“The importance of meeting someone (in person)? According to us the importance is that you persuade that person and now he or she becomes a client.”

Rehema, Caterer

Summary of Findings

1. Touch driving use of technology
2. Tech and touch working in tandem
3. Tech pushing micro-entrepreneurs back to touch due to:
   • Lack of trust
   • Lack of transaction facilitation
   • In-person training
   • Access constraints

Despite the increased digitization of both personal and business domains, there is no clear line between online and off. Rather, people engage in ‘tech and touch”. “Tech” refers to online, mediated interactions and “touch” to face-to-face communication. When looking at micro-entrepreneurs’ behavior across platforms, the reasons for the blurring of the online and offline worlds range from issues around trust to digital literacy constraints.

We see the blending of digital and human interactions across all technologies, from the use of e-commerce to simple mobile phone calls. Chepkirui, a hairdresser and one of the 27 micro-entrepreneurs we interviewed for our research, described why she uses both tech and touch with her clients:

“I just tell them to come so that we can speak face-to-face, because on phone it is so hard to convince someone.”

Findings from our research build on themes we’ve heard from our partners—and beyond—around the hybridity of tech and touch:

• Accion Venture Labs’ Tech and Touch Balance report shares lessons from successful startups that have managed to find innovative ways to balance digital tech with appropriate human interaction to better serve their customers.
• FIBR’s MSME and Superplatform research in Tanzania revealed how digitally augmented micro-entrepreneurs expressed interest in investing in offline services. All seven of the micro-entrepreneurs interviewed in the research were interested in the concept of a “pop up shop”, a temporary physical storefront enabling customers to come and try out products before they buy them online or in-person.
• BFA’s Catalyst Fund has also witnessed how tech and touch has positively impacted inclusive FinTech companies as they work to broaden and deepen financial inclusion. FinTechs that are not ready to fully digitize the customer journey have found that human interaction at the point of customer acquisition helps build trust and maintain customers.
• TechnoServe’s Smart Duka program in Nairobi, leverages both in-person trainings and WhatsApp support groups to upskill and upscale selected high-potential corner stores.
• Donner and Maunder highlight the blurring of online and offline strategies in their analysis of internet use by informal microenterprises in Kenya and South Africa. Using marketing as an example, Donner and Maunder discuss how “the market landscape in many places is becoming a melange of the old and new approaches: the offline and the online, the appropriated and the purpose built.”

This section, one of two detailing “additional observations”, shares insights from our interviews around the interplay between online and offline practices among micro-entrepreneurs in Kenya and the underlying incentives for them to dip in and out of platformatized markets as they go about their daily business.

The flow of “Tech and Touch” is multi-directional

From our in-depth user research, we saw the journey between tech and touch moving in multiple directions. Below we go through the three basic journeys we found:

1. Touch driving use of technology

With new technologies, human interaction is often needed to build trust, drive adoption, and encourage use. Even in the case of mobile money in Kenya, with 13 years of digital transactions under its belt, human interaction is still required at various points along the customer journey. In the case of micro-entrepreneurs and platforms, given that platforms are a relatively new technology for this user group, human touch is particularly important.

In the Upskilling section we discuss in detail how micro-entrepreneurs leverage in-person training and support to navigate and get the most out of the various platforms on offer. For example Faith, a fresh juice seller, despite leveraging various platforms (from Instagram to YouTube and WhatsApp) for upskilling purposes, found her most reliable source of information and advice was her mentor, Esther. Similarly Daniel, a micro-entrepreneur who does online freelance writing in the evening, was trained on his evening side-hustle by a friend. Asked how he knew how to use iWriter, a freelance writing platform, he told us:

“My friend explained it to me and I did a few articles. It’s a learning process.”

Micro-entrepreneurs also use human touch to build relationships with their customers before they move conversations online. Benard, a shoe merchant, uses his physical store to help market his shoes, attract customers, and build relationships. He then tends to move regular customers over to WhatsApp for on-going marketing and communication purposes.

“By the way, most of the customers I sell to (in the market), after that I just deal with them through WhatsApp.”

2. Tech and touch working in tandem

Tech and touch can also work together, complimenting each other. Rehema, a caterer, told us how in-person meetings with potential clients help build trust and solidify relationships while her Facebook page is a great way of promoting her products and services.

“You see some people will like to see what you do…It is hard for someone just to trust you once. You can’t just tell someone I know how to cook and maybe you don’t have evidence.”

Benard, a shoe merchant, communicates with his clients via WhatsApp, but goes offline to deliver the shoes in-person and receive payment. Similarly Faith—despite using a variety of platforms to communicate with clients, promote her goods, and upskill herself—delivers her juices in-person.

As discussed in the Search, Promotion, and Discovery section, many micro-entrepreneurs use a blend of social media platforms and offline tools in their buying and selling journey. Despite e-commerce sites (like Jumia and SkyGarden) providing an end-to-end service, we observed that self-contained, all-in-one messaging and coordination is the exception not the rule. Instead, most of the micro-entrepreneurs to whom we spoke use a patchwork of different social media platforms alongside phone calls and in-person meetings in the selling and buying cycle. Indeed, touch often comes into play for micro-entrepreneurs for the last mile delivery component.

3. Tech pushing micro-entrepreneurs back to touch

While the two above journeys, touch driving technology adoption and technology and touch working in tandem, are perhaps less surprising observations, our third journey focuses on technology pushing micro-entrepreneurs back into the offline world. The impetus for this is usually tied to a micro-entrepreneur’s issue with a platform, be it a breakdown in trust or inability to complete a sale (often due to the lack of an online payment mechanism).

In the table below, we have mapped the drivers of this movement—from tech to touch —to the platforms most widely used by the 27 micro-entrepreneurs we interviewed in Kenya. For example, micro-entrepreneurs were mainly pushed off Facebook due to: lack of trust, lack of transaction facilitation, and access and literacy constraints.

Below we discuss each of these drivers in more detail.

Lack of trust

Trust is critical in all commercial transactions. When platforms work for micro-entrepreneurs, trust plays a central role.

Our conversations with micro-entrepreneurs revealed a lack of trust predominantly across social media platforms. Users of these large social media platforms contribute to the erosion of trust. Odeke, a micro-entrepreneur who uses a small team to distribute water for him in the traffic in Nairobi, explained that he had been scammed when looking for a job on Facebook:

“Jobs that are being posted there (on Facebook) are cooked, most of them. To get a genuine one is difficult. There are contacts there. When you call that person, they will tell you send money. So, it’s a game.”

Privacy concerns are also raised around Facebook. As Makena, a tailor, told us:

“You know Facebook has a lot of things and if you want to protect yourself, your privacy, you don’t just go on Facebook.”

Further, while the network effects of social media allow micro-entrepreneurs to increase their exposure exponentially, there is insufficient personal interaction to build trust-based sales. This is especially important for small businesses that rely on personal cachet rather than brand and reputation. Large platforms, such as Facebook, enable micro-entrepreneurs to widen their customer reach, but the larger their audience grows the less intimate it becomes. As Zawadi, a baker, told us:

“When it comes to Facebook, the challenge is not everyone knows you, you are just Facebook friends.”

As a result, when micro-entrepreneurs find a potential customer on Facebook, the relationship is often moved to WhatsApp. Micro-entrepreneurs appear to trust WhatsApp more than Facebook; accordingly WhatsApp plays a larger role in facilitating interactions and closing sales. The higher level of trust on WhatsApp may derive from the user experience and interface of WhatsApp as well as its closer connection to SMS messages. The fact that it is linked to a person’s phone number, a more tangible form of ID than a Facebook profile page, may also be a contributing factor. Otieno, a shoe merchant, told us why he views WhatsApp as more trustworthy than other social media platforms:

“The fact that you know the people rather than Facebook or Twitter where you don’t even who you are talking to…”

However, as observed in FIBR’s MSME and Superplatform research a number of our respondents commented on the overwhelming number of messages they receive through WhatsApp. Kioko, a small trader of flash disks, complained:

“I don’t like WhatsApp groups…you wake up in the morning and you find like 200 messages.”

Kipchoge had a similar attitude towards the platform, choosing to post on his WhatsApp status rather than through WhatsApp groups. In order to stand out among the sea of WhatsApp messages, Nduku, a micro-entrepreneur who runs a thrift store, calls clients before sending a WhatsApp message:

“I will talk to you first so that you expect it. I don’t just go posting, because you may see something from me and you don’t know what it means.”

Ultimately, when micro-entrepreneurs find a potential customer on a social media platform, a phone call or in-person meeting is seen as the most powerful and reliable way to close a lead. We’re not saying that no social media platform supports trust, rather trust grows when micro-entrepreneurs and their customers move from Facebook to WhatsApp and, ultimately, in-person communication (see “Tech and Touch Journey” image below).

For example, despite using Facebook and WhatsApp, Nduku who owns a small thrift store, viewed face-to-face interactions as her most powerful sales tool. A number of our micro-entrepreneurs also leverage their physical shop location to build ultimate trust with customers. Kerubo, a micro-entrepreneur who sells beaded jewellery, shared how she builds trust with customers:

“I just tell them come to my shop at Ngara and see for yourself if you don’t believe.”

Lack of transaction facilitation

The fact that micro-entrepreneurs cannot transact financially across certain platforms (namely social media), and therefore close sales, also forces them offline. And this isn’t unique to the platforms that micro-entrepreneurs have appropriated to fit their business needs, such as social media. Some e-commerce sites also take a hands-off approach when it comes to transaction facilitation. Unlike Jumia, which handles all transactions and interactions between buyers and sellers (even cash-on-delivery payments), OLX does not provide any mechanisms for payment. To transact and close a sale, buyers and sellers that have connected across the OLX platform must move their conversations offline and transact in-person. While there are inclusion benefits of enabling cash on delivery payments, it is “expensive, inefficient, and time-consuming for both merchants and buyers.”

In-person training

While various platforms provide opportunities for online upskilling (see more details in our Upskilling section), in-person support still plays an important role. We observed in-person training either purposefully being provided by a platform, or organically provided by family and friends to fill a skills gap. For the latter, friends, family, and acquaintances were called upon to help fulfil a variety of literacy and livelihood training needs. For example:

• Kipchoge was trained on how to use StudyBay, an online freelance writing platform, by his girlfriend.
• While Faith uses YouTube to watch upskilling videos and chats with a business coach via Instagram, her most valuable source of information is from a friend: “Yeah, because it’s face-to-face and I can tell her this is what I want and this is what I’d like to do, and she would tell me no, do this and that.”
• And Chepkirui relies on in-person training for her hairdressing business, highlighting that not all skills are conducive to online training: “It is hard for me to follow instructions from a video.”

Access constraints

Access barriers also contribute to the tech and touch approach. A number of microenterprises we spoke with connected their fragmented use of social media to the cost of data bundles. Zawadi, a baker, explained why she sometimes chooses to send an SMS over WhatsApp:

“If it’s WhatsApp, if someone doesn’t have data or maybe WiFi, they won’t see it on time.”

Similarly, when we asked Kioko, a micro-entrepreneur who sells flash disks through various on and offline channels, how Facebook could better help his business, he replied: “Stop charging. I can post anywhere, any time.” This metered mindset, in which people dip in and out of Internet access due to pricing constraints, is an important access concern and illustrates why a micro-entrepreneur might wish to transition a potential customer onto a platform that requires less data, or to phone calls or face-to-face communication. WhatsApp is also cheaper than Facebook, which could explain the transition from Facebook to WhatsApp or, as in the case of Benard, bypassing of Facebook completely:

“And my business, most of them, I do through WhatsApp…You see for the first thing WhatsApp is fast and WhatsApp is cheap.”

We also noted access constraints on online work platforms. A number of micro-entrepreneurs to whom we spoke had opened accounts on online work platforms but struggled to access jobs due to the massive oversupply of labor on these platforms. This pushed micro-entrepreneurs off the platforms, to either look for people who were selling pre-made, highly rated accounts (see more on this in the Digital Side Hustle section) or to look for outsourced work. Mary, a micro-entrepreneur we interviewed who employs four people to support her online writing, explained to us how she trained her staff off the platform:

“I realized working on my own, I don’t make much and I can actually pay someone to do it for me at a lower price. I got some people that I trained, now I just get to delegate them together on those jobs.”

It appears that various gatekeeping issues bounce some micro-entrepreneurs straight back into the offline world.

Summary of Findings

1. Building an online account that stands out from the crowd
2. Outsourcing work
3. Off-platform support
4. Making the side hustle your full-time business

A side hustle is a money-earner employed in addition to a primary business or job. Side hustles come in all shapes and sizes, and are prevalent in some countries such as Kenya particularly among young men and women. As Muthoni Mwaura’s Kenyan study found “the notion of side hustling is particularly important for understanding youth livelihoods in contemporary contexts.”

It is hard to find a Kenyan who doesn’t have some sort of venture or job bubbling away on the side to supplement their main income. As Wambui succinctly put it:

“Everything here is just hustling, hustling, hustling.”

There are many offline examples of side hustles, such as those described by two of our interviewees, Rehema and Robert, below:

“Like for me I’m a hustler, when we don’t have these jobs, I try some other things….Like me at where I stay I’ll cook chapatis and sell 15 bob each.” —Rehema, Caterer

“It’s a farm…That one is my side hustle.” —Robert, E-Commerce merchant

But in this piece, we focus on digital side hustles which leverage platforms.

This section, one of two detailing “additional observations”, shares insights from our 27 interviews around how micro-entrepreneurs in Kenya are building their digital side hustles through online work platforms.

Defining the digital side hustle

In our research, the majority of digital side hustles were fulfilled through online work platforms. These platforms enable the sale and purchase of online task-based services, such as microwork and online freelancing. Among the microenterprises we spoke to who do online work, most of their work consisted of freelance writing, such as product reviews and academic writing. The sites they use included Upwork, Freelancer, Uvocorp, iWriter, and StudyBay. Most of our respondents also did online survey work, the channel through which we recruited the majority of our panel.

Small sample, fascinating findings

Our research in Kenya reinforces other work suggesting that a number of “traditional” Kenyan micro-entrepreneurs have taken to platforms to support their side hustles with remarkable aplomb. Among the 27 micro-entrepreneurs we met, 11 had side hustles, four of which were “digital”. This is in addition to two micro-entrepreneurs who do online digital work as their primary business. Read on for details about each of these six entrepreneurs:

Working with online work platforms as a side hustle:

• Otieno, a shoe merchant who does academic work on the side at night, averages 5-6 hours of online work a week, which he starts doing when he gets home at around 8:30 pm.
• Kamau, a pastor with a real estate business, completes roughly 15 surveys a month.
• Dorcas, a baker, makes 40% of her earnings through online work such as iWriter and Upwork.
• Daniel, who runs a small duka (convenience store) writes articles and does product reviews online in the evening through iWriter and Upwork.

Working with online work platforms as a primary business:

• Over the past two years Mary, an experienced online academic writer, has hired a staff of four to help support her online writing business.
• Kipchoge, an academic writer and Jumia representative, has completed 178 assignments on StudyBay over the last two years, which he considered a small number. Along with his girlfriend, they have five “freelancers” to whom they outsource work.

While we appreciate our sample size is small, we believe the insights we gathered from these six microentrepreneurs present an intriguing opportunity for further study and investigation. In our introductory Platform Practices Section we discuss how technologies are adapted to fit the needs of the user and ensure they get the most out of what these technologies offer. Online work platforms are no different. Both those who thrive and struggle across these platforms develop ways of improving their platform experience. In this section we will look at how a small selection of Kenyan micro-entrepreneurs behave across these online work platforms and how they bend rules to maximize these online work opportunities.

1. Building an online account that stands out from the crowd

Given the popularity of digital side hustles, competition is stiff and the oversupply of labor phenomenal. Research by the Oxford Internet Institute has quantified the incredible oversupply of labor among Kenyans working across one of the leading online work platforms. Their data from 2016 shows that, across one specific platform, only 6.9% of Kenyan account holders billed at least one hour of work or earned at least $1.

Despite being the most successful freelance writer we spoke to, Mary shared her experience of the oversupply of labor and undersupply of jobs:

“In the five clients that you talk to, one of them gives you a job…but initially you could even go for a whole week…you talk to hundreds and hundreds of clients…”  

This competition, and ensuing race to the bottom when it comes to fees and wages, was evident in our user research. Kipchoge, another successful online freelance writer spoke of his experience with being outbid across online work platforms:

“There are writers who under-bid others because they already understand the instructions. For example, if an order is supposed to be paid USD$50 and this writer she has understood the order, the writer will under-bid me from my bid of $50 and place a bid for $40 or $35.”

Daniel also emphasized the extent to which fees are undercut on iWriter:

“For a 500-page doc, you are paid $3-5.”

Faced with this stiff competition, micro-entrepreneurs do what they can to stand out from the crowd. Below we highlight a number of strategies that they employ:

Designing an Online Profile

While we only have snippets of information on each of these subcategories, these observations were consistent among the six micro-entrepreneurs we interviewed who use online work platforms. These insights show the lengths to which micro-entrepreneurs will go to promote their online work profiles across heavily saturated platforms. Kipchoge, a seasoned user of StudyBay—an academic writing workspace—uses the picture of a white man as his profile picture (see image below). When we asked why he chose this picture, he said:

“Because the clients we are dealing with are usually from the West.”

Setting a “Home” Location

Along a similar vein, Njeru uses a VPN (avirtual private network) to trick his iWriter clients into thinking that he is located outside of Africa. He told us:

“If you want to write for such a site, you will get a virtual private network…If you are in Australia you get more jobs than in Kenya.”

Building up Ratings and Reviews

As discussed in detail in the Credibility Section, ratings rule the game across these platforms. The more traditional mode of building up ratings and reviews is to complete more jobs; to do so many digital side hustlers work late into (or even through) the night. However, some bypass this conventional approach in a bid to stand out from the crowd. Mary and Kipchoge who do online freelance writing as their main business “employ” freelancers to whom they outsource additional work. This inevitably increases the speed at which they can complete jobs and in turn build up their ratings. This is discussed in more detail in the following “Outsourcing Work” section.

While credibility is intended to be built on experience and quality of work, some entrepreneurs have learned how to hack the rating system. For example Njeru told us that some online micro-entrepreneurs in Kenya “review themselves” by logging into a platform as a client, posting a job, accepting and completing the job from their freelancer profile, and issuing their own review of their work!

“Kenyans are very crafty, creative and bright,” he told us.

Buying Second-Hand Accounts

We also found evidence of people selling and buying accounts for online work platforms. A number of micro-entrepreneurs told us about accounts being sold through Facebook groups, such as the image below captured from one of these groups. These pre-made profiles are designed to help users who either struggle to open their own accounts or want to buy highly rated and skill tested accounts to access higher paid jobs. For the account seller it’s a money earner in itself, creating a business by selling access to accounts on online work platforms. All they need to do is open an account, pass some skills tests, complete a couple of assignments, and then share the log-in credentials and related account details with the new account owner. Njeru explained what you get if you buy one of these accounts:

“Everything will be done for you, inputting profile information including email address and linking it to Paypal.”

Otieno, a shoe merchant and part-time online freelance writer, didn’t hesitate to tell us about the Upwork account he purchased.

“I bought an (Upwork) account from somebody…A friend of mine sold it to me.”

Various factors influenced his decision to buy an account, stemming from technology and literacy constraints in opening his own account, to challenges in passing Upwork skills tests, and lack of reviews and ratings to help him win his first assignments.

There are inevitable risks involved in the somewhat unethical purchase of pre-made accounts which are often (in the case of Upwork, Freelancer, and Uvocorp) linked to freelancers’ skill-level through various tests. The image below of a message sent across one of these Facebook groups, demonstrates the risks of purchasing a second-hand account.

Interestingly, one of the Facebook groups dedicated to this type of online work, warns group members against selling accounts (see image below):

2. Outsourcing work

According to our research the practice of outsourcing work acquired through online writing platforms is common for a number of reasons. Firstly, it helps those who can’t access their own online work – usually due to barriers to opening their own accounts or inability to win work due to intense competition – find outsourced work off the platform. Secondly, it enables those that have their own accounts, but wish to grow their online work business, to complete more jobs and generate more income. Thirdly, it assists those who purchase a secondhand account—and, in doing so, take on the account holder’s platform identity and experience—to complete assignments that the new user is unable to do based on their own knowledge and experience.

This process of reintermediation, in which successful online entrepreneurs become intermediaries themselves, has been found in other markets. Graham, Hjorth, and Lehdonvirta found evidence of successful online entrepreneurs in the Philippines and Kuala Lumpur purposefully “taking on more work that a single person can handle, and hiring other workers on the platform to carry out the work for them.”

In our own Kenyan research, Mary, who employs four people to support her online writing, explained:

“I realized working on my own, I don’t make much and I can actually pay someone to do it for me at a lower price. I got some people that I trained, now I just get to delegate them together on those jobs.”

While outsourcing work isn’t endorsed by platforms, it is a common practice. As Mary told us:

“the sites that we are using, they don’t know that we delegate to staff…they think that you’re working on your own…I am not sure whether it is okay if those websites learned that we do this.”

Account owners usually find extra staff through friends, family, or Facebook groups. Of the two Facebook groups we saw dedicated to online writing, one had over 100,000 members and the other over 55,000 members. From a quick review of one of these groups, we saw the proliferation of outsourced work in action. The image below is a screenshot from one of these Facebook groups through which a member is trying to recruit outsourced writers.

Why do online micro-entrepreneurs outsource work?

Similar to Mary, Kipchoge and his girlfriend both have StudyBay accounts and outsource work to a number of regular freelancers, or what he calls “colleagues”. This helps him fulfil jobs that require a specific skill set.

“With academic writing or with writing in general, you actually need someone who is special in something…someone who has special business related papers, accounting related papers, IT related papers… So, for example, if the order is for accounting, I already have my accounting guy. I just download the instructions, send to him and then once he has told me it’s okay…I’m able to place my bid now.”

While Mary also has a number of regular freelancers she works with, she also uses Facebook groups to find qualified people to complete specific jobs:

“Sometimes you’ll get a task that you don’t understand so you come to this (Facebook) group, and you post.”

Outsourcing work helps online work account holders grow their business. Online entrepreneurs need to complete more jobs and build up their reviews in order to stand out from the heavily saturated crowd of online freelancers. Outsourcing work helps them do this. Outsourcing work to multiple “colleagues”, enables entrepreneurs to work on multiple jobs at the same time and, in turn, rapidly build up their profiles and ratings. This is key to winning jobs across these platforms.

Who are they outsourcing this work to?

Not only does outsourcing work benefit account owners, it  also benefits those who are either locked out from opening their own accounts or simply struggle to compete with more experienced writers. Not all micro-entrepreneurs are able to open and set up their own accounts on these online working platforms. For example, Kohe, a tax and insurance consultant, was unable to pass the skills tests set by Upwork. “I tried joining Upwork but I failed the test.” Otieno, a shoe merchant who does online work on the side, doesn’t have an account on any online work platform and relies purely on outsourced work acquired through friends, or friends of friends. The availability of outsourced work gives those who are unable to open their own accounts, or struggle to win their own jobs, an opportunity to reap the rewards of the digital side hustle.

What risks are involved?

This process of reintermediation, in which successful online entrepreneurs outsource work to those who struggling to find their own work across these platforms, can lead to exploitation. Outsourcing also exaggerates the race to the bottom for wages and work conditions. Not only has the oversupply of labor created endless competition on platforms, but it has begun to filter offline and into the growing pool of outsourced micro-entrepreneurs. Estimations of oversupply of labor are therefore likely low, failing to account for the growing workforce who complete online work but don’t necessarily have their own online presence (even if they find this work through Facebook groups). Moreover, in addition to driving wages down, there are increased risks when a middleman, unregulated by the platform, is introduced into the workflow process. A number of the micro-entrepreneurs to whom we spoke highlighted the risk of accepting outsourced work through Facebook groups dedicated to online writing due to the risk of being conned into completing services without being paid. As Mary told us based on her experience in Kenya:

“There are many people who have not paid their (outsourced) writers.”

3. Off-platform support

The world of online work can be an overwhelming place. Online entrepreneurs, or those who desire to enter the world of online work, often seek support from off the platform. We found evidence of micro-entrepreneurs leveraging in-person support. While beneficial, this off platform support has its limitations. For Daniel, while a friend initially upskilled him on iWriter it took over a year to work out how to master the process:

“My friend explained it to me and I did a few articles. It’s a learning process.”

Kipchoge learned how to use StudyBay from his girlfriend. Initially she gave him some of the less complicated jobs After building up enough experience, he got his own account.

“Before I was in a position to actually complete a paper from a client, it took me like three months.”

Facebook groups dedicated to the world of online writing also provide support and guidance. Across these groups users share tips on how to set up accounts on the different online writing platforms. There are also opportunities to connect with trainers who teach people how to write and complete assignments.

4. Making the side hustle your full-time job

Through the process of bending rules, appropriating technologies, and hacking systems, some online entrepreneurs have been able to build relatively successful businesses through these online work platforms. As research by OII similarly found: “Some workers are able to thrive in platforms that reward entrepreneurialism by skilfully building their ranking scores, aligning their self-presentation with the needs of clients, and re-outsourcing tasks to be performed for even lower wages.”

Two of our interviewees, Kipchoge and Mary, “employ” staff to help manage their online academic and article writing businesses. Their digital side hustles have become their primary business. For example, Kipchoge earns 70% of his money through online writing. Mary does online freelance writing full time. She told us that many of her friends from university also do this type of work, mostly academic writing, as a full time job. “Yeah, some of them even come from the university to do it,” she told us. “They concentrate on it…They even have big offices, and they have writers in there…” Mary refers to her work as a business, not a side hustle.

But this work isn’t all smooth sailing. While gig work provides more jobs and the flexibility to either run it as a side hustle or main business, it comes at a cost. In addition to the challenges that come with an oversupply of labor, and the race to the bottom in terms of fees and work conditions, these platform exhibit an obvious imbalance of power between clients and freelancers, tilted toward the former. The idea that the client is always right rings loud and clear. As Mary explained, “Okay, so, academic writing specifically, you get some very unreasonable clients.” Kipchoge also pointed out this imbalance.

“For the platform administrators, clients are their customers so they don’t disappoint the customers. In most cases, they actually punish the writer.”

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Read next: Tech and Touch ⇢

“YouTube is like a tutor.”

Doris, Craftswomen

Summary of Findings:

1. Direct Learning: Micro-entrepreneurs receive varying levels of training and advice from e-commerce, ride sharing, and online work platforms
2. Peer Learning: micro-entrepreneur-developed online support groups
3. Consumptive Learning: Proliferance of self-learning through YouTube
4. Offline Learning: In-person training still plays an important role in upskilling micro-entrepreneurs
5. A-B Iterative Learning: Through trial and error, micro-entrepreneurs figure out how to use the platform for business

This section, one of four detailing “platform practices”, describes how the 27 micro-entrepreneurs we interviewed use the information and services available on (and off) platforms not only to buy and sell but also to learn about buying and selling.

We observed a number of channels, both on and off platforms, through which micro-entrepreneurs learn new skills and literacies: Platforms directly offer information and training to their users; advice and training is offered through third party platforms (YouTube videos, Facebook, and WhatsApp groups, etc.); support is provided offline through friends and family; or micro-entrepreneurs are self-taught. While our first section discusses direct support, the sections 2, 3, 4 and 5 highlight third-party, self-taught and offline learning and literacy practices. These sections draw attention to gaps and point to needs of micro-entrepreneurs that platforms are not currently meeting.

1. Direct Learning: micro-entrepreneurs receive varying levels of training and advice from e-commerce, ride sharing, and online work platforms

We observed direct support delivered by e-commerce, ride-sharing, and online work platforms. By direct support we refer to platforms that not only provide the channel for skills acquisition and learning, but also designing the content. In comparison social media sites, while providing support channels through the likes of Facebook and WhatsApp groups, don’t directly design and deliver the literacies and livelihood skills themselves. While Facebook shares guidelines (albeit only for buying and selling on their Marketplace which is yet to launch in Kenya) and commerce policies for their groups, these are designed to protect users rather than upskill them. We therefore tackle the use of social media support groups in the peer-learning section.

Training and Support from e-commerce platforms

The relationships e-commerce platforms have with micro-entrepreneurs is, to varying degrees, a matter of upskilling these small enterprises and enabling them to thrive across their platforms. While Jumia offers comprehensive digital and in-person training, and OLX takes a more light-touch approach, e-commerce platforms as a whole want microenterprises to grow and prosper.

Jumia guides sellers through various best practices from how to run a promotion to how to package products. This training is delivered online through generic emails, targeted messages, and in-person training. Either online or offline, it appears that detailed advice and support is on offer across all lines of the business. As Robert, a Jumia merchant, succinctly told us:

“When it comes to Jumia…[their] training is perfect.”

Jumia’s stringent quality-control procedures, and penalties, also encourage merchants to refine their product offerings and, in turn, improve their online business. Robert explained that items are rejected, and merchants are penalized if they don’t match their online descriptions:

“Sometimes I used to take the correct items but maybe the color is different so once the item is rejected you are charged five hundred shillings, so from there is when I went back, I settled my mind then from there I started my verification process, so from that time now I could deliver the correct item.”

We also observed that through the use of algorithms some e-commerce platforms guide users on how to best use their platform to conduct and generate business. Tips like “use more colorful descriptions”, or suggestions to include more photos in posts were sent to some of the micro-entrepreneurs we interviewed if their posts did not attract many views or clicks. Once they incorporated these suggestions, they often saw more views and, in most cases, were able to generate some business.

For example, both Jumia and OLX use backend data analytics to deliver programmed advice to micro-entrepreneurs on how to improve posts and adverts. Dorcas, a baker, shared how OLX offered tips on marketing across the platform:

“They send you a message when they see your ad does not have so many views…they told me that, if you want to post something about food, you don’t write “chapatti”, you write ‘food’, the overall word for that so that when people are searching for that, they get it.”

Similarly Wambui, an artisan who sells her goods on e-commerce platforms, after receiving no clicks on her initial OLX post, was nudged by the platform to use more images to help bring the item to life. This resulted in more activity around her posts.

The fact that training and support is on offer highlights  these platforms’ desire to support their merchants. However, in general, OLX takes a much more hands-off approach than Jumia in terms of merchant support and upskilling. This is evident in the communication channels they open up to their merchants. Having recently moved their offices and customer support center out of Kenya, OLX is only contactable via email. As Robert told us:

“Nowadays you just write an email (to OLX), from the email you cannot call them directly because they moved their office from Nairobi to South Africa.”

Training and support from ride-sharing platforms

Ride-sharing platforms also offer a variety of support and guidance to their micro-entrepreneurs. Some ride-sharing platforms, such as Taxify (now Bolt), send both SMS and in-app messages to their drivers. These are generic (see image 1), personal (see image 2), or targeted (see image 3) messages, with the latter triggered by things like bad behavior.  Topics covered include ways to reach more customers, improve their customer service, increase their ratings, and benefit from the promotions and deals on offer. While we only gathered insights around information and advice sent to Taxify drivers, we heard of similar levels of support on offer through other ride-sharing platforms in Kenya.

Online work platforms

Online work platforms, such as Upwork, iWriter, and Uvocorp, also help upskill their workers. For example Uvocorp, a freelance writing platform, gives new writers a mentor for one or two months or until they are able to complete jobs by themselves. The mentors are designed to coach users through best practices in completing assignments as well as understanding business etiquette in managing relations with clients. This support ranged from tactical support like teaching grammar and the importance of syntax to business support like how to manage different types of clients. As Mary discussed:

“Yes, they give you a mentor, who gives you jobs…they show you your mistakes, in which after like two months, you can graduate and become an independent writer.”

Other channels used by these platforms include free online skills tests and online training centers. Along with this on-platform support, off-platform advice and training can be found on Facebook and WhatsApp groups. We discuss this in greater detail next section.

2. Peer Learning: micro-entrepreneur-developed online support groups

While the previous section focused on direct support and training offered through platforms, this section (and the two subsequent sections) highlight bottom-up improvisations. These aren’t platform observations in terms of highlighting what platforms are doing for micro-entrepreneurs but rather what platforms should consider doing.

Online support groups developed across social media platforms appear to be a popular skills and advice acquisition channel for micro-entrepreneurs. As mentioned above, while this may be viewed as a direct platform training practice, we view the use of social media groups for upskilling as a third-party practice. Rather than the platform itself designing and delivering the training, social media platforms simply provide a channel through which users can develop their own content. This focus on user-led upskilling is evident in Facebook’s recent Mentorships program.

We observed micro-entrepreneurs leveraging the network effects of social media to develop support groups across various business sectors. For example Naisula, a cook, told us how she visits a Facebook group to search for recipes and cooking tips:

“I go to ‘How to cook Kenyan meals’. Yeah, there you can find everything…it teaches people how to make new meals…everybody is a teacher there.”

Similarly, on Instagram, Faith connects with a business coach who gives her advice on how to grow her fresh juice business:

“She has helped because nowadays… I don’t give out debts. If you’re buying, just buy and if you don’t want, just leave it. It’s not about taking juice and then you pay tomorrow. That is how she has helped me.”

Beyond Facebook and Instagram (as mentioned in the Search, Promo, and Discovery Section) the network effects of WhatsApp have enabled micro-entrepreneurs to come together in smaller more intimate groups. These online support groups, or what we call “digital trade unions”, have enabled important lesson sharing among micro-entrepreneurs working within a given sector. For example Odeke connects with fellow bottled-water distributors through a WhatsApp group; they discuss prices and share advice.

“In WhatsApp mostly, people post business opportunities so you can tell people, I am making profit in this thing, you can just try it and see what you do.”

Organizations such as TechnoServe and FIBR have also begun to leverage the power of WhatsApp through TechnoServe’s Smart Duka Program and FIBR’s micro-consulting pilot.

Micro-entrepreneurs working on online work platforms (such as Upwork and iWriter) also use social media groups for support (see image). Daniel and Mary joined a number of online writing groups on Facebook and WhatsApp to better understand the nuances of joining the growing gig-economy. Through these channels they were able to figure out how to build a suitable and enticing profile for Western clients, learn how to satisfy different types of client demands, and in some cases search for mentors to coach them through the process. Some advice is learned simply by browsing the thousands of messages posted in these groups and noting the dos and don’ts, while more specific and tailored advice is obtained by directly messaging different contributors.

The unregulated nature of these groups results in advice ranging from  the ethical to the potentially unethical when it comes to tips on how to ‘game the system’. This theme is discussed further in the Credibility and Digital Side Hustle sections. The organic nature of these support groups also presents risks to users. We heard time again that it’s dangerous to trust unverified strangers on Facebook; we also heard stories of micro-entrepreneurs being cheated out of money. The more discerning micro-entrepreneurs tend to be cautious in whom they engage over Facebook and, if they seek out personal advice, ensure it is from someone who has been verified and validated by others through positive comments and Facebook “Likes”.

3. Consumptive Learning: Proliferance of self-learning through YouTube

Beyond Facebook and WhatsApp, YouTube is another popular tool for learning. Micro-entrepreneurs tend to leverage YouTube channels to learn more about a specific craft. For example:

• Faith learned how to make more complicated juices “by watching tutorials on YouTube.” Through YouTube she also learned about how to plan her day, sell to customers, package her products, and meet health and safety standards.
• Kerubu taught herself to dance through YouTube, which she now does professionally. “Youtube is so awesome...” she shared.
• And Wambui taught herself how to make her bracelets and ornaments through the platform. For her, “YouTube is like a tutor.”

Even information about farming, a popular side-hustle among many micro-entrepreneurs, is found on YouTube. Kohe, a tax and insurance consultant with a small shamba (farm) watches YouTube videos to get “smart about farming.”

We heard from some of our micro-entrepreneurs that, because of the commentary under YouTube tutorials, they can quickly determine if the video is helpful or not. It is infinitely less challenging than trying to assess the validity of online written commentary on WhatsApp or Facebook where there are many different variables (comprehension, presentation, articulation), outside of the content itself, that can influence the quality of support.

4. Offline Learning: In-person training still plays an important role in upskilling micro-entrepreneurs

Despite the variety of online avenues through which micro-entrepreneurs receive support and training, in-person support still plays a significant role. In addition to formal in-person training, friends, family, and acquaintances support micro-entrepreneurs as they seek to grow their businesses. This type of training is often the preferred method. Among the micro-entrepreneurs we spoke with:

• Daniel used a friend to help him navigate the iWriter freelance writing platform.
• Faith, despite leveraging WhatsApp and Instagram for guidance, still found personal advice from friends the most valuable source of information. When asked where she got the best advice, she shared: “From Esther…because its face-to-face and I can tell her this is what I want and this is what I’d like to do and she would tell me no; do this and this.”
• Chepkirui relied on in-person training for her hairdressing business, indicating that not all skills are conducive to online training: “It is hard for me to follow instructions from a video.”

We discuss in-person training in more detail in our Tech and Touch section.

5. A-B Iterative Learning: Through trial and error, micro-entrepreneurs figure out how to use the platform for business

The more cavalier micro-entrepreneurs appear to develop their own unique processes to generate leads, marketing their products and closing transactions over platforms by trying different approaches. Through this method, each of the micro-entrepreneurs found a unique style that resonated with customers and gave them an idea of what types of posts, messages within posts, and images in posts attracted customers.

For instance, Atieno, the owner of a food condiments company, spent quite a bit of time trying to figure out what images resonated best with her customers. At first, she spent lots of time manicuring the image so that the condiment and the place setting looked perfect because she thought that’s what the customer wanted. She was quickly proven wrong as each of these well staged photos received few comments or Likes, the social media proxy for success. After experimenting with different looks and settings, she saw customers reacted best to images where the condiments were in use (see above image).

She subsequently changed her Instagram approach and posted photos exclusively of her interacting with the condiments; her Instagram posts have since netted significantly more sales.

Kioko, a flash disk salesmen, uses photoshop to create different advertisements that he posts across his different social media channels. Initially, he cropped pictures of his goods using images on the internet and, at times, watermarked photos. He eventually noticed that when he used images with a watermark, customers would not respond so he changed his approach and avoided using watermarked images (see imagep).

We consistently saw behavior like this—whether creating, editing, and adding new content to advertisements, or posting more lifelike photos of goods on Instagram—among many of the micro-entrepreneurs we interviewed. This ability to adapt based on trial and error seems to be driven by the hustle of the entrepreneur. Whereas some, like Asmani, would give up if they were unable to attract interest from a post, others, like Kipchoge, persistently post and make constant adjustments knowing that customers “bite” if the posts are positioned correctly.

Concluding thoughts

As you’ve just read, learning and skills acquisition was a key and common practice among the 27 micro-entrepreneurs we interviewed. Some of this direct learning (section 1) was happening on platforms, designed and driven by the platforms themselves. But the majority (sections 2,3,4, and 5) happens outside platforms.  While there is a gap in platform-driven learning, we believe this presents an opening for platforms to look at practices 2,3,4, and 5 as inspiration to add more value and increase relationships with platform users. Read more about our next step suggestions on this theme in the Policy and Interventions Takeaway section.

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Read next: The Digital Side-Hustle ⇢

“Yeah, the other challenge is…they can give a small rating, so it affects your account rating, that means it will affect your ability to get jobs.”

Mary, Online Freelance Writer

Summary of Findings

1. Ratings rule the game, especially when it’s all you have.
2. Offline feedback is easier to manage.
3. Micro-entrepreneurs react to Facebook feedback in a variety of ways, but they don’t seem that worried about it.
4. Some micro-entrepreneurs try to game the system.
5. Micro-entrepreneurs can also rate their customers.

Platforms manage and influence information about the quality and credibility of micro-enterprises: formally, through rating systems; semi–formally, through likes and comments; and informally, through in-person communication. Credibility can either elevate or tarnish micro-entrepreneurs’ growth across platforms. This section, one of four detailing “platform practices”, describes how the 27 micro-entrepreneurs we interviewed manage this new environment for credibility and reputation, highlighting approaches, responses and awareness.

1. Ratings rule the game, especially when it’s all you have.

The further micro-entrepreneurs are removed from the ability to physically interact with clients, the more they rely on their platform ratings.

Ratings on e-commerce platforms

Jumia, a B2C e-commerce model, restricts direct communication between buyers and sellers. At no point in the customer journey are merchants able to communicate with their customers, and vice versa. Because of this, buyers rely on the rating system to determine which sellers are credible, and sellers rely on these ratings to complete sales. See image below of an example of the rating system on Jumia Kenya.

As Robert, who sells phone accessories across Jumia, explained:

“To maintain my seller score, I should deliver the right item at the right time because once the item gets to the customer at the right time you will be very happy and you will give me five stars…so my items will be on the landing page all the time, so I will make sales.”

Micro-entrepreneurs understand not only the impact of high ratings, but also low ratings. As Robert told us:

“The impact of the three stars and below…means my item is not correct or it’s not delivered. From there I think the item might end up being deleted from the website, so I will end up missing the sales. So I think I should keep an eye on the seller score.”

Ratings clearly rule the game for Jumia merchants. As with any successful rating system, higher rated merchants win more work than those with lower ratings. In a bid to support merchants in this environment, Jumia poses strict rules around issues such as packaging or product specifications which, if violated, result in a fine. This encourages Jumia merchants to focus on quality and consistency, and consequently protects their reputation and rating. As Robert shared:

“Sometimes I used to take the correct items but maybe the color is different so once the item is rejected you are charged KES 500 (~$5) from there is when I went back, I settled my mind then from there I started my verification process.”

This theme of platforms supporting micro-entrepreneurs is discussed further in our Upskilling section.

While ratings rule the game for Jumia merchants, on OLX, a C2C e-commerce platform, the lack of a rating system is supplemented by the ability to directly communicate with customers. As Kioko, a micro-entrepreneur who sells flash disks, explained:

“I had one customer from Malindi, he saw my [OLX] advert and he called me, but he could not trust me and I could not trust him, so I couldn’t send the goods. So, he called and said, ‘I have a relative who is in Nairobi’ and that I should go and deliver it to his relative. He works at the bus station. So, I went and delivered to the relative, who confirmed after which he sent the money.”

Online work ratings

Across online work platforms, ratings, or what Upwork fittingly calls “Job Success Scores”, help freelancers win work. With an oversupply of labor on these platforms, ratings help micro-entrepreneurs stand out from the crowd. See image below of how the Upwork “Job Success Score” is calculated.

Mary, an online freelance writer, relayed how integral ratings are in the bidding process for the three online work sites she uses (Freelancer.com, Upwork, and Uvocorp):

“For someone who is looking for someone to work for them, they definitely will look for the rating. They won’t go for somebody who disappointed their client, so when they see that the clients that you have worked for are happy, you have a higher chance of getting the job.”

On the other hand, those who struggle to build a reputable rating suffer. Given the excess supply of labor on these online work platforms, winning jobs and building credibility is a long and arduous process. Kipchoge described the journey to improving his rating on StudyBay:

“For you to move a level, there are several qualifications. In most cases in the beginning you need to at make at least $1500… complete at least 100 orders, and have at least 30 likes… If the client likes you, that is one like less like [needed to move] to the next level.”

The challenge of building a solid rating score distinguishes those who flourish across these online work platforms from those who struggle. Credibility on these platforms is governed by two things: your rating and the number of reviews you have. Similar to buying a product on Amazon, both components contribute to a freelancer’s credibility: quality of service [ratings] and volume of service/experience [number of reviews].

While Mary has hired four people to help manage her online writing business, Daniel, who does online writing as a digital side hustle, struggles to compete with highly rated, seasoned freelancers:

“Upwork has good pay but the problem is bidding. You can stay for two months without getting a job.”

He struggles to compete against those who have both strong ratings and lots of jobs under their belts.

As with e-commerce sites, ratings on online work platforms are particularly important for micro-entrepreneurs unable to interact directly with their clients. On Upwork, as with OLX, the platform enables freelancers and clients to communicate directly with each other. However Uvocorp, like Jumia, acts as an intermediary between writers and clients. As Mary explained :

“On Uvocorp you don’t talk to the client…They have like a support system where they get their jobs, they talk to their clients, then they give you the job. Like now they’re delegating it to you.”

In our Digital Side Hustle section, we further explore the challenges and opportunities of working across these online work platforms.

2. Offline feedback is easier to manage

While some micro-entrepreneurs interact and transact across purely digital platforms, the majority use a blend of online platforms and offline tools in their buying and selling cycles. Many micro-entrepreneurs personally interact with their clients towards the end of the customer journey, either through phone calls or in-person meetings. This face-to-face communication opens the door to offline feedback.

Among our interviews, the general trend was to deal with in-person complaints in real time. Complaints either start and end with an explanation, or they start with an explanation and end with a free service. Faith, a fresh juice seller, was able to address in-person complaints about rising prices by explaining that her ingredient prices had increased. Chepkirui, a hairdresser, and Makena, a tailor, both offer their customers a free service if they are unhappy with the initial outcome of their transaction. Makena is even willing to lose money to maintain a customer, highlighting the value of maintaining one’s credibility. She explained that, if a customer is unhappy with her work, she would look for a qualified tailor to remake the garment.

“In business you have to make profit and loss,” – Makena

The ability to respond to informal, in-person complaints quickly and efficiently helps maintain trust between buyers and sellers. Before their credibility is tarnished, micro-entrepreneurs are able to explain and rectify an unsatisfactory experience. As Faith shared, responding to these complaints is important because:

“…it will be like yeah this girl can listen to us. We can just talk to her and she can hear our advice.”

The fluidity of dealing with offline complaints sits in contrast to the rigidity of documented online feedback.

3. Micro-entrepreneurs react to Facebook feedback in a variety of ways, but they don’t seem that worried about it.

While formal online feedback and ratings (through platforms like Jumia and Upwork) is structured, documented, and offline feedback is fluid, undocumented, feedback through social media sits somewhere in between. On Facebook, for example, there are no rules regarding how feedback should be provided. Informally, individuals leverage “Likes” and “Comments” to provide opinions on a product or service. Kioko, a micro-entrepreneur who sells flash disks both online and offline, explains the informality of feedback shared on Facebook:

“Maybe you saw my post on Facebook, then you came and bought my flash disk, so tomorrow, I post another one. So, you come and comment and say I bought this flash disk and it’s still good.”

While the feedback leads to informal reputations rather than formal ratings, the results are digitally documented. This can have negative and positive knock-on effects, both of which are amplified by the network effects of social media. While positive feedback can help build trust and credibility, negative (at times unjustified) feedback can effectively ruin a micro-entrepreneur’s business. Kioko shared his experience with unjustified negative feedback on Facebook:

“I get many such negative comments. Someone has not even bought from you and he just says this is fake.”

Beyond Facebook, we saw unjustified feedback affecting micro-entrepreneurs on other, non-social media platforms. Kipn’getich, a taxi driver, explained the spectrum of feedback he receives from riders:

“Sometimes customers are not the same. You may offer customers good service and (they) give you even a one star, and you have offered a service worth five stars.”

He specifically argued that customers should have guidelines for rating drivers.

In the absence of a formal rating system or trusted intermediary, micro-entrepreneurs adopt a variety of approaches to manage complaints. Although some understand the importance of addressing negative reviews to maintain their reputations, others focus on removing the evidence. Kioko, when asked how he responds to negative Facebook comments, bluntly told us: “I hide them.” Others seem unaware of the impact or significance of such feedback. Both Rehema, a caterer, and Odeke, a water vendor, felt Facebook comments affect their morale more than their sales. Odeke, for instance, is secure in the idea that his online reputation won’t translate into his offline work:

“Actually, it would affect my mind but not the business. Nobody knows where the business is.”

Micro-entrepreneurs respond to informal, but documented, Facebook feedback in a variety of ways. Either it is ignored, unrecognized, or, we assume (but didn’t find any specific evidence of this), addressed directly. However, all in all it is held in less regard than formal online feedback which translates into official “star ratings” and “levels”.

4. Some micro-entrepreneurs try to game the system

When ratings rule the game, micro-entrepreneurs will go to any lengths to grow their credibility. This is particularly true across online work platforms. Daniel, a part-time online writer, told us that some freelancers improve their ratings by signing in as clients, posting jobs, then accepting the jobs from their own writing accounts, and issuing a glowing reference (for themselves!) upon completion:

“Kenyans are very crafty, creative and bright. To create a higher level, you log in as a client.”

As their ratings grow, some even look to sell these accounts, knowing how hard it is to build credibility. As Daniel told us:

“If the profile goes higher, you sell the account. It’s very interesting.”

However, credibility isn’t just about levels and ratings. Unfortunately, image also matters. One online writer, Kipchoge, uses a picture of a white person as his profile picture on his StudyBay account because “...the clients we are dealing with are usually from the West.” More about these practices are discussed in the Digital Side Hustle section.

And this practice of tweaking the rules of the game to increase one’s credibility isn’t limited to online writing platforms. Odeke ran us through how you “cook” a message on Facebook to give the  appearance that you have more customers and a bigger business than you have in reality. While adapting technology to fit one’s needs isn’t new, it’s interesting to see this being applied to credibility and ratings.

5. Micro-entrepreneurs can also rate their customers

While so far this analysis of credibility has focused on how micro-entrepreneurs are rated, ratings go both ways. Uber drivers can rate their passengers, Upwork freelancers can review their clients, and a Facebook seller can post feedback about a buyer. On Jumia, merchants can also rate the platform itself. With Jumia in charge of delivery, a delayed delivery will impact the merchant’s seller score. In such an instance the merchant can rate Jumia . Asked about his own ratings of Jumia, Robert told us:

“If I rate, I think the message goes directly to the Managing Director so from there he will be able to get back to the staff and he will ask them why this has not been delivered to the customer at the right time.”

It was unclear from our discussion if this rating system had any further purpose or impact.

Kipn’getich, a Taxify taxi driver, also rates his customers. As with his rating, it appears that there is no set criteria for the customer rating process. However, Kipn’getich evaluates his customers by the following criteria: “The approach; how the customer approaches you. How she or he talks. The waiting time,” and highlighted that he developed this process himself.

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Read next: Learning and Literacy ⇢

Summary of Findings:

Off-Platform Transactions:

1. Limited functionality of social media platforms forces micro-entrepreneurs to explore cumbersome methods of receiving payment.
2. The lack of an online payment mechanism on some e-commerce platforms pushes transactions offline.
3. Some micro-entrepreneurs use off-platform digital credit to meet their businesses’ needs.

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On-Platforms Transactions:

1. Some e-commerce platforms provide an end-to-end service from promotion to payments.
2. Online work platforms pay freelancers through a variety of online payment methods, including M-PESA.

What’s a transaction? A customer finds a good or service they want to buy. A seller is eager to provide the good or service that the customer desires. Customer and seller discuss terms, and, if the terms are appropriate, the customer and seller exchange money for the good or service. This structure is fundamentally the same across geography and demographics, as customers continue to search, negotiate, and transact for goods and services.

What differs, however, is how money is exchanged. In Kenya we observed the use of cash, M-PESA, buying on credit, and bank account transfers as mechanisms through which micro-entrepreneurs receive payments.

Cash

The tangibility of cash is often a driver to use physical money, as explained by Wawira a micro-entrepreneur who works at a veterinary shop:

“I don’t know if this is an African thing but basically I love to touch money.”

And as Benard, a shoe merchant reiterated:

“The real thing is that we love cash transactions.”

Zawadi, a baker, prefers to use cash due to convenience and cost:

“Maybe people just don’t like the process of going to your phone to start paying for something…and sometimes you know when you want to pay with M-PESA…there is a charge.”

While Nakesa, who runs a small construction business highlighted similar concerns about the cost of M-PESA. She weighed this against the benefits it brings in terms of financial management:

“…but I like it because it gives me a track of my finances.”

M-PESA

With M-PESA as prevalent as it is in Kenya, many micro-entrepreneurs like to transact using this medium of exchange (often in tandem with cash), leveraging its convenience, security, and incentives to save. As Rehema, a caterer in Kibera, told us:

“M-PESA is safe because no-one has your M-PESA PIN. No one can steal it, even if your phone gets lost your M-PESA will be safe.”

Chepkirui, a hairdresser, explained that she prefered her customers pay her through M-PESA rather than cash because it reduces temptations to spend:

“When I get paid through M-PESA, it is very hard for me to misuse the money.”

And Kerubo highlighted the convenience of M-PESA for her jewellery business, telling us she prefers it to cash because:

“It’s on my phone…it’s so easy, there is no movement.”

Paying on Credit

In other instances, and as a way to compete against other nearby businesses, some micro-entrepreneurs extend a line of credit to their customers. This is often not the preferred method of transacting, but fierce competition sometimes forces micro-entrepreneurs to explore alternative modes of attracting customers.

Bank Account Transfers

It was also interesting to hear that a number of micro-entrepreneurs have a bank account for saving money and/or as a requisite for receiving payments through some platforms (more on this below!). Otieno, a shoe merchant, told us he likes to transfer profits from M-PESA directly into his bank account on a daily basis, leaving some float in his M-PESA account for the next day’s expenses.

However, beyond preferences, platforms influence the scope of these exchanges in platformized markets. This section, one of four detailing “platform practices”, describes how the 27 micro-entrepreneurs we interviewed have adjusted their transaction behaviors in response to what the platforms do (and do not) offer in terms of transaction support.

Off-Platform Transactions

1. Limited functionality of social media platforms forces micro-entrepreneurs to explore cumbersome methods of receiving payments for goods and services.

Micro-entrepreneurs in Kenya often use social media platforms to promote their goods and services, from computer accessories to cupcakes, and from professional product reviews to article writing. If a customer is interested in the good or service, they often respond to the post publicly before migrating to a one-on-one conversation on a social media platform (generally WhatsApp).  They then tend to leave the platform and negotiate final terms through a phone conversation or in-person meeting, and ultimately exchange money off the platform. The method of payment is often determined by preference or geography. Kioko, a small trader of flash disks, is paid cash-on-delivery for items he delivers in person and through M-PESA for goods he sends via post or friends. This use of multiple online applications and offline tools is cumbersome and time intensive.

Offline, unprotected transaction exchanges are also more risky. In response, some micro-entrepreneurs find ways to formalize this offline payment process. Faith, a fresh-juice seller who uses WhatsApp to communicate with clients, requests an email from customers to confirm large orders so that there is is a reliable record that an order has been placed and payment made.

“If it’s something like a party, and it’s a lot of money, you have to write me an email as proof so that we can just trust each other…I prefer an email because in WhatsApp I could just delete it by mistake, but in email I’m not likely to delete it.”

Generally, the savvier social media sellers ask for a deposit before sending a good or service. The amount of the deposit varies, but the experienced seller generally asks for enough money to recoup the cost of the good in the event that the customer fails to pay the full balance (or pay at all). Nduku, a micro-entrepreneur who has a small clothes shop, often uses WhatsApp to promote new stock with existing clients. If a customer expresses interest in buying an item of clothing, she requests a deposit via M-PESA before sending the item:

“Before that thing is delivered you pay 50%, because there is also transport, so that I don’t lose out.”

The lack of transactions facilitation across social media platforms, from Facebook to WhatsApp, forces micro-entrepreneurs to transact offline and often in-person, adding a time-intensive and inefficient layer to the sales process.

2. The lack of an online payment mechanism on some e-commerce platforms pushes transactions offline.

While some Kenyan e-commerce platforms, such as Jumia, provide an end-to-end service for their merchants (more on this below), others fall short, forcing buyers and sellers to transact offline. OLX (a C2C eBay model) is a good example. While OLX brings buyers and sellers together enabling broader discovery and efficient matching of supply and demand and provides nudges of advice to help merchants make the most of the platform on offer, their service more or less stops there. Any type of interaction between buyer and seller, be it communication or monetary exchanges, happens independent of the platform. As a result, payments have to be organized off the platform, usually through cash or M-PESA.

3. Some micro-entrepreneurs use off-platform digital credit services to meet their businesses’ needs.

We spoke to a number of micro-entrepreneurs who were either accessing digital credit offerings, or were interesting in doing so. All of these digital credit offerings were accessed through apps, independent of platforms. Chepkirui, a hairdresser, prefers to access credit through Tala and Branch rather than M-PESA’s M-Shwari due to the speed at which credit limits grow on Tala and Branch. Of the two, she prefers Tala, again due to the superior speed at which her credit limit grows:

“I think Branch take their time to add money as compared to Tala. Tala each time you pay back the loan you get a KES 1000 (~$10) more if you want to loan again. So I can take a loan today maybe KES 1000 (~$10), pay it back tomorrow and next week if I want to take the money again they can give me KES 2000 (~$20).”

Odeke, a bottled water distributor also uses Tala loans to buy new stock. He likes the instantaneous nature of the digital credit offering, which gives him immediate and emergency loans. Like Chepkirui he uses both the Tala and Branch apps.

While these insights aren’t specifically related to platform practices, the off-platform financial behavior of micro-entrepreneurs should be of interest for platform players designing for this segment.

On-Platform Transactions:

4. Some e-commerce platforms provide an end-to-end service from promotion to payments.

Jumia, (a B2C site similar to Amazon), differs from OLX in terms of the level of control it exerts over the relationship between buyer and seller. Jumia acts as a middleman and trusted intermediary intermediating interactions and transactions between buyers and sellers. When it comes to payments, Jumia’s escrow account builds trust between both parties and negates the need for merchants to request deposits for goods, as we observed with transactions made after social media interactions between buyers and sellers. In brick and mortar businesses, customers can see the good or service and use their intuition and judgement to determine if it’s worth the price. But when doing business over platforms, it’s significantly more difficult to assess the quality of the good or service and determine if the seller is trustworthy. The escrow account offered by Jumia mitigates some of these concerns.

In terms of payments, Jumia merchants are paid via bank transfer or check, either on a weekly or monthly basis.

5. Online work platforms pay freelancers through a variety of online payment methods, including M-PESA.

As discussed in our Digital Side Hustle section, we encountered a number of micro-entrepreneurs who were leveraging online work platforms, Upwork, Freelancer, Uvocorp, iWriter, and Studybay to sell their freelance writing services, from product reviews to academic writing. These platforms provide a purely online service to their freelancers, and, as such, payments are also managed digitally on the platform.

For an online work platform such as iWriter, freelance writers create an account, build a profile [explored further in the credibility section], and explore freelance assignments as posted by individuals or businesses. Some of these websites function like an auction in which the writer reviews the instructions for the assignment and places a bid on how much they’ll charge for the assignment. At the discretion of the client, the writer with the most appropriate profile and the most cost effective bid wins the work. Once the job is complete, the client sends the bid amount plus the website fee via an escrow service that is released either through a bank transfer or third-party such as PayPal.

Upwork enables freelancers to transfer earned money directly to their bank accounts, as well as through third-party payment vendors such as PayPal and M-PESA (only in Kenya). Withdrawing funds, however, is not necessarily instantaneous. It depends on the type of contract with hourly contracts usually based on a weekly billing cycle and fixed-priced contracts based on milestones.

Under this scenario, the platform operates as the trusted intermediary between parties that ensures the transaction—money for a written assignment in this case—is completed by both sides. As Mary described it:

“…now when you use a site like Freelancer, the client is regulated by that company, so… before you start writing that assignment, the client has already paid, and basically, the money is being held by the site, so once you finish, they now give you the money.”

With online work platforms, there is an implicit trust when using these dedicated services as opposed to those that are retrofitted for purpose.

But outsourced work is paid off the platform

However, not all micro-entrepreneurs can access online work platforms and benefit from the integrated services on offer. As discussed in our Digital Side Hustle essay, due to various gatekeeping issues, some micro-entrepreneurs are locked out of online work platforms and look for outsourced work. Outsourced work is either found through friends, family, or dedicated social media groups (see image). When work is taken off the platform, so are interactions and exchanges. Accordingly, the trust that digital escrow accounts provide to these freelancers erodes.

A number of the micro-entrepreneurs we spoke with highlighted the risk of accepting outsourced work through Facebook groups dedicated to online writing due to the high probability of being conned into completing services without being paid. Mary told us, based on her experience in Kenya, that:

“there are many people who have not paid their (outsourced) writers.”

Concluding thoughts

Among the platforms we observed micro-entrepreneurs using in Kenya, there was a clear distinction between platforms that mediate business transactions (Jumia, online work), and those that don’t (social media, OLX). While transactions mediated by platforms engender trust through escrow accounts, we must be careful of labelling one as good and the other not. Online payment mechanisms bring benefits, but access and gatekeeping issues prevent some micro-entrepreneurs from using these online payment tools.

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Read next: Credibility ⇢

“You see like Facebook now we’ll be going for the masses. It will not just be limited to a few people within our sphere.”

Kamau, Small Trader of Flash Disks

Summary of Findings

1. Micro-entrepreneurs use a variety of channels, including Facebook and WhatsApp, to connect and coordinate with customers
2. E-commerce platforms are leveraged by more digital savvy micro-entrepreneurs
3. Digital ‘trade unions’ are emerging over WhatsApp
4. Micro-entrepreneurs promote their writing skills across online work platforms

Markets are easy to recognize. Sellers come together in one place to promote their goods in order to attract buyers. Buyers flock to a set location to search for the products they wish to purchase. The concepts of bringing together buyers and sellers in one place, be it in physical, dusty market or across a digital, data-fuelled platform, are similar.  Usually, and ideally, both modes enable supply to be matched with demand, and benefit from the network effects of additional buyers and sellers.

But one key to digital markets is that they facilitate better, broader discovery, by (hopefully) the ‘right’ customers, with little geographic constraints. This section, one of four detailing “platform practices”, describes how the 27 micro-entrepreneurs we interviewed use platforms to promote products and services, and find new customers.  

1. Micro-entrepreneurs use a variety of channels, including Facebook and WhatsApp, to connect and coordinate with customers

Despite e-commerce sites (like Jumia and SkyGarden) providing an end-to-end service, we observed that self-contained, all-in-one messaging and coordination is the exception not the rule. Instead, most of the micro-entrepreneurs we spoke to use a patchwork of different social media platforms, along with phone calls and in-person meetings, in the selling and buying cycle.  In Kenya, Facebook and WhatsApp are the platforms most widely used by micro-entrepreneurs as ‘marketplaces’ to connect with buyers. Of the 27 micro-entrepreneurs we spoke to in Kenya, 24 used Facebook and WhatsApp to promote, advertise and secure business.  As Kioko, one entrepreneur, told us:

“In fact, a lot of business is coming from social media. Per day I can sell like 5 flash disks through social media.”

Below we look at how these different digital and non-digital tools are used, and what influences this behaviour.

Facebook

Many micro-entrepreneurs use Facebook as a powerful marketing tool, leveraging the network effects of social media to connect with a wider audience beyond their direct friends and contacts.  Several of the people we spoke with commented on the role Facebook played towards customer acquisition:

“You see like Facebook now we’ll be going for the masses. It will not just be limited to a few people within our sphere….You reach more people through Facebook groups. I post in eighty groups.”

Kioko, Small Trader of  Flash Disks

“On Facebook…I’m in like 100 groups.”

Kipchoge, Online Merchant and Freelance Writer

“Facebook and Instagram…some people are just friends you have never met them in person. You are just social media friends.”

Zawadi, Baker

Facebook is seen as a volume game, where interactions are based on quantity not quality. It serves as a perfect channel for exposure, but doesn’t provide the level of personal interaction people need to make a sale or purchase. Sales are generally achieved through more personalised interaction.

WhatsApp

While micro-entrepreneurs leverage Facebook to expand their networks and connect with potential buyers, customer enquiries are rarely dealt with over the platform. After promoting through Facebook, exchanges tend to move to WhatsApp, or directly to phone calls and in-person meetings.

One-to-one WhatsApp messages are used as a coordination tool for existing customers, or for direct communication with new customers. Dorcas, a baker and online freelance writer, told us about how she moves customers she discovers on Facebook over to WhatsApp:

“Most of our conversations start on Facebook messenger. Following a series of communication, once I confirm you are a potential client, I give you my personal WhatsApp number.”

But the  journey doesn’t always flow from Facebook to WhatsApp. Some micro-entrepreneurs, such as Benard a shoe merchant, move their customers directly onto WhatsApp. He uses his market stall to promote his shoes and build customer relationships, and having solidified these relationships he then moves the conversations over to WhatsApp:

“By the way, most of the customers I sell to (in the market), after that I just deal with them through WhatsApp.” WhatsApp one-on-one messages are the new SMS for many of the micro-entrepreneurs we spoke to.

In addition to direct messages, WhatsApp groups are a fascinating, critically important and not well understood channel for sales. WhatsApp groups support daily life in Kenya. They’re used for church groups, high school reunion classes, neighborhood associations, and even to connect women that visit the same hair salon. Moving business transactions over to WhatsApp groups is a totally natural thing to do, and one that almost every micro-entrepreneurs we talked to was taking advantage of.  

When WhatsApp groups are used as a promotional tool, the reach is confined to a smaller pool of contacts, resulting in its applicability for more intimate product promotion. Otieno, another shoe merchant, explained to us why he prefered to promote his products in WhatsApp groups rather than Facebook groups:

“The fact that you know the people rather than Facebook or Twitter where you don’t even who you are talking to.”

The fact that people can market products within WhatsApp groups, and then also use the same channel for low budget customer relationship management is interesting. While both could be done across Facebook, WhatsApp feels more personal, perhaps due to its connection to a person’s phone number, and therefore greater level of personal connection.

While WhatsApp groups are the primary form of communication on WhatsApp, a fair number of micro-entrepreneurs also use their WhatsApp status (similar to Instagram stories) to promote their products or services. It is notably the younger and more digitally savvy who have adopted the WhatsApp status as a promotional channel. Faith, a fresh juice seller, showed us how she promotes her drinks on her WhatsApp status (see image). Kipchoge, a seasoned merchant across various ecommerce and social media platforms, also leveraged his WhatsApp status to promote his products:

“On WhatsApp, I usually don’t post to groups on WhatsApp because WhatsApp groups can be disturbing because of too many notifications…So I just post the images on my status, and I’m done.”

Phone calls and in-person meetings

Phone calls and in-person meetings build further trust in a sale, from both the buyer and seller perspective. Kerubo, a jewellery designer and dancer, explained why micro-entrepreneurs move conversations from WhatsApp to phone calls:

“I don’t know why Kenyans believe that (by) talking to a person…(you) get the clear information…They might think that I am this person who wants the deposit…so after chatting online they make a call then clarify.”

This move to phone calls, or ultimately in-person meetings, not only shows commitment to a sale in terms of the time people are willing to invest, but also demonstrate how trust builds the closer buyers and sellers move towards physical contact. These offline channels are also critically for transaction facilitation with no payment mechanisms available over WhatsApp or Facebook. We discuss more about the shift from online to offline tools during the buying and selling cycle in our Tech and Touch section.

2. E-commerce platforms are leveraged by more digital savvy micro-entrepreneurs

Kenya boasts a range of e-commerce sites from Jumia (a B2C site similar to Amazon) to OLX (a C2C Ebay model), as well as newer entrants such as Sky Garden and Kilimall.  OLX and Jumia, the two most popular e-commerce platforms, differ in terms of the level of control they exert over the relationship between buyer and seller, as well as the level of support the provide to their users. While OLX simply hosts a platform for sellers and buyers to connect, leaving communication and payment to happen independent of the platform, Jumia acts as an intermediary between the two restricting direct communication and therefore intermediating all forms of interactions. As described by Robert, an e-commerce merchant:

“OLX is also very good because it lets you have direct contact with the buyer, so once you get to a buyer, the buyer can also give you referrals…”

However, acting as a trusted intermediary Jumia arguably provides more growth opportunities for their micro-entrepreneurs through various upskilling opportunities and online ratings and reviews.  Jumia also provides an end-to-end service through online transaction facilitation, where in contrast OLX users have to move off the platform to complete payment.

There is a general perception among micro-entrepreneurs that the success they have conducting their business over e-commerce platforms is due to the ability of these platforms to match them with more serious buyers. One of the micro-entrepreneurs we interviewed,  Kioko who sells flash disks over Facebook and OLX, shared his opinion:

“On OLX you post for serious people. When I get a customer from OLX I just know he is serious.”

Similarly Kipchoge, who promotes and sells various products over WhatsApp, Facebook and OLX, explained why he prefers to use a dedicated e-commerce channel:

“I get more potential customers from OLX, Facebook not as much because it’s flooded”

Micro-entrepreneurs are using these sites as an online marketplace through which they can more efficiently market their products to a larger pool of active buyers. When we asked Robert, a Jumia Merchant, why Jumia was his prefered e-commerce platform, he told us:

“Their marketing is very wide, they have experience with their marketing, the platform is also trusted by a high percentage.”

Thanks to these platform attributes, e-commerce sites are generating business for microenterprises. Robert averages 40 orders a day through Jumia. For Wambui, an ornament maker, 70% of her business comes through OLX.

However, not all merchants are equally benefitting from these platforms. While the more business and tech savvy micro-entrepreneurs appear to thrive across these platforms, access constraints prevent some from benefiting from such opportunities.  One interviewee complained about the level of detail required to sell items across Jumia, such as submitting the weight of each product.

Beyond traditional merchant activities, some e-commerce platforms provide additional avenues for income generation.  For example Jumia hires representative to 1) promote their goods across other platforms, such as Facebook and Twitter (as part of their affiliate program) and 2) help sell their products to offline customers (as part of their JForce program). Some of the micro-entrepreneurs we spoke with have ventured into these different revenue channels – as heard from Robert:

“I generate a link from Jumia website, I paste it on Facebook so once you click that website and place an order from Jumia, I get a commission.”

Despite the income generating opportunities provided by e-commerce sites, use of social media and e-commerce aren’t mutually exclusive. Robert promotes his products through his Facebook page, and Kipchoge uses Jumia to set a pricing benchmark to help with sales arbitrage across Facebook.  As heard from Kipchoge:

“For example, this smartwatch that I have in my arm, if you are to purchase it on Jumia it goes for around 15-1600 shillings. Plus shipping charges which is around 200 which comes to 1700. In town, I’ll get the same smartwatch at 1200-1100 and I’ll sell it at 1500-1600.”

This behavior suggests that there is no standardized price for products and for the savvy business person, they are able to exploit information asymmetries for profit. It’s also an example of how micro-entrepreneurs develop  “digital repertoires” which skillfully combine more than one digital tool at a time to pursue livelihood specific goals. When businesses combine information and contacts across multiple channels and platforms, digital information moves and aggregates in unanticipated and sophisticated ways; and as a result, markets work more efficiently.

3. Digital ‘trade unions’ are emerging over WhatsApp

Aside from matching supply and demand, the networking effects of social media platforms have enabled microenterprises to come together in new ways. We saw evidence of microenterprises forming groups through WhatsApp to share trading ideas, negotiate better prices, manage staffing issues and advertise assets for rent and sale.  What could be described as the fringes of a digital trade union, the coming together of microenterprises on social media platforms such as WhatsApp has facilitated important interactions among informal trade groups. In the absence of formal trade structures, it is interesting to see the development of these WhatsApp craft unions.

“WhatsApp is where the wholesalers and those who have shops have one group. So, there is where we discuss. Someone can post that “let us increase the price”….so from there you learn and change also.”

Odeke, Bottled Water Distributor

On the purpose of the Taxify WhatsApp group: “Purposely it is to bring the drivers together in case they want to communicate…they talk about if you need to hire a car or if you’re selling you can even sell there…”

Kipn’getich, Taxi Driver

“We also formed a group called ‘smart duka’ where you get to meet suppliers of various commodities. We meet on a weekly basis, Wednesday and be able to negotiate for better prices.”

Daniel, Shopkeeper

These WhatsApp groups are formed by micro-entrepreneurs working in the same region, in trades that have been digitally augmented by platforms, but whose end service or product is tangible – be it a taxi ride, birthday cake, fresh juice or new bracelet.

4. Micro-entrepreneurs promote their writing skills across online work platforms

From our research we also spoke to micro-entrepreneurs who were leveraging platforms to promote their writing skills and win small, task-based online writing jobs such as product reviews and freelance writing. Through platforms such as Upwork, Freelancer, Uvocorp, iWriter and Studybay some micro-entrepreneurs were able to find work either to supplement their primary income, or as their main business.  

While we heard of some gatekeeping issues that prevented micro-entrepreneurs from thriving across these platforms – ranging from challenges with opening accounts to issues winning jobs due to an oversupply of labour – tweaks and hacks appear to breakdown some of these barriers.  One apparent common behaviour to circumnavigate some of these gatekeeping issues was to accept outsourced work often advertised on Facebook groups dedicated to online writing (see image below from one of these groups). These tricks to overcome gatekeeping issues have enabled a wider range of micro-entrepreneurs to benefit from the business available across these platforms. More about these online work practices in our Digital Side Hustle section.

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Read next: Transactions, on and off platforms ⇢