Back to Course 5: First Steps in Entrepreneurship
Some of the side effects of global crises, such as economic downturns and wars, include the adoption of beliefs that are passed down from one generation to the next. In some cases, these beliefs limit our potential to create. Many of us grew up in family systems where the list of expectations we were expected to meet was clear.
Among the beliefs instilled in us is the idea that we must land a good job and do our very best to keep it. However, many of us seek to break free from the paradigms we were led to believe in and have decided to give the world something better through who we are and what we do.
In this article, we will explore one of the ways humans have found to expand our horizons through our actions: entrepreneurship.
How do you start a business? That’s the big question.
To begin with, it’s important to understand the context we’re in, to realize that we’re not alone on this journey toward entrepreneurship. Before us, many women leaders have taken the reins of businesses in our region, and there is still much work to be done. Latin America, being composed of emerging economies, has the potential to generate many more startups, since our industries still have a long way to go in terms of development.
The world has already recognized the potential of women's entrepreneurship. Half of the small and medium-sized enterprises in the region—which total just over 17 million—are founded and led by women, according to the Global Entrepreneurship Monitor (GEM) report.
The first question most of us have asked ourselves is: What should I start? What should I build? What business could be most profitable? Depending on where we are in life, the question will change, which is why the advice is to take a step back from that question and ask ourselves why we want to start a business—so we can recognize where we’re starting from and with what intention. Keep in mind, there’s no right or wrong answer; it simply gives us clarity on why we’re starting a business and helps us own that reason.
THE CONCEPT OF IKIGAI
According to the Japanese, we all have a reason to live; we all have an Ikigai.
Ikigai is a Japanese concept for which there is no exact translation; however, we can define it as “the reason for living,” “the reason for being,” or “the drive of life.” Some have found it and live by it, while others carry it within them and are still searching for it. It is not an easy search; it is a journey within ourselves, delving to the very depths of our being to find it.
For the residents of Okinawa, a Japanese island home to the world’s longest-living people, passion and work go hand in hand. In this context, it becomes clear that Ikigai and work are one and the same; thus, through this concept, we can begin to engage in a process of self-reflection or reassessment (if you already have a business up and running) regarding BEING and DOING: the reason why you want to get up every morning.
To discover our Ikigai, we must engage in self-reflection on the four pillars that underpin our lives:
First pillar: What you truly love
Second pillar: What you're good at
Third pillar: How much you can be paid
Fourth pillar: How I contribute to making the world a better place
Now we begin to make the intersections: when we connect pillar 1 and pillar 2, we find our PASSION; when we connect pillar 2 and pillar 3, we find our PROFESSION; when we connect pillar 3 and pillar 4, we find our VOCATION; and when we connect pillar 1 and pillar 4, we find our MISSION.
It is through exploring these intersections that we discover our Ikigai. In the toolkit, we’ve included a worksheet that can guide you on this journey of self-discovery.
BUSINESS MODELS
Once we’ve identified the business we want to start or are in the process of launching, it’s important to have a clear understanding of the business model, as it provides structure and highlights:
- Information about who our customers are.
- The value we offer.
- The way we communicate and get in touch
- How we make money to stay sustainable.
To achieve this, we can use a visual tool to help us organize those ideas. We’re talking about the Canvas Model (you can find it in the toolbox).
The Business Model Canvas is divided into nine sections, and it is recommended that you fill it out in order, as each section builds on the others.
- Market Segments: In this section, answer the following questions: Who is your customer? Who are you targeting? Who would be your most important customers? Describe them in detail, whether you list specific company names or provide a description of the person you want to sell to (buyer persona). An important point here is that the customers you describe should be profitable and that you can work with them long-term, grouping them by needs or behaviors.
- Value Proposition: What problem are we solving? What value are we offering our customers? What need are we meeting? This section focuses on describing the value we offer our customers—what makes us unique.
- Channels: Which channels do our customers prefer or use? How will we communicate with them? What touchpoints do we currently have—or will have—with customers? How do these fit into our customers’ daily lives? In this section, we will define the channels through which we will communicate with customers; these channels correspond to five marketing phases:
- Information: Promote the service or product
- Evaluation: Assessing our value proposition from our customers' perspective
- Purchase: How to purchase the service or product we offer
- Delivery: Method of delivering the service or product
- After-sales: Customer service provided after the sale of our service or product.
- Customer Relationship: The relationship we have with our customers is part of their overall experience with our product. From the moment they first learn about us until they make another purchase, it’s all part of a single experience. So, in this section, ask yourself: What kind of relationship do you want or have with your customers? Do you want it to be personalized or automated?
- Revenue Sources: This section focuses on our startup’s cash flow (to cover expenses and ensure profitability). Our business may have various sources of revenue, such as subscriptions, product or service sales, rent, etc. Here, you can ask yourself: How do our customers currently pay? How do I want my customers to pay? How would they like to pay? What price are my customers willing to pay for my service or product?
- Key Resources: What resources does my value proposition, distribution channels, and service/product require to be developed? This section will help you identify the most important assets for your business. These assets may be owned, leased, or outsourced.
- Key Activities: In this section, you will identify the most important actions your business must take to deliver your value proposition.
- Key partners: Recognize the suppliers, allies, and partners who help keep your business running.
- Cost structure: This is a breakdown of the costs associated with delivering and maintaining your service or product. Here, you can separate fixed costs from variable costs, giving you a clearer picture of which investments are essential and to what extent you need to work with investors or secure loans.
If your startup is a social enterprise, a variation of the standard Canvas model has been created that includes a section where you can describe the impact of your social enterprise or the problem it aims to solve.
In addition, you need to prove that the idea you’ve refined through your Ikigai and shaped into a business model actually works for you. The best way to do this is to share it with others, but keep in mind that your business model may vary depending on the market. Nothing you do is set in stone, so keep iterating. Failure is an opportunity to learn and to refine your product or service.
Remember that social media is a key factor in the growth of your projects. It is through the connections and recognition within your city’s and industry’s entrepreneurial ecosystem that you’ll be able to generate more business and investment opportunities; you’ll learn more about this topic in an upcoming course.
Back to Course 5: First Steps in Entrepreneurship
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