Every day, African entrepreneurs are faced with the same problem. On the one side we have a financier looking for ventures to invest his money in; on the other we have a business owner unable to push their products at the pace they would like.
It is not that business owners don’t ask for financial assistance and it is not that funders don’t receive proposals; but a fundamental problem exists. You can have two companies that both sell the same electronic gadgets, but money flows to one business and not the other. Often, it come down to packaging.
Entrepreneurs haven’t come to terms with packaging their businesses for far too long. A bank’s main product is money, but why do we choose one over the other? Again, it is the packaging. Our choices are made around the value added services the banks have around their product, such as technological advancements or insurance services.
I have sat in many meetings and listened to investors saying, “we have money, but we just don’t come across the best investment opportunities”. At the same time, they acknowledge there are many entrepreneurs with brilliant products and services. These entrepreneurs have pitched their ideas, only to have them declined. It is likely that their proposal was not correctly packaged.
Legendary venture capitalist, Tom Perkins, knew about the two Steves (Steve Wozniak and Steve Jobs) in the early 1980s, but did not invest in Apple. It was not that the concept lacked substance, it was how the idea was put across.
The South African government established the Small Enterprise Finance Agency (Sefa) in 2012. It has a Youth Fund worth $145.71 million which was supposed to be spent within five years, but two years later, there is still $119.9 million in the fund’s coffers. Less than a quarter of the money, meant to kickstart small businesses, has been spent. Are they struggling to find bankable business cases because the new ventures are not packaged in a way that will attract investment? I suspect so.
This is a matter that needs urgent attention!
A product’s packaging needs style and a unique design. It needs to evoke emotion and needs to appeal to the relevant niche market.
Companies need to package an experience in their products and services. People are emotional beings driven by feelings; often our spending power is propelled by sentiments rather than reason.
In order to connect to a customer, you need to tap into their emotions by creating an experience through your product. At the end of the day, what matters is your unique selling point.
Functionality is a key factor beyond packaging a product. For example, the software inside a tablet matters more than the design. Reviews for this type of product will focus more on functionality than what it looks like.
Although I have emphasized how packaging your business’ products and services will determine the appeal they have on the market, the approach will vary for different companies. It is important to know what your market expects in the segment you operate in; however Henry Ford and Steve Jobs have a different view to this.
“Customers don’t know what they want until you show them,” said Jobs.
“If I asked the people what they want, they would have said a faster horse,” said Ford.
Great entrepreneurs dictate what the market wants and then improve their products as they receive feedback.