Should iKhokha prioritize expanding our merchant base or improving existing user retention?

Introduction

The key trade-off we're examining is whether iKhokha should prioritize expanding our merchant base or improving existing user retention. This decision is critical for our growth strategy and resource allocation. I'll analyze this trade-off by considering our business context, user impact, technical feasibility, and resource implications.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking our revenue model might heavily influence this decision. Could you share how our revenue is currently split between new merchant acquisition and existing merchant transactions?

Why it matters: Helps understand the financial impact of each strategy Expected answer: Revenue is split 60/40 between existing and new merchants Impact on approach: Higher existing merchant revenue would lean towards retention focus

• User Impact: Based on our merchant segments, I'm curious about churn rates. What are our current churn rates for different merchant segments (e.g., small vs. large businesses)?

Why it matters: Identifies which segments need more retention focus Expected answer: Higher churn in small business segment Impact on approach: May suggest targeted retention efforts for specific segments

• Technical Feasibility: Considering our current platform, I'm wondering about the scalability of our onboarding process. How much additional load can our current systems handle for new merchant acquisition?

Why it matters: Determines if expansion requires significant tech investment Expected answer: Current system can handle 2x current volume Impact on approach: High scalability might favor expansion strategy

• Resource Allocation: Looking at our team structure, I'm thinking about our capacity for new initiatives. How are our product and engineering teams currently allocated between new features and maintenance?

Why it matters: Assesses our ability to take on new projects Expected answer: 70% new features, 30% maintenance Impact on approach: High allocation to new features might support expansion strategy

• Timeline Pressure: Given market dynamics, I'm curious about competitive pressures. Are there any immediate market threats or opportunities that we need to address in the next 6-12 months?

Why it matters: Helps prioritize short-term vs. long-term strategies Expected answer: New competitor entering market in 9 months Impact on approach: Might necessitate aggressive expansion to secure market share