach that audience.
So when Flobyt launched its free WiFi platform last month, I decided to complete the second part of the post and share what I find interesting about Don Jazzy’s latest project.
Why I think Don Jazzy is a big deal with Flobyt’s social WiFi
Don Jazzy has really pulled his weight in the Nigeria music scene as the boss of Mavin records label, same with Dele Odufuye in the tech scene. I respect them both and their joint venture with their other co-founders is disrupting the “internet” market by giving for free what many users would have paid for.
You might probably be aware that Flobyt is not the first social WiFi programme in Nigeria. For context, CafeNeo uses free wifi as an incentive to drive patronage to its stores (just like Starbucks), iRokoTV is offering free movie downloads for its users at some of their kiosks and at least 2 Nigerian Banks; ZenithBank and UnionBank have launched free WiFi programmes at some of their branches. The problem is that the implementation by the banks was not as innovative. In fact, in the original draft of this post, this is what I recommended to the banks:
“Instead of the banks asking their customers to login with their account numbers, which many of them might not even remember offhand, they should simply allow them to login easily via their emails or social IDs and even make the WiFi available to EVERYBODY in more locations”
It appears like Flobyt understood this pain point and innovated around it to launch a near-perfect solution with a simple memorable caption: Don’t use your data, use ours.
Is Flobyt’s social wifi business model sustainable?
Since the launch, many people have been excited about the free WiFi part, but two major concerns people have expressed include:
1. How will they prevent some people from using the data anyhow?
2. How will Flobyt even make its money back?
Flobyt seemed to understand tendencies of its users. According to their FAQ page, WiFi can only be used on mobile devices and browsing sessions are limited to 15 minutes or 15 megabytes per session. In order to discourage “loafers”, you can expect they will modify this term by including time-out sessions before a device can be reconnected to the network using the user’s ID.
On the revenue side, the platform is currently ad-supported. You might notice from the screenshots on Flobyt launch page that the platform will help to promote the songs of artistes on the Mavin Records label. However, I expect the revenue side to be expanded as they explore more sustainable revenue models. Here are some possible opportunities to explore.
1. Lead generation
By expanding the service to reach more people via their partner network, Flobyt is positioning itself to generate more leads to drive traffic to their paid products. There is also possibility for data capturing, to collect survey responses and consumer preference for brands and productize the data.
2. Strategic partnerships
By offering free WiFi as a loss-leader, Flobyt can monetize by charging access fees to third-party whose services are accessed via the platform. It can also use it to score strategic partnerships (much like Facebook did with Free Basics) with platforms like IrokoTV whose users have to download or stream movies beyond the 15 minute or 15MB allowable browsing sessions.
Another way to think of this strategic partnership model is by checking the About Page. It reads that Flobyt (the company, not the product) is …”an independent consulting firm that helps international companies to be successful in Europe and Africa. Through our strategic solutions and implementation assistance, we have led some of the world’s strongest brands to enter and establish worldwide”.
Hence, the product (free WiFi) could just be an aspect of the game-play for the company to become the access to local businesses. Think of this more like a modern-day “Yellow Page” publisher with access to both the data of companies (its partners) and readers (its users). The potential to leverage this data for revenue is obviously limitless.
3. E-Commerce Inventory
Also, because the service is free to users – who are willing to be exposed to advertising in return for free WiFi – Flobyt can use the platform to develop their own inventory or team up with 3rd party that has ad inventory and is looking for audience. This is good, especially for daily deals sites, coupon sites and eCommmerce platforms that want to expand their distribution to more audience.
Quite a number of people might not care about the business side of things for Flobyt anyway, as long as they can browse with free data 🙂
But competitors do. That is why you should get ready for a year of free WiFi.
Get ready for a year of free WiFi.
It is very likely that more providers will jump on this trend so users should get ready for a year of free WiFi. This is because while Flobyt is still setting up for full launch, SWIFT, a leading ISP responded by offering free WiFi too.
A reference to the memo they published showed that users will have unlimited downloads without restrictions. Right now, this service is limited to the Murtala Muhammed Airport, but they can expand coverage soon. This is all good news for us, the end-users. 🙂
Social WiFi + Public Transportation = Biggest traction.
While putting free WiFi in specific locations is a great idea, I believe the biggest traction is hooking up the service with the transportation sector. To use this strategy at scale, one of the best demography to offer this free WiFi deal to are commuters. Imagine hooking up free WiFi with a bus services that transports up to 160,000 people in Lagos everyday.
Based on personal assessment, while working on this post, I know that people spend an average of 30 minutes in these BRT buses before they get to their destinations. When you add the time spent waiting for bus arrivals at the bus stations (which could be up to 1 hour), then you realize that each commuter spends an average of 90 minutes for a one-way trip.
Typically, commuters using the BRT services use their wait time and in-transit times to make calls, chat, browse the Internet or just stay bored. What if you can instantly turn those “bored” commuters to your potential market audience by giving them free WiFi while they travel or wait at bus stations? It’s an instant win-win as the BRT becomes more appealing to commuters. And aside BRT services, there are over 16 car hailing services in which a provider can hook up with as distribution partners.
Now that Flobyt has proven that free WiFi can work at scale in multiple locations, I am looking forward to the day when this will happen with the transport sector. Fingers crossed.