At a recent masterclass for entrepreneurs, venture capitalist Vusi Thembekwayo hosted a Q&A on what to do and what not to do.
Solve a problem
“The money is not where the ego is.” This is seasoned entrepreneur Vusi Thembekwayo’s way of saying that all businesses, big and small, have to focus on the customer, not on themselves or their product. Customers don’t buy products or services, they buy solutions and benefits.
What does this mean in practice? “Every business should start with this question: what problem are you solving? Right now, there could be a kid somewhere in a township building an app when the road he lives on is full of potholes.”
Vusi’s fix: “Solve problems where you are and not where you want to be. A discount clothing chain will sell more T-shirts per hour than a premium car company will sell cars per year because they’re solving a problem that is immediate for their customers: affordable clothing.”
Think beyond the product
“Perfect is the enemy of good,” says Vusi. “We’re all wearing clothes that aren’t superior, but they’re good enough. Anything you put into a product to take it from ‘good enough’ to ‘perfect’ is money you won’t get back.”
Vusi’s fix: “Know the difference between ‘done’ and ‘perfect’. There’s no point in tinkering with your product if people can’t buy it.” A bakery, for example, needs to get good quality baked bread on their shelves early every morning, rather than spending the whole day trying to get the perfect loaf.
Know all the players in your business
For your service or product to be of most value to clients, you must have an intimate knowledge of all aspects of your business. This means you should understand the whole process, or the value chain as it is called in business terms, and ensure you get and give the best and most cost efficient service.
Vusi uses the example of someone who sells hats that are made in Lesotho to illustrate this. “She sell hats in Johannesburg, but her hats come from Lesotho. That involves a respective distribution, production and customs value chain, each with its own business relationship. If there are 2 competing [hat] companies, which one is better? It’s the one with the better value chain that wins.”
Vusi’s fix: “Don’t have cappuccino meetings in Sandton. Go to visit the hatmakers (or the farmers or whoever you buy from) and get to know their business. This is a sign of a seasoned entrepreneur – they build great networks.”
What customers want to know
There are other mistakes that can be made in business and not all of them can be avoided. Laying a good foundation can, however, keep you from going too far off track. Once you’ve taken the leap from side hustle to start-up, Vusi says your brand story should form the basis of your business objectives – for yourself and your customers. To tell your brand story he says you have to answer these 4 questions:
- What problem are you solving and why is it urgent?
- What is the cost of not solving the problem?
- Why are you the best person or company to solve the problem?
- What do you want customers to do?
“Amplify the problem and make it urgent. ‘Urgent’ means ‘action’. At the end of every engagement, there needs to be an action: subscribe, follow a page, buy!” says Vusi.
