The Dilemma of Demand
Entrepreneurship and Innovation Editor Mutiyat Ade-Salu asks 3 entrepreneurs in their 20s/30s for their take on the first task of setting up any business: determining a need for it. Ask any business resource what you need
Entrepreneurship and Innovation Editor Mutiyat Ade-Salu asks 3 entrepreneurs in their 20s/30s for their take on the first task of setting up any business: determining a need for it.
Ask any business resource what you need to do to run a successful company or sole proprietorship and the answer is pretty unanimous: satisfy a need. Apparently, American entrepreneurs are doing this really well. Recent statistics from the Kauffman Foundation revealed that entrepreneurship in the U.S. grew for the 3rd straight year in 2016, with about 45% of new companies making it through their first 5 years of business! The biggest sectors of course were IT Services, Advertising & Marketing, Business Products and Services, Health and Software. Between 2006 and 2010, there was a downturn in the number of startups going from 107 per every 1000 firms to about 78. Since 2010, however, the number of startups has almost steadily increased again to about 88 per thousand. One reason for this upswing may be the growing generosity of “angel” investors, and it seems this was the year to take advantage of that.
But first thing’s first: an entrepreneur must determine the level of need for their product or service. As a budding entrepreneur myself ( it took me years to realize I could not sustain myself as a musician and actor without a business mindset), I have wondered about the issue of meeting a customer’s need in relation to what I have to offer. It’s like the chicken or the egg conundrum. Which comes first: the service or the demand? Should a startup business owner find a need/demand for their product or create one for it? I called on three friends of mine, each a brilliant mastermind in his own right, to help me figure it out and the conversations were truly enlightening.
First, I phoned my old colleague Apuje Kalu, a celebrity wardrobe stylist of Igbo descent based in Los Angeles, California.
Business Profile: Apuje Kalu | Sole Proprietor | apujekalu.com Instagram: Apuje
Position: Create A Demand
Point of View: “It’s Complicated”
Quotable: “You never know who may have a need for your service. Sometimes, they themselves may not know…”
Apuje offers 3 strategies for generating a need for one’s services:
■ Market Through Social Media | This consistent Instagrammer has over 12,000 followers and says to post regularly because “you never know when someone will hire you. The more you put out there, the more likely someone will offer you a gig.”
■ Publicize A Passion Project | One example he offers is how he got a high-status gig off of styling a photoshoot, bro bono, for a photographer friend raising breast cancer awareness. “ A representative from ESSENCE magazine saw it after [the photographer] posted it on social media then contracted me for one of their own shoots, giving me stylist credit.”
■ Balance Paid Work with In-Kind Services | A celebrity stylist for the likes of Ne-Yo, Jordin Sparks, and LeToya Luckett, Apuje has sometimes styled celebrities for features in smaller magazines to get access to their Public Relations Manager or Artistic Management. “Then they see what you can do and hire you for events such as press appearances, film festivals, or red carpet events.” One such person was actor Jay Ellis, co-star of the new HBO series “Insecure” created by Senegalese-American writer Issa Rae. Apuje met Jay just 3 years ago at a unpaid photoshoot for a magazine and the rest was history: Jay requested him for another paid editorial and then subsequent paid appearances for BET network’s “The Game”.
One note of caution, though. “You have to bring the same rigor to an unpaid job as you would a paid job…”, says Apuje. And that’s one way an entrepreneur can effectively “create” a demand for their services. To put a twist on a famous quote by John Wooden, the true test of a person’s character is what he or she does when no one is paying. Ironically, that type of discipline keeps the paychecks coming.
Next, I sent a message through Google Hangouts to my boy Dr. James Lott. A Yoruba-American from Chicago by way of Baton Rouge, Louisiana, he’s currently working on a healthcare start-up in the Seattle, Washington area.
Business Profile: James Lott, Pharm.D.| CEO of Fiduscript | fiduscript.com
Position: Create and Find A Demand
Point-of-View: “It’s Industry Specific”
Quotable: “Some people are just really intuitive and they see a demand or problem where other people don’t…”
According to Dr. Lott, statistics show that companies that are Business-to-Business do better than companies that are Business-to-Consumer. He says, “Typically when you’re “B-to-B” you need to find a demand, not create one, because that other company got along fine without you at first.” For example, we can compare the healthcare industry to the casual dining industry. “The American healthcare industry is already maxed out as far as costs go,” says James, “nobody wants to spend any more money.” But if we look at casual dining, it’s a voluntary industry. “If people like it, it’s like a healthy indulgence and people are looking for new ‘experiences’ and ‘adventure’ when it comes to food and ambience.” In that setting , an entrepreneur can create a demand. James’ favorite experiment with this is going to food trucks. In fact, he calls himself a “food truck slut” because every food truck is a different experience and he loves the whole Mom-and-Pop model. (Big companies aren’t doing it yet.) Best of all, he can spend as little as $3 or as much as $15 and not feel bad about it.
In addition to demand, James also likes to consider something called “the pain point”, a problem that there has to be a solution for or it’s going to affect the business. In creating his own start-up, the pain point was prescription drug abuse, a growing issue that’s bad for a community and also a nation. The solution? An innovative technology his company came up with that will hopefully reduce drug abuse across the nation by 20%.
Sometimes an entrepreneur sees a problem, but other people don’t see it yet. For instance, when James’s company started working on prescription drug abuse, the issue didn’t get the national attention it’s getting now in 2016. 3 months after James created his company, the industry then realized there was a problem in the first place, claiming prescription drug abuse is killing more people than car accidents. (He thinks the subsequent coverage was a coincidence, though.) James notes, “If I had launched this product right away, I would have been creating the demand, but now [it’s like] I’ve found the demand.”
At the end of the day, James felt the question of finding or creating a demand was one of the hardest questions one could ask an entrepreneur. In his opinion, “finding and creating a demand intersect.” I agree it’s a hard question, but I still think it’s an important one to ask given the tough saturation of most markets nowadays. No entrepreneur can afford to march into one without knowing the demand to be met.
So, off to the United Kingdom I go (at least through Facebook messenger) to chat with a former professional soccer player (or “football” for the connoisseurs). Does he believe in “finding the demand?”
Business Profile: Emmanuel Wonder Adewole, Esq. | CEO of Wonder Sports and Entertainment Group | houseofaman.com
Position: Find then Create a Demand
Point-of-View: “I’ve the traveled the world a lot.”
Quotable: “People in China are not African. They don’t get it…”
Well… Emmanuel, a Yoruba man, believes in not just finding the demand, but taking it an extra step further and creating another demand. The former Arsenal FC Academy member turned attorney turned businessman has his hands in 4 different companies and employees he calls partners in about 7 offices across the world. He pointed out to me that in some parts of the world there’s more manpower to help bridge the gap between the Western and Eastern hemispheres. For instance, there’s a difference between the United States/Canada and the U.K. On both sides of the water, there’s a need for authentic African food. However, in the. U.S. and Canada, it’s more expensive to sell it. Emmanuel says, “In the U.S., one person who imports African food can monopolize an entire [regional] market, whereas many Nigerians based in the U.K. can travel back and forth to Nigeria to import goods due to the shorter distance.” Furthermore, he notes, “Four plantains at a Chicago Walmart can cost 13 dollars but, in the U.K., 8 plantains are only 1 pound…” Yikes! That’s about $1.24 for twice the amount of plantains! It’s clear there’s a greater demand to be found in the U.S. and Canada.
Wonder, as his fans affectionately call him, also started a men’s clothing business called AMàN, a modern, traditional African men’s couture fashion brand. He found there was a need for African fashion by African men in the Diaspora when he saw his friends either waiting for their uncles to bring them designs from overseas or throwing major dough to buy the Afrocentric knockoffs at high-end stores like Zara or H&M. “I said why spend $40 on Zara products manufactured in China? They’ŕe manufactured there for much less than the sales price. Why don’t I manufacture [the clothes] in Nigeria and be the one-stop shop for people in the U.S. and the U.K.? The [African] designs are in vogue, but people in China are not African. They don’t get it. “ So, he created a solution for the lack of authenticity and high price point by building a shop near Ibadan, Nigeria. He employs 4-5 tailors and 2 shoe cobblers and the manufacturing he’s created has partially satisfied a need for jobs there. In creating House of AMàN stateside, Emmanuel has also created a need for authentic African fashion by manufacturing the kinds of products his friends couldn’t even get at JCPenney. First he found the demand, then he created a new one. His next venture is to go into the food and hospitality sector in Nigeria with his company Visao International Group.
After hopping from LA to Seattle to the UK, my conclusion is that creating or finding a demand isn’t easy. Both must be handled with vision, discipline and tenacity. I admire the game plan of Apuje, the foresight of James, and the twist on demand by Emmanuel. However, if I had to choose one, I’d lean more towards James’s viewpoint that deciding on what to do with the issue of demand depends on the type of industry one goes into. And if I turn on my female intuition, I see a future in which entrepreneurs will not only dominate the marketplace, but also change the way we define “demand”.
Mutiyat Ade-Salu is an actress, vocalist, educator, and aspiring entrepreneur from New York City. Learn more about her work at meettia.com