Entrepreneurs are said to be creative human beings. They think outside the box. They are visionary and future-oriented. They start simple, sell ordinary products, and improve over time. They think far beyond having exciting business ideas and enticing a wider audience to short-lived benefits.
Nothing wrong with prioritizing the target audience, but the potential business risks can also never be ignored. The definition of risk is mainly up to the entrepreneur as it varies from one business to another. It could be a new technology that becomes a game-changer. It could be an underestimated cost of installation, and poor launching. Substitute products can divert the customer’s interest. A risk can come from the lack of rules and regulations that govern the whole business industry and cater for the survival and growth of new business startups.
The gap created by the lack of law has possibly led to the chaos existing in the local market. It is the chaos of imitating and “copycutting” other people’s business ideas. Worse than that is when your own idea is copied next to your shop, sometimes little modification to the original name. Then it is reproduced again and again as it becomes comprehensible to the public.
As a result, the market becomes more saturated and it becomes weaker to withstand the external competition, and if nothing changes, a market collapse can be inevitable.
In those situations, novelty, rarity, newness, niche market and all that sort of new idea incentives will be gone. There could also be a point of disappointment, if such factors were the only strategy for survival.
This form of imitation or what some people call “Me Too strategy”, which is more present in the Somali entrepreneurship market, is incredibly problematic. So where is the way out?
Going to the most ordinary industry, in the first step, is a good choice in the times of unpredictable changes. The idea is simple. Go to the large and well-established markets and sell the most basic products, products that will never go out of fashion, products that will never be out of the market, and which are massively consumed.
The motivation is the magnitude or size of the market, and if everything goes right, you are on your way to being a millionaire.
It is amazing that this approach was followed by many self-made billionaires who worked their way up from a humble beginning to one of the wealthiest human beings in the world. If you do some research, you will find marvelous examples in this regard.
Perhaps we can better learn from Aliko Dangote, the Nigerian Muslim, the richest man in Africa, the richest blackperson on the planet, and the founder of Dangote Business Empire. This man started his business with $3,000 borrowed from his uncle and he sold the very common products that we all know: rice, sugar and cement. As the market was very good at that time, he was able to repay the loan within three months.
Warren Buffet, the American mega-rich, also sells razor blades, drinks, and laundry detergents, choosing the most basic products that attract lots and lots of buyers.
The idea works best for those who have a great vision in mind. It works best for those who possess a growth mindset and the enthusiasm to reach beyond their limits. It seems this is what Aliko and most millionaires do.
Aliko, after launching his small business, should implement his growth strategy starting with a local trade. He traded from one city to another across Nigeria. The local trade gives the new entrepreneurs the chance to explore the market. They will interact with new customers and businesses. You will learn new places. It is a matter of learning and experimenting rather than profit seeking.
The next step was international trade, importing goods and communities from abroad to the Nigerian market, the market he already knew.
He then started to produce cements and sugar locally, putting his foot in the manufacturing world. He currently owns, according to Wikipedia, the biggest cement plant and one of the leading sugar refinery factories in Africa.
The business of common and everyday products can be complemented with competitive strategies including pricing, quality products, the use of the technology, and most importantly having an unyielding vision ahead.
So, choices are available for entrepreneurs. They can choose to enter into a niche market and lead with innovative products. Or they can start with the most common products and lead with great vision and competitive strategies.
Dr. Ismail Mohamed Ali is head of Multimedia and Graphics, SIMAD University