Suddenly, entrepreneurship is all the rage across the Middle East. More than 70% of the nearly 500 respondents in a recent London Business School survey described the growth of entrepreneurship in the region as ‘Steady, ‘Fast, or ‘Very fast’. Perhaps inspired by role models elsewhere, entrepreneurs like the UAE’s Rabea Ataya are showing their Middle Eastern peers that there’s no shortage of potential here. Ataya, whose bayt.com is the leading online job board in the region, says, “There’s plenty of opportunity here, and there’s starting to be a more robust infrastructure, too.”
But if you are thinking of taking the entrepreneurial plunge, you may want to pause and ask yourself whether you’ve got the kind of mindset that it takes.
Problem-first, not product-first logic
Far too often I hear this from aspiring entrepreneurs. “My new idea is to sell X to Y.” Not so fast. The real question is whether Customer Y has a compelling problem that Product X can resolve. Consider Mexico’s Simon Cohen, who in 1996 was working to build up the international side of his family’s textile business. He had a problem. “The service from the freight forwarding company was very poor.”
Cohen reasoned that other importers and exporters must be struggling with similar service issues, and he wondered whether doing freight forwarding better might be an opportunity and solve a real problem, too. He focused on differentiating through quality service. “In the early days, I set my alarm for 2am, and spent an hour or so replying to emails, talking to my agents, getting cargo updates, and letting customers know where their goods were. Then I would go back to sleep until morning.”
By solving importers’ and exporters’ problem of poor service, Cohen’s company, Henco, has grown to become one of Mexico’s largest freight forwarders. Solve genuine problems and your business will thrive.
Think narrow, not broad
“If I can sell my product to just 1% of my huge market, I’ll be rich.” Actually, though, that’s not how good entrepreneurs think. Take Phil Knight and Bill Bowerman, founders of Nike, who started by targeting the tiniest of markets – elite distance runners.
With some latex poured into Bowerman’s wife’s waffle iron, the duo created shoes that did two things others did not. Theirs had wider footbeds, to guard against ankle injuries that were common among distance runners, most of whose running was done on uneven country paths. The latex cushioning also guarded against shin splints caused by the miles of pounding that distance runners’ legs endured.
It took five years before Knight could quit his day job and devote full time to the business. But when Nike reached dominance in the running market, Knight then repeated the process in tennis, basketball and more, and the rest is history.
Beg, borrow or steal
In 2009, in preparation for her wedding, Mimi Naghizada started thinking about how she wanted to style her hair. She wanted to use hair extensions – increasingly popular with celebrities and her friends. However, after going to the local mall, she came home frustrated. The colours were limited, and the quality was disappointing.
Her fiancé Alex Ikonn had been looking to start a business. “But what about resources,” he thought. He logged onto Alibaba.com and found Chinese manufacturers who could supply the hair extensions. He found a logistics provider – no warehouse would be needed. He found an e-commerce template with which he could build a rudimentary website. And he even found most of the money he needed to pay for the first shipment from China, via credit card offers of new accounts with six months’ free interest.
Today, Luxy Hair sells millions of dollars’ worth of hair extensions annually, with a tiny workforce. No, the Ikonns didn’t really beg, nor steal, but in essence they borrowed virtually every resource they needed to start and grow what is today a thriving business.
"Yes we can"
What entrepreneurs do, really, is to pursue opportunities. Often this means doing things they have never done before. When Coca-Cola re-entered India in 1995 by acquiring the country’s leading cola brand, ThumsUp, Coke found itself the new owner of a set of distributors whose territories were described in words, not maps. Coke needed maps.
In stepped Rakesh and Rashmi Verma, telling Coke “Yes, we can. We can give you the maps you need.” With typical Indian ingenuity, the Vermas began cutting what rudimentary paper maps they could find into A4 size pieces, slapping them onto their desktop copier/scanner and, “Voila,” a digital map was born. Gradually, by taking on one commercial assignment after another, the Vermas built what has become India’s largest digital mapping provider.
So what about you?
Great entrepreneurs are almost always made, not born. Can you find a narrow target market having a compelling problem you can solve? If so, your customers will pay you – ideally in advance – to solve it. Can you assemble – but not bother to own – the resources you’ll need? Can you learn to do something you’ve not done before? Yes, you can!