The world of economics have been guided by certain concepts and realities that has remained the same since the dawn of time.
Whenever the mind wanders into how a business venture work, certain words always comes up. Assets, expenses, equity, liabilities, net profit, net loss, revenue and so on are used to describe the business venture. Yet, one of the key universal realities in any business venture since the dawn of time is the law of supply and demand. With the perfect understanding of this notion, a business owner can make headway in the right direction, and reach the heights of success.
Every human being wakes up in the morning to a very human nature- the desire and need for something.
The reality is, very few are ever really content with what they have and are always looking to attain a better form of it. If I mainly drink tap water, I would be dreaming of one day drinking Evian or Fiji. If I have deli meat with Laughing Cow cheese, I would be dreaming of Wagyu beef and Brie cheese, flown in directly from Japan and France respectively. If I live in a studio apartment with one window and a leaking tap in the kitchen, I would be dreaming of a seaside apartment in Santorini, Greece, with a pristine view of the turquoise waters of the Aegean sea.
Everyone is always seeking something better, unless if they are truly content with what they have in their life but that is a rare trend in our day and age.
The same notion is evident in both the entrepreneurs and their clients. The business owner always dreams of attaining new heights of success in their business venture. The clients are always on the look for the better option. What causes true success in a business venture? The drive to attain a new height.
Entrepreneurs go into the business of earning money, and attaining their desired success. The notion of supply and demand is key towards this success.
Entrepreneurs must create the demand for their product. They have to look at their situation from an eagle-eye view to truly see the opportunities available to them.
Supply and demand works on human nature to attain what they desire and need. We know that customers will always strive to attain the basic necessities of their life, but the trick is to provide them with a better choice for something to want, cherish and desire.
We have to create the demand.
The unknown is terrifying for most but this is where the most opportunities lie. We always fear the unknown because...well it’s the unknown. But the unknown has the potential to bring about the happiest of circumstances and opportunities.
The trick is to utilize anything that the future brings into the present moment in time to attain success. It is necessary to observe everything with a keen eye to do so.
Business owners have to strategically watch out for anything that could be used to their advantage. The best source for this would be the news.
Allow me to demonstrate. Consider the example of an entrepreneur running a 50s-style diner, specializing in burgers and milkshakes. Currently, the diner is facing a slight wave of stagnation, as the profits are getting slimmer and slimmer, and the debt collectors are knocking at the door.
The entrepreneur goes to the diner every day, trying to think of what to do about the diner. Should the diner be sold? Something inside whispered loudly, “No!”. Surrender is not an option, but the options to salvage the situation are nowhere in sight. The entrepreneur sits in the finest booth that the diner has to offer, drinks a cup of coffee and reads the newspaper. Flipping through the pages, his eyes spots an article about the rise of vegetarianism in the world. Immediately, a lightbulb moment happens within him, and his brain goes into motion. He saw his salvation.
He remembers a nutrient store frequented by fitness enthusiasts, and decides to drive there immediately. He gets greeted by the friendly staff, and asks them about plant-based proteins. He walks out of the store, carrying bags of whey, soy and pea protein. He walks in to the diner, tells his cooks to drop everything and to come with him. He lays down the idea to create the ultimate vegetarian burger. The new burger has to have all the attributes of what makes a delicious burger, captivating the patrons of this fine diner to come back again and again. The plan is set in motion, and the cooks come up with a winning recipe, after many trials and tribulations. The burger is ready.
All the restaurant owner has to do now is to create a demand for it. He starts a marketing campaign in town, saying to the world “We have something for everyone”, and asks his cooks to make a slider version of his new burger to let the people of his town taste his new creation. The new idea is a raving success, and his diner is saved. Patrons who did not visit in a while come back to the restaurant, and new patrons fall in love with it.
This situation is an example of innovation saving the day. This simple idea turned his restaurant from an everyday diner to one that's more specialized, catering to the current demands.
What would deliver this point more is a few real-life examples
What can be a better example than Apple? They have made themselves a household name in the truest sense.
Steve Jobs rejoined Apple in 1997 from a long absence, in a time of great financial tribulation for the company. He acted as an Interim CEO, and immediately recognized Jonathan Ive’s creative design talents. The two put their skills together to good use, and launched the very colorful and iconic iMac, which was a spectacular machine in both looks and functionality. They followed their success with another iconic success; the Ipod. It was released in 2001, and it was inspired by a 1958 transistor radio designed by Dieter Rams.
The jewel in Apple’s success story, and the star of the show however is the Iphone. Released for the first time in 2007, it infiltrated the minds, hearts and pockets of the masses. With Siri, it brings forth a nice touch of personality to Apple’s consumer electronics. When computers were first introduced to households, imaginations of computer users ran wild with ideas, imagining the possibilities and making them happen. What we see here precisely that in action.
Another example would be Netflix.
Who of us have not heard of Netflix? But did you know that their case is a great example of succeeding from a failure purely due to innovation?
The popular movie and TV show behemoth started off as a mail-based movie rental business venture. The image above was an offline advertisement by Netflix during their initial business model, unearthed by Redditor u/greysonkatz. It’s difficult to imagine Netflix as a business that has been around for ages, but Netflix started off as the world’s very first online DVD rental store in 1998. Just a year later, they changed to a subscription model rather than a pay-as-you-go. Yet, the company fell on hard financial times, and was almost bought out by Blockbuster.
No one were buying DVDs anymore.
Nearly a decade later, internet speeds were becoming more and more adequate for online streaming and Youtube was becoming increasingly more popular. This changed saw Netflix shifting to the streaming service that we all love and binge on today.
Now, the company produces their own films and tv-shows, catering to a wide variety of audiences from all over the world and is one of the most successful companies today.
How could we apply this way of thinking to every step that a business owner takes?
Let us consider every part of the business. For payments, an everyday business owner would consider that the client would be fine paying cash. Especially in such a traditionally cash-centric region. However, if given the choice for a more convenient and innovative way to pay for their products consumers will slowly move towards that, as can be seen by the year on year greater adoption of online payments in the MENA region.
When it comes to inventory, the business owner should think about the choices they would have for the clients. Would they be fine with the same old inventory? Would they prefer a variety of choices or fewer, more specialized choices targeted specifically at them?
Marketing is now more important than ever to ensure the success of a business, but the methods have changed over the years. Old advertisements in the paper might be just fine since the dawn of the printing press, but digital advertising reaches a far wider audience. Even within digital advertising, how can we be innovative and engage with our audience?
When it comes to customer service, this never was and is still not given the importance it needs in the region. But now we see more and more companies focusing on developing their customer service teams to better improve the experience for their customers. Businesses are starting to understand that just focusing on the core products alone will not help them stand out from the masses. They need to be innovative when thinking about the whole experience.
The business world is one filled with stories of success and failure. Understandably, the word “failure” is absent from the mental dictionaries of most entrepreneurs, yet it remains there as an unfriendly ghost that whispers in their ears every once in a while. It stays in the shadows, and it is understandable why it does.
Every entrepreneur refuses to accept failure as a potential reality. Yet, every entrepreneur should face this fear and learn to progress beyond it. Our world before was all about the survival of the fittest. In the current world, the same notion survives but it is now about the survival of the creative, determined and inspired.
Would you agree? What else do you think is important to create demand for your products and services? Let us know in the comments below!