Upon arriving in Nakuru it quickly became obvious that the
way businesses started and operated were normally based on nearby, already
successful, businesses. Whilst this may seem logical to imitate successful
businesses, most of these “copycat” ventures lack any innovation and differentiation.
They argue that if one person selling fruit for 20 Kenyan shillings a piece is
making money and their business is growing, then if they follow this business
plan exactly, they should automatically be successful. This causes their new
start up to either fail because it doesn’t offer anything different to the
existing businesses or just obtain a small share of the custom that the
existing business already receives. Already it has become apparent that this
culture of exactly copying successful business will be one of the most
important aspects to overcome in Kenya.
At this point it seems paramount to stress the importance of
offering potential customers a product that differs, in some way, from what
they can already buy because more often than not, they will simply continue to
buy from the established business rather than your start up. It is highly
likely that they will trust the established business more than your start up as
it is a recognised brand compared to your new entrant. However, if we can
highlight the significance of offering a slightly different product, service or
business plan that better suits the needs of your customers, then it is more
probable that they will be successful.
Ultimately, this culture has led to whole streets fielding
market stalls which sell exactly the same products at exactly the same price.
For example, if you wish to purchase a pair of shoes, there are a few select
streets which are virtually the only places you can buy these items. If a
seller were to set up a shoe stall in a different street, this slight change
might be enough differentiation to increase their sales. Over the coming weeks
I will be trying to outline how this copycat culture is hindering businesses
but the culture can also be seen as an opportunity to exploit and easily
innovate and differentiate.
4 comments
It would be interesting to know where these entrepreneurs (copy-cats and others) get their ideas from. Is it simply by observing the success of others? How can knowledge that may impart entrepreneurial opportunities be brought in?
To some extent I agree but you also have to consder the issue of risk. In these Jua Kali businesses then managing risk alongside a strategy of multiple businesses reduces exposure. In a nation where there is no 'safety net' and the needs address by business are low order ones (heating, shelter, food) then innovation is risky
Robert- We've been hugely encouraged to go out and speak with these types of entrepreneurs to gain first hand knowledge of how they generate their ideas and what drives them to select an idea over another potential one. From what we've been told, much of the ideas that are chosen to be brought in and used for a business are chosen from observed success. Often we are told of how they have heard of a successful business in Nairobi and because it is already a success in the capital, they believe it can be successful in a smaller scale in Nakuru whilst carrying less risk as someone else has started this business first.
As I've come to discover, it's difficult to be subjective to the local entrepreneurs and facilitate entrepreneurial teachings, rather than attempt to impose my own entrepreneurial views and beliefs on them. What we hope to achieve is a culture of entrepreneurship whereby we've instilled entrepreneurial teachings that don't dictate what Kenyans should innovate but the tools necessary to show them how to innovate, challenge every solution and see problems as the opportunity for innovation.
Diane- Thank you for your comments and as you've said the reasons for these businesses copying other businesses isn't a black and white situation. Many businesses follow the example you've shown and essentially bypass the risk of starting a new business by examining successful businesses (and the many factors involved in their success; product, service, marketing, logistics etc) and using their experience as a metaphorical safety net. I agree that innovation is risky but I also believe that a business lacking innovation can be just as (if not more) risky. The "copycat" businesses we see every day in Nakuru are the ones that follow a successful business exactly.
For example, they use the same suppliers, the same pricing, the same advertising and even set their stall up near the business they are copying. This is where following these successful businesses becomes a problem because now they have a duplicate business literally next door and the usual customers to the successful business continue to use the successful business over the new start up because of their brand loyalty.
These reasons make it imperative for these businesses to innovate and exploit the need for differentiated products but, like you said, it may be wise to first establish a business (that is similar to those that are successful) before innovating and increasing the risk associated.
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