Organisations such as Global Entrepreneurship Monitor have gone a long way to analyze the state of entrepreneurship in South Africa and the reasons that contributed to this state. One of the big questions is why there are so few entrepreneurs. I’ve heard a number of explanations related to culture, education and access to finance but here are a few that I’ve observed and I believe contribute significantly to our low entrepreneurship participation rates.
What Will People Say
About 2 years ago there was a popular documentary by 3rd Degree on a group of youths called Izikhothane. These youngsters came from impoverished backgrounds but they somehow managed to compete with other groups about who had the most expensive material possessions like alcohol and branded clothing. The challenge of sustaining the standard eventually became too much when one skhothane committed suicide because his unemployed grandparents couldn’t afford his lavish lifestyle and he had lost a challenge.
Such is the nature of South Africans, Izikhothane are extreme but they are reflective of the culture of our nation and I’m only ruling out other countries because I have not lived there so I wouldn’t know. We compete on every level that is significant to us; who drives a better car, has a better job, the bigger house, which holiday destinations, who gets married first (ladies…) etc. Don’t get me wrong, there is a place for competition as it spurs us to better ourselves and reach new heights. It just becomes a problem when your “frenemies” inhibit you from reaching your potential because quitting your job and doing your own thing will negatively impact your lifestyle and how they perceive you. The risk becomes too great especially when your lifestyle has brought you a certain level of exclusivity and access to niche social groups.
This blog would probably be a lot more helpful if I could tell you how to deal with it… but I can’t. If you’re in this situation, you’re not doomed but I can’t help you. How did I get over this? Well, I was never high up the social food chain so I faced a much lower opportunity cost, in fact the move to entrepreneurship was horizontal 😉
Its been reported by the Finscope Consumer South Africa 2014 survey that over 4.9 million South Africans show symptoms of over-indebtedness. That means that just over 15% of South Africa’s adult population fall in this category. I imagine that as one gets older, the more likely you are to fall in this category because you are likely to get married, commit to a bond and have children… “beautiful” things on their own but they are financially demanding and their steady growth may not be in proportion to your salary. How does that translate into entrepreneurship? Well, it doesn’t. I have a strong hunch that within this 4.9 million there are several Aliko Dangotes, Sheryl Sandbergs and Richard Bransons with great ideas and expertise that have the potential to create thousands of jobs and significantly reduce poverty but they can’t really take risks because of their financial situation – debt, dependents etc. It doesn’t matter how smart you are, how great your idea is or your track record sparkles, no successful entrepreneur or mentor will advise you to go into entrepreneurship full time if it means mouths may go unfed, that doesn’t mean you shouldn’t do it, it just means that it’s a hard decision that you will have to make on your own.
If you’re young don’t to get in this sticky situation or at least be smart enough to predict how you will avoid common pitfalls that your elders have made.
If you’re in this situation, do push your entrepreneurial pursuits as a side business and when you feel the need to go full time, apply for funding from different institutions, these institutions understand that people have to transition and some actually prefer people with work experience especially if you’re proposed business is in the industry you’ve been working in. Who knows, you may have a smooth transition from your current job to your startup.
The Perfect Product
Facebook has not always been the seemingly crisp, clean and high value social network with over a billion users. Facebook, was once “Face Mash” and then it was “The Facebook” and then it was just “Facebook”. Amazon was nearly called “Cadabra” at the onset but employees were worried that customers would hear or confuse it with “cadaver”. Jeff Bezos (Amazon founder) also considered calling it “Relentless”, he liked the name so much that he bought the url and if you go to www.relentless.com you’ll be redirected to the Amazon website.
The brief history lesson on company names is meant to serve as a metaphor on how even the best companies were/are not perfect especially at the early stages of the business. All successful businesses have to change their customer segments, product offering, pricing model, revenue model etc according the lessons that they learn as they interact with clients, funders and suppliers.
I have come across a number of individuals who have ideas worth exploring but want to develop the perfect “Facebook”, complete with the blue “Like” button. They feel that they or the product are not ready so they go on to study a business and/or accounting course, go on a mission to find the perfect business partner or start attending networking events in order to have the “perfect” networks before one goes into business. I’m not against education, business partners or networking but if they replace or postpone the entrepreneurial journey then they are more of a hindrance than a help.
If you are in a start up or about to start something, you’re correct, to some degree, about the problem that you’re trying to solve but you’re probably wrong about a lot of other things like how you’re going to solve it, who’s willing to pay for your solution, how much it should cost, the type of expertise you require etc. And how do you answer all those wrongs?
You try and you err.
You adapt or you die.
People’s opinions can go jump.
Manage your money and do it well.
Perfection is overrated.
Just do it.