In 2017, mobile phones overtook desktop computers in terms of market share and online searches. Asia is the largest contributor in terms of global subscriptions. 5G networks are becoming a reality and consumers are loving it. Terabyte consumption of mobile data in the Asia Pacific region is expected to see an eight-fold leap forward to over 22M by 2021. The premises for a further structural shift towards faster and more efficient businesses are set.
Yet, many small businesses are not taking advantage of the vast amount of opportunities this opens up. A well accepted reality is that most small businesses fail. This flies in the face of logic given that founders have an existential drive to succeed and at least have the potential to be more innovative in products and operations in this digital age. However, Forbes opines that small businesses are not always great in embracing trends, such as digital marketing and mobile commerce, for example only 17% of SMEs in the US have mobile friendly websites.
We must overcome this trend and start from first principles. The global digitisation brings opportunities for entrepreneurs in three key areas:
- Prices – Growing global competition is bringing down prices for consumers. China’s Big Four – Oppo, Vivo, Xiaomi, Huawei – are disrupting the handset market dominated by the well-established Apple and Samsung by offering affordable smartphones, having already captured roughly 60% of the Chinese market share and a fourth of the global one. This global competition is good for consumers – as demonstrated by the price war between Uber and Chinese challenger Didi, (Disclaimer: Uber lost eventually). This can benefit cash-strapped entrepreneurs in getting their infrastructure in place cheaply.
- Access – Technology doesn’t discriminate by geography and can favour entrepreneurs and also customers based in remote locations. The combined unique mobile subscriptions in Europe and North America are projected to total nearly 800 million by 2020 and an equivalent number in Africa. In the Pacific region, subscriptions are expected to exceed 3 billion by the same date. This creates great opportunities for mobile based start-ups for entrepreneurs not living in London or New York.
- New customers – E-commerce platforms such as Daraz in Pakistan and Nepal alongside their older sisters Amazon and Alibaba enable thousands of SME’s to sell their goods abroad and unlock a new global customer base.
What does this mean for small entrepreneurs?
The window of opportunity offered by the tech democratisation also has its dark side and entrepreneurs will need to have smart business models to thrive and not be swept up by well-financed new (and old) tech giants such as Amazon and Google. How has WeChat, Tencent’s web chimera, managed to reach nearly 1B users in only 6 years and became the first Asian company to crack a $500 valuation, overtaking Jack Ma’s Alibaba? Most successful start-ups get these three basic things right:
- Focus on your customer: The newly-found, accessible, and economically empowered consumer base should be the number one priority for every entrepreneur. Amazon’s CEO, Jeff Bezos, famous for his ruthless focus on customers, said that if there’s a choice between a focus on the customer or a focus on the competition, he’d chose the customer every time. Be like Jeff Bezos.
- Find your niche: Entrepreneurs will need to understand today’s markets and the niches that are opening up. Being big is great in many areas (negotiating power with suppliers, economies of scale, finding tax havens etc) being responsive and nimble is better. Entrepreneurs need to exploit these advantages, react quickly to new ideas and conquer pockets that giants won’t dare tapping into. App developers, for example, thrive on staying agile and capitalizing on trends. A developer can build an app in days or weeks on a minimal budget, go live, and make changes on the fly.
- Ensure you’ve got the right skills: The digital skills gap is real. 54% of organisations polled by LinkedIn and Capgemini agreed that they lost competitive advantage because of a shortage of digital talent. Making sure your employees are properly trained on digital skills is one solution, tapping into often forgotten talent pools such as women (!) can also save your start-up from getting left behind.
It is not the strongest […] nor the most intelligent that survives [but] the most adaptable to change – wrote Charles Darwin about evolution
Entrepreneurs never had as many tools for change at their fingertips. Becoming a mobile-savvy organization requires significant effort, from better data collection and first-class IT systems, to support for automation and rapid deployments. But companies that embrace the growing use of mobile devices stand to make those margins back and then some.