Consistently being frugal and saving money can be really useful to accumulate startup capital when someone aspires to be an entrepreneur or businessman. However, buying products and services actually teach us more than being frugal, it teaches us about the market.
I think the best way to understand customer behaviours is by being the customer. We will learn prices of various products and services. We will understand competitive advantages each seller uses. We will understand how experienced sellers talk to potential customers. Best of all, we will identify the missing piece or the unsolved problem in certain product or service. That is how an entrepreneur should be created, by identifying problems worth solving.
In current time, I observe that many upcoming and promising entrepreneurs are female. This is different with 50 years ago. I assume that it could be because females are risk averse and more careful in business, which leads to a better survival rate of their companies. I finally realize that many of them actually starts a business they understand most. Some of the impressive businesses I see females run today: fashion products (apparel, accessories), bakeries, makeup service and training, wedding organizer, sugar wax, pretty phone case, skincare, perfume, etc. These are what they spend most of their money for. These are also where they can make the most money from. These are what male businessmen usually don’t understand.
There is a direct correlation with buying and understanding. The more you buy, the more you understand how to compare products and services. The first step to innovating is by understanding.
There are more frugal males and females. When we have less interaction with the market, we can imagine better for moonshot ideas as we are not limited by current practices. However, we don’t actually understand the market enough. What an irony.
More male entrepreneurs are seen building companies that could achieve massive scale but without solid cash flow at first, which usually is a very new product / service. Males are less risk-averse compared to females. This could be the reason we see more male billionaires.
More female entrepreneurs are building solid cash flow businesses. In the coming years, we will expect to see more female multi-millionaires. More male entrepreneurs will have failed high-risk startups. In the past, discovering the land of America was the greatest wealth creation ever done, but many of other explorers didn’t find any new land.
PS: This post contains my observation at this moment. I might change my mind in the future. 🙂