As the COO of Lula, I understand the unique challenges facing small and medium-sized enterprises. Cash flow management is a constant struggle for many business owners. I lead the teams that manage people, processes, and products at Lula. With my background in product development and startup growth, I bring a unique perspective to the table. I thrive in environments where different industries, interests, and subjects intersect, and I’m always looking for new and innovative solutions to help SMEs succeed.
Unleashing Success in a Resource-Constrained Market
Finding ways to improve products or services, or even introduce new offerings, in a tough market can literally mean the difference between survival or failure for a business. Innovation is the lifeblood of any business, especially for small and medium-sized enterprises (SMEs) operating in niche markets like South Africa. With limited resources and numerous constraints, it’s crucial to be selective about where you invest your innovation efforts.
It’s easy to think innovation is for the big companies like Amazon, Google or Apple. That innovation needs to be some ground-breaking release or big change in how things work. Sometimes they are. But more often, innovations come from a dedication to improvement. From the hustle to acquire new customers and keep your existing ones.
By understanding the power of selectivity, you can pave the way for market beating results.
Perspective of a South African fintech
Lulalend has a front-row seat to working in a tough market. We’re incredibly lucky to be riding a fintech wave.
For us, this remarkable growth is driven by increased accessibility to financial services, rising demand for innovative financial products, and significant investments in the fintech sector. This is probably a result of the fact that our market is looking for innovative products to help us navigate these tough economic times in the first place.
All this pressure means that businesses in South Africa face unique challenges when trying to survive and grow. Capital is more constrained and can rarely just be thrown at a problem the way you hear about in places like Silicon Valley.
As an SME owner, understanding this evolving market is crucial for capitalising on its potential.
The Role of Selectivity in Success:
To thrive in this arena, selectivity is paramount. As an SME in a small market, you must carefully choose where to focus your innovation resources.
While constraints exist, they shouldn’t deter you from exploring new ideas. By taking an outcome-driven approach and understanding the jobs your customers need to get done, you can concentrate your efforts on the most significant tasks.
This strategic focus allows you to optimise your limited resources and deliver solutions that outperform existing alternatives.
Working Backwards from Customers’ Unmet Needs:
Selectivity lies at the heart of our success at Lula (so far). By prioritising customer satisfaction, you can identify their unmet needs and craft innovative solutions that directly address those pain points.
An outcome-driven approach and the jobs-to-be-done framework serve as valuable tools for achieving this. And something we’ve used to great effect.
For example we’ve heard from customers that they want to get better at tracking their cash flow. And want to get out of their spreadsheets every night. They just want answers to questions like “how much money am I going to have at the end of the month?” and “who still owes me money?”.
Well we already try to answer those questions to figure out how much we offer our customers in funding. So we’ve launched Lulaflow as a way to playback these answers to our customers.
There were literally thousands of other projects or features we could’ve taken on, but 10/10 customers were flagging these issues to us and letting us know how unsatisfied they were with the old way of tracking cash flow. So we were able to focus on this innovation and cut out a lot of the noise.
While profitability and cash generation are important considerations, they should not hinder your ability to innovate. By striking a balance between profitability and customer-centricity, you can create meaningful solutions that drive both success and revenue.
Steps to Implement Selectivity:
Implementing selectivity in your business endeavours requires a thoughtful approach. Here are five steps to guide you along the way:
- Understand your target market: Gain deep insights into the needs and preferences of your niche market segment.
- Identify the most significant jobs to be done: Determine what progress looks like for your customers and focus your innovation efforts on those areas. What jobs are really important to them that they don’t do themselves and their current solution is leaving them unsatisfied?
- Align with outcomes: Define the desired end results for your customers and design solutions that deliver those outcomes.
- Test and iterate: Continuously gather customer feedback, iterate your solutions, and refine them to ensure they meet evolving needs. This doesn’t have to be some formal, scientific process. It needs to be a habit, where you’re constantly speaking to customers and making adjustments that make sense for your business.
- Prioritise resource allocation: Optimise your limited resources by focusing on high-potential opportunities that align with your business goals.
Overcoming Constraints in Innovation:
While constraints exist in our market, they can be overcome with strategic thinking and a customer-centric approach. Remember that South Africa’s market size may be smaller, but it offers unique advantages such as a clearly defined customer base. By leveraging your close proximity to customers, you can gain valuable insights and develop tailored solutions that resonate with their specific needs. Embrace these constraints as catalysts for innovation, and let them fuel your drive to succeed.