WHY BILLIONS FOR MAKATE?
Nkosana Makate - The Inventor of the “Please Call Me service”
According to Kenneth Makate who invented the Please Call Me service, the invention is worth R10 billion. This value has been questioned by some who claim it’s too much for the invention. Some have however suggested that Makate deserves to be compensated for the invention.
The Please Call Me debate is forcing South Africans to begin a discussion about the value of information products and how to compensate innovators at work. There’s no question about the need to compensate Makate for his invention as the Constitutional Court declared on this matter. The value of compensation is the bone of contention and the Please Call Me product worth is what needs to be determined.
The dominating narrative is that Makate simply presented an idea without implementing and therefore he does not deserve much in terms of compensation. This reasoning is flawed since the idea was based on an understanding of the market conditions and the value of the USSD technology. There are a couple of reasons why Makate deserves the billions for the invention. The following are just some of the reasons:
Technology Commercialisation Strategy: Freemium Model
Technology: USSD (Value Added Service)
Target Market (Africa)
TECHNOLOGY COMMERCIALISATION STRATEGY
One of the main challenges in implementing consumer technology services in Africa is the affordability of communication. In comparison with other parts of the world, the African consumer market does not spend much on technology communication services. This was even more complex in the early 2000s when the Please Call Me service was invented. The affordability of communication was the driver for the creation of this service. At the time this was a major challenge for consumers and companies like Vodacom.
It can, therefore, be argued that the concept was not just a technology. It also introduced a technology commercialisation strategy that did not require the audience to pay, the freemium model. This alone was a great achievement by Makate who understood this based on his observations as an accountant at the time within Vodacom. What Makate achieved for Vodacom is equivalent to what Google achieved with enabling the public to search for anything online for free. When Google was created this approach was considered revolutionary.
TECHNOLOGY: USSD (Value Added Service)
The Please Call Me Service was not just a useless idea. It was an idea that took Unstructured Supplementary Service Data to another level (USSD) to another level. What Makate introduced was a Value Added Service on top of the USSD platform. His addition was key. It was also different from other inventions from MTN and Orange Personal Communication Services. The key difference is related to the target market and business objective.
Makates idea was that the service should be focused on a particular market, namely, that of people with prepaid cellular phones who were out of airtime in the African continent. This target market was key, especially when one considers that the service was first introduced in the African continent where most users at the time were always out of airtime.
These factors should be considered before anyone declares that the Please Call Me service is not worth much. It is important that decision-makers who make decisions about the value of information products familiarise themselves with the true value of information assets and ideas.
Facebook acquired WhatsApp, a service which enabled free communication via mobile phones for US$19.3 billion. How valuers of WhatsApp determined such value for WhatsApp should be understood. The monetary value derived by Vodacom based on the Please Call Me service goes beyond advertising revenue. Makate enabled Vodacom to access a tough African market with a groundbreaking tech commercialisation strategy. The true value of the Please Call Me product should be determined. This process should not only take into account the advertising revenue generated from the service. This process should measure Please Call Service as a product. It should consider the Please Call Me service audience in the same way that the audience on Facebook is measured. Each person who used the service has to have a monetary value attached to them. Such clients did not just use the Please Call Me service. Some of them switched to Vodacom to use the service and some of them evolved to become loyal subscribers. All of these factors should be considered. The Please Call Me concept is worth a patent. Its inventor should be rewarded accordingly.