Executing a Winning AI Product Strategy in Africa: Pricing, Profitability, and Building a Defensible Moat

It’s Tekedia Mini-MBA Graduation Day – Executing A Winning AI Product Strategy in Africa

The evolution of artificial intelligence (AI) is changing how products are developed, especially in African markets. Unlike traditional SaaS models where scaling leads to near-zero marginal costs, AI products face a very different economic reality. The costs associated with AI—particularly token usage and GPU compute—are real and variable. Every prompt processed translates into an expense, making growth a complex financial challenge.

This shift demands a clear strategy focused on unit economics and scalable advantages from the outset. Profitability cannot be an afterthought; it must be embedded in the product’s design. Pricing becomes more than just a number—it’s a strategic lever that can determine survival and competitive edge.

Four Pricing Frameworks for AI Products

• Usage-Based: Customers pay per action, such as each token processed or image generated. This ties cost directly to value but can cause unpredictable bills for users.
• Outcome-Based: Payment happens only when a successful result is delivered. This aligns incentives but is often challenging to measure and implement.
• Value-Based: Charges are based on the perceived value to the customer. This approach can be highly profitable but requires deep insight into customer needs.
• Subscription with Soft Cap: A flat fee covers a certain usage level, with extra fees for overages. This model offers cost predictability for both users and providers.

Beyond pricing, the common belief that AI itself is a fortress of competitive advantage is misleading. Proprietary technology used to be the key to building defensible positions. Today, foundation models are widely accessible, turning AI into a commodity. The real moat lies in the systems built around these models—the integration, the user experience, and the operational model.

Successful AI product leaders combine strategic vision with financial savvy and technical fluency. They design systems that make AI economically viable and technically effective, creating defensible products that can thrive in competitive markets.

From local marketplaces to global trading desks, AI offers opportunities to deliver superior performance. But this requires a disciplined approach to economics, pricing, and system design.

Graduation Event Details:
Sat, Sept 6 | 7pm – 8.30pm WAT
Topic: Executing A Winning AI Product Strategy in Africa
Platform: Zoom

For those interested in expanding their AI product skills and learning practical strategies, explore Complete AI Training for relevant courses and certifications.