by Nthulane Makgato Founder and Director Red Case (http://redcase.co.za)
I recently finished a book titled The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone. A great read for anyone who is interested in the 20-year rise of the multi-billion dollar company and its billionaire dollar founder, Jeff Bezos. There are many interesting themes in this books like how Jeff Bezos is central to Amazon, his love for books that drove innovations like the Kindle and the how he has similar characteristics of many great entrepreneurs like Steve Jobs in his uncompromising attitude toward excellence.
The one theme that stood out for me and made me think twice about the funding landscape in South Africa was talent. From a very young age (2-3years), Amazon was able to attract talent, not only did they hire graduates from Harvard, they were able to poach the best people from then established companies such as Cinnabon, Barnes & Noble and Microsoft. Amazon has always had a high standard of people to hire and this has played no small part in the company’s success and this is true for any company much like Google, Facebook, eBay etc. If you’ve assembled a great team, your chances of success increase significantly.
So how was Amazon able to attract and maintain these expensive hires? They raised money from several families, investors and investment companies.
The concern that I have is that when I, like you, want to grow my business into a multi-million dollar empire, will I have enough funding to poach an engineer from Sasol, business analyst from Nedbank or a law guru from Adams&Adams? Based the funding landscape in South Africa, I’m not completely sure… With unemployment being so high, the drive for many institutions may be to fund ideas that will create many jobs early on. A focus on the quantity of jobs created rather than the quality.
One can always argue that USA is different from South Africa, which is true. USA is wealthier (more money to invest, bigger talent pool, lower unemployment rate etc) and their attitude to entrepreneurship allows investors to take more risks on ideas that could or couldn’t work. These differences explain why things are different but they don’t make talent any less valuable. Since we know that our GDP will not leap frog that of USA anytime soon, it may mean innovative ways, to attract talent, which do not include money… good luck with that…
I was at an event a few months ago and in the Q&A I asked the speaker a question along the lines of why SMMEs in South Africa don’t get the financial backing to have the option to poach or hire precious talent. In a long and winding speech, the speaker basically said that South African entrepreneur’s business ideas are not good enough to warrant such an investment. I would have normally had witty response but for someone who loves South Africa as much I do, that hurt. Made me wonder if Red Case is that good…
Other than the fact that I just didn’t like the speaker’s response, it came across as though there was no element of risk when a funder decided fund a start-up. That it was cast in stone that an idea was good or bad even though we know of countless entrepreneurs who were rejected many times before they got funding and became successful.
At the same time, we know that the quality of our education is not great, only a select few have access to the internet and information and our risk averse nature as a society may mean that we don’t look for real innovation, we just throw the word around an awful lot and then copy the next person’s idea. As I thought about it, it evolved into a “chicken and the egg” dilemma. Are entrepreneur’s ideas not good enough for substantial investment or are funders too risk averse to take a chance and fund what could possibly be the next Amazon? I don’t have the answer to that, perhaps you do?
In conclusion, poaching an employee has just been scribbled on my buck list. I also want to know how it feels to say “I’m head hunting Jane Doe – Head of Strategy at Coca-Cola International, I hear she’s the best, how much does she want… give it to her!”