Bad Entrepreneur

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 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!

There is no substitute for experience when putting together a quality small business and a good business mentor can help you avoid some of the basic mistakes that start-up entrepreneurs make.

We look back on some of the problems we encountered and in hindsight an experienced mentor could have helped us conserve our cash and build our brand more effectively.

The great thing about technology including Twitter, Facebook and other social media platforms is that you now have some “access” to a lot of these big names. You don’t just have to sit back and buy their books when they roll them out once a year. This new “Meet the Giants” offering from Gibs is a perfect example of what people can access. Check it out if you get a chance.

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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.

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 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.

I have just read an extremely interesting article entitled: “Government’s Positive Role in Kick-Starting Entrepreneurship” which is an interview with Josh Lerner.

The interview discusses the role that government must play in developing entrepreneurs and I thought it made for quite an interesting debate given the current economic environment and the increasing dependance on government to support small businesses.

Lerner points out that government did a lot of work to stimulate what is now Silicon Valley in the US in terms of making an investment and venture capital friendly place for entrepreneurs.

With initiatives like Silicon Cape gathering some traction it proves that there are opportunities for government, funders and entrepreneurs to work together.

However – and this is important – the partnerships need to decide whether they are investing in entrepreneurship or they are investing in a couple of small businesses to create a couple of temporary jobs.

They need to be working together for the right reasons.

For these initiatives to be taken seriously from an entrepreneurship and innovation perspective they need to be treated as such. If they are simply there to create jobs then historically these initiatives have proven unsustainable.

(I heard a statistic the other day that out of 800+ investments that SEDA made into small businesses – start-ups – over the last 5 years, not a single one has survived)

One line that jumped out at me from the interview is where Lerner said: “it is far easier to found a start-up if there are 10 other entrepreneurs nearby. In many respects, founders and venture capitalists benefit from their peers.”

This is an excellent point and I think it is one of the reasons that things like Silicon Cape are retaining their momentum. We are not talking about a couple of individuals trying to motivate eachother – you have an entire venture capital and innovation community working together.

Another point raised by Lerner: ” Often, in their eagerness to get to the “fun stuff” of handing out money, public leaders neglect the importance of setting the table, or creating a favorable environment.”

This is something that the steering committee for Silicon Cape cannot lose sight of. While it is great to talk about the successes of investments being made, they need to remember that their job is to ’set the table’ for other funders, innovators and entrepreneurs to come into the picture.

Check out the full article here.