NAKURU’S TRIPLE THREAT
Since our arrival in Nakuru 4 weeks ago, we have been working with Balloon Ventures. We have been learning about the core elements of entrepreneurship and engaging in the business research that define start-up business, in the first two weeks we were blown away by how entrepreneurial most Kenyan’s are.
Studying and researching in a completely new environment has placed us in a point of continuous search for patterns and structures in the way that Nakuru’s numerous micro-enterprises function . Balloon Ventures has facilitated the learning process with research exercises in which, for example, the volunteers venture into Nakuru’s busiest market hubs and conduct a series of practical enterprise surveys as well as recording and analysing a variety of business modelling and measuring tools.
So far we have been able to identify 3 major obstacles to Nakuru’s existing micro-enterprises;
1. Market mis-cognition.
2. Copycat culture.
3. Lack of risk-taking.
Market Mis-cognition. (useless sales)
A simple walk down Kenyatta Avenue, means an encounter with a conjuring barrage of hard sales. First a vendor trying to offer you a leather jacket on a bright sunny Nakuru morning, an aggressive sale of a wrist watch (perhaps for my other wrist), trying to avoid a hard seller who follows you for a few yards down the road means you might look away from the seller to avoid eye contact. By looking away your eyes may meet the sight of another street salesman trying to sell a hair brush to a man with a shaven head.
Nakuru’s businessmen possess a detrimentally heavy reliance on impulse purchases by the customer. The practical approach of Nakuru’s micro businessmen may imply that they favour the methodology of trial and error. However, there is little to no evidence of market identification. The most notable form of market targeting we found was the selling of products to passengers in buses; this strategy allows the potential of a number of unidentified but engage-able customers.
While this form of indiscriminate selling may appear viable there are important concerns associated to its sustainability as a sales strategy. The lack of a target market means that products sell irregularly, and the lack of sales structure means sales cannot be measured, improved nor consequently maximised.
Nakuru’s micro-enterprise network is almost exclusively compromised of competing identical businesses clogging up their own market. Most micro businessmen seem to invest in a business idea they have seen someone execute and made some profit from it. Businessmen are seemingly unaware of diversification or don’t see the benefits of being innovative, the result is streets and alleys filled with stalls selling shoes, shoes and more shoes…
Lack of risk taking
One does not need to look far to find out why risk taking isn’t pursued in Nakuru’s micro-enterprises, the existing copycat culture is promoted by the fact that most micro-finance organisations do not usually fund risk-taking ventures. Nurturing a fear or an avoidance of entrepreneurial experimentation can inflict some long term damage to Nakuru’s entrepreneurial reasoning, considering the fact that Nakuru is a society where most entrepreneurs lack formal education and any learning is mostly acquired on a practical basis.
All three problems point towards a common area of development, innovation. Austrian economist Joseph Schumpeter argued that an Entrepreneur is an innovator who implements entrepreneurial change within markets. Entrepreneurial change can manifest itself in 5 different way:
1.) the induction of a new/improved good
2.) the induction of a new method of production
3.) the opening of a new market
4.) the exploitation of a new source of supply and
5.) the carrying out of the new organisation of any industry
Bearing Schumpeter’s definition of an entrepreneur and what we have learnt at Balloon Ventures; a start-ups key objective is the search for a scalable business model through constant testing, learning and iterating. In other words, startups seek sustainability through innovation. In the case of the hawker selling random goods at a matatu stop, this would mean not just seeking passengers in stationary buses at the stop to sell an extremely variable number of good to. But, instead asking questions (What sells best at stationary buses?, what makes a stationary bus a viable market?, when are bus passengers most responsive?) and being a little more strategic about what he sells and who he sells to.
A regular cycle of research into a business model allows results to occur and potential areas of development to a rise. Innovation is key to breaking out of the copycat culture and to stimulate development. By bringing Balloon Ventures entrepreneur curriculum to Nakuru’s micro entrepreneurs, we seek to support them with tools to bring innovative ideas to their businesses and ultimately break out of the entrepreneurial straightjacket of the copy cat mentality.
Competition in Nakuru is perceived by local entrepreneurs with a sense of lamentation and passiveness as though their current competition is an inevitable and invariable burden to be tolerated indefinitely.
Our contribution to local businesses is geared towards entrepreneurial innovation. We work with local businessmen/women to come up with innovative business ideas and new approaches to business that would make them more sustainable, while sharing transferrable skills and knowledge amongst our group as a whole.
By Duncan Nyasio and Yann Lutchman Langue, ICSE Volunteers