Why fluff must fall

Gary Bannatyne, Director of Empire State, asks: when did merely wanting to become an entrepreneur qualify you as one?

Maybe I have got it completely wrong – and if I have I wouldn’t feel too bad, because there is so much rubbish out there that this perspective could fall comfortably into that ever-growing pile of misinformation allowing individuals to take shortcuts.

Thinking about the state of entrepreneurship in South Africa reminds me of a young girl in Girl Scouts. She is given boxes of cookies to sell in order to raise money.
The first girl goes and sells to her parents. All the boxes. They don’t even eat cookies but they buy them to support their beloved daughter.
The second goes and sells to random people who are more than likely the type of people who eat cookies. That is hard work.
The third girl goes and sells to everyone at her father’s work. They buy mostly because they have money and eat cookies but also because if they support the bosses daughter they may find themselves in favour with the boss man.
The fourth girl doesn’t sell to anyone but buys her own cookies with her own savings. She love cookies and more specifically she loves her cookies. She won’t get more boxes to sell, but manages to sell just enough to not be kicked out.
For the sake of my point, let’s assume there are a lot more of the fourth type of girl than anyone else.

Entrepreneurs and all that fluff

When did wanting to become an entrepreneur qualify you as an entrepreneur? I reckon South African entrepreneurs have been – and continue to be – born into a culture which allows you to thrive in the world of start-ups.
There is a simple test if you are reading this and unsure of what you are: if you have never taken money from a willing customer for a product or service that you have created then you only aspire to be an entrepreneur.
If you are not Girl Scout #2, then you are misleading yourself.
This attitude gives people the perception that all entrepreneurs are beggars and full of shit. It does the younger guys with great talent climbing into the trenches a disservice. We have successfully diluted the industry by having so many people thinking they have arrived when, in actual fact, they haven’t even climbed onto the starting blocks.

I think very fondly of the entrepreneurs that don’t win competitions and aren’t in photo shoots. It seems these guys and girls are out there actually getting work done. They are fighting hard to find their first customer or keep their last. You can see them coming a mile away and it is always so refreshing.
My issue is that we have become comfortable with accepting people that are pretending to be something that they are not, and we entertain these people because they are like groupies that follow funds and hide out in incubators.

In a similar vein, it blows my mind is to see how many people are dispensing advice through consulting and motivational speaking but have never owned or run a successful business in their lives.

Take responsibility. Entrepreneurs need to find credibility again.

Incubators, accelerators and even more fluff

Let me start off by saying that I admire the organisations that have got this right. It is not an easy thing to do, especially considering the above, and the type of people you are dealing with who take chances. The companies who are doing well at this have an important, measurable output: they take businesses to market and turn concept into commercial opportunities.

It is maybe important to differentiate between an incubator and accelerator.
An incubator is as straightforward as that: nurturing business ideas and concepts and either taking them to market; or, for the already-commercial ones, building a more solid foundation with which to operate within the market.
Accelerators by nature are designed to accelerate opportunity. In the West these are traditionally companies with more traction that have proven that the foundational structure of a business is correct, and now need support to take a business through the very dangerous growing pains that we all know so well.

However, there are more incubators popping up than there are bottle stores in some areas. And sometimes both leave one a little bit tipsy. They are shining and they have free stuff and they promise that you will be the next Elon Musk.
You are constantly at networking events and listening to the next big thing. You are invited to competitions and showcase days and things are very bright for you until you realise you need to put petrol into your car or pay for your taxi or catch a train.
Then the colours start to fade and the lights become dim because you have had to ask your folks or your uncle to lend you some cash. You might even been naive enough to sell them your idea for equity without any financial plan. You realise it is more than just tips from already-successful start-ups that you need. You start looking a lot like the first Girl Scout.
This helps for a while, but a few free lunches later you wonder why you are not super rich because you have written down every quote and tip from the successful folks and you are still without a customer.
Then you realise that what you need is not the fluff. What you need is a registered business that has a great MOI (memorandum of incorporation). You need a shareholders’ agreement that is drafted professionally and not pulled off the Internet.
You realise that to be a supplier for large corporate you need your tax clearance certificate – and you can get this if you were one of the lucky ones that didn’t gather judgements against your name on credit cards and cell phones while you were busy taking tips at the cocktail function.

Although everyone in the space generally wants to do good, it is time to take responsibly. Many, many incubators are slowing companies down rather than building them up.
Take responsibility and start working on the not-so-sexy things. Help companies draft affidavits as an EME to obtain level 1-4 status. Entrepreneurs need tools and tangibles, not food and tips.

Innovation and the giant fluffy marshmallow

I feel sorry for the very skilled people that work and operate within the innovation space. They add huge value to organisations and start-up companies because they understand the tangible effect of innovating and innovative thinking. Sadly, the rest are messing it up for you.

Innovation used to be a hard-hitting word that was reserved for a few who would dare to brand themselves as the forward thinkers; the weird ones that were bold enough to live and exist outside the box. A box that you could measure and a box that became a house through hard work and a desire to disrupt the status quo.

Now every man and his dog are innovation specialists and every large organisation on the planet has an innovation department which they throw money at to ensure they sleep well at night.
And they do sleep well because they have a department that looks at the innovation life cycle – and their business will never be challenged.

Innovation is a culture and should be a label reserved for a select few. It seems that one of the most exciting aspects of business in the 21st century has been highjacked by people masquerading as “specialists’” and guys that know your business enough to save you from the start-ups.
These guys are breaking innovation; they have kicked it in the teeth. These companies and people and units have become fluffy to the point where you are innovative if you fly around the world and have an understanding of what everyone else is doing.
What they don’t realise when they come back from their travels with great new models to do business is that they are inevitable restructuring the way they do business, and this is doing more harm than good. Innovation has become nothing more than a recycled version of Twitter views and opinion pieces.

The ones that are taking responsibility are the start-ups, people and organisations that are innovating without the fluff of “innovation”. It is at their core and they are doing it because their business requires it. It is not borrowed; it is appropriate to them.

For the rest, take responsibility and stop reselling good people’s hard work. I know some of you are making a lot of money from it but just make sure you are there when the rubber hits the road and the conversation moves from innovation to execution.
That will separate the woman from the Girl Scouts!

Funders and the mythical people who actually make deals

Again, please take responsibility here. Stop pretending to be a high-risk venture capital fund if you are neither high-risk nor have venture capital. You will look long and hard to find a fund that is a combination of the two. Some funds are in the growth capital phase; others are not out and out VCs but probably represent a large fund or company that doesn’t rely on cutting more than two deals a year.

Some people are winning and some people are losing and then some people are just ruining it for a multitude of others. I just want people to start taking responsibility for their space. Let’s call a spade a spade when it comes to people who are lazy and entrepreneurs that want to do well but aren’t prepared to work hard.

We need more of Girl Scout number two.

We need incubators to go back to the drawing board and provide support – not distractions.

We need funders who claim to be high-risk to close some deals – specifically to the right start-ups.

For the entrepreneurs here: stop your rubbish. We are a special breed in this country and the more fluff we create, the more we will be served in return. It’s time to be responsible; the work we are doing is going to change this continent.

Give Empire State a High Five!

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