Starting a business used to be very hard. You needed capital, guts and in many cases the right connections. This is in part because you didn’t really need to think a lot to create a viable business. Business formation was driven by the lack of a particular product or service in an area, so if you were first to spot what it is that wasn’t being provided you could simply launch and start making money. This is why when you look around you the corner store that sales bread and milk is still standing today doing the same thing it used to do.
Something has changed however, these days’ life is fast paced. Economic development and in some cases slower development has created new challenges that need to be solved and this is where the all-important topic of “Why Startups?” comes in.
A start up is described by Wikipedia as “A start-up company (start up or start-up) is an entrepreneurial venture which is typically a newly emerged business that aims to meet a marketplace need by developing a viable business model around a product, service, process or a platform.”
Look around you, any big problem that you see is begging for a solution, which if done right can create profits by improving the lives of those who are paying for the service or product and potentially be scaled to other regions facing the same problem. In Zimbabwe many people young and old are jumping onto this startup gravy train and this is great! Start-ups generally help create jobs and if done right can expand to new territories and put the country on the map once again.
However, when compared to other countries such as South Africa and East Africa, Zimbabwe has been slow to catch on to the startup craze that has hit the world, creating huge companies such as Airbnb (the biggest hotel service that doesn’t own a single room), Uber (the biggest car rental company that doesn’t own a single car), Paypal and so many more. The list is growing every day.
Every startup is often led by a visionary founder or two. It all starts with identifying a problem which needs solving. Start-ups that succeed solve the problem in a scalable way. There are many start-ups that have failed because they went after problem that was really not a problem or didn’t need to be solved. To be successful most founders spend a lot of time framing their problem before launching their product.
Secondly, start-ups unlike corporate entities rarely stick to failing business models, they pivot until they find the right product – market – fit. We are particularly excited to see that entrepreneurship can now be taught informally to founders of start-ups. By following certain proven paths it is now easier than ever to start an enterprise that can quickly be grown into a successful business. More importantly with the right tools and support, many start-ups these days are able to utilize platform that have been made by others which makes it easier and cheaper to launch a startup venture.
In coming weeks in this column we will look at how to create new products and services using ready- made tools such as APIs, SaaS, PaaS and so on. Recently we attended a pitch for start-ups where we saw some interesting business models being developed locally by entrepreneurs. We know how difficult it is to control things like side marketing in agriculture, or how hard it is to provide funding to farmers at affordable interest rates. Entrepreneurs are employing crowd funding models to solve some of these problems in a way that is simple, by making it easier for anyone who wants to go into farming for example, do so without actually owning or tilling the land.
The simplicity of some of the ideas can be mind-blowing and in future articles we will share why simple products are the most successful at scaling and creating a sustainable business model. While it is easier for small companies to launch their products that solve problems that have traditionally be pain points for many consumers, big corporates are finding that their space is rapidly being taken over by some of these innovative start-ups, often a fraction of the cost it took them to establish theirs. We share why it’s important now for corporates to think and act like start-ups in future articles.
Corporates that dig in and don’t grab these opportunities to innovate will die. It’s just a question of time. Take for example the area of Voice of Internet protocol communication, instant messaging apps that overnight changed the communication habits of millions of Telco customers. With each passing day more apps are being developed that continue to replace traditional services and clearly our corporates must embrace these innovations and keep their customers happy.
For any startup one of the hardest things to do is obtaining paying customers quickly enough and keeping them hooked to their product. Most successful start-ups start by signing up users and then adding on product features as they go. It’s not easy to know the right way of acquiring customers and this is why most start-ups collaborate with others.
There are many examples of solid businesses that we thought would be there forever! Look at Kodak! Thankfully many corporates are realising that they can invest in start-ups too or in some more radical cases are even starting to behave as one too. Remember start-ups create their products and services by rapidly launching and changing course when required by circumstances to come up with the right product that addresses customer pain points.
Investing in a startup can be hard too. That’s why many start-ups have to fight it out with others by pitching their ideas to investors. In Zimbabwe such pitching competitions don’t happen often enough which reduces the level of creativity in our startup community. Thankfully this is changing. The number of innovation hubs is increasing daily, meaning that our startup ecosystem is expanding. Zimbabwe now has over 8 active innovation hubs, and more are being launched at Universities across the country. However more still needs to be done, especially by corporates who often the biggest beneficiaries of the innovation and product development processes that take place in many of these hubs. Government must also create tax incentives that encourage the development of start-ups.
How can we all contribute to the development of Zimbabwe’s startup ecosystem. We would like to hear from you. Kindly email hararehub@gmail.com with your thoughts.
