Bad Entrepreneur

When I presented at the AD:Dynamo seminar earlier in the year I did a small exercise which I thought might be useful for aspirant bloggers.

One of the big complaints that most bloggers have is that people don’t post comments on their blogs and they never really become an interactive “hub” or meeting place where people exchange thoughts and ideas.

The blogger throws the post out to the blogosphere and sits and waits expecting people to contribute and then becomes disappointed and disillusioned when they dont. Some become a little bit desperate and start looking to buy these solutions that will supposedly send stacks of traffic to their site.

My issue is that many of these aspirant bloggers are desperate for this thing called “traffic” – because hopefully it will monetise their blog and make it more interactive – that they forget what “traffic” actually is.

What I did during my presentation was to get everybody in the room to stand up and go and introduce themselves to three different members of the audience. They had to exchange cards, tell one another about what it is they do and why they might be interested in them.

This is what traffic is and if you’re not getting any responses to your posts, then maybe you need to be putting yourself out there a bit more and interacting with other people.

Bloggers tend to look at their traffic stats and talk and view their visitors as numbers/leads/sales. The traffic you want (even if you are planning to monetise your site) are real people. They are not just a nameless, faceless number. 

Instead of this grandiose idea of thousands of visitors and impressions being generated by your “traffic”, maybe start approaching it as one value adding contributor to your community at a time. From there let the value of adding to the blog and exchanging ideas be the catalyst for new visitors and community members.

I am quite excited. This whole concept of “social lending” seems to be gaining some traction in South Africa.

Recently we had Eve’s Crowd Fund which has raised pledges in excess of R750k to support start-ups in SA and now a girl by the name of Bridget has started an initiative to raise R130k so she can buy a new car.

She’s hitting up the community for 500 donations of R260 in return for some advertising on her site for  a year. It works out something like 24c a day for the advert she is offering, which is pretty cheap.

I am having this discussion with Chris M over at Imod, but thought I’d raise it on this blog as well.

My interpretation of social lending is that while there is an immediate beneficiary, there is a “greater good” in making the investment. Crowd Fund being an example – Eve and her investment board have raised their profile and investment capital, but the investors are contributing to the entire start-up culture in South Africa.

In Bridgets’ case the community is buying her a R130k car.

No sour grapes but I’ve never owned R130k car. Is there any reason why she can’t have a R65000 car and donate R65000 to charity? To me THAT is the power of social lending – a community clubs together to support an individual but the community itself also scores.

Like I said – I love the idea of social lending but not sure that this concept from Bridget necessarily embraces the principles of it. 

… otherwise you’re welcome to ask me for my bank account details and you can start paying off my homeloan if you want?

Because it is Monday and we all need to start off the week in the right frame of mind, I am going to start with a quote that a friend has just e-mailed me:

“Life is short, so treaure and love those that make you happy and smile, banish those things that make you sad and angry and live every day as if it was your last, since you never know when it is your time to go.”

I have a couple of observations from this weekend which I thought I would toss out to the blogosphere and see what others are  saying.

Bread price
Until Saturday I had never bought bread from a local bakery. Sure I’ve had Fournos for breakfast or lunch but never really been one to do the bakery thing. If I need bread I run into Pick ‘n Pay or Spar and I fork out about R10.50 for a loaf of bread or two each each day depending on how many of the three kids are at home that particular day.

Purely by chance I ran into a small local bakery and a loaf of bread was R6.50… err that’s a pretty big price saving. The next day I ran into the Woolworths attached to the Engen garage and was about to buy my normal brand of Tiger Brands manufactured bread (R10.50) and I found Woolworths no name bread for R7.95 – still a sizeable difference.

It doesn’t look like the Competition Commission fines are making any real meaningful impact on the retail price of bread, but maybe you need to shop around and support some of the small business or non-traditional brands and vote with your wallet!

Nigerians and Indians
I won’t lie, I racial profile my e-mail inbox. When it involves Indian, Chinese or Nigerian businesess looking to “strike up a business venture”, I tend to hit the delete button pretty quickly.

This is kind of ironic or “dof”, considering that each week I am writing about how Nigeria, India and China are the most promising growth regions across the globe.

Yeah of course a lot of them are still 419 scams and half the time I can’t work out what their broken English is trying to say but maybe I am being a bit short-sighted.

A couple of things happened this weekend which got me thinking. I was on Afrigator on Saturday and at one point the top bloggers were from Egypt (which incidentally has been identified by Stratfor as a continental superpower within the next 10 years) and Nigeria.

Shortly after that I had reasonable business enquiries – “reasonable” being that they appeared to be legitimate companies – from both Nigeria and India.

Maybe that was a wake-up call to myself that you can no longer just talk about these countries as growth opportunities for tech and business investments – you need to live it.

I was on Loy’s StartupsNigeria site last night and I realised what a cracking offering he has. We focus a lot of attention on opportunities in South Africa but don’t spend much time looking at what these guys are doing. The venture cap guys whinge that the SA market is too small and need a “global” audience but how much time do they spend looking at Africa? It is easy to say you are designing something to be sold into the US markets but how much effort do you put into selling something into African markets?

Beyond tech
Lastly I have become a bit frustrated with non-tech entrepreneurs who don’t make use of tech for their businesses. I know a lot of people who quite happily use Facebook as a social networking (non business) tool, but don’t make any effort to use it for business networking.

Yes Twitter and blogging might be a little “geeky” but then you can’t turn around to me and say that you can’t afford advertising and marketing for your small business.

I’ve seen some really cracking local businesses out there including sports, social responsibility, engineering, e-learning and administration but the brains behind them are using very little in the way of technology to promote their brands.

Guys – technology makes you flexible to market, administer and ramp up your business much quicker than traditional business tools. Use it to your advantage!

This post is probably going to make some of my readers throw up a little in their mouth but I’m gonna post it anyway because I’ve seen some pretty negative

things written about SA in the last few days.

Earlier today a bunch of Twits (the Twitter kind) got the chance to ride on the Gautrain – what a friggin awesome experience! How can you not be excited that after all this talk we are getting a decent passenger train system!?

It’s finally here and will be ready for use in less than three months time – this is monumental in my humble opinion.

I humbly apologise in advance to the peeps over at the Gautrain but I have stolen this picture off their site, because I think its important that people actually see that this thing is real. For all you nay-sayers does this like a country which is falling apart?! DORKS
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This is a multi-million rand train system that will ultimately make a huge difference to the congestion on the roads and improve your productivity and those around you. See the opportunity, not the negative.

So endeth this rant.

I needed a bit of cheer for my Friday and I got it in the form of some very upbeat comments from the global chief executive officer of consulting group Accenture.

I interviewed William Green this morning and one of the questions I asked him was: “You’re represented in 120 countries around the world, which are the most exciting as an international investor?”

His response: South Africa, Mexico and South Korea

I’m doing more of a write-up on the interview for Fin24.com later today but suffice to say, his view was that SA and Mexico are the only two “normal” economies that actually want to do business with international investors. Fantastic stuff…

He had a lot of praise for the innovation he was seeing coming out of South Africa, the passion and spirit of South Africans. His only criticism of us is that we don’t trumpet our successes enough.

Personally I just thought that it was brilliant to have a highly respected industry professional saying good things about the country.

It got me thinking about other South Africans who are very pro-SA.

Jeremy Gardiner from Investec Asset Management kicks off all his presentations with a video on why South Africa is so damn good compared to the rest of the world. He includes feedback from leading SA business people and backs it up with stats and figures and when you leave one of his presentations you feel proud to be a South Africa.

I am not sure that Nic Haralambous from SA Rocks would like to be described as the “pin-up boy” of Pro-South Africa but he’s right up there with the best of them.

Let’s go out on a Friday and add your pro-SA voice to this thread by telling us one thing that is truly South African to the core!

and don’t normally do the whole poetry thing but I thought this was an interesting piece of advice for a Friday. First two paragraphs make for an interesting entrepreneurs lesson:

My Wage
Jessie Belle Rittenhouse (1869–1948)

I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store;
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have paid.

JESSIE B. RITTENHOUSE, “My Wage,” The Door of Dreams, p. 25 (1918).

Credit where credit is due – In putting together her Crowdfunding initiative,  Eve Dmochowska has probably come up with one of the most innovative small business concepts of 2010.

WIn a nutshell the way it works is that angel investors can make investments into a centralised fund, starting at a minimum of R1000.  The money is pooled together and will then be invested in start-ups who need R50000 – R100000 to be invested in start-ups who need some dosh to put together proto-types.

I came across the site purely by chance yesterday and saw that 34 people had pledged about R40k. I checked again this afternoon and that number had jumped to 84 people pledging R240k… absolutely brilliant. (PS yes Rival has made a pledge.)

Anyway the website explains it in more detail but I thought I would chuck in my 10c in terms of why I believe this initiative is so important.

• South Africa does not have a culture of Angel investor networks – this is a very important step in the right direction
• At any given time there are 20 – 25 young entrepreneur teams and ideas being given a chance to be part of the start-up environment
• It sounds grandiose but concepts like these change the South African venture capital and funding landscape PERMANENTLY.  Banks, venture capitalists and incubators have come in for a lot of flak for their failure to back small businesses and start-ups but over the last two years they have been scrambling to put together SME offerings… just when the real innovators have found a better way to access the market.

For me the most interesting part of all of this has been the great response to “social lending”.

A few years back I shot down a business called AngelMoola which was maybe before its time in providing facilities to promote social lending to people seeking small short-term loans. Fast forward three years and Kiva and now Crowdfunding has picked up a very real supporter base.

People like this just give me a super good feeling about South Africa, they make the world go round. Well done to everybody involved in supporting this initiative – you guys rock!

I get to read quite a lot of negative commentary about SA banks – specifically the big four (Nedbank, Absa, Standard and FNB) – and the way that they deal with small and micro enterprises (SMMEs).

The main comment that is made is that big banks “don’t understand” small business but this seems like a really generic comment and doesn’t help them improve what they are doing.

If I sum up the comments and try and take some of the emotion out of it these seem to be the main criticisms which are levelled against these institutions:

• They don’t lend to small businesses
• If they do offer to lend, they require high levels of collateral and don’t take risks with entreprreneurs
• It’s too expensive for small businesses to borrow from banks
• Banks hound entrepreneurs when they don’t make their repayment commitments

I am not going to try and influence this debate yet but I am going to make some observations and then maybe let the blogosphere and contributors to this blog give their input about what they expect a bank to do to better support small businesses.

• FNB has brought a number of innovative technology solutions including Instant Accounting and potentially PayPal
• Standard Bank is putting a lot of effort into initiatives in the franchising sector and small business networking
• Nedbank is supposed to be bringing a technology driven solution along to compete with PayPal (not totally sure how that is going to work)
• Absa has been throwing money at a couple of grassroots initiatives but don’t really seem to have a “small business identity”
• Sasfin is supposed to be “the bank for entrepreneurs” but you never really see them doing much visible in the sector

So my question to you is:

1. In your opinion which SA bank is doing the most to supoprt small business?
2. What are they doing well?
3. Which products have the most benefit to you as a small business?
4. What could they do to better improve their offering to you as an SME owner?

We’ll rustle up a bottle of something nice for the blogger with the best comments so go wild.

Remember – this is not a bank bashing exercise, this is an attempt to come up with constructive criticism to support the sector. Let me know.

This post has next to nothing to do with entrepreneurship, but I thought it might stimulate a bit of debate over the weekend.

Earlier this morning Chile was hit by a massive earthquake and big parts of the world are now on tsunami / tidal wave alert. With the devastation in Haiti still fresh in many peoples minds, many people are gearing up to offer assistance to areas which are going to be impacted.

Just some stats which I have picked up following Twitter this afternoon:

• Roughly 3 million people have been impacted by the earthquake
• All commercial ports in Hawaii are closed
• 500000 families in Chile alone have been displaced
• Technology infrastructure in Chile, Argentina, Hawaii, French Polynesia has been damaged
• I’ve just read on Twitter that the King of Tonga has just opened the palace gates to take in fleeing residents

These are society changing events and we have had some really big earthquakes in the last few years.

This year we had Haiti and Chile and not so long ago (2004) there was a major one in Iran as well which killed 15000 people. On top of this there was the 2004 Tsunami which killed roughly 230000 people

With these events being in the news, I was under the impression that natural disasters of this magnitude were on the up and the world was falling apart.

I went and found this page on the US Geological Survey National Earthquake Information Center site which seems to show that in fact there has not been a noticeable increase over the last 10 years.

Watching the world react to these various crises it has been interesting social experience.

Point 1 – expand your horizons

I mentioned Iran earlier on in my post because many of us (myself included) have this American fuelled perception of Iran as little more than a carbon copy of Iraq let by religious extremists chanting along in the desert.  Yet if you go and do your homework it is considered as being just outside of the whole “MAVIN” group of countries (Mexico, Australia, Vietnam, Indonesia, Nigeria) which has been identified as some of the most promising growth regions for business in the coming years… (just as an aside you might be interested to know that global geo-political consulting agency Stratfor identifies Egypt as the new African super-power within the next decade – how are you positioning your business around this?

My point – the world doesn’t just revolve around the US, UK, Japan Brazil, Russia, India, China – other economies offer just as many opportunities for your innovations. But it means you have to expand your horizons and be aware of what is happening in these places.

Maybe the world is tired of excess

I am always a bit cynical when I read about “social responsibility”.

I get the concept and I get “the bigger picture” which is why where possible Rival makes investments in various social responsibility projects but in many cases it just comes across as too soft and fluffy.

But maybe a combination of major natural disasters, the global financial crisis and the global recession (which has seen millions of people lose their formal jobs) might hasten the shift of the world into a new world order where excess is no longer the order of the day.

I dunno… Busy watching various web-cams and following the Twitter feeds and it is super eerie… let’s see how this plays out.

… well sort of.

There has been some mumbling from the Gauteng quarter, that not enough has been done to involve them in the whole Silicon Cape initiative.

Having chatted to Justin Stanford last week, he seems to be of the view that it should be an all-embracing community initiative which encourages community driven events and idea sharing. That includes extending it beyond Cape Town, even to the plebs of Johannesburg.

The flip-side of that, is that some of the tech entrepreneurs in Cape Town feel that it detracts from the idea of a close-knit innovation sharing community.

Me, I’m of the humble view that the more the merrier and technology has meant that we can exchange ideas and opportunities from Gauteng, Durban, Cape Town, Limpopo (howzit Julius Malema!) or anywhere else.

No reason to limit networking under the Silicon Cape banner if it benefits the industry.

With that in mind I bounced it off Justin last week and we’re going to try and test the waters in Gauteng to see what people are saying and doing and maybe some feedback about what their expectations of Silicon Cape is.

But this is where I need some input:

• What’s the expectation of an event in Gauteng? Is it to share a couple of drinks and network a bit?
• Do you want a speaker from the Silicon Cape steering committee to give you their take on life and where the initiative is headed?
• Do we need a minimum dress code to keep the bankers (cold shiver) out of the room?
• Any objections to somewhere in Sandton?

Catherine Luckhoff and I opened our big mouths and have decided to make a run with a Gauteng event some time in the next few weeks but we’re kinda shooting in the dark in terms of expectations and what people want. Plus we’re always keen to have people volunteer to commit some time / ideas to making it run smoothly.

PS if anybody feels like sponsoring a couple of crates of Spiced Gold for the organisers I won’t complain… I promise to disclose them to Julius’ satisfaction and will be totally transparent with the gift register.

Ok jokes aside – a couple of us are prepared to run with this, but we need guidance from the Gauteng community. All input would be appreciated!