There were plenty of lessons for budding entrepreneurs during the second episode of SABC2’s popular entrepreneurial reality TV show The Big Break Legacy which was screened this week.
The programme set a great challenge - to make money! This is the core of any business, and even though the task was limited to a single day of trading, it represents an important lesson for the contestants and for entrepreneurs in general.
The brief was clear - with R2000 start-up funds make as much money as you can in a single day. The only limitations were no food-related businesses and focus activity to the greater Randburg area. Teams were chosen at random and each had 15 minutes to brainstorm a business idea, and then use the remainder of the day to operationalise the business.
The time allocated to the team task of developing a business idea was very limited. Often entrepreneurs will spend months on this stage, thinking up a number of business ideas, testing their viability and dismissing the ideas that don’t have potential. What was interesting to observe was that the ideas that emerged were largely related to individual contestant’s personal experience, networks, or current business activities.
Some innovative ideas emerged - Team Letsatsi Inc’s idea of selling Kaizer Chief’s kit following the weekend game and Team Newton’s 4th suggestion that they target call-centre workers who would have cash to burn after a week at work. Both teams however, failed to really stretch their imaginations to innovative ideas and ended up with simple ‘buy-and-sell’ businesses that had no chance of sustainability.
In thinking about innovation as the genesis of the idea generation process, Google, one of the world’s most innovative companies, uses eight pillars to express their innovative philosophy.
Three of these pillars would have been useful for the contestants to consider and may be useful for entrepreneurs battling to develop great innovative ideas:
- Think big but start small – no matter how small your business is at the start, plan it with a big intention. More importantly, don’t be afraid to roll up your sleeves and get stuck into the business.
- Look for ideas everywhere – generating ideas is a volume game and as seen from the contestants, is a function of your knowledge and experience. Work hard to expand your horizons (travel, read, etc.) to fuel your great ideas.
- Never fail to fail – failure is a big part of success as it often illustrates that the entrepreneur has been prepared to take a risk and push the boundaries of innovation. Know your limits (in terms of skills and resources) and swing for the fences!
The team’s respective ideas were interesting to observe. Newton’s 4th chose to sell hair weaves; a product that is clearly in demand, but one already stocked by a large number of salons in and around the Randburg taxi rank. Letsatsi Inc. chose a safe option with clothes and shoes. Neither team presented anything creative, although Jared’s hard work during the day to secure sponsorship (and free product) from Darling Hair Products represented the kind of entrepreneurial thinking that one would expect in a competition such as the Big Break Legacy. His winning the status of ‘blue chip’ was well deserved.
Selling and Marketing
Apart from coming up with a business idea, the team task created an opportunity to sell products directly to the end consumer. This is an invaluable activity in any business; to interact face-to-face with your customers and understand their likes, dislikes, concerns and buying habits.
Many companies adopt this strategy as a way for their executives to remain connected to their core market.
Raymond Ackerman, founder of Pick n Pay, one of South Africa’s most known retail brands, speaks of “hearing grasshoppers jump” - keeping your ear so close to the ground that you can detect the slightest movement. This kind of strategy of being close to your customers is exactly what the contestants experienced during the episode 2 tasks.
Each team had a similar tried and tested model - buy low and sell high. The only problem with this approach - something highlighted in the short duration of the task - is that it becomes almost impossible to sell the value inherent in the product. Watching each team sell their goods, it was clear that price was the biggest reason that customers bought.
Letsatsi Inc tried valiantly to ‘sell the sizzle and not the steak’, but their rather tacky handwritten sign that showed the prices discounts on multiple purchases made it clear as to their value proposition. What Letsatsi Inc highlighted was that selling unknown or unrecognisable brands is hard work, especially if you have no time or budget to build the brand in the mind of the consumer.
If they chose to follow a low price strategy, it may have been better to sell known brands that already have a value proposition in the mind of the customer. Newton’s 4th had a conventional approach to selling their hair weave product. Prior to Jared’s arrival with the boxes of free sample stock, the team acquired their stock from a local retailer (I must assume at a fair discount) and then chose to sell from their corner position at the taxi rank.
Sales were slow and this is no surprise give the rather lacklustre sales techniques of the team members.
The efforts of Newton’s 4th highlighted that selling is a skill not easily acquired. The conventional wisdom is that selling is a ‘numbers game’ and that eventually your sales pitch will ‘stick’ on enough customers.
In contrast the current thinking is that a good salesperson is more of a hunter, possessing a deep conviction about their product and the value it will add to the customer’s life, a fervent belief that the solution offered by your product has no match and the absolute determination to communicate the benefits of the product to their customer.
Selling is at the heart of most entrepreneurial activities, and it would do the contestants well to remember the line from the movie Glengarry Glen Ross – the ABC of selling – always be closing.
Watch Saturday’s episode when the first contestant will get their marching orders and leave the Big Break Legacy house. The show is broadcast on SABC 2 at 9pm on Saturdays and re-broadcast at 12.30 on SABC1 and NCBC on Sunday. In this episode titled Green Economy, teams have been asked to build a recycling vehicle for the collection of tins. They will be provided with materials to build their prototype, test it and market it.
Dr Jonathan Marks is a senior lecturer and Director of the full-time MBA programme at the Gordon Institute of Business Science. He teaches, researches and consults in the field of entrepreneurship and family business.