Notes from exploring business models in the Jobtech sector course

We have been taking the JobTech Alliance course and here we will record notes on what are learning. Do check out the course available here.

Module 1 — Platforms for offline work

• On pricing, platforms have to strategically juggle discounts, promos, and pricing irregularities while considering ways to reward both service providers and users. At the same time, they have to acknowledge the impact of power users on platform sustainability and learn more about spending habits in the regions they operate.
• On payment structure, platforms grapple with the choice between implementing per-day or per-trip payment (for ride-hailing and logistics) structures and how that makes financial sense for service providers.
• Some platforms offer more than one service, and that can get complex. There are homogeneous vs heterogeneous forms of labor provisions in job tech platforms. Understanding various labor forms is crucial for constructing business models, including skill development's importance for a more dependable business model.
• Beyond building the tech, platforms have to navigate systemic hurdles stemming from infrastructure, cultural norms, and asset acquisition. This varies per platform and the sector they are playing in.
• Managing user experiences remains challenging, particularly in retaining control post-mediation.
• Platforms strive to function as asset-light entities, all while providing employment opportunities.
• Jobtech platforms are ideally moving work and service offerings from offline to digital. This comes with its challenges. These platforms need to do more to be successful, in places where policies, infrastructures, and user habits are still developing.

Module 3— Digital services for micro-enterprises

• Cash is still king
• The prevalence of literacy gaps and the digital divide is evident.
• Buy Now, Pay Later (BNPL) models support stock financing.
• Fulfillment in this sector poses a challenge, although some engagements utilize light technology, most operations, including warehousing, remain offline.
• Platforms in the sector function as either intermediaries (e.g. Jumia) or augmenters (e.g. Shopify).
• Platforms actively advertise, offering clients new market access and business management solutions.
• Persisting offline sales models coexist with online platforms.
• Building trust and establishing localized networks are critical factors for success in this sector. This includes having last-mile delivery agents who are pivotal in completing the logistics chain.
• Platforms sometimes track day-to-day sales and how money moves for credit scoring purposes.
• Supply chain optimization and market intelligence are valuable areas where platforms can contribute.
• Asset-heavy approaches are avoided by job tech platforms, mirroring strategies in offline work platforms.
• Offline operations pose significant scalability limitations.
• This is a sector with more female players. Embedding finance can support gender-focused financing and women’s support initiatives.
• COVID-19 accelerated digitization, especially in restaurants, witnessing a substantial increase in digital adoption.
• Quicker payments are essential for materials in products that require production time.
• The focus is on attracting users with tools and retaining them through network engagement, “come for the tool, stay for the network”.

Module 4— Tech-enabled skilling

• New ways of working demand new skills — As industries evolve, this necessitates acquiring new skills to stay competitive in the job market. That’s where tech-enabled skilling platforms play in.
• The main question is who pays for the skills? Some platforms operate on a BtoB approach while others are B2B.
• Skill funding dynamics in Africa vary. Funding for skill development often falls on many players including donors or involves partnerships between governments and private sectors. After the funding, the next challenge is balancing high-end skill demand with other skilling demands and capacity-building
• There are varied business models in skill development with no one clear winner. Matching placement fees for senior practitioners often yields better returns compared to junior practitioners, adding complexity to determining the most effective business model.
• Demand-led skilling is the way to go. It is important to align skill development with market demand by identifying job opportunities or having market predictions and then tailoring training programs accordingly. These profession-led boot camps can have a better outcome where demand and supply are fulfilled.
• Training efforts need to think about the skill outcomes. Training is just one step, other critical aspects include networking, establishing verifiable credentials, ensuring inclusivity, and defining training purposes beforehand. It’s important to follow the data trail. Tracking employment outcomes over time offers insights into the effectiveness of skill development programs.
• Models of training can vary. Self-paced vs. guided cohorts present different advantages and challenges.
• Social support and financial incentives (stipends for learners) during training enhance engagement and persistence in skill development.

We will be adding notes here as we complete the course which has 5 modules. Stay in tuned.