We all know life is full of opportunities. In a business, context opportunities lie scattered all along the value chain and in every transaction. Successful entrepreneurs seem to have an uncanny ability to sift through all the noise and detect the signal that smells opportunity.
One has to match that opportunity with an execution capability. Often entrepreneurs struggling to find traction or acceptance, discover the need to pivot. Eric Ries, who coined the term “pivot” explains; “Pivots imply keeping one foot firmly in place as you shift the other in a new direction. In this way, new ventures process what they have already learned from past success and failure and apply these insights in new areas”. For example, a company set up to create an online marketplace, might end up selling the technology, or even hosting the technology for existing retailers to open an online store.
Steve Blank, entrepreneur and academician who launched the Lean Startup Movement lays out the context: “Unlike the stories in the popular press, entrepreneurs who build successful companies don’t get it right the first time. The real world is much, much messier. And a lot more interesting . . . founders who succeed observe that something isn’t working in their current business model, orient themselves to the new facts, decide what part of their business model needs to change and then act decisively”.
Have a read of the “Sachet Revolution” example from India – It was the practice for consumer goods companies in the US market to go for large pack sizes. This boosted sales and also enabled consumers to shop less frequently – families had storage space, large refrigerators and they had fatter wallets; often both parents were working and had little time for shopping.
In developing countries like India, conditions were quite different. Purchasing power was significantly lower, homes had limited storage and the custom among the poorer classes was to purchase groceries on a daily basis. With large joint families, the availability of domestic help, etc., shopping daily was not a problem!
CavinKare, an Indian manufacturer introduced shampoo and hair oil (single use) sachets in 1977 and this strategy ignited the retail market. The multinationals, however, only adopted this approach in the ‘90s. Today the Rs 5 (about 8 US cents) price point contributes 45% to the overall food sales of makers of snacks!