Over the years, I’ve been privileged to meet some remarkable entrepreneurs in developing countries who are swimming against the tide and succeeding, despite all odds. Like Australian entrepreneurs, those in developing countries are creative, courageous, tenacious, resilient, admit no doubt and are determined to build something. They need seed funding to start and grow businesses, just like Australian entrepreneurs, and they take big risks. While there are many similarities between Australian entrepreneurs and those in developing countries, there are some subtle differences which may hold valuable lessons for Australian entrepreneurs.

Whereas Australian entrepreneurs tend to focus on one main activity, entrepreneurs in developing countries are more likely to establish a portfolio of activities. The cost of failure for them is extremely high - it means they cannot afford the basic necessities of life such as food, shelter and clean water. So, they pursue a range of activities with widely differing risk profiles, which may be a clever way of mitigating risk.

   

Families living in poverty have few choices for making a living given their lack of education and scarcity of job opportunities. Because regular employment is so difficult to secure, they are forced to look for ways of building their own businesses. Being an entrepreneur is a necessity rather than a choice and the stakes are tremendously high as the failure rate of small businesses in developing countries is substantial. Accessing start-up capital is problematic as the lack of a credit history makes it impossible to get a bank loan. To kick-start their businesses, they need a hand up through a small loan from a reputable source of finance rather than via one of the many loan sharks who have crippling interest rates and impossible pay-back conditions. I’ve noticed that when these entrepreneurs start businesses they are prepared to ‘fail fast’ rather than continuing to operate an unprofitable business for an extended period like many Australian entrepreneurs. They don’t have the financial resources to prop up an untenable business, so they quickly move onto the next venture and see if they can make a go of it.

I’m constantly fascinated by the ingenuity displayed by entrepreneurs in developing countries when they swim against the tide and establish a business one may consider a departure from perceived wisdom. When they are willing to do something out of the ordinary. One woman living in a slum in Delhi who is particularly ingenious established a small-scale piggery with a loan from Opportunity International Australia, despite cultural norms and religious rules against eating pork. She was originally an agricultural labourer from a rural area and when she arrived in Delhi realised that many people in her local community love pork. She identified an opportunity to capitalise on a potentially vibrant market niche. Given the prevailing custom to steer clear of pork, there are few suppliers and so little competition, which is an added advantage. She is acutely sensitive to market signals and her business is thriving. She is a true innovator! She is prepared to operate a business that doesn’t come with a community seal of approval and she is succeeding!

Another woman I met in India is solving the problem of safely distributing eggs and, as a result, her business is booming. Lots of people in India keep chickens so you must wonder how one can be a successful egg entrepreneur with such intense competition? The big problem for egg producers in India is safe distribution. The extreme heat means that eggs quickly go bad and become poisonous. This woman realised that if she boiled the eggs she could substantially extend their life so they can be more safely distributed. Such a simple solution but highly functional! She had the insight to know what to do using a small loan from Opportunity as start-up capital and to give it a go. She worked out the right price to charge for the eggs and is making a substantial profit. Her biggest problem is potential competition from her neighbours if they discover the secret to her success, so she is careful to keep her closely guarded secrets to herself. And she is succeeding!

When I recently visited a slum on the periphery of Delhi that includes hundreds of families from rural areas, I met a woman who is satisfying a market need by transporting popular sweets from Agra, the only town in which they are made. Delhi residents love them, so the woman is using a small loan from Opportunity to fund transportation of the sweets in sufficient quantities to make a substantial profit. She identified something in high demand and short supply and is organising a way of getting it to market. I believe a key lesson for Australian entrepreneurs from this woman’s experience is to find something no-one else is doing. Find something different that is in high demand and quickly hits the market’s sweet spot. A niche product that’s difficult to get but very popular.

The entrepreneurs in developing countries I particularly admire are those who are in some sense breaking the rules by swimming against the tide. By pursuing a business idea that’s an observed departure from perceived wisdom. I feel so privileged to have met so many of these innovative, courageous and remarkable entrepreneurs and to see them flourish against all odds in very difficult circumstances.