Are the only options really "zero growth" or "drown in red-tape"

We often hear talk of South Africa's informal sector [aka second economy], but I don't think that business people really understand the significance and challenges of this cog in our economy. In fact, I'm incredibly sure that, not only do we highly underestimate the significance and challenges, but also that we don't have a cooking clue what needs to be done to dramatically improve the situation.

Here's a Business Day article which gives a little bit of insight into this interesting phenomenon.

I recently had a chat with a highly respected audit partner from one of the "Big 4" auditing firms recently around this topic. What really stands out is the disparity between what this second economy represents, and the business mechanisms and legislation being put in place as South Africa "progresses".

Here is just the tip of the iceberg in this love-hate relationship:

Informal sector -

A veritable wishing well full of potential-laden young entrepreneurial mogul-wannabes. BOAT-LOADS of skill [some we would easily recognise, others not so much]. OODLES of enthusiasm. TONS of ingenuity.

And no tools to overcome their greatest needs.

What do [we believe] they need?

• A bit of guidance. [and we say "but we have many organisations providing mentors, etc..."]
• Some education. [and we say "all government ever talks about is education..."]
• A structured, practical means to develop their business [and we say "ummm..."]
  

Why is this?

Consider the current business environment in SA -

• Registering a business, along with all the prerequisites takes ages [and we know they need to do this to attract funding from any serious business-person, that funding being critical to help them grow into a serious business themselves]
• Our tax requirements are onerous, complex and absolutely mind-numbing [and we know they need to meet these requirements to be taken seriously and to avoid any nightmares down the growth path]
• Opening a bank account is a borderline I'm-off-to-crazy-land exercise [and we know many can't provide proof of residence and other similar documents which are required. we also know the Mzanzi account doesn't cut it as account balances can't exceed R15,000]
• After this its the accounting, auditing and other legal regulations that companies have to comply with [and we know that every existing business already struggles with these - so how is a newcomer supposed to cope]

What I had to ask myself was this: do you leave these young firestarters alone to dwindle along in the second economy for the rest of their lives, just trying to make ends meet?

or do you help launch them into the bubbling cauldron of business as we know it - the same cauldron where many experienced directors of companies are calling it a day due to the high personal risk involved in being in business?

Honestly, both options are appalling to me.

We need some, no - many, no - HEAPS more success stories like this. There must be a better way. Government? Lawyers, regulators, SARS? Can anyone help please?

30 of the coolest entrepreneurs under 30

If you're looking for a bit of inspiration as you struggle to take the plunge into entrepreneurial immortality, check out this slideshow from Inc.com about 30 of America's young, fast-rising stars and read a bit about their businesses.

HAIR RAISING venture capital statistics!

I just can't get this out of my mind. I saw it a few days ago, and when I close my eyes, it sits there haunting me!

1 in 10,000

In this MBA.co.za article, this is said to be the number of new ventures have venture capital in hand when starting out [and thats in the US - I shudder to think what SA's stats look like].

1 in 10,000.

1 in 10,000?

1 in 10,000!

Heaven help our fired up, driven, WOW entrepreneurs! We've got to find a way to change this!

More on this soon. Its too scary to be left alone.

Creativity + business = explosive growth

This blog by Elaine Rumboll is fascinating [visually stunning too!] as it recounts the process of teaching business to creatives.

It's fascinating for me because I spend a fair amount of time in a creative environment, and every day I am strategically being challenged to balance the business side of business with the creative side of creativity [does that make any sense whatsoever].

I think that this is one of the [as yet only partially discovered] secrets to immense growth - allowing the creative spirit to run free [more or less] and then maximising its impact from a business angle. Something which many have tried and very few have succeeded at so far.

My experience is also that it is an incredibly difficult balancing act [from the business side]. If the posts in the blog are anything to go by, its just as difficult from that side too.

Very, very interesting...

What we have here is... failure... to communicate

Please, read this post about VC funding on Thought Leader - it sounds like the world has gone mad... or business in general anyway.

On one hand - VC funders saying they don't get enough good proposals, cancelling events due to lack of interest, looking for the best place to invest their war-chests.

On the other hand - entrepreneurs struggling to obtain funding, trying to raise capital from "friends, family and fools" [Tycoon - "Finding startup capital"], and just generally spending more time trying to fund the business than actually running the business.

Lets be honest - there are some absolutely mind-blowingly, awesome ideas out there. Yes, many of them internet-based businesses [Justin Hartman - you're spot on with your comments in the VC article!] - my personal favourite in terms of stunning growth potential and making the most out of "systems" [I hate the word, but love the concept].

Do any of the VC's have the guts to go with this? Vinny, you know how to do it - Lingham Capital could prove to be the groundbreaker in this field and show government and the dti how to 'do it'!

To the dreamers... keep dreaming! To the funders... get funding! And to the business people... let's help put this together and make it work!

[BTW - my belief - this is SA's greatest opportunity, and will solve many of our legacy problems]

Is it better to hire a chicken or a pig? [and you can vote]

As the old joke goes, a chicken is involved in producing eggs, but a pig is committed to making bacon. Interestingly though, the chicken is [perfectly qualified to and] highly capable of producing eggs ad infinitum, but the pig's capability is, shall we say, restricted to only producing bacon once.

The question I would like to ask is "Would you rather hire someone who is 50% committed and 100% capable, or someone who is 100% committed and 50% capable?" [for these purposes, capability meaning adequately trained and skilled to do their job]

My answer? You can "teach" capability, you can't teach commitment.

What do you think?

[Please feel free to use the poll alongside - lets see how well it works - I'll publish the final results once its done]

Bottom line is, without commitment everything else is pointless -> if this is a critical entrepreneurial characteristic for starting a business (which this interesting article by SA's resident tycoon suggests is true), then how much more do you need it from employees, to whom you trust the business you have built with blood, sweat, tears, passion [a key ingredient for commitment] and heaps of faith?

Those who can, do. Those who can't... blog?

It seems there are those who think this way. Andrew Keen for instance, with his new book "The Cult of the Amateur: How today's Internet is killing our culture" [on principle I refuse to link to it].

I had a quick look at the book in a store, and while I disagree with his stance, I must admit he makes some good points, and raises some intruiging questions.

The primary issue that stood out to me pertains to [business] society in its entirety and not just to blogging - its apparent that we have entered the age of the "amateur" [where every Tom, Dick and Sally can lecture to a global audience on any topic they wish] - as a business leader, is it better to be an expert in a specific field, or is it better to have a good general overview without favouring any particular skill?

"Jack of all trades, master of none". Usually negative connotations. Can it be a good thing?

Having done some hard time at a large financial consulting firm, I watched in horror over five or six years as experts became increasingly necessary. In terms of accounting standards, there were people who specialised in one specific standard. On the tax side, you needed people specialising in one hairy area of tax law. I can just imagine what a law firm's skills profile looks like today. [perhaps we should ask Paul Jacobsen or his firm?]

But as a business leader [where entrepreneurial skills are a must, rather than technical knowledge and expertise], perhaps this is not the case? Even if the environment has gotten tougher, the old maxim of "surround yourself with people better than you are" is even more true [and possibly easier, with the increasing number of experts around]. Perhaps being an "amateur" [ie not an expert] is a better qualification for being a leader?


Perhaps the "Amateur" [inexpert?] business leader is the glue that holds all the experts together - all working seamlessly to create an incredible business?

Just a thought.





Going back to the fuss about blogging particularly - it was interesting to see Matthew Buckland commenting on a very similar matter when blogging hit the spotlight here in SA earlier this month.

Even the infamous Vincent Maher, who could perceivably ride above this wave, was affected by it and had to face the question, as he admits himself, here.

By the way, Matthew and Vincent, courtesy of Mail and Guardian, have done a stunning job with Amatomu [one of my new favourite landing sites] - well done gentlemen! This should become one of South Africa's premier blog directories in the very near future, if it isn't already.