Reflecting on selecting the right people for entrepreneurial success
I think a startup ecosystem in an emerging market should support entrepreneurs in the following ways:
- Finding a co-founder: We should encourage founders to consider their good friends, judging their character and commitment. We should teach them conflict resolution skills.
- Finding early employees: We can link people in existing communities that share some values, such as church communities. We should teach founders to look for attitude over aptitude. They should look for excited, committed, trustworthy team members. Diversity is needed from the start and we should convince founders of the benefits of diversity.
- Team culture: We should expose entrepreneurs to companies with a great culture (in terms of office design, values, structures). This is best experienced, not taught. We should encourage founders to explain to their teams why they are doing what they are doing.
- Marketing: We should use our community networks to start word-of-mouth marketing for promising entrepreneurs.
- Coaching/Mentoring: We should encourage this and also create networking opportunities for entrepreneurs.
- Training: We should provide training opportunities in topics such as finances, sales and distribution. We should teach entrepreneurs useful frameworks.
- Seed funding: In emerging markets seed funding is more common than venture capital. We should ensure that founders understand the dangers of too much funding. They should focus on efficient operations from day one. Even though crowdfunding is yet to gain significant traction I think it can make a valuable contribution in emerging markets.
- Managing investors: We should help entrepreneurs decide when and how much money to raise. We should teach entrepreneurs pitching skills and that telling the truth is best. We should teach them how to pick and manage investors. It’s OK to say no, because you can’t fire your investor later. We should help them to evaluate offers and valuations and board structures.
- Finally we must help entrepreneurs believe in themselves and encourage them not to lose hope.
I loved the following insights I gained this week:
- Diversity is the source of creativity and innovation. Diversity generates productivity.
- In order to promote diversity we need to recognise our unconscious bias.
- A recent survey found that only 6% of tech startups in South Africa has female-only founders. It does depend how you define a tech startup, but we certainly need to encourage more women to take the leap.
- The main antidote to politics in a company is to be fair and transparent.
- Understanding VC business models and agendas helps to evaluate their offers and decide whether to accept their funding and influence or not.
I wondered about the following this week:
- The Holacracy approach at Zappos and other companies looks like an unworkable concept to me. The self-management ideology does not solve issues around self-interest that are intrinsic to human nature.
- If you cannot find a friend as a co-founder, is it better to go with someone that looks like they could become a friend or to go it alone?