Bad Entrepreneur

I’m looking over my scrawled notes from this evening and trying to decide what my takeaway was from the presentation by trend analyst Dion Chang who spoke at Gibs in Johannesburg.

First up I was a little irritated by listening to that woman whose two “questions” were more like statements on how she did it in HER business. For crying in a bucket, if I wanted to listen to what you had say, I’d book an appointment with you. I came to hear people put their questions to Dion.

Now that, that rant is out the way….

In my humble opinion the presentation itself was a bit wishy-washy. I can’t say that anything ground-breaking came out of it.

Largely it came across as a bit of a rehash of most of the issues those involved in publishing / PR / advertising / online communities have been debating for a while.

Dion spoke quite a lot about the “empathetic consumer” which is a concept I think I can buy into. My short-term concern is that we still need to see the “frugal consumer”.

It is important we don’t mix up the empathetic consumer with the frugal one – something that could be very important if you are planning to launch a consumer driven business.

Two statements from Dion did jump out at me:

• “Networking is going to be a force to be reckoned with” – that in itself is not new but I can see a very clear difference between the people who focus on their own personal networking compared to those who sit behind a desk waiting for things to come to them.  If you are planning to start a business then use every single piece of technology – blogs, Twitter, LinkedIn etc and network like crazy to give yourself half a chance
• “Involve me and I will understand – collaborate” – Dion spoke about seeking out mutually beneficial partnerships. Again it is not new – but the point is that you can go out and use technology to help you find these partnerships. This is a helluva important message for people who are looking to start their own business… in 95% of the instances you will not succeed by trying to do it all yourself.

Anyway – I am going to sleep on those two thoughts for a bit and decide how they might influence my business in the coming months.

If you would like to buy Dion Changs, Flux Trend Review for 2010 – you can buy it online at retailer Loot for R163.

The original press release with Dions “top 10″ trends is further below. Feel free to scroll back and give your thoughts.

It’s a bit of an arb post for a Friday night but I have just seen the details for the Euro Lottery, which stands at $103 million. Yeah yeah your chances of winning it are next to zero but just imagine that you did strike it big…

… no more fighting with customers for payment, no more worrying about “cash-flow” in your SME – in short FREEDOM.

I was just looking at the last results: there were 164 people who won GBP2573 each. At the current exchange rate that is R31288. That’s better than a kick in the teeth for the cost of a ticket.

And if you hit one of the big prizes then you wouldn’t need to come back to work for a good while and wouldn’t need to lose any sleep fighting to keep your SME afloat.

Heck you could even become a philanthropist and casual wave and smile at the press as they photograph you handing over a couple of million!

If this sounds like your cup of tea then the lottery link is here!

Brett Commaille over at InVenfin took great pleasure in hearing how I was rejected and ejected from micro-lender Capitec today in favour of the security guard who works in the parking lot at the Cresta shopping mall.

I’m not going to bore you with all the details but in a nutshell I was looking for a short-term loan to pay off some software development costs I wanted to push through.

Being a Capitec shareholder and having never tried out their service offering I strolled into the bank, took my seat in the line and waited to speak to a consultant – somewhere between the security guard and the guy who washed cars at Audi.

Now to put my visit in context I’ve interviewed Riaan Stassen (Capitec CEO) before and he’s regularly told me that they are aiming to target the middle-class market so I thought I must fit in to this category. It only took a few suspicious looks I was getting from the consultants to know that I wasn’t their idea of “typical” client.

After a few minutes one of the consultants came up to me to ask me what I wanted. When I explained my requirements she shook her head and told me that because I was effectively “self-employed” I would not fit their lending requirements (remember they are charging 30%+ interest).

Please could I move on so they could service people who were gainfully employed and had a pay-slip to prove it…

… and that dear reader is what you set yourself up for if you decide you are going to bootstrap an SME.

Having hit every single source of credit to feed this monstrosity we created, I think I have felt every emotion under the sun while watching this start-up get put together. Even now where things are starting to come right and the blocks are falling into place, I still love and hate every single minute of the adventure.

To be ushered out of Capitec a few days after Standard Bank approved a R1m bond for my new house is probably one of those experiences which will stay with me for a long time to come.

I wanted to write this post for two reasons. Firstly I wanted to entertain but secondly I hoped to highlight to other would-be entrepreneurs what they are potentially letting themselves in for when they make the decision to take the plunge.

Personally we made a lot of mistakes when we set the business up. These are mistakes we are still feeling 5 years down the line. A big mistake is that we made our business and personal balance sheets one and the same.

In humble conclusion – if you are planning to start a business I hope you remember the blog about the dork who got sent on his way from Capitec in favour of the security guard who leads a desirable and predictable life… at least now you know what you are letting yourself in for.

I have been meaning to blog on this subject for a while now but have always found myself being side-tracked.

Fortunately Chris over at the iMod blog indirectly hit on the subject and I’ve decided it is now time to sit down and write it. Chris was talking about the different ways that he uses advertising channels AdGator, AD:Dynamo and Google AdSense and amidst all of the back and forth comments we both agreed that we’d far rather support the local entrepreneurs – Justin and Sean – than see our money being shipped overseas to support the Google monolith.

Obviously as publishers we need to weigh up the economic sense of it but in principle our preference is to support SA entrepreneurs, technology and business.

I’m not arguing the pro’s and cons of support Google AdWords but I’d love to know how much money goes off South African credit cards each month and flows to the US or Ireland to land up in Google’s accounts. Even if it is 1000 advertisers spending R500 a month, that’s half a million bucks going offshore and not being ploughed back into local business.

Remind me again what our unemployment rate is in South Africa and why people have given up looking for jobs?

It is the same when you hear that the World Cup mascot figurines are being manufactured in China. Yes there are economic realities around manufacturing which need to be taken into account but bigger picture is that the country has missed out on developing skills and keeping money in the country.

I had coffee with Pavlo Phitidis from Aurik last night and he raised a really good point – the Americans are not taking this recession and collapse in their employment rate lying down. It’s a big machine to turn but every American is being urged to buy locally manufactured products and services. Suddenly you see companies like Ford returning to profitability – they innovate, they grow and the jobs will follow either directly or downstream.

It’s a generalisation but in general as South African consumers we just sit back and assume that whatever comes from overseas is better than what we can produce locally.

You cannot turn around and say that there are no opportunities for local entrepreneurs if you are not prepared to support those that are standing right in front of you and have taken all the risk to get their product there.

Do me a favour when you’ve finished reading this post: Go out and buy a book by a South African author or a bottle of South African wine. If you are spending money every month with Google then go and divert some of that to AD:Dynamo or send Justin an e-mail and say you’re keen to advertise with AdGator.

You want a video game? Stop sending money to people at EA and Nintendo and take some time to find out what local guys are doing.

There are plenty of ideas and opportunities to support local entrepreneurs but you have to see them and understand why it is important to support them. Feel free to post other really obvious places where people are sending money to non South African businesses while we flounder and have no clue where our next jobs are going to come from.

Just remember – one day it might be you or your child twiddling your thumbs in an office wondering where your next client might come from while potential customers are busy creating jobs overseas… just a thought use it, don’t use it.

I hate to gush about a product – especially when its from a bank (cold shiver) – but FNB’s Instant Accounting package is simply awesome and will (in my humble and probably worthless) opinion be one of the most revolutionary products for the small business environment in 2010.

I’ve mumbled about it in a couple of previous articles but today I got to try it out firsthand. Suffice to say that I may not be a huge fan of FNB but I’m but I’m opening an account with them to get my grubby little paws on this tool.

If you are one of those SME owners who hates doing their admin and tends to collect all their paperwork in a shoebox somewhere then this program will change the way you work completely – and its not even complicated to use!

Plus it’s FREE which makes it frikkin awesome.

In a nutshell it is a rules based book-keeping package which runs off of your bank statement. According to the guys over at FNB 98% of the transactions that you will need to capture into your book-keeping package will be on your bank statement anyway so all the system needs to be told is where to allocate the income and expenses.

I’m just a lowly journalist but I couldn’t find any faults with it – the system does anything that I would need as an SME owner and a few more things than I expected it to be able to do.

And it’s not just aimed at small and micro businesses. The guys over at Cash Converters use it to track and do reporting on their other various stores and helps management pull up reports to compare different operating units.

Apart from the usual book-keeping up to trial balance functionality there is some nice reporting features on it including:

- Budgeting and budgeting variance
- Financial performance against previous financial year
- Cash-flow forecasts
- VAT reporting

The product is also very flexible. I had expected a “rules based” product to be very much an ‘out the box’ offering which could not adapt to different industries. The demonstration I saw included the services industry and a retail company. By FNB’s own admission it’s not ideal for manufacturing type businesses but for the rest you can configure this thing to your hearts content.

Nice product, I tip my hat to FNB and its developers – I’m sold on it.

I have to say that I was a little surprised that my column on Fin24.com this morning did not generate a bit more debate in amongst the comments section.

Anyway for those who don’t have the inclination, the gist of the column was about how technology had been a fantastic leveller of the playing fields, specifically when it came to financial tools to empower small businesses.

The problem with technology is that alot of entrepreneurs with that mystic thing called “budget” assume that SME’s can make investments while there are those out there who are scratching their heads and wondering how the next salary bill is going to be paid. If you don’t have money you often don’t look at investing in technology which might make you more competitive.

I thought it might be a bit of fun to create a post and try and list some of the
(South African) tools that are available for entrepreneurs. I’ve tried to limit them to South African companies so that we can support local businesses.

Feel free to post / add to them in the comments below:

Free blogging platforms

A lot of tech-savvy entrepreneurs take for granted that they will have a “web presence”. But for many smaller businesses this is something they have no clue about. Free blogging platforms such as Bundublog.com, Blat, iBlog and 24.com are all ideal places to get yourself some kind of presence at no cost in an existing community.

Website and marketing tools

Blog aggregators such as Afrigator, Myscoop, Amatomu are all great ways to build traffic to your site. They’re free, mahala, cost you zilch and used correctly they can help build awareness of your company or brand.

Can’t afford a professional designer but have a few bucks to spend on some webdesign tools? What about things like Yola and WooThemes?

Want to market your company but can only afford to pay for marketing which results in sales or leads? What about using things like TrafficSynergy or OfferForge to promote your business?

Don’t forget Sean Rileys AD:Dynamo business which is a very affordable marketing solution (heck we can afford to use it!).  Nice way to advertise your business on web, TV or mobile.

Looking for a clever piece of communication, networking and database tool for SMEs to manage their contacts? Have you tried Scott Cundills MajesticWay?

They’re not local technology but if you are loooking to zero in on building contacts or a local  professional network – have you tried Twitter,  Facebook, LinkedIn?

Financial

Book-keeping packages, credit assessments, basic financial management tools – these cost a small fortune and often need some skills to use them properly.

One of the funkiest things I discovered yesterday was Instant Accounting from FNB. I’m going for a demo on this tech next week but I have to say that this has to be one of the most innovative packages I’ve heard about in a while.

Other local suppliers and tech which jump out at me include Netcash, MaristIT and iTrust.

I’m sure there are plenty of others with some really neat solutions so please post ‘em below. Don’t make it an out and out plug for your business but I think it could turn into a really fantastic post and something which could empower up and coming South Africa entrepreneurs.

Did you realise that 7% of 2010 has been and gone? January has gone before you blinked an eye.

On top of that Daniel Munslow has just said that I should take into account time lost over the World Cup and the traditional South African shut-down for December and its an even bigger chunk of time lost!

Suffice to say it has made me very aware of time and resources.

I was just looking back on some of the plans and budgets that I drew up at the start of the year and it struck me how quickly time moved before work was turned into equiries which were turned into money in the bank.

I know I’m not the only one who made grandiose plans in January – there are plenty of people who have mentioned on Twitter that they had big aspirations for the year and it just served as a reminder to me that time is such a critical part of a start-up businesses make-up.

Every day, minute, hour, month or week that passes where you are not selling your brand and monetising your offering is a day closer to the point where you close your doors.

There is a girl who recently asked for some advice around starting her small service business. She had a lot of time for things like marketing stuff and “brand building” but had no real urgency around getting the invoicing out for the little business she had got and offering attractive terms to get that cash in her bank.

I’ve had to try and emphasise to her that all the fun things count for absolutely zilch if there is not money in the bank.

Every single hour in every day for an SME counts – especially if you are trying to bootstrap the business.

I know it sounds pedantic but how often as a business owner do you corner your staff and ask them whether they’ve delivered on what they were supposed to? How often do you check up exactly what it is that they have done in the last hour?

In a big business people can hide behind a machine that is rolling over on its own momentum, but you don’t get the same luxury in a small business.

I am not one of those tree-hugging, bleeding heart heart feminists who believe that women will rule the world (rumour has they already do), but I did feel it was appropriate to at least dedicate a blog post to them considering some new info I have at hand.

I am reliably informed – by people far smarter than me – that:

• In 2009 more women were employed than men in the US as a result of the fallout in the global financial crisis
• Women control 70% of all consumer money spent world-wide

On top of that 3 of the last 4 projects which have been brought to me have been women looking to strike out on their own.

The last thing I want to do is come across as being condescending toward women in business, but I would like to try and point out to them that it is ok to “think entrepreneurial”.

As it is South Africa doesn’t have the widest entrepreneurs culture. I’ve seen it recently where people who have always envisioned themselves working in a corporate have suddenly been forced to consider whether they will be able to provide for themselves if they strike out on their own.

The opportunities are there, the data is on your side and while it is not always obvious, women are becoming increasingly entrepreneurial in and around South Africa so if you see an opportunity then go for it!

I swore to myself that I wasn’t going to publish this rant, but after seeing that “Ricky Gervais quits ‘pointless’ Twitter” is considered news for the Mail & Guardian I’m going to go hell for leather.

Yesterday one of South Africa’s more high profile social bloggers posted a rant slamming Sandwich Baron for failing to deliver her sandwich on time. “I’ve tweeted three times, DM’ed them and called them once” she writes on her blog. FFS (!) you don’t Tweet somebody after they’ve failed to deliver – you unleash absolute hellfire and brimstone on the first hapless person who picks up the phone and you repeat process until you get somebody senior enough to make your problem go away.

Since the start of the year I’ve come across six “social media experts / gurus” between the ages of 21 and 24 who have given me the story about how they could revolutionise a business using their knowledge of technology. For crying in a bucket you don’t look like you would be comfortable talking to a real living, breathing woman and yet you want to tell me about SOCIAL media?!

I’m sure there are many other social media experts in South Africa with the right credentials but I know of only one person who I would trust to run a “social media” campaign and that’s Melissa Attree.

Melissa has worked in an agency with real people, real clients and seen PR / marketing / media relations / communications from various different angles.  In your early 20’s you have not done that so go and get yourself a little experience and some contacts and a portfolio and then take it from there.

Don’t get me wrong – Twitter, Facebook, Foursquare,blogging etc – they’re all great tools and many have the capacity to be very handy business tools. They’re a big part of my business. But unless you are out there meeting real people and constantly talking to the industry in which you operate, how are you possibly going to understand what the major problems are?

I was reading a post the other day from one of these young guys and he was berating the way that companies “expect” employees to work from 9-5 when technology empowers them to be far more productive in that time. My response was that I’m in the process of looking for somebody for our business to fulfil a sales and marketing type role. I can tell you now that I’m probably not going to rush to give that person a PC with access to the internet… and I run an internet publishing business.

I would far rather that person be out meeting industry people with a higher profile and talking about some of the things we are doing and letting THEM build the social media hype around it.

If you are not comfortable with people, then force yourself to go out and interact with them. If necessary go extreme and go to a strip club and let the dancers hit on you all night and when you can finally walk away having had a conversation with them without emptying your wallet then you know you’re probably equipped to start talking about social media.

Said it before and I will say it again – one of the biggest mistakes I made when I started out in my small business is that I tried to conduct my business from behind a computer screen. I convinced myself I was “networking” or “building our profile”. The single biggest project we ever got came because my wife and her assistant bought tickets to go to listen to some speaker at a health conference. Over the tea and biscuits they were having at the interval she got chatting to one of the organisers and 24 hours later she was asked to put together a proposal that would prove to keep us in business for six months.

Makes you think doesn’t it….

… so endeth this rant.

Each year Dion Chang releases his 10 trends from his Flux Trend Review which includes interviews with a number of strategists, economists and other industry experts about what they expect to emerge in 2010.

Trend predicting is always difficult but I find some of these are quite thought provoking and thought I’d post them below and then get feedback from our readers:

1: Peak experiences
The global financial crisis and ensuing recession of 2009 and can be regarded as a global peak experience. Peak experiences refer to these types of events that stand out in our mind, affecting us deeply and in most cases, changing our thoughts and behaviour patterns: 9/11 was a similar global peak experience. What the crisis and recession has done is made us more aware of our actions (their impact and responsibility we need to take), to our business practices, the planet and our fellow human beings. It has shifted our thinking from a self-centred “me” era, to an era of “us” and “we”. As a result, people are looking for deeper life experiences, as well as brand experiences (product and services) that stand out. Brands and corporate companies need to adapt quickly to this changing consumer mindset.

2: Shift in value systems
A global economic crisis acted as a catalyst to other important issues. Systems that govern our lives are changing and redirecting. 2009 was a year of tumultuous change, which led to a questioning of personal value systems. With global retrenchments numbering tens of millions (and counting), it would be foolhardy to think that there would be no domino effect. Retrenchments, or threat thereof, have forced people to question their life’s motives, embarking on a search for purpose. As a consequence, even the idea of luxury has been turned on its head, with more and more people valuing the idea of extraordinary thoughtfulness, more time with loved ones or premium service over material things such as handbags and branded sunglasses, and other logo-splattered commodities. This soul searching has also resulted in a much-needed empathic movement around the! world. Whether it is sympathy for a retrenched co-worker, or hostility toward uncaring politicians or greedy corporates, there is a growing civil voice that is calling for a new world order. We are experiencing a broad-spectrum paradigm shift in the way people think, make decisions, and choose to live.

3: A New World Order
Business will no longer be done as “usual”. The consumer revolution is well and truly underway as more and more consumers take responsibility over their purchase decisions. Despite the downturn, there is an increasing trend towards people spending a little extra and opting for better quality, timeless design and value for money, as well as earth friendly, fair trade versions of their regular products. We have moved from a passive consumer to a very active and vocal consumer who wants to be engaged with, not talked at. For advertisers and marketers this is a dramatic shift from “broadcast” advertising to interactive engagement, and brands that do not deliver on this will ultimately be outperformed. It is now necessary for companies and brands to not only engage with it’s target market, but also embark on multiple conversation! s to secure loyalty.

4: Shift of power to ethics
We are seeing the beginnings of a shift away from a power hungry, greed-based, profit-at-all-cost leadership model, towards a more ethical and responsible style of leadership. This is most evident in the election of Barack Obama in November 2008. It signals a dramatic shift from the head (logical, egoistic, bottom-line approach) to heart (empathetic, care for the planet and for the entire human family) – notable in the attention being given to CSI programmes of late. This same shift of style of governance can be seen in South Africa with the marked difference between the aloof and centralized Mbeki administration, to the more engaging and empathetic style of the Zuma administration.

5: The Start of the Female Century
As an extension of the previous point, we can track a move from left-brain, logical thinking, towards a more right-brained, intuitive approach when it comes to leadership and decision-making. Archetypal feminine principles such as caring for the home and the family are coming into play. The only difference being that now the world is seen as our home, and all the global population, our children. How we organise our society is being commanded from the bottom up. Most job losses in 2009 occurred in traditionally male run industries such as the banking sector and manufacturing, and by the start of 2010, there will be more female workers in the USA than men (as reported in Time magazine). This is the most significant social change in a single generation, and sees women gaining more power in terms of their income and spend. Even technology is finding it&rsquo! ;s feminine side. Social networks – which are also becoming more and more pivotal to the way in which we operate our lives – tellingly, mimics how women operate: forming communities and engaging in conversations.

6: The rise and rise of social media
Social media is responsible for the biggest change in social dynamics in the past few years and is literally “rewiring” our brains to think, act and communicate differently than ever before. People find like-minded friends via cyberspace, and no matter how obscure their interest, there is always a group to support it. Boundaries such as race, geography and culture become less important and shared interests matter more. It has enabled real-time global conversations and given everyone on the planet the ability to publish. Depending on your age group, Facebook may already be old hat, and early adopters are already looking for the next big thing to surpass Twitter. Whatever the format, social media has proven to be not just a passing fad, and has resulted in the most dramatic upheavals in industries such as print media and marketing & advertising! . Ignore this space at your peril.

7: Niche Tribes
The shotgun approach of one marketing strategy for a mass audience is now not only ineffectual but also hopelessly outdated. Traditional, tried and tested methods of marketing and advertising are being thrown on its head. The idea of “tribes” contests the idea of Lifestyle Standard Measurement (LSM). This model takes into account the unique interests of people, and the ever-splintering niches that define them. You are no longer able to box people in set categories and assume their behavioural patterns are based on an empirical, soulless definition of them as a target market – this understanding (and the types of interaction it presupposes) is moving towards a more organic model that celebrates individuality as a primary factor. Hence the need for multiple consumer conversations. (see trend # 3 – A New World Order)

8: Pick and mix society
Our new society – buoyed by an increasing number of maturing digital natives (the Net Generation) – has become used to a myriad of information ports, shopping sites and “How to …” blogs. These cyber citizens have grown used to the freedom to customise anything and everything online, and are becoming increasingly frustrated with the limitations of the offline world. They can wear what they want, eat what they want and watch what they want, when they want and how they want. They shun traditional information avenues preferring peer to peer or word of mouth validation of themselves, or a new product that is targeted to their tribe. They are eco aware, techno savvy and distrustful of any voice of authority, be it political or corporate. They demand transparency, accountability and social responsibility as core policies, not bad! ges of honour. They are hesitant in handing over their loyalty to a brand, and will only cede that loyalty if the brand echoes or meets their complex benchmarks of authenticity and integrity.

9: Ambient awareness
In an age of information overload, tools are being developed to filter and alert us according to our interests or industry. Thanks to tools like Twitter and RSS feeds, we can filter exactly what information comes to us, according to our preferences. Most young people do not read newspapers or watch televised news; their reason being “If it is important enough, it will come to me”. This is in stark contrast to the pre- Internet generation who were weaned on a one-way, “broadcast” style of learning and information consumption. In 2010, we have all become accustomed to “skimming”: the ability to absorb vast amounts of information, without the yearning (or perhaps time) for in-depth analysis. The downside to this new skill is the growing concern that we have too much information at our fingertips, but not enough kno! wledge. The knock-on effect is that we are also becoming busier, but less productive.

10: Empathetic economy
The demand for transparency, authenticity and accountability is getting louder and louder. Civil society demands more ethical traits as we reach a fork in the road concerning the management of our economy. On the one hand, we have a greedy, power-hungry and profit-driven economy where money is wedged at the top, which will always keep the poor and the young at a disadvantage (This essentially is where the problems affecting future of the planet lie). On the other hand, we have a more social, ethical and empathetically driven economy emerging, which is mindful of the planet, rewards philanthropy and spreads wealth and goodwill throughout all levels of society, spreading wealth – and therefore power – from the hands of a few to the hands of many. These are both extreme economies, and repeat the age-old ideological battle between capitalism and socialism, b! ut fought with 21st century hindsight. Only this time round the ideology is not between countries, but a race to find a sustainable solution for mankind. After all, we have proved to ourselves in the last 2 years that, as a species, we have a spectacular ability to self destruct, and will if we don’t find a new way forward.

The 2010 Flux Trends Review conference

In February 2010, ten of the country’s leading thinkers in a broad array of disciplines will gather to present their insights into trends beyond the economic meltdown at a one day conference in Johannesburg:  the 2010 Flux Trends Review powered by BlackBerry®.

Hosted by trends analyst Dion Chang, the 2010 Flux Trends Review powered by BlackBerry will give a unique South African perspective to social, business, technology, political and marketing trends.

Explains Dion Chang: “The 2010 Flux Trends Review conference will cut through the clutter and table dominant trends for marketers, strategists, corporate executives and media to mine for insights and business opportunities.”

The 2010 Flux Trends Review powered by BlackBerry takes place at UJ Theatre (Kingsway campus) on Thursday 25th February 2010, and costs R2280.00 (inclusive of VAT).  Bookings are now open.  Go to www.fluxtrends.co.za for more information.