Many have the idea that entrepreneurship only works when an idea already exists, and that you have to have it all figured out before you start. This is one of the biggest myths of entrepreneurship – you can go and find your idea instead of waiting for it to come to you.
Having an idea and developing that is part of the traditional idea of entrepreneurship. You can call this a top-down approach, since the idea is already in place, but it needs to be implemented. This can be a small idea or a big idea. Let us say, for example, that you want to earn an extra income by providing a tutoring service in a subject you are skilled at. Your idea is already in place, now you have to find a suitable market to advertise to and gain a client base, in order to generate your income.
Another example would be, you want to start buying and selling cars. So, you start small and sell one car, make a profit and buy another, and so it goes on. Perhaps you start off small selling to your friends and family, and your business spreads by word of mouth or you begin to advertise a little wider. It’s pretty simple, right? But what about when you do not have a specific idea, but you still want to be a business owner or entrepreneur? Everyone needs an income, especially in an uncertain economic climate. Entrepreneurs do not necessarily need to have an idea of a product or service beforehand. This is called the bottom-up approach, because you are looking at different factors in order to build up to a product or service.
When we talk about market research, it refers to examining a group of people who have something in common – whether it be age, gender, location, occupation, interests – or a combination of these, and studying them to find out patterns of behaviour which may relate to needs or wants, which can be satisfied through the provision of a product or service. You can start by observing the ecosystems and communities surrounding you – which may be many. If you’re a student, there is an ecosystem and community at your school or college. If you are on social media, there is another ecosystem and community which you belong to. You may have insight into communities which you are not a part of, but are able to observe. For example, you may be a student at a school, but you’re an observer to mothers who pick up their children from school, who might want to make use of a safe transporting service for their children at a reasonable fee. Once you start to observe these ecosystems and communities, you might start thinking about needs and wants within them, and whether you could contribute to satisfying those needs and wants through the provision of a product or service specific to a need or want you have observed.
The “Township Economy” is a thriving example of the bottom up approach to entrepreneurship. For example, Gauteng Province defines the township economy as “Enterprises operated by township entrepreneurs to meet primarily the needs of township communities. They are made up of diverse economic activities, ranging from spaza shops, street vending, hair salons, shebeens, minibus taxis, to mechanical services, manufacturing, burial societies, stokvels, child care services and more. These are largely micro-enterprises with low capital and low skills base.”
Townships have their own ecosystems and communities. Bottom-up entrepreneurs in townships look at their surroundings, and think about which product or service may be missing in this ecosystem which they can fill. A typical drive or walk in a township means you will pass a shop or enterprise for almost anything. There are barber shops, shops selling or fixing TVs and electronics, furniture, beauty salons, fruit vendors, toiletry vendors, and the list goes on. Many, if not most, operate informally. On a street where there already exists a fruit vendor, a meat supplier, and a furniture shop, it is likely that another one of these would be less successful than opening an enterprise which provides a different product or service to the existing ones.
This approach is one that can be applied to basic entrepreneurship at any level. Successful township entrepreneurs examine their ecosystems and fill a present need where supply has not yet equalled demand. You can do the same by examining ecosystems around you and identifying where supply has not yet met demand. Further than this, you might even identify an idea for a product or service which has never been done before. This is how many ‘’tech start-ups’’ have begun.
The tech start-up industry, which is another discussion in itself, often begins with a broad idea or a broad ecosystem identified, of which in-depth market research is conducted before shaping a product or service. This can thus follow a bottom-up or top-down approach. Market research, however, allows you to understand the nuances of what is missing in the market, which can contribute to your product or service being outstanding by filling the missing needs. The biggest mistake we can make when starting is to assume that we know everything before we even begin.
So, start examining those ecosystems around you. Identify needs and wants, examine the supply and demand, and talk to those within those ecosystems about what they want – whether formally or informally. You might be surprised at the ideas it can inspire in you. Great entrepreneurs are not skilled only at their trade – they are skilled at examining ecosystems, identifying needs and gaps, and filling those gaps. Let the ideas start finding you! There is no best time for entrepreneurship – it’s about grabbing an opportunity and moving ahead.