Forbes India 15th Anniversary Special

3 traits of successful market-creating entrepreneurs

Creating a market isn't for the faint of heart. But a dose of humility can go a long way

Published: Dec 19, 2023 11:08:44 AM IST
Updated: Dec 19, 2023 11:15:26 AM IST

Market creation—particularly in emerging and developing economies that remain underserved—requires virtues that diverge from the typical business-management emphasis on productivity and efficiency.
Image: ShutterstockMarket creation—particularly in emerging and developing economies that remain underserved—requires virtues that diverge from the typical business-management emphasis on productivity and efficiency. Image: Shutterstock

When new entrepreneurs set their sights on bringing products and services to market, one of their first tasks is knowing that market inside and out so that they’ll be able to innovate within it.

But some entrepreneurs choose instead to enter nascent, or nonexistent, markets. These innovators do so with the intention of creating markets.

Market creation—particularly in emerging and developing economies that remain underserved—requires virtues that diverge from the typical business-management emphasis on productivity and efficiency.

“Market-creating innovations often transform complicated and expensive products and services into simple and affordable ones, and then get them to people,” says Efosa Ojomo, an adjunct lecturer in entrepreneurship at the Kellogg School. “It’s a beautiful alliance between discovery and distribution that, whether you mean to or not, helps create prosperity.”

Ojomo, who also leads the Global Prosperity Research Group at the Clayton Christensen Institute for Disruptive Innovation, a nonprofit think tank, identifies three traits that make market-creating business leaders a special breed.

1. Humility

Something Ojomo sees in contemporary market creators is a quality of humility: an openness to learning that he describes as akin to “having a beginner’s mind.” This quality is not as essential for entrepreneurs working in established markets.

“If you’re a chip supplier, for example, you may not need to think about all the ways your venture can fail,” Ojomo says. “But if you’re doing something that hasn’t been done before, you’re going to fail. If you pilot a new product and it doesn’t work, you have to be humble enough to believe the innovation process is more important than your original idea and keep learning.”

Javier Lozano founded Clinicas de Azucar, a one-stop-shop for diabetes management, after spotting a need to streamline several medical services and bring them together under one roof. He believed that if he could standardize the treatment, he could reduce costs and improve patient outcomes.

Lozano’s goal was to open a chain of clinics. But before he seriously considered scaling his idea, he first spent three years setting up and running a single clinic to learn how to best serve patients’ needs. Lozano kept iterating to figure out what was working, what wasn’t, how to build the right pricing strategy, and how to sculpt the right experience for the customer.

“Lozano actually rejected some growth capital because he knew they didn’t have it quite right at the time in order to scale,” Ojomo says. “He didn’t feel they were getting the outcomes they wanted at the right price point.”

His patience proved fortuitous. Ten years later, the organization is opening roughly one clinic every month.

Also read: Entrepreneurship through acquisition is still entrepreneurship

2. Systems Thinking

Market creators have their work cut out for them because, in addition to developing a product and building a market for it, they often have to create the underlying infrastructure required to support their efforts.

This makes the ability to think about complex systems critical. To develop this skill, Ojomo recommends asking: What might impede me from making this product or service and getting it out into the world—and how can I work around those impediments? The questions are not always about the innovation itself, but about the conditions and limitations of the system in which it will be used.

“If you’re going to create a market in cell-phone technology, you can’t just say, “we’re going to provide you a phone and then it’s your business how you want to pay for it, how you charge it, how you buy it, or how it gets to you,” Ojomo says. “It is thinking about the market you create as an entirely new system, with the understanding that no product or service exists in isolation.”

As Mo Ibrahim’s telecom company, Celtel, began trying to expand affordable cellular service to Sub-Saharan Africa, he learned that distributing phones and building transmission towers was only the beginning. His company also had to consider the reliability of electricity, the educational systems that could produce people to support the technology, and the security of the infrastructure itself.

“For them to be able to make this service available, they have to think about all the things that could impede their ability to provide it,”Ojomo says. “In underdeveloped markets, you can’t take for granted that systems exist.”

So as Celtel was establishing its business in the region, the company installed generators next to the cell towers, hired security personnel, and designed education programs to train staff.

“They were just trying to get people access to communication, and all of a sudden they were in the business of fuel transporting and education and healthcare,” Ojomo says, “because what it takes to make a product or service affordable to the average person in the region is the system.”

Also read: 3 steps to work on entrepreneurial well-being

3. Love

While “love” may not appear in many business lexicons, in Ojomo’s experience, it is one of the key engines of market creation. Why else would any rational business leader choose the difficulty associated with market creation when there are so many safer bets?

“There is nothing more arduous than creating a new market,” Ojomo says. “You’re often on your own and the infrastructure necessary for the market doesn’t exist yet. I can only attribute the staying power to create markets to love.”

Ojomo breaks love down into three dimensions: love of people, especially people who haven’t had access to the product the market creator is introducing; love of your product and what it can acomplish; and love of the process that will bring the product—and the market—into being.

Some market-creating leaders are more oriented to people, he says, while others may be motivated by product or process, or some mixture of two or all three.

“I think as leaders, we can be more conscious of the things we feel passionate about, and more purposeful about connecting with them,” Ojomo says. “Because when we’re captivated by love, there’s this sense that, ‘Oh, I couldn’t help myself, I just don’t know, I can’t place my finger on it,’ even as we gravitate towards things bigger than ourselves.”

Ojomo recommends that entrepreneurs look beyond themselves to identify the motivating force—the particular love of people or place—driving their desire to work in a particular market.

Gregory Rockson founded mPharma intending to solve a thorny problem in his native Ghana’s pharmaceutical industry: doctors and pharmacies were struggling to manage prescriptions. But he soon discovered that the issues ran deeper than communication among patients, doctors, and pharmacies. Patients weren’t even going to pharmacies because drugs were too expensive. And when they did go, inventory was not managed well, so medicines were often out of stock.

While Rockson was addressing the inventory management systems, he realized he could negotiate prices with pharmaceutical companies to bring prices down. With drugs both cheaper and more regularly in stock, sales went up. This led to establishing franchises, which eventually brought primary-care doctors into the facilities.

“Each step of the way, he went further into solving the next issue that was keeping Ghanaians from receiving primary care,” Ojomo says. “I don’t know that Gregory would go through the hassle of figuring all this out if he didn’t love his fellow Ghanaians.”

[This article has been republished, with permission, from Kellogg Insight, the faculty research & ideas magazine of Kellogg School of Management at Northwestern University]