‘It is always urgent, ‘here and now’ without any possible postponement. Life is fired at us point-blank,’ said Jose Ortegay Gasset.
When is the business problem not the real problem? Why do most small businesses fail? How can one survive, and even prosper? Is access to credit funding what smaller enterprises need most? Is the bigger the customer problem solved, the more valuable the enterprise? Does creative destruction fuel innovation and change in both the tiny shop at the side of the road, and the development partner dispensing millions of dollars?
Many Kenyan small businesses struggle because they are often competing in the same crowded spaces, using the same business models, targeting the same customers, and reacting to the same economic pressures. The issue is usually not a lack of effort. It is a lack of differentiation, weak systems, limited strategic thinking, and survival-mode decision making.
an three years. Business is tough. It’s almost like there are two types of people: employees who go to the ATM at the end of the month, certain of finding cash in the bank, and those who live in the uncertainty of a constant hustle.
Is access to money the answer?
Many business owners and even banks think access to finance solves problems. It usually does not. If a business has no differentiation, weak margins, and no repeat customers, then more access to credit simply delays failure.
‘Money to sell’ is the Coca-Cola-like product banks and financial institutions have on offer. But access to money is not the prime problem facing most small and medium businesses. Success is driven by identifying a specific customer need, providing a unique value proposition and maintaining an ability to compete with adaptability to change. Many small businesses are trapped in imitation economics. They ask ‘What business is working?’ instead of ‘What important problem is being poorly solved?’ Having that shift in mindset changes everything.
Does a copycat business survive?
Most entrepreneurs enter visible businesses. People copy what they can easily see succeeding. Price wars, thin margins, customer disloyalty and constant cash flow pressure are the result.
A business without distinction becomes a commodity. Strong businesses solve painful, expensive, recurring problems. Most small businesses mainly sell inventory.
Does a hardware store sell cement? Or, does it sell ‘fast affordable rural house completion solutions’? Most hair salons cut hair. Or, does an astute salon owner sell confidence, convenience, grooming subscriptions, and professional image management?
Being in a reactive survival mode mindset stops one from being big-picture strategic. Many owners spend almost all their time chasing sales, paying urgent bills, handling daily crises, managing staff and negotiating debt. Very little time is spent on: innovation, partnerships, market positioning and creating systems.
Most businesses try to serve everyone. But markets reward specialists. How trusting is your business sector? Trust is fundamental in any relationship. ‘Will they do what they promised?’ Can they deliver quality, on time, on budget?’ Trust deficits increase business friction with late payments, unpredictable procurement, contract uncertainty and corruption risks
Businesses that will grow disproportionately in Kenya in the future will likely be those that see what others missed, solve pressing customer problems, organise fragmented markets, build trust systems, create platforms, package expertise and leverage technology intelligently.
Does only the jargon change?
Many development partners work on the traditional way of doing things path, which has been there for 50 years plus, for instance, five-year plans, log-frames, monitoring indicators, workshops and reports. The jargon changes, but the fundamental assumptions are the same.
Leading-edge development partners are taking on more venture capital model – for instance, shorter time frames, quick test and learn, challenge matching funds, embedded tech expertise, not just meetings and slide decks. Are development partners using outdated tools? An analogy would be a plumber with only a saw. Is there a risk of using old tools and mindsets – to fix today’s complex problems?
Constant storm reality
With the termination of USAid beginning in January 2025, the donor – NGO community has undergone a radical shake-up. This, along with the conflicts in Ukraine, and now in the Middle East, has shifted affluent countries’ spending priorities.
Creative destruction is the force impacting both profit-driven small businesses and development partners, working in what economists would call ‘the realm of the social good’.
Creative destruction drives innovations, technologies, or business models that disrupt and replace older, established ones, driving long-term economic growth, while causing short-term disruption.
Economist Joseph Schumpeter described a ‘perennial gale’ of competitive destruction that forces us all to adapt in the tsunami waves of turbulence in the here and now.