Many aspiring founders begin with a sheet of paper and an order to “think big.” Soon it is covered with fashionable industries, personal interests and predictions about the next big thing. The exercise may produce ideas. It says little about which ones could support a company.
Commercial opportunities usually leave evidence. Customers pay too much, improvise around poor products or remain excluded from markets. Falling costs can also turn an impractical proposition into a viable one.
The evidence is easier to find in people’s behaviour than in a brainstorming session.
Fix Something People Already Put Up With
When Obi Ozor and Ife Oyedele founded Kobo360 in Lagos in 2017, road freight was already a large, essential industry. Manufacturers had goods to move, and thousands of truck owners needed loads. Demand was hardly in doubt.
The operating problems were easier to miss. Trucks could return empty after deliveries, leaving owners to absorb the cost of the return journey. Shippers had limited visibility into cargo once it left their premises. Kobo360 introduced software that connected available trucks with loads and allowed shipments to be tracked.
By 2019, the company had worked with businesses including Unilever, Dangote and DHL. It had also raised about $30 million in equity and working capital from investors led by Goldman Sachs.
Entrepreneurship has always been about survival and solving problems. — Obi Ozor
Goods still moved by road; Kobo360 found value in reducing the waste around the journey.
A less dramatic example might be an accountant who abandons newly purchased software and returns to Excel. Perhaps the interface is poor. Perhaps the program cannot accommodate the company’s approval process. Watching the accountant complete the work would reveal the source of the difficulty.
The useful signals are measurable. How many purchases are abandoned halfway through payment? Why do customers request refunds? How many staff hours go into correcting errors created by an unreliable product? These costs help a founder estimate what a buyer might pay for an improvement.
Speak with people who recently changed suppliers or considered buying and decided against it. Ask them to describe what happened, including the point at which the transaction broke down. Their account will usually be more useful than a broad question about what they want from an “ideal” product.
Serve People the Market has Quietly Written Off
Safaricom launched M-Pesa in Kenya in 2007. At the time, only about a quarter of Kenyan adults had bank accounts. Many potential customers earned irregular incomes, dealt mainly in cash and lived far from a bank branch.
M-Pesa allowed users to deposit or withdraw cash through local agents and transfer money using a mobile phone. By late 2025, Safaricom reported 37.9 million one-month active M-Pesa users in Kenya. The company recorded 37.5 million active mobile subscribers over the same period. M-Pesa was also generating more revenue than voice, mobile data and text messaging combined.
Its agent network brought basic financial services closer to customers, while small transactions suited people whose income did not arrive as a monthly salary. Both choices shaped the business as much as the underlying technology.
An excluded population may appear to offer an obvious opening. In practice, some customers remain unserved because reaching them is expensive and their individual purchases are small. Need tells the founder where to investigate; current spending reveals whether a business might be possible.
Take a trader who borrows from an informal lender. The loan provides clues about the amount required, the borrower’s repayment pattern and the purpose for which the money is used. A prospective competitor can investigate those transactions before deciding whether cheaper funding or another method of assessing risk would support a better offer.
In other industries, the answer may lie in smaller packaging or instalment payments. Distribution often decides the matter. A product priced within reach can still fail if each sale requires an expensive journey to the customer.
There will also be cases in which the numbers refuse to work. Discovering that early is useful. It stops a serious social need from being mistaken for a self-sustaining commercial market.
Notice What is Changing Before Everybody Calls it a Boom
Industry forecasts can make enormous markets sound readily available. They seldom explain how a new entrant will reach a buyer and collect revenue.
Keep a record of changes affecting a customer group you understand. Suppose a regulator introduces additional reporting requirements. At first, affected companies may assign the work to existing staff. Recruitment adverts and requests for specialist consultants begin to appear months later. Those decisions reveal how much disruption the rule has created and where companies are prepared to spend.
Artificial intelligence can be examined in the same practical way. An insurance company may employ staff to extract routine information from claim documents before an assessment begins. A founder would need to learn how long the work takes, what mistakes cost and who can authorise the purchase of new software.
“AI for African businesses” avoids all three questions. Its apparent scale is part of the problem: nearly every company fits inside the description, so no particular buyer comes into view.
Population change also needs to be followed into a transaction. Rapid growth in a city could increase pressure on rental housing. Interviews might reveal that buildings are available while rent collection and maintenance remain disorganised. That finding points towards a different company from the one suggested by the headline population figure.
Even a sound proposition can arrive before its market. Customers may understand the product and remain unwilling to alter an established practice. A missing payment system or unresolved regulation can delay adoption for years. The company carries its staff and development costs throughout the wait.
This is why procurement notices and hiring patterns deserve attention. They show where organisations have begun spending. Market reports remain useful for context, but they cannot replace evidence from the buyers a new business expects to reach.
Use a New Capability to Open a Market
In December 2008, NASA awarded SpaceX a $1.6 billion contract covering at least 12 cargo missions to the International Space Station. Orbital Sciences received a separate $1.9 billion contract.
The awards followed NASA’s Commercial Orbital Transportation Services program, which supported private development of rockets and cargo spacecraft. SpaceX’s first contracted cargo flight launched in October 2012.
Elon Musk entered an industry with daunting capital requirements and little tolerance for failure. SpaceX pursued reusable launch vehicles and an operating model intended to lower the cost of reaching orbit. NASA gave the company an early customer prepared to finance and purchase the capability before a broad commercial market existed.
We would not be the company that we are today without the support of NASA. We’d probably be limping along, trying to change the world, but limping instead of running.
– Gwynne Shotwell
Lower launch costs subsequently made other ventures more plausible. Large satellite networks providing broadband coverage depend partly on putting many satellites into orbit without allowing launch expenses to overwhelm the business.
For companies developing new technology, a successful prototype may still be years away from regular sales. Production needs to be established. Some products require certification. Buyers may also expect maintenance and training before they will adopt the system.
The first application should reflect those constraints. New battery technology could begin in expensive industrial machinery, where longer operating time has an immediate financial value. Revenue and performance data from that use might justify expansion later. Entering the mass vehicle market immediately would require a much larger manufacturing and service operation.
A technical roadmap should therefore include the commercial work around the invention. How will the first buyer use it? What must be built before delivery? Who pays while the company completes those steps? The answers determine how much capital the venture will consume before sales become routine.
Test the Opportunity While it is Still Cheap
Suppose a founder wants to sell weekly meal subscriptions to office workers. She interviews 100 people, and most praise the idea. Encouraged, she rents a kitchen and hires staff.
She has committed money before learning whether enough people will buy.
A smaller trial would offer 30 subscriptions for the following week and require payment at booking. The orders might reveal strong demand on Monday and very little by Friday. Delivery costs could also make some office districts unattractive. Neither problem would have appeared in the original interviews.
The next trial can be adjusted. The founder might sell three lunches instead of five or restrict deliveries to one cluster of offices. If customers keep buying, the kitchen decision can be made with actual order data.
Other ventures will need different commitments from prospective buyers. An enterprise-software company could negotiate a paid pilot. A service provider might perform the work manually before commissioning an application. The customer should have something at stake, whether money or access to a real operating environment.
For the meal service, the founder could require 20 paying subscribers at a minimum gross margin after food, packaging and delivery. Eight orders would not automatically end the idea, but they would make a full launch difficult to justify without another test.
The US Small Business Administration advises founders to examine demand, customer location, market size, competitive saturation and prevailing prices. Many projections quote the value of an entire national industry. A meal-delivery founder needs a much smaller figure: the number of office workers who can be reached within a profitable delivery radius.
Early tests will leave questions unanswered. Their immediate purpose is to keep an uncertain assumption from turning into rent, salaries and equipment that the business cannot support.
Frequently Asked Questions
I have seen the same business elsewhere. Is the idea still worth considering?
Possibly. Find out why customers would choose your version. Geography may create an opening, or the existing provider may overlook a particular type of buyer. If the only distinction is a different name and logo, there is little protection when the established company responds.
How should a founder estimate market size?
Start nearby. Count the customers accessible through the sales channel the business will actually use, then estimate how often they might buy. A national or global industry figure can provide context, but it should not be presented as revenue the company can realistically capture.
Why would a profitable company ignore customers who clearly need its product?
Serving them may require lower prices, expensive distribution or a different method of collecting payment. An incumbent designed around larger customers may decide that adapting its operation is not worthwhile. That difficulty can create room for a new entrant, provided its economics are built for the neglected group from the beginning.
What should I ask in a customer interview?
Ask about the last time the person bought or attempted to buy the product. What prompted the purchase? Where did it become difficult? What alternative did the customer choose? Questions about a recent event tend to produce better information than invitations to imagine what they might buy someday.
How do I know when to stop testing?
Decide which result would justify another round before the experiment begins. Repeated rejection from qualified customers deserves more weight than enthusiasm from people outside the target market. If reasonable changes to the offer and delivery method still leave weak demand or impossible margins, the evidence is pointing elsewhere.
