In the video below, Efosa Ojomo outlines five key ways to find business opportunities by looking for areas where people struggle because they lack access to basic products or services, called “non-consumption.” He emphasizes that solving for non-consumption requires empathy, observation, and creative business models rather than waiting for ideal infrastructure or traditional forms of investment. Though challenging, pursuing market-creating innovations can transform societies, much like the early railroads or Henry Ford’s automobile revolution.
NOTE: Some people have complained about the video not having captions. You can find the full transcript below. A podcast of the video has also been offered for your benefit.
Transcript of the Five Keys to Spotting Non-Consumption Video
Let’s now talk about how to spot these opportunities. I really want to focus on five things—five ways to spot non-consumption. Because when you spot non-consumption, which are moments of struggle that you see in people’s lives, then you can go back and build a business model that targets that non-consumption. First, over-engineer products. Let’s talk about that.
About 9% of households in Nigeria have access to a car. About 87% in America. And somebody might hear that and say, well, then Nigeria must have a much better transportation infrastructure. I think we all know the answer to that. The thing that I think about is, do we need, in Nigeria and other countries on the continent, do we need our cars to be as durable, efficient, as cars, say, in the US, and as expensive? I mean, do we? Maybe we do, maybe we don’t. I don’t think we do. I mean, look at how cars are used. Do we take road trips like folks do from Boston to the other side of America, California? My wife and I drove here from Wisconsin. How many folks from Wisconsin here?
But my wife and I go, the thing is, you need a car that can do that in America. Do what you need this in that year. Can we innovate around the way we move around? Make a car that costs $1,000 maybe. It’s not as good, but it’s something. Do the same for refrigerators as they’ve done in India.
Air conditioners—2% of households in Nigeria. And it gets really hot, right? Those are moments of struggle. Can we fix that? Keyed into people’s emotions, the next one. Emotions and energy, right? Think about this for a second. This is M-Pesa in Kenya. Before M-Pesa, you want to send money to your dad in the village? Thank you to a bus driver. He would drive there and hopefully get it to do that. I’d be very anxious if I had to do that. In case it comes around, an innovation, and now I believe it’s about 1.5—I missed—1.5 billions of dollars of transactions every year. I’m sorry, every month. Every month, by 18 billion a day. The thing about these innovations is when they strike, when they happen, the growth is astronomical because everybody is struggling, but there are no products that are made to help ease that struggle.
How many folks have used numbers since they got here? There you go. Do I even need to talk about this stuff? All right. So think about what—you know, the thing about a lot of this is observation. Right? You have to be empathetic and you have to be an active observer. Now, you would look at this and say it’s a bunch of people waiting to get a cab. An entrepreneur looked at it and said, what do we have? We’ve got some enabling technologies. Let’s put all these things together. Let’s figure out a market-grade innovation in the U.S. It’s a little too expensive in Nigeria for market-grade innovation, but that’s another story.
Excess capacity. This may be funny or pathetic, but I’ll explain what this—why I have electricity line. When you have excess capacity, abundant resources—so I talked about the youth in Nigeria as an abundant resource. In the 1930s, electrification was going up in America, and refrigeration as well. All right, so the homemade refrigerator—not homemade, refrigerator that goes to people’s homes—is starting to get sold. Well, it turns out that the utility companies invested quite a bit in electricity. They had so much excess capacity that they started selling refrigerators at cost and sometimes below cost. Anybody tell me why they would do that? Why utility companies would sell refrigerators? Thank you, exactly, right? They had so much excess capacity that they started doing it.
Right, so where do we have excess capacity? There’s so much land, a bunch of buildings on the continent. Can we leverage these things? And the last one is, look out for where people are going to break the law. Now, a lot of us remember before the age of streaming and iTunes. I think when an entrepreneur can look at what people are doing, the struggle is so much that they’re like, look, it’s worth it. I’m going to just break the law. And what I’m talking about… and other things on the continent that are illegal, but why is it so hard that we do it? That presents another story. I see that very few people wake up in the morning and say, I want to break a wall today. That feels good. And so looking out for these things can really give us a sense of where market-creating innovation opportunities are. But it’s not easy, but they’re everywhere.
So if you look at Ancopa, this is a generator, but they’ve come up with a solar kit. If you look at Freeline, this is a banking hall in Nigeria. They’ve come up with a service called Street Banking. Chotakul, I’ve talked about that a little bit. India, no electricity. And the Tata Nano was inspired by this. This isn’t real. This isn’t like Photoshop. And so the innovations, the opportunities are everywhere. It’s left for us as innovators to go out and find them.
Now, I’d be naive if I said that we’re in obstacles. First is we’re really good at solving for consumption. We’re very good at that. The second is convincing capital to go after these innovations where we’re not quite sure what the market size or how we’re going to do it. It’s really tough. So I don’t want to be naive about that. Waiting for interest.
This is probably one of the biggest insights I’ve had in my time in doing research. When America built the railroads, it was way too expensive for people to go on them. So what did they transport? Coal, oil, innovations. They were not transporting people or infrastructure, no. So we can wait for infrastructure all we want, but we’re going to wait for a very long time.
Corruption, that’s a big one. THAT’S A VERY BIG ONE. BUT THERE ARE WAYS WE’RE NOW THINKING ABOUT INTEGRATING TO SOLVE FOR CORRUPTION. IT REALLY REQUIRES A PARADIGM SHIFT. I DO THIS FOR A LIVING. I DO THIS RESEARCH EVERY DAY, AND SOMETIMES I HAVE TO PINCH MYSELF TO SAY, MAN, IS THIS POSSIBLE? BECAUSE IT SEEMS HARD, BUT IT IS. AS I READ MORE ABOUT COUNTRIES THAT ARE PROSPEROUS AS WHAT I SEE, IT REQUIRES US TO THINK VERY DIFFERENTLY ABOUT DEVELOPMENT.
And it typically starts out at a low margin. So that’s tough, right? We all want high margin stuff. But I guarantee you, the kinds of things that await you at the end of market period innovations are Henry Ford type stuff. And that changes countries. It changes nations. It changes…