It was 2006 and I wanted to start my first business. I was young and naive about how businesses ran so I approached a more experienced businessman for advice. He asked me what I would do to make everybody in the community where I would run my business willingly pay me 5 Naira on the same day. He told me that the answer to the question was the secret to starting a successful and lasting business. After thinking about the question for a while, I concluded it was impossible. But even though I couldn’t answer the question, I never stopped wondering about it. And indeed, my perseverance paid off.
After several years of trying to figure out the answer to the ‘5 Naira question’ I decided to get other people’s opinion about it. I rephrased the question and asked what they would do to get everyone in Lagos willingly pay them 5 Naira on a particular day, and shared the question on social media. Although some of the answers I got were a bit bizarre but I was amazed at the response. Some of the replies suggested hypnotism, magic and scamming while others were just silly jokes. Reply after reply and then finally, I got a reasonable answer that put an end to my years of pondering.
Someone had seen the question on twitter and decided to answer it. In his opinion, he felt that the solution would be to offer a 5 Naira means of transport that got people home safely and faster without having to go through the holdups in Lagos. If you have ever been to the city Lagos, then you might appreciate this answer better.
To begin with, Lagos is very popular for its hustle and bustle. As at the time of writing this, it is very common to spend hours in traffic jams every day including holidays and weekends. It can take you up to 2 hours or more for a journey that shouldn’t last more than 30 minutes without gridlocks. Lagos is simply an overcrowded city where people are always on the move. Looking at the answer more critically, you will also discover that the traffic situation in Lagos is a problem that is common to every single person living in it irrespective of status, age or religion. That is why media platforms like “Gidi Traffic” and “Traffic Radio” are popular and deserve outstanding reviews. So yes, I agree that Lagosians would be more than willing to pay 5 Naira for an alternative to their traffic hassles. And that’s how I proposed the 5 Naira theory.
The Five Naira Theory simply states that to get everyone in a particular society to willingly pay you 5 Naira on a particular day, you would have to provide an efficient solution to a problem that is common to all of them.
Like every other theory in life, the theory of the 5 Naira is subject to limiting factors. While it might not be practically possible to get every single person to pay 5 Naira on the same day, it is however possible to get so many people who would be willing to do so at the same time. This is what the theory leverages on.
You may be wondering how this answer or theory has anything to do with business. Well, the truth is that it has everything to do with it. You see, there are little things that happen every day that gives us a clearer picture of the dynamics at work in life and even in business. For Sir Isaac Newton it was an apple falling from a treea that made him understand the force of gravity. In business we have a lot to learn from the 5 Naira theory. One of such lessons is that a good business is one that solves a common problem. The scale of the problem you solve invariable determines the scale of the business you will end up building. Google is an example of a global brand that solves a global problem.
Another thing to note about this theory is the amount. Though figurative, the 5 Naira value shows that the solution is affordable. Some businesses do well but fail when it comes to the issue of cost. How much people have to pay for your service is an important part of this theory. That is why companies like Virgin and Google are very successful – they offer practical solutions to global problems at affordable rates. Except you intend to build a brand like Rolls-Royce Motor Cars that offers high-end luxury products or services, you need to take note of this point.
Google is a classic example of the N5 theory. In 2011, Google recorded over 1 billion monthly unique visitors and earned 50 billion dollars in annual revenue for the year 2012. 1 billion people from around every month, that is more than one sixth of the entire world population in the same place. Once you have access to the internet it costs absolutely nothing to use Google. But take note that Google doesn’t have that much visitors only because it is free. There are many companies that won’t enjoy that much patronage even though they offered their services for free. The 5 Naira theory shows that to get a lot of people’s attention, your solution should also be efficient.
Seven years ago when I approached the businessman about my intention to start a business, I had hoped for some sort of financial support or a ‘get rich quick’ advice. You can’t imagine how disappointed I was when all I got was a riddle. If only I had known that what he gave me was worth more than money itself could buy, I would have been more grateful. It has been over seven years now and I don’t regret any moment I spent trying to figure out the answer. It has been worthwhile.
Today I present to you The 5 Naira Theory. I hope it would be useful to you as much as it has been to me. Please feel free to modify it, share it with everyone and together we will build the Nigeria of our dreams.
ABOUT US: Zimylink Brand Managers is a brand management firm. We’re a team with in-depth expertise in developing and deploying effective brand solutions for big and small brands. As part of our approach of bringing ideas to life, we publish our thoughts and theories on branding and also solicit the contributions and opinions of other industry experts. This is to help emphasise the impact of branding on the development of small and medium sized businesses towards building a sustainable economy in Sub-Saharan Africa.