Disrupting industries: How to identify and exploit market gaps
Global business markets are shifting and changing at a rapid pace. Gone are the days when businesses had all the time in the world to scan the playing field for gaps that they could exploit. Today’s businesses need to be agile enough to pivot quickly and identify and exploit market gaps before competitors corner the market.
LinkedIn maintains that by doing basic research, you could find a gap in the market which you could exploit to your advantage, and that could be the difference between failure and success. In an article, the company went on to say that there are three things, which if a business gets right, will bring them high levels of success:
Find out who your ideal customer or persona of that customer is who is most likely to buy from you
Identify what the result is that your customer is looking to accomplish
Identify how to get the result they want with the product or service you offer
To explore this dilemma, Nexford University’s Director of Career Innovation, Jennifer Bangoura, EdD, recently assembled a host of industry experts to share their first-hand experiences about identifying and exploiting gaps in the market to build globally successful companies.
One member of the panel is the co-founder of two of Africa's first unicorn companies: Iyinoluwa Aboyeji, also known as ‘E’, who cofounded and scaled several category-defining technology businesses in Africa, including two of the continent’s first unicorns, Flutterwave and Andela. While he was CEO at Flutterwave, Iyinoluwa led the company to become one of the fastest growing payments technology businesses of all time, accessing over $2 billion across 50 million transactions with annual revenues of millions of dollars a year.
In another major coup, the webinar was also privileged to have in attendance Nexford University’s Founder and CEO, Fadl Al Tarzi. As the leader of Nexford, Fadl has made it his mission to solve the world's biggest education challenge: to put a world-class education in the hands of the many and not the privileged few. He became an entrepreneur at 18 and has over 20 years of experience founding digital marketing and technology businesses, having founded and managed the MENA region's leading digital engagement agency.
The drive toward disruptive innovation!
Kicking things off and looking through the lens of disruptive innovation in the world of big business, Fadl said, “Innovation is important in business not necessarily for the purpose of disruption, but for the purpose of improving humanity and society at large. Because there are several challenges that continue to exist across the world today, that really shouldn't exist. So, the technology that we have today, the infrastructure that we have today, across the world, the human power that we have today, and the intellectual power that exists across the world today, is more than enough to solve the world's largest challenges.”
Getting even more granular, Fadl went on to say, “There's just an immense amount of technology available today that enables us to solve significant challenges. And that's why disruptive innovation is critical today. So, if you're not in the startup world, for an existing business, if you're not in the business of innovation, then you are essentially in the business of getting out of business. So, any business that isn't continuously innovating, it's going to cease to exist over the coming five to 10 years.”
Iyinoluwa echoed Fadl’s sentiments when he said that there are a lot of problems that are impossible to solve using the tools and methods that we have used over the last 100 years, including education.
From a shared office space in Amsterdam, Iyinoluwa said, “Prior to Nexford, higher learning cost too much and took too long to get to the end goal of getting a degree. Nexford is a disruptor, so, for the first time we have a situation where you can go to school from wherever you are, and your curriculum is aligned to your workplace. But most importantly, you're able to do this at your own pace. You can do this very quickly, or you can take your time. And that's a prime example of disruptive innovation, or as I like to say, democratising.”
From disruption comes greater access
Fadl took the mic again and made mention that he believes the major difference between disruption in markets between the United States versus Africa could be in leapfrogging existing options. Leapfrogging describes a rapid change made by a company or any kind of organization to a higher level of development.
Fadl said, “Think about before mobile payments were available and how people would make their payments and how difficult that process was, and the reliance on cash and the cost of using cash from a safety perspective infrastructure and the enablement and speed of transaction. Small shops on the streets of Nairobi or Lagos or Abuja must be able to transact today get bill payments with electricity or for phones or for internet and make commissions out of those payments.”
He went on to say that he believes that the volume of transactions has gone up significantly because of mobile payments, and addresses issues like corruption and bribery. So rather than go through the same evolution that a market like the United States or the United Kingdom went through over a 100-year period to get to where they are today on digital payments, Africa has this fantastic opportunity to do it in nine years and almost go from nothing to the most modern system. They can leapfrog the rest of the world, and ultimately enable mass access to products and services much more quickly.
See the gap and go for it!
In today’s fast paced business world if you miss seeing the gap in the marketplace it will very quickly close as somebody else storms through it. According to LinkedIn, exploiting gaps revolves around a need or desire that is not being properly fulfilled. Every market has gaps, but you will only find them through relentless searching. Once you do discover a powerful need or desire, fill it in a different and better way than your competition is doing – if they are filling it at all. Either way, start hammering wedges into the gap, and you will have a huge competitive advantage.
Iyinoluwa reinforces LinkedIn’s findings by saying that most businesses are built off the back of market gaps. And these are the same gaps that he exploited when building his global businesses, such as Andela. For others to do the same, he believes attaining the same level of success involves procuring the necessary skills to see gaps, exploit them, and then ultimately profit from them.
He went on to say, “When we created Flutterwave, it seemed like we were going into a saturated market. But because we sat down and had spoken to small business owners, we heard something that showed us there was a gap. They wanted one platform that allowed them to get paid regardless of how the customer wanted to pay and get the funds into their bank account the following day. And by just understanding that, we were able to then build a billion-dollar company simply by aggregating all these different payment methods on behalf of merchants so they could use them. It’s all about finding innovative ways to solve seemingly impossible problems.”
In the case of Nexford University, Fadl spoke about the company starting with a wider objective. The starting point was the desire and objective to deliver positive social impact.
From this initial objective, he started thinking about the problems that exist today in higher education and used this as a formula for success. Nexford started by looking at the impact of the lack of access to high-quality, yet affordable education. This is the common denominator across many of the challenges across the world. And then, from there, the university identified two specifics. One is people want access to high-quality, affordable education. The second is that they want education that is relevant. Ultimately with education, it is all about moving forward in life, whether it is in terms of getting a promotion, or getting a new job or changing careers.
Building on these ideas, Fadl said, “There were two problems that we set out to solve at Nexford. So, like Iyinoluwa, we went to the market to identify the gaps that existed in higher education. And that's a critical step in validating one's idea and identifying whether the market opportunity is real. In talking to potential customers and understanding it is a real pain point they're solving for us, it became clear very quickly that across the world, people are having to pick between one of two buckets. The skills are one bucket, and credentials are another bucket. So, they need the skills to progress in their careers, but they want the credentials that employers are looking for.”
Fadl went on to say that this means if people are going to traditional universities and getting the degrees, but then going out trying to get a job and finding they don't have the skills needed, they must continue learning more. Nexford set out to combine the two.
Of course, that same logic can apply to many other industries who are looking to identify what the real problem is they are trying to solve today. Therefore, it is incredibly important for founders to think about if they are improving an existing process, but at the same time remember that they are not altering behavior completely, they are making it a lot more efficient to do something people already wanted to do.
Ask, listen, react
It is not just that founders need to be asking good questions, they also need to listen carefully to the responses, and then act on them.
As an example, Iyinoluwa said, “When we were building Flutterwave, we listened and learned very quickly to understand that our customer was a business that wanted to accept payments, with or without developers, and they were very particular about being able to account for where their money had come from and be able to service their customer.”
In response to that point, Fadl stressed that in Nexford’s experience, you need to differentiate between the customer, and the influencer. Not doing that is a big mistake. Many founders conflate that if you're selling to an organization, it may be the person that you are talking to is not the actual buyer, or vice versa. As an example, from a B2B perspective, it’s very often that we see startups going and selling to someone that may not be using the product.
Differentiating between the two is important while validating the market opportunity because again, it could be that the person who wants to use the product really does want it but the person who needs to buy it has no incentive to buy it, and therefore your business is never going to work. It is all about identifying market gaps, and then shifting the focus to exploiting those market gaps. This is where the work really happens, identifying what this gap is, listening to customers, and thinking about how you turn this into a business opportunity.
To give a practical example, you could ask the question: why is education unaffordable to lots of people? One reason is payment terms. When you charge tuition, you need to charge it in a way that people can pay for it. Lots of people are paying from their monthly salaries, and therefore you need to make an option for people to pay monthly. This is what Nexford has done, and it is quite different from other traditional university tuition structures. Traditional universities often require payment by term or by semester or even by year. By staying close to their customers, Nexford identified how learners want to buy and determined how to sell to those customers.
Making money in markets that haven’t been created yet
If you think about the number of organizations that make money, like Apple, they create a massive ecosystem that's anchored around one specific company. So, between the accessories and the App Store, and the resellers and the servicing companies, the fixing screen companies and so on, there's 1000s of companies across the world that make money. So, the ecosystem approach is a terrific way to follow because suddenly you have lots of other companies indirectly selling your product or service.
Mark is a college graduate with Honours in Copywriting. He is the Content Marketing Manager at Nexford, creating engaging, thought-provoking, and action-oriented content.
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