Market Stifled? Create Your Own

Market Stifled? Create Your Own

SHARE

In the days of wind powered seafarers, the true skill of a ship’s captain was measured by those who traversed the Atlantic and the Pacific. What made these journeys so treacherous were the doldrums, spaces and places of no wind.

Not a breath sometimes for days on end. Caused by the centrifugal forces of the earth’s spin, the doldrums claimed many pioneering and ambitious captains, crews, the ships they sailed in and ultimately, the investors who lost all but their lives.

The strategy adopted by smart captains was this: Acknowledge that you’re in the doldrums and then act. Get your crew on deck to take up oars and paddle to where the headwinds are blowing. Those that sat and prayed for an end to the doldrums often perished.

Related: Thriving in a Downturn

Paddling a seafaring ship is no mean feat. It’s hard. The ship was designed to be powered by wind, not grumpy sailors. The smartest captains would even offload hard-won cargo into the seas to lighten the load since they knew it was a race against time and resources – water and food!

The South African Doldrum

Today, I believe that South Africa is in the doldrums. The rand has collapsed, our recent credit rating places us just above junk status, the impasse between labour and business deepens and that between business and government is at an all-time low.

 

Entrepreneur-Newsletters
Entrepreneur’s daily tips & insights delivered direct to your inbox.

Ambivalent economic direction and leadership suggests the doldrums are here to stay for a while. Any prediction of when they will end will make one look like a fool or a genius. Either way, it’s too risky to bet, and good entrepreneurs are risk averse.

At Aurik Business Accelerator we’ve conducted 22 000 entrepreneur assessments, and the best performing entrepreneurs have a number of things in common, one being a low tolerance for risk, and a habit of only moving once the downside risk has been capped.

The best way to alleviate the worry of the doldrums is to act. Paddle towards the headwinds. Make changes in your business model, strategy and perhaps life.

The big benefit today is that we have  many radars pointing clearly to where the headwinds are blowing. As a South African entrepreneur, when I look into this radar I see a weak currency that seems intent on depreciating further as long as current conditions hold.

I also see a distinct and unique heritage, English as the language of business, a collection of excellent trade agreements such as the African Growth and Opportunity Act allowing exports into the US to be duty free, the source of raw materials and brainpower.

When I shift the radar further afield, I see flat, soft economies globally, intense competition, humility brought on by tough times, and the need to innovate to sustain and build business. In one word, the appetite for change in foreign markets is greater than it’s ever been, and with change, the appetite to accommodate new ideas has grown remarkably.

The starting point is always to work with what you’ve got. Looking at the radar of three entrepreneurs that I work with can provide some inspiration, insight and ideas on what we could do.

Related: How to Survive – and Grow – in Tough Times

The Biker Fashionista

Preston has always had a natural talent for fashion and making any item of clothing look edgy and sexy. 20 years back he created a brand called Rip Torn that targeted urban, hip, edgy young professionals. It was a hit.

Recently he became interested in biking and noticed that the protective clothing that bikers wore was, well, very functional. It made a biker look ridiculous and overweight with a contorted body made up of knobbly knees and a big bum.

Within a short period, Preston came out with a range of bikers’ wear that challenges the edgy, sexy clothing ranges of Diesel, True Religion and the like, but with all the functional features of traditional bikers’ wear.

The jeans were Teflon coated inside, had removable knee guards inside the leg, gauzes to increase airflow and reflector tags in all the right places.

The range got launched and the business is being built. Preston’s radar points his ship towards an obvious set of headwinds.  Niched customer segments, such as bikers amongst others, are easy to find and reach globally.

Bikers cliques are serviced by passionate, biking retailers that are easy to locate globally. On the back of his unique, edgy fashion biker wear, a number of models would see Preston leveraging his fashion range here in South Africa into the same market abroad.

His choice of country must capitalise on trade agreements, the weak rand, his unique designs, and the fact that a retailer in that foreign market will want a point of difference.

That retailer is hungry for something that will set his outlet apart from other competitors in his market. Preston’s strategy for entry could be through an agent, distributor or direct, but this is another discussion. His radar is clearly indicating which direction he needs to paddle his ship to catch some very fruitful headwinds.

The Leather Lord

As a second generation entrepreneur, Thomas’ taxidermy business is built on one of South Africa’s most sustainable natural resources: The hunting industry. Popular or not, it brings in over R1,6 billion of foreign revenue and employs well over 400 000 people.

Foreign hunters pay fortunes to spend a week on a hunting trip and leave with a trophy. The skills of a good taxidermist include the tanning of skins which allows for the manipulation of the leather into shapes and creates a smooth feel.

His greatest competition comes from US taxidermists who also target American hunters. They claim that South African taxidermists cannot be trusted to turn a hunt into a trophy; that they’re poorly skilled and unreliable, and a hunter can ill afford to take chances. It’s problematic for Thomas.

The creation of a hunting trophy has a number of stages and each stage adds tremendous value in the process. Ideally, Thomas, and South Africa, want the complete trophy to be made here.

Thomas’s radar is spinning hard and never before has timing been so good to paddle towards headwinds blowing in the faces of his competitors. In the niched taxidermy industry, American competitors who are at a cost disadvantage serving the same market will find relief in having a significant portion of the taxidermy process done locally where the cost of labour is lower, the advanced process of value dropping the shipping costs further and no need to use preservative chemical for the hide.

The competitive price advantage for a taxidermist in the US using Thomas for this purpose would provide an undeniable competitive advantage.

Related: Disrupt Your Thinking, Transform Your Business

The Dignified Driver

Martin had a terrible accident at the age of 26. On a weekend away with friends, he jumped into the Vaal River from the same spot as the day before and hit a sandbank, which left him paralysed, unable to move his hands or legs. Many of us would have resigned our lives at this misfortune. Martin did otherwise. He went on to build one of the world’s best 4×4 electric wheelchair manufacturing businesses, selling wheelchairs locally and globally today.

Most disabilities occur at a time in one’s life where you don’t know what you don’t know and so the purchase of a wheelchair is a tricky business. Martin’s wheelchairs have the benefit of being designed by someone who knows what your life will be like.

I understand that a great frustration is the complete loss of independence, having to rely on people for almost everything. In addition, it’s likely you use a catheter. Catheters that aren’t managed and not emptied can cause fatal infections. Martin’s experience in this field led to him designing a number of useful elements to his wheelchairs.

The most recent has been a solenoid that Martin designed to allow the user of the wheelchair to independently void the catheter. You simply drive out the room, find a tree, park under it and release the contents of the catheter with a wisp of your breath: A completely independent solution avoiding an embarrassing request for help, and potentially fatal outcome for inaction.

Similar to Preston and Thomas, Martin’s radar is pointing to strong headwinds. A niche market, proprietary design, local manufacture using many local parts, a weak currency lowering his final costs, and a trade agreement.

Sourcing and finding other manufacturers and licensing the solenoid or supplying it for their use on their products is in itself a significant business. What makes it even easier for Martin is the fact that he has an international reputation both as a motivator, inspiring all who have the benefit of meeting him, but also as a user.

There is undoubted sincerity in his presentation of the product. Imagine his story in the US!

So, to all entrepreneurial captains out there, look at what you have, combine it with what we have in South Africa, and begin paddling to the headwinds. It may take time but when your spinnaker fills with wind, you may wonder why you never did it before.

Your first step is acknowledging

Admit you’re stuck in a doldrum, then act accordingly. Those who do nothing will perish.

Plot your direction

Shift your radar for headwinds or market opportunities, then paddle if you have to, to get there.

Related: Silent Killers of Great Businesses and How to Avoid Them

Pavlo Phitidis
Pavlo Phitidis is the CEO of Aurik Business Incubator, an organisation that works with entrepreneurs to build their businesses into valuable assets. Pavlo is a regular commentator on entrepreneurship on 702 Talk Radio and 567 Cape Talk Radio. He can be contacted at www.aurik.co.za