I wrote a post some time ago titled How To Save Your Company.
This would be another long post as usual, and if you really want to become an entrepreneur, and you’re not accustomed to reading posts that have over a thousand word contents, then you’re not ready. You’re just fraternising with the idea of hustling, you are hustling because it just shows you’re not reading books.
I have established the fact that solving a problem is different from building a business. You can solve a problem and make no dime from it if you do not know how to build a business around it. Also, you can build a business without really solving a problem.
This may be the first time someone is telling you this because a lot of people who you pay huge money to learn from might just say – if you want to start a business, look for a problem to solve and monetize it.
If we look at it in the skeletal view, it’s very correct, however so many wantpreneurs have misunderstood this to be solving huge problems, solving dire problems. Well, it is not so. A good example is the reality show called “Big Brother Nigeria”. That’s a business on its own and there’s no problem it’s solving.
You may want to debate that it’s solving the problem of entertainment. But is it a dire need? Do people really need Big Brother?. Were people really craving a reality show like Big Brother Nigeria before it started? The simple answer is No!
No one could have imagined such a show will bring millions of naira in turn over for the organizers. They just built the “business” around some human realities. I had to state this point to make you as an entrepreneur understand that you really need to understand business aside from solving a problem, else your business wouldn’t scale.
The first lesson I want you to note down today is: NEVER BUILD YOUR BUSINESS ON ASSUMPTIONS OR SPECULATIONS
What I mean is that it can cost you your head to set up a busy assuming there’s a need, assuming there are 1 million customers, assuming the clients will come. In the last piece, I simply explained how the market size for the Edtech industry is 11 million customers but in real sense they are not up to 1 million.
What this should point out is that you need to do your assignment as an entrepreneur on research. Your research has to be well grounded, it has to be real, it has to be very correct. I will stop here shortly and continue before the peace ends.
The second lesson to take note of is: NEVER JOKE WITH THE POWER OF NUMBERS
It’s simply a continuation of the previous point. I feel a lot of entrepreneurs do not take this seriously or do not even understand this. Numbers help you plan and succeed. I quite agree that it’s not easy understanding numbers when it comes to the business world.
There are so many entrepreneurs yelling that they’d become billionaires just by running a particular business whereas in the real sense, such a business cannot make them more richer than a hundreds of thousands for decades and eternity. This is what I simply termed as optimism bias.
Let me give a quick illustration of this so you’d understand my point before I continue on the real point;
Let’s assume I want to join the Super Eagles team of Nigeria as a young guy, I will be full of optimism that I will one day join the team if I am consistent with training. While that may sound true, it is so very untrue. I might be consistent for eternity and not get a chance to even play for any club in the state. The reason is simple;
Super eagles team just needs 11 players on the team at a time andets say there are 2 million young Nigerians who also want to play for Super eagles; this means that my chances are low.
Optimism will not help you consider the numbers or look at the reality. There should be an optimism check or boundary. Once you realize that the probability of playing for the super eagles team is low, it gives you the awareness that your chances are slim and this helps you pivot and make the right strategies which could be
Train 15 hours instead of 5
Try to chat some players up
Block their cars
Play for the school team
I just gave this as examples. The issue is a lot of people are taking this path already but they don’t know. They just feel it’s the next step while some are just confused. This analogy to just gave will help you to come up with the right strategies after understanding the boundary of your optimism.
You cannot be optimistic enough to claim you’d build a company that will beat Facebook. I can. The reason is because I know the boundary of my optimism, let’s say the probability is 1: 2 billion chances. That’s the boundary of my optimism and once I am fully aware of this, I need to go learn and understand what I need to measure up to make the probability 1:1.
Why did I go through the stress to analyze this for you? I did that because I want to talk about technology and your business. The first problem around this will be in the form of lessons as well.
- You don’t introduce your business to technology, rather introduce technology to your business.
People just start from the wrong side of things. A business should be built from the foundations first and not the roof. When people want to build businesses, they are in a haste to implement all the technological opportunities available, the technological tools available. It’s very wrong.
The reason is not far fetched; you have a business, you already know your numbers and the fact that your business cannot fetch you more than some millions in Nigeria and you want to become a billionaire, this is where you begin to apply technology.
I’d give the proper analysis even though it’s pretty hard trying to explain it. Firstly, I will begin by saying that technology plays so many roles in businesses of which one is to help reduce cost and increase reach which can be simply explained as productivity.
I mentioned earlier that due to the African culture at the moment, some businesses have higher potential of scaling especially in the need economy. However, if your business is in the techecosyem or service economy, then you need more than just building a product. Let me give this simple example;
I want to sell a pair of shoe for 1 thousand naira, from understanding numbers, I know that only 1000 customers are available in Nigeria, this means I’d have a revenue of 1 million naira. Yet, I want to make billions from this business or get investments to expand. I need to make technology play a key role know this.
Now, before technology plays a key role, I need to understand exactly what the business wants to achieve and map them out before I use technology to achieve them. Let’s say the goal is to make 1 billion naira instead; I can ask questions like;
- Can a customer buy more than one shoe? So, how can technology solve this?
Simple answer, you do branding using social media and use customer retention strategy. I won’t explain further than that.
- Can I get more than 1000 customers in Nigeria?
Yes, by using customer attraction strategy and building a community. But creative Ads would have done it’s work as well.
- Can i expand beyond Nigeria?
I’d leave you to answer that. Once you answer it, the next question is how can you apply technology to achieve this.
And many more steps. This is how technology should work with your business.