The other side of the coin: Busting myths surrounding South African entrepreneurship
This article has been a year in the making. I’ve had to pivot several times. I could not write it without consulting key role players in the ecosystem — and those identified don’t necessarily correspond to those recognised by mainstream media, educational institutions, or extravagant competitions.
There is a decidedly depressing side to entrepreneurship that glossy business publications ignore, and who can blame them?
While reports of xenophobia, gender-based violence, child rape, corruption, and one of the highest unemployment rates in the world abound, entrepreneurship in South Africa is manna: its powers purportedly messianic, and everyone can get a piece of the pie (supposedly). Society has reached saturation point. We don’t want more doom and gloom. We want to hear the inspiring stories, the successes, the wins.
It’s not that simple. To gain a better vantage point, I turned to Jason Levin’s 2017 startup ecosystem discussion paper ‘Unicorns, Gazelles and Leapfrogs’. While Levin (entrepreneur, intrapreneur and director of Elevation Holdings) emphasises that it is a non-academic, “from the horse’s mouth study”, it is also intended to be a “catalyst for conversation.” To date, the ‘conversation’ has been one-sided.
Discussions about the impact of ‘ego’, and how pride, bias, and self-promotion should be omitted from decisions around funding, partnerships, collaboration, and types of entrepreneurs selected by incubators and accelerators which followed the paper’s launch proved to be damp squibs. The machismo and posturing that went along with stomping them out was telling. Promises to “look into these problems” have been forgotten in a characteristic dismissal of real concerns.
While bullshit conversations around the South African startup ecosystem continue (originating primarily from stakeholders pushing their own agendas), what of entrepreneurs who fall between the cracks, who aren’t glamourous or successful, especially in a country where the divide between the haves and have-nots is jarring?
I interviewed 27 entrepreneurs, two accelerator representatives, three incubator representatives, and five funding/investing spokespersons. Some entrepreneurs asserted that their applications to incubators or accelerators, as well as requests for funding or mentoring, went unanswered.
I wanted an authentic experience, so I posed as an entrepreneur with a business in the technical and vocational education and training (TVET) sector, matching graduates with suitable jobs. I made it clear that the initiative was self-funded, but that I needed mentoring. I sent 13 applications to major incubators and was met with no response. I participated in pitching workshops, and, while there was interest in the idea, the judges shut down upon hearing that the ‘business’ was not yet turning a profit. The verdict was unanimous: “Great idea, but how will it make money?”
The bottom line is: If you don’t have a bottom line, you aren’t going anywhere.
In August, Seed Academy (an accelerator) released this year’s ‘The Real State of Entrepreneurship Survey’ results. It identified problems which have been exacerbated in the four years the report has been published: a chronic lack of business know-how, access to funding, and access to markets. Many of the entrepreneurs surveyed (1 000 in total) pointed out that they do not know how to access funding or business support. These findings echo what Evashnee Naidu, Chief Enabling Officer at enablED (an incubator), confirmed for me. Her research indicates that the failure rate of startups is 50%, and this happens within their first two years in operation.
There are always going to be entrepreneurs on the periphery of the ecosystem, the ‘great idea’ generators, but if they aren’t going to be South Africa’s first unicorn, few ecosystem inhabitants care. In fact, if I could give potential founders a glimpse of their future, they may well encounter a script that looks like this:
Dear ____________
Thanks for entering our competition/enrolling in our programme. Although you were shortlisted, your business needs refinement before we offer funding or assistance.
While this was an idea pitching event/initial qualification process, we expect all entrepreneurs to have a five-year plan and financial projections.
We reserve the right to use your idea/proposed business model in any manner we see fit.
Better luck next year!
The paternalistic, demoralising message couched in exploitative language is: don’t call us, we’ll call you (but only when you’re a ‘success’).
In 2016, I visited the poverty-stricken township of Zenzele outside Randfontein and met Ditsebo. A single mother, she lives in a two-room dwelling composed of aluminium and plastic, with a dirt floor and no running water or electricity. Despite these challenges, she is a community leader who coaches volleyball and bakes bread with a solar-powered oven. She put herself through college, and plans to sell more bread to uplift her community now that she’s completed her studies in entrepreneurship. People like Ditsebo need support. The question is, who’s going to provide it?
For Willem Gous, international speaker, trainer, and author, entrepreneurship is one of the biggest lies we sell people. His personal crusade is demythologising this ‘con’. He’s frank in his motivation: “Growing up, I saw my dad work himself almost to death. His record was working 72 hours straight without any sleep. He smoked 80 cigarettes a day, and drank copious amounts of coffee to stay awake. He has nothing to show for it: When he lost his businesses, he lost everything.”
Gous’s father passed away a few months before this article was published. How many unsung antiheroes like him are there? For Gous, this cautionary tale needs to be told:
What the business books, trainers, and courses fail to tell you is that entrepreneurship, in and of itself, cannot realise your dreams of financial success and freedom. It is designed to address only the needs of the customer, yet we continue to peddle it as a means of upliftment. Only when we build businesses that address the needs of both customers and entrepreneurs will we be able to foster, accelerate, and celebrate entrepreneurial potential for the benefit of us all.
Where to from here, then? Entrepreneurs who haven’t ‘made it’ need to insist on being provided with whatever support they need. You are going to face criticism and rejection, but take from them what you must in order to grow. The ecosystem needs your voices in order to change, and to fix broken or failing mechanisms.
To the funders, incubators, and accelerators: stop rehashing the same platitudes about how ‘being an entrepreneur is not for sissies’ — entrepreneurs understand how tough it is because they face challenges every day. Indeed, one of the greatest considerations is something every entrepreneur already knows: be less concerned with definitions, categories, and limitations. Be open to debates and discussions, and offer meaningful support. We’re all tired of empty promises.
