4 entrepreneurship lessons from the experts

By: OPEN

Businesses operating today face many challenges and South Africa’s current economic climate means times really are tough. For the start-up and entrepreneur community, passion, dedication and even finance aren’t necessarily enough to ensure a business will succeed.

History shows us however that it’s often these highly pressurised environments that in fact spur innovation and business disruption. These conditions seem to ignite start-ups who thrive on creating tomorrow’s solutions for the issues of today. More and more, we’re seeing corporates working with fledging SMEs in symbiotic relationships, where funding and infrastructure are matched with agility and innovation.

While there certainly appear to be dynamic entrepreneurship hubs developing around South Africa, it’s still not an easy environment in which to be starting out. Interestingly, it’s not all down to funding needs either. Three entrepreneurs share their insights into the greatest challenges facing this community in SA and what is required to succeed.

Make networking work for your business

According to Sandras Phiri, Director of Startup Grind Cape Town, based at Workshop17 at the V&A Waterfront, the single biggest obstacle facing entrepreneurs is how to begin selling their product or service. “Too often we see entrepreneurs closing up shop simply because they haven’t tested whatever they are selling on actual clients. Desktop research and data collection from the internet does not replace speaking to real people and this is where the mismatch can come in,” says Phiri.

Networking can play a critical role. Meeting potential clients, partners as well as other entrepreneurs can provide valuable insights to inform business decisions and ensure entrepreneurs are on the right path. With 300 chapters globally, Startup Grind – powered by Google for Entrepreneurs – has a strong focus on networking as a means of getting good advice, benefiting from the sharing of best practice and lead generation.

Selebogo ‘DrLifesgud’ Molefe from The Hook Up Dinner (THUD) SA, a networking movement that is based at OPEN Sandton, echoes this sentiment. “An entrepreneur’s success hinges on access to markets. As a result it’s all down to the contacts you can leverage because cold-calling is one of the hardest and possibly least effective ways of reaching the people that count for your business.” For this reason, THUD, which started out with 8 people in 2012 and today is active in 13 cities and 6 countries with a network of over 89 000 entrepreneurs, values the role OPEN Sandton plays in nurturing an ecosystem of contacts, referrals and collaboration. He says, “For us, having a partner with an ever-growing network of resources from corporates and entrepreneurs alike, has transformed our business.”

Perception first and then delivery

Caitlin Craig, head of Community for She Leads Africa, a community that helps young African women achieve their professional dreams through engaging online content and pan-African events, believes that consistency is important. “For an organisation such as ours, where we’re running business bootcamps and corporate masterclasses as well as pitch competitions, having a consistent, professional partnership as we do with OPEN, to provide the spaces we need is critical. We need to be able to rely on appropriate spaces to promote the growth of skills – our audiences need to trust in us.”

When events happen in the same place all the time, the space becomes a home, and together with a monthly rhythm, builds visibility and accessibility. People know where and when to go. The movement gets cemented and it becomes more than the sum of the separate events.

She Leads Africa has grown to an impressive community of 400 000 upwardly mobile members across the continent, so it’s not hard to understand why a level of consistency with key partners in place to help maintain a level of quality in delivery, would be important.

Molefe stresses how perception drives the market. “For clients to take you seriously, there must be a perceived value exchange and this can be greatly influenced by how and where you’re operating from,” he says. “Clients view us differently now that we’re in a key business district and the energy our surroundings imparts on our business from a collaborative and an enabling environment has been unprecedented.”

Flexibility

New businesses by their very nature, are dependent on a degree of flexibility in order to survive. Molefe believes that small, nimble teams are a far less risky approach for entrepreneurs, instead of assembling large teams with a salary bill to match.

Entrepreneurs don’t have economies of scale on their side when they first start out and so its advisable to keep the number of staff down. The downside, however is that the resulting lack of capacity means corporates don’t want to do business with the small guys. This is where the benefits of operating from a partner co-working space can make all the difference. If you’ve built up trust with your network and you’ve all assessed each other’s quality and delivery levels, it’s literally a matter of tapping into this ecosystem.

Phiri feels South Africa’s inflexible labour laws are a challenge. “The labour laws here are not friendly for start-ups. In a tiny team there is no room for people who aren’t performing because for most of these young businesses, they’re struggling to make ends meet.” He explains that employing people is a sign of success because it means your income is starting to cover these costs but entrepreneurs need room to manoeuvre so that the company can survive.

Beyond bucks – accessing skills and mentors

Financing for entrepreneurs is a funny thing. There’s no denying they need it, but without the right skills to know how to self-organise and how best to use it, monetary assistance is pretty much useless. The notion of imparting sage advice to someone less experienced is by no means a new idea. When there is a meeting of minds the process can be extraordinarily fulfilling for both parties.

For Molefe, capacitating one’s team is key because for many start-ups, specialist skills are sometimes lacking. This is where mentoring can help fill the gap. “The Hook Up Dinner’s monthly events are aimed at establishing crowdfunding for great businesses but are also contributing to skills and network building. We find many multi-nationals are looking for entrepreneurs to enter their supply chain to comply with the BBBEE act. Through this process, mentorship has a clearly defined role to play.

In the corporate environment, mentorship is on the rise and the benefits are being recognised. According to Deloitte’s 2016 Human Capital Trends report, Millennials planning to stay with their employer for more than five years are twice as likely to have a mentor (68%) than not (32%). This same approach is invaluable in the start-up and entrepreneurship space. It has many benefits and Phiri believes one of the most important in this space is that mentors can help entrepreneurs and investors connect with each other. “Investors often speak a different language, figuratively, to the entrepreneur and this is how they can miss each other. Coaching can help align these needs so the value connection is made,” he concludes.