Entrepreneurship acts as a powerful engine for economic development, fostering innovation, driving job creation and affecting positive socio-economic outcomes. A thriving entrepreneurship ecosystem hinges on effective market access, one that connects businesses with customers. 

Across Africa, there is a polarisation and unevenness in the investment space, specifically relating to funding and market access for entrepreneurs. Many countries have started concerted efforts to address this and in South Africa, in particular, the government has acknowledged the diversity and different dynamics within its economy. In recent years, the Department of Small Business Development’s (DSBD) introduction of the National Integrated Small Enterprise Development (NISED) Masterplan is one strategic blueprint that aims to advance policies to support entrepreneurship. 

According to Dario Giuliani, founder and managing director of Briter Bridges, a leading research and market intelligence company dedicated to emerging markets, entrepreneurs often do not have access to information and resources that will assist them in gaining access to markets and funding.

“The lack of information for entrepreneurs acts as a barrier, stifling the creation and accessibility of opportunities. For entrepreneurs, I believe that the way to approach the concept of access to market is to understand the composition of the stakeholders that operate in a given market and the size of the opportunities within that market.”

At the recent Motse Collective Impact Entrepreneurship Ecosystem Gathering 2023, hosted by Allan & Gill Gray Philanthropy South Africa in partnership with the African Institute for Entrepreneurship and the Hasso Plattner d-school Afrika at the University of Cape Town, Giuliani expanded on the ways entrepreneurs could gain market access. He emphasised the need for those within organisations — founders, project managers, expansion managers and the like — to fully understand the business and the product or service offering and development. “In the context of Africa and emerging markets, there is often this goal to replicate [international] models and ideas without necessarily understanding or contemplating the differences of history, environment or socio-economic circumstances within the various markets.”

The past few years are a testament to the volatility of markets and, when the history of a market is examined over 10 or 20 years, the peculiarities of that market as well as fluctuations across markets provide a broader perspective of how the economy and society has developed. In addition to understanding the environment from both a historical and contextual viewpoint, it’s important to assess the trends across category verticals, such as energy, agriculture, financial services, logistics, and others. For a more nuanced understanding, these verticals can be analysed even further to solar energy within the energy vertical or payments, crypto and credit within the financial vertical. So how are trends assessed for particular industries?

“Start by checking who is already there,” says Giuliani. “For instance, conduct market leadership analysis to understand who is dominating the market. Ask yourself: Is there already a market for this? If I enter now, will I face fierce competition or is there a lot of acquisition potential? Will my exit or growth opportunities be collaborative?

“For entrepreneurs — and even for large established companies — who are launching a new product or service or company within a specific market, there must be an understanding of where the product or service fits into the current market environment. Are you innovating or bringing something new into the market? Or are you replicating something that is already out there? Are you operating in a market that is already crowded? Who are your competitors? Who is building similar solutions?”

An aspect that is often overlooked by smaller businesses seeking market access is that of capital availability and capital composition. Not all companies have the same capital requirements. Some may need commercial capital while others may be seeking semi-commercial capital or even philanthropic capital. 

Giuliani highlights the debate around the lack of access to capital for entrepreneurs, specifically when approaching traditional financial institutions. “Banks have not necessarily been very trusting of early-stage companies and topics such as [entrepreneurs] accessing finance and financial inclusion across South Africa have sparked massive debate.

“This is why we’ve seen a rise of alternative financial instruments across Africa, such as venture capital, some of which have been controversial but the majority of which don’t always cater to small, medium and micro enterprises (SMMEs) but rather to start-ups,” he adds.

With this in mind, Giuliani underscores the importance of entrepreneurs understanding their capital requirements while doing market research into new territories they wish to enter. This includes asking the following questions:

  • What is the composition of capital in that market? 

  • What are the avenues for financing for your company?

  • What is your business in need of? Does it need debt financing? Or will it benefit from grants or philanthropic capital?

  • Is your business a strategic investment or an exit opportunity for a corporate?

By answering these questions, entrepreneurs can identify the resources they require based on their business model, the sectors they operate in and the markets they wish to enter — and map out a successful strategy for accessing key markets for their business.

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This article is based on a masterclass on finding innovation solutions for market access presented by Briter Bridges founder and managing director Dario Giuliani at the Motse Collective Impact Entrepreneurship Ecosystem Gathering 2023, hosted by Allan & Gill Gray Philanthropy South Africa in partnership with the African Institute for Entrepreneurship and the Hasso Plattner d-school Afrika at the University of Cape Town. The inaugural two-day gathering provided a space for ecosystem builders, policymakers and entrepreneurs to collectively reflect on the state of entrepreneurship and the actions required to enable an equitable society in South Africa.

Sources:

MCI EE Gathering 2023 Break-away Session 1 (video)

MCI EE Gathering 2023 Masterclass #1 transcript (rough)

National Integrated Small Enterprise Development (NISD) Masterplan