Michael Collins Ajereh or Don Jazzy, one of Nigeria’s top pop musician has been linked to Flobyt, a startup that provides free WiFi.
According to information on its website, Flobit provides free WiFi services through “partner of locations including; eateries, parks, taxis, buses, restaurants, cafés”
They also pitched the startup as a fit for ‘at home’ wifi experience, when you’re out and about. Checking emails, uploading photos to Facebook, funny instagram videos – whatever you’re into, surf it for free on your smartphone or tablet”.
As per its monetisation model, Flobyt will be funded by advertising as its key revenue model. While this is practicable, there are hiccups with the model. While a paid model has not really succeeded at least with the death of Oxygen WiFi, there are more risks with a totally free model.
Partnering with merchants and stores is a good idea, there are tendencies that such arrangements are skewed to favour partners. This for instance means that the startup will be charged for service fees to cover power costs and other maintenance fees. It is a no-brainer that Flobyt will cover all Internet costs as well.
Many stores in Lagos (and perhaps by extension Nigerian in general) see free WiFi service to their customers as an ‘over-the-top’ and sometimes as a privilege. While some might reduce costs borne by the startup, others especially shopping mall merchants who pay huge rents in Dollars (USD) might pass on commensurate charges that is due to the startup.
A model that might work in Nigeria might be proper partnership where Flobyt is seen as a technical partner to merchants/stores to provide WiFi service. Costs of Internet and equipment is borne by the startup, while a merchant bears power costs. Revenue from advertising, paid sponsorships and other initiatives are then shared according to traffic from a each merchant’s store.
Don Jazzy and his co-owners must have done their feasibility study and a lot of analysis must have created its current model. There are possibilities that its approach will work out, however, costs might be a big problem for this type of business.
As a startup, you do not want to stay too long before you start declaring profits. Investors and other stakeholders will want out soon.
Still, Don Jazzy’s new venture is commendable and we can only wish him best of luck.