The Five Constraints of Market Formation, tested on a market much closer to home than San Francisco — how OPay went from an app on your phone to the way Nigeria moves money.
I made a claim: markets don't arrive with a ribbon-cutting ceremony (part one is here). They form through small changes in behaviour, before anything looks like a market at all. First people notice something. Then they get curious. Someone tries it. They try it again. They stop being surprised by it. They develop expectations around it. And eventually they compare it not with the old world, but with their preferred version of the new one.
That last step matters, because adoption is not the same thing as preference. You can use something because it's new, because it's cheap, or because it's the only thing available. A market built on preference — people paying a premium for a driverless car, remember — is a different kind of market entirely.
So the interesting question is not “will this technology work?” It's this: what is preventing participation right now?
We spend enormous amounts of time and money thinking about how to create demand. More awareness. Better messaging. More promotion. But what if understanding isn't the constraint? What if people understand the product perfectly well — they just can't reach it, or don't believe in it, or have no reason to move today, or the pieces around it aren't connected enough for it to be worth their while? Then more advertising isn't solving the problem. You're just getting better at talking about the wrong constraint.
This is what led me to the Five Constraints of Market Formation. Five questions I now ask of any market that's stuck.
Do people understand what this is and why it matters?
Sometimes the answer is genuinely no, and communication really is the solution. In the earliest days of mobile money in Nigeria, agents spent more time explaining than transacting — the concept of money living in a phone number had to be taught, person by person.
But notice what OPay did not have to do a decade later. By the time it scaled, no Nigerian needed convincing that digital money was a real thing. Banks, USSD codes and a decade of mobile money had done that work. Understanding was already solved — which is exactly why competitors who kept spending on “education” were pouring money into a constraint that no longer existed.
The discipline this demands is not “what could we improve?” but “what is actually binding?”
Can people actually participate?
Can they get the product? Can they pay? Do the rails exist? A market cannot form if participation is physically, digitally or economically difficult — no matter how well people understand or want the thing.
This was Nigeria's real banking problem. It was never that people didn't want financial services; it's that the banks never built for them. Branches concentrated in commercial districts. Minimum balances. Paperwork. So OPay didn't advertise its way into the mass market — it built rails into it: hundreds of thousands of agents with POS terminals in neighbourhoods that had never seen a bank branch, accounts with no minimums, and an app simple enough for a first-time smartphone user. The agent network wasn't marketing. It was infrastructure.
Do people believe participation will work out for them?
Trust is broader than security. You can have technically secure infrastructure and still have a trust problem — people may not believe the service will work when they need it, may not trust the institution, or may simply not have enough evidence yet.
Nigeria is a masterclass in this distinction. Everyone understands what insurance is. Almost nobody buys it — not from confusion, but from a deep conviction that the claim will never be paid. Understood, accessible, distrusted: a market frozen at constraint three.
Cash worked the same way. Cash dominance was never really a technology problem; it was a trust problem wearing a technology costume. OPay's answer was profoundly human: the agent. A face in your own street who converts your cash, fixes your problem, and is there again tomorrow. Trust wasn't built by a security whitepaper. It was built by repetition, proximity, and evidence — one small successful transaction at a time.
Why now — and why again?
A market can sit in perpetual “maybe” — understood, accessible, even trusted — without a mechanism that converts possibility into behaviour. Sometimes a product creates the trigger. Sometimes a cultural moment does. And sometimes the trigger is an external shock nobody planned.
For OPay, it arrived in early 2023: the naira redesign. Physical cash effectively vanished from the economy, and when the entire country stampeded into digital transfers at once, the big banks' apps buckled under the volume. OPay's transfers kept going through. Reliability, at the exact moment of forced behaviour change, did in three months what five years of marketing could not — it flipped mass habit.
But the trigger is only half of it. Ignition without a loop is a spike, and the cash crunch eased. What kept the behaviour was that every subsequent transaction confirmed the first one: the transfer landed, the agent was still on the corner, the merchant still accepted it. The constraint framework explains why the opportunity existed; momentum explains why it converted when it did — and why it stayed.
Are enough of the surrounding pieces connected for participation to be worthwhile?
Partners, platforms, suppliers, infrastructure, users, distribution. A market can have a brilliant product and still stall because the ecosystem around it isn't ready. Waymo needed regulators, high-definition maps, fleet depots and insurance frameworks before a single paying rider mattered. A payment app is worthless if the other side of your transaction can't receive it.
Here OPay inherited as much as it built: interoperable transfer rails connecting every bank and wallet in the country, an exploding POS ecosystem, and merchants who — after the cash crunch — would accept a transfer for a bag of pure water. When the trigger came, the coordination was already in place.
The constraint that binds is rarely the one you solved last.
The five constraints don't operate in sequence, and the job is not “solve all five.” They behave like a moving bottleneck. Solve Access and you expose a Trust problem. Build Trust and you generate more demand than the system can coordinate. Create momentum before the rails are ready and you get a stampede into a wall — ask the bank apps that crashed in 2023.
So the market-formation question is always the same, and always current: which constraint is preventing participation right now? Diagnose it, intervene on that one, and watch whether behaviour actually changes. If it doesn't, you diagnosed wrong. That's not a failure of the framework — that is the framework.
And one honest caveat, because frameworks earn trust by admitting their limits: the Five Constraints explain why a market opportunity exists and where it is stuck. They don't, on their own, decide who captures it. The constraints on digital payments in Nigeria stood for a decade, and plenty of players attacked them. OPay won the moment because it had the capital patience to hold its position until the trigger arrived — and the reliability to perform when it did. Formation is the door. Execution and timing are the shove through it.
Which is exactly why this lens matters for anyone building, investing or working in markets that don't exist yet — especially across Africa, where most of the markets that will define the next twenty years are still in their awkward years. The weird-Jaguar years.
The question is never just “will it work?”
It's: what has to change before people stop seeing it as technology — and start seeing it as normal?
Find the constraint. That's where the market is forming.
This is the second half of a piece that began on LinkedIn. The method is set out in full here, the twenty checks we run are here, and the longer OPay case is Nigeria spent a decade solving the wrong constraint.
Occasional notes on how markets form — sent when there is something worth saying, not on a schedule.
Subscribe