South Africa is a country of extreme contrasts, where the first and third worlds have collided.
42 percent of South African children live in a household where neither parent is employed. Settlements like Diepsloot, which are densely populated with handmade shacks, sit close by wealthy suburban neighborhoods.
But there is hope: the solution to this poverty is entrepreneurship.
That’s part of what inspired Batterii Founder Chad Reynolds and a group of 9 other entrepreneurs to join forces with Paradigm Shift this summer in Johannesburg and Cape Town, South Africa.
Paradigm Shift is a nonprofit that encourages economic development in South Africa through business training, microfinance opportunities, mentorship and discipleship. The program works alongside local churches so that they can continually equip business owners with knowledge, education, skills, and confidence—all of which they can put to use along their entrepreneurial journey. To date, the Paradigm Shift program has served more than 37 locations in Africa and touched the lives of more than 2,500 microentrepreneurs.
“South Africa ranks among the most materially ‘unequal’ countries in the world, but Paradigm Shift is working to address this extreme poverty. We wanted to help fuel their mission,” explains Reynolds.
This Summer’s two-week trip to South Africa featured a roster of Cincinnati, Ohio-based entrepreneurial talent, ranging from the head of a local urban development firm, to marketing research and branding professionals. The group also included leaders from Cincinnati Children’s Hospital Medical Center, ChoreMonster, Ahalogy, OCEAN Accelerator, and more.
The community of South African entrepreneurs included both men and women. Reynolds explains that many of the people were entrepreneurs by circumstance. “There are not many jobs available, and so they create businesses to survive.”
These businesses include car repair shops, convenience stores, daycares, custom clothing, or delivery services. It’s not uncommon for these entrepreneurs to start building a business on an extremely small scale. “Maybe it’s walking around the settlement selling candies, over the course of one year, to save up enough Rand to rent a shack for their business,” says Reynolds.
This lack of available funding is one of the core areas that Paradigm Shift looks to change: a microloan not only has the ability to restore hope and dignity, but it also significantly changes the course of the economic future for an entrepreneur. 92 percent of the entrepreneurs who are given these loans through Paradigm Shift are able to repay the funds, which also means the cash can be redistributed to another business owner. But a loan by itself isn’t enough. Education and mentorship are key, just like they are for entrepreneurs and intrapreneurs in the more developed areas.
“They work incredibly hard using what they have to make it work. Our goal was to help educate them on the basics to make their hard work even more effective,” says Reynolds
Helping to Identify Their Unique Selling Proposition
Over the 2 weeks, approximately 250 entrepreneurs participated in a series of workshops aimed at teaching the building blocks of entrepreneurship. These included sessions on researching the marketplace, building unique business ideas, testing concepts, and executing a business strategy.
Reynolds says that an issue for many of the young companies is the concept of having a unique selling proposition. “In an environment where everyone is selling what they have access to, competitors that look just like you can pop-up right next door.” Most of the business owners feel as if the only way to survive is to compete on price. The mentors focused on how the entrepreneurs could create a different kind of “experience” or “story” compared with their competitors.
One entrepreneur named Ntumba, a refuge from the war-torn Republic of Congo, had hand sewn all the clothes she was selling in a local market. She was struggling to attract customers, especially since competitors had popped up next to her and were selling designs they had seen from her shop.
Surprisingly, she had no branding or even a company name to differentiate her from the clothing businesses next door. “Her story was key to building a relationship with her customers,” says Reynolds. “They need to know her.” Over the course of the next hour, the team was able to create a logo for her business based off her signature, and provide clothing tags and signage to share her story with customers.
Reynold’s workshops in South Africa focused on this very concept – how to connect dots to create story and an experience. “We focused on ways to better understand the needs of the consumers, and then selling them a product—but at the end of the day, it is about the entire experience and a promise for the next customer.”
Another component in the workshop was coolhunting.
Coolhunting refers to the process of scouting, recognizing, capturing, curating, and then sharing market intelligence with colleagues. The traditional term of coolhunting focused heavily on identifying trends, but coolhunting today can be thought of as a step towards building a stronger innovation pipeline.
The goal of coolhunting is to improve idea quality and idea execution by connecting all meaningful inputs, including fit (the system and the market), function (face, form and features) and feeling (experience, meaning, and lifestyle).
Coolhunting can be broken down into two phases: inspiration and innovation. During inspiration, the focus is on unfolding the experience and the “dots” (or attributes) that make something interesting and notable. During this phase, consumer insights and market insights related to an idea are also captured and explored. After inspiration comes the innovation phase, which often includes a sketch or visual representation of how you might apply the “dots” and learnings to create a new experience. During this second half of coolhunting, innovators are able to verify customer value and business impact.
In Johannesburg and in Cape Town, Reynolds explains that the method was shared as a way the entrepreneurs could continue to innovate in a world where many others would replicate or copy their business.
Whether for a large enterprise or a smaller start-up, our minds constantly combine various observations we’ve experienced, in an attempt to solve problems we encounter. And because coolhunting is built on the premise that inspiration is the foundation for innovation, the entrepreneurs learned the same thing Reynolds regularly demonstrates in a corporate setting: observing, capturing, and collecting ongoing inspiration increases the chance of “connecting the dots” in a useful and novel way.
“We focused on the explorer mindset. It’s important to always be looking for new ideas and building themes for your company to improve on. Having planned exploration time during the course of running the business provides whitespace to connect dots and evolve your business based on future needs your customers will be seeking.”
Even in their small business and with limited resources, the entrepreneurs understood the value of coolhunting to understand customer needs and be able to ideate new products or services based on those needs.
The same can be said for larger organizations: success with coolhunting is largely about adopting a mindset rather than a rigid process.
Walking away from the experience, there were some universal truths about the process of creating new things that were the same across culture and economic divides, says Reynolds. “We are all trying to create something to be proud of. This is our path to financial freedom and providing more for our families (and communities.) To accomplish this, we all are working hard to observe what people need, evaluate what we’re really good at, and then finding new ways to package for sale to others. This is the beauty of entrepreneurship.”
In many ways, the limited resources of entrepreneur in settlements like Diepsloot have caused them to be more industrious. An observation Reynolds will walk away with is the kind of sacrifice and pride the entrepreneurs all have in what they do. “Tamo, who owns a small market in Diepsloot, has slept on the ground in his business for two years: it is his home and his business. He was proud of what he accomplished so far and was excited to talk with us about how he could grow further.”
In the future, Reynolds and the entrepreneur team hope to increase the opportunities for American entrepreneurs and business innovators to the work that Paradigm Shift is doing in South Africa. “In addition, we want to accelerate how they can share these stories with one another through the Batterii platform.” In the meantime, the program will continue to change lives and help businesses in South Africa spark their next steps as they grow.
Find out more about Paradigm Shift at shiftingparadigms.org
The Art of Coolhunting For Beginners
After returning from the mentorship program in Africa, Reynolds realized, “Being an entrepreneur in the US, you sometimes forget how many resources we really do have. I'm used to working with large companies with many resources and this trip proved you can use techniques like coolhunting no matter your resources.” Leverage all your resources to be more innovative, starting today. Download the Coolhunting Canvas 101 that Reynolds uses to walk innovators through the practice of observing and capturing ideas, inspiration and trends.