How To Make The Most Of What You Don’t Have
Want to find out how to grow Ireland out of its current economic stagnation? Ask the first Chinese woman billionaire. More precisely, ask her how she got to be the first Chinese woman billionaire. She did it, quite literally, by turning trash into treasure. In order to get where it so desperately needs to go, Ireland must do just that.
Let me explain.
In 2006, Forbes magazine declared then 49-year-old Zhang Yin to have a net worth of $1.35 billion. Zhang, who had started out as a lowly worker in a textile factory, earned all that money — and established an empire — by taking two waste products and combining them. What were the products? Waste paper (which was in scarce supply in China) and empty containers (which were in huge over supply in the United States). By exporting one cheap product (waste paper from the US) inside another waste product (containers that were worthless in the US but needed in China), she built a recycling and paper supply empire.
She was also epitomising what it means to be an entrepreneur. After all, entrepreneurs excel at finding weaknesses and turning them into advantages. To the entrepreneurial eye, holes in the market of today appear as stepping stones to the market of tomorrow. The economic rubble of the present is, first and foremost, the foundation material for the economic rebound of the future. And this is how everyone else’s garbage becomes the entrepreneur’s gold.
Examples of this abound. The demand for cars in the middle of the 20th century drove a demand for oil, and huge amounts of this ‘‘black gold’’ were taken out of the ground and refined into the fuel that made cars go. But in the process, tens of billions of gallons of waste products, such as NGL (Natural Gas Liquids) and LPG, were produced every year. Rather than this waste having to be dumped somewhere, people figured out uses for it, and the plastic industry was created. For good or ill, we now live in a world which would be unimaginable without plastic.
They key for many entrepreneurs is to find things that are in over supply and re-use these to create a market demand that satisifies customer needs.
At my own business, Carma (previously Avego), we are taking advantage of a similar dynamic. We take a product which is currently wasted (only 1.15 seats of a typical 5 seat car during rush hour are occupied) and match this waste up with need (other commuters going the same way), and generate efficiency (lower costs for the rider, recovery of costs for the driver, better use of our highways and city streets).
It’s the time-honoured tradition of creating something from nothing. Suddenly, instead of being ar- tificially constrained by overcrowded roads, we reframe the problem, recognise the waste that is inherent in our current model of thinking, and discover what existed all along in front of our noses.
Boom! Instant opportunity.
So how does this apply to Ireland? One can hardly count the ways. For a start, it’s easy — and, of course, accurate — to see the Celtic Tiger-fuelled real estate bubble as the source of economic pain: causing housing prices to tumble and net worths right along with them.
The question now is: how do we work this to our advantage?
Can we take these ghost estates and these vacant industrial projects and use them for our country’s aggregate progress? Can we perhaps repurpose some of these projects as inexpensive ‘‘co-working centres’’ to help jump-start entrepreneurship?
One of the limiting factors for a person starting a business is just getting set up with an office. Despite the oversupply of real estate, rental costs are still high in many parts of the country, and landlords are still expecting early-stage entrepreneurs to pony up multi-year lease agreements at a point in time when businesses are least able to make long-term commitments.
Can we remove some of this friction, and thus improve Ireland’s prospects to be a more entrepreneurial country?
That’s one macroeconomic example. What about micro? What about you and your goals?
Look around you. Is there a business you can start, or a way you can improve your current business by reframing the core problem that is facing you as an opportunity?
What don’t you have? What is the weakness, or a marketplace discrepancy that is staring you in the face? And how can you make the most of it?
You may think I’m one of those get-rich-quick gurus who’s urging you to ‘‘think outside the box’’. I’m not. The nine-dot problem that ‘‘thinking outside the box’’ was coined to describe was meant to get people thinking beyond the constraints of a well-defined problem.
Here’s the point: too often we are trying to solve the wrong problems. For example, we don’t need to increase the cost of real estate in the country, although that seems like it’s the desperate hope of so many, and even the stated policy goal. That only raises the cost of living for the families of today, as well as tomorrow — and renders Ireland less competitive into the bargain. We shouldn’t wish to reverse the decline in housing prices, even if we could.We should strive to use the decline in that sector to spur growth in other sectors.
In short: you know that box that you’re not thinking outside of? It doesn’t exist.
Ask Zhang Yin.
Originally published at sosv.com on January 30, 2014.
