You have a great business idea. Now where to start?
Solve a painful problem
Problems. We all have them. Some problems are minor, but others waste enormous amounts of our time, energy and money. Some problems literally see people dying every day. Other problems keep people in poverty for a lifetime or cause businesses to go under.
The most successful businesses are the ones that solve real problems.
M-Pesa provides banking for the unbanked. SafeBoda gets you a boda boda within minutes for a pre-set price and lets you weave through traffic in the 6 pm rush hour. OkHi provides physical addresses for places without an address system. Bena Care provides nursing services in people’s homes, saving them hospital expenses and time in traffic when visiting their loved ones in the hospital.
Banking, traffic, hospital bills are all enormous problems that Kenyans face on a daily basis, sindio?
With this in mind, ask yourself, what is the problem my business will solve? Is it a real problem that affects people’s lives and businesses, or is it a nice-to-have? That’s not to say that you can’t provide a nice-to-have solution, but just know that if the economy gets tough, your service may be among the first that people will cut from their budget.
Can you tell your customer the savings or the return on investment when they buy your product? Can you promise that you can save them an hour in traffic on their daily commute, or that you’ll save them 8k daily in hospital bills by paying 2k for a nurse to visit their home twice a day?
Focus on the customer
Your only goal as an entrepreneur should be to solve a meaningful problem for other people. Kitenge laptop bags are really cool, but do they solve a meaningful problem? Is your customer in real pain because of this problem?
As a business that supports early-stage startups, a common problem we see is entrepreneurs perfecting their product before testing it and getting feedback from customers. In fact, a common life journey of a startup looks something like this:
- You have a great idea
- You spend some time building your product so that you can sell it
- You try to sell it
- You realize people aren’t willing to buy your product
- You run out of money
- You close your business
A survey of failed businesses showed that 42% of them failed because they were building something that the market didn’t need. In fact, it was by far the most common reason for startups to close.
Figure out your secret sauce
Every successful business has a secret weapon. Research what other businesses in your sector are providing, and what their customers love and hate about them. For the Kijiji, one of our not-so-secret sauces is part-time membership. When we started out, most entrepreneur hubs in Nairobi only had full-time membership, and they required you to pay a one month deposit before starting. That meant that not only did you have to fork out 20k for membership, even if you spent half your time in the field or in meetings, you also had to have the cash flow to put in another 20k as a deposit. We wanted to make sure that as many entrepreneurs as possible could have access to a startup community (after all, it takes a village to start a business), so we offer part-time membership from as low as ksh 3600 – with no deposit.
If affordability is your planned secret sauce, know that lower prices aren’t everything. Airtel Money vs. M-Pesa is a textbook case. People complain about the high cost of using M-Pesa and till last year, Airtel Money was free to use. But as we all know, M-Pesa is the winner. At the end of 2018, Safaricom had 78% market share in mobile money. What do you think is Safaricom’s secret sauce despite the higher prices?
Will people pay for your solution to their pressing problem? There is only one way to find out! Validate your business idea by finding your first five customers.