SMME Mock Up magazine

DECEMBER 2014

MO IBRAHIM Telecoms Entrepreneur & Philanthropist

AFRICA, OPEN SESAME!!

Izani Media, in conjunction with the Money Tree Group SMME - template and layout.indd 1

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From the Editor OPEN SESAME!!

So shouted Alibaba, when

in Egypt, his cellular networks holdings spanned 14 African countries and connected 76.8 million people when he sold it

Our journal is not only here to inspire you, but also to offer practical ideas on new business opportunities and how to exploit them

he wanted the cave to show him its riches. This is in effect what Africa’s millions of small and medium size businesses are shouting, now that the continent’s time has finally come. “Open up opportunities; open up markets; open up the bright African future. “ And show us your caves full of gold but, please, do save us the bandits!!

On this edition’s cover is an inspirational African entrepreneur, telecommunications giant Mo Ibrahim. A Sudanese engineer who was raised

for $3.4 billion. He is clear about the fact that they had never paid a bribe and that he could only secure such a good price for his company because it was well governed and ethical.

Alibaba 7 – Bandits 0. We can learn from his sage words.

Not everyone is destined to become a Mo Ibrahim.

Yet, the entrepreneur’s impact could be local and very powerful. In our section on success stories, we share with our readers many other ways in which to trade meaningfully in this world.

fully. So, make sure you read every page and keep the journal handy for future reference. You never know when you may need it.

Finally, make sure you sign up for our next networking event, and that you bring all of your business associates and friends in the SMME sector along. Our networks are only as strong as the sum of the people who form them, plus one.

See you soon.

Lebo Gunguluza

EDITOR Lebo Gunguluza EDITORIAL PRODUCTION Money Tree Group charl@moneytreegroup.co.za | 082 452 8110 ART DIRECTION White-Space Invaders SALES Money Tree Group Tokologo Phetla tokologop@moneytreegroup.co.za 073 684 8874 PRODUCTION Printing: Business Print The Opportunities Network Journal is published by Izani Media, Johannesburg. ©Izani Media. All due care will be taken with material submitted, but the magazine and publishers cannot be held responsible for loss or damage. We assumes no responsibility to return unsolicited material. All rights in letters or unsolicited editorial or graphic material will be treated as unconditionally assigned for publication and copyright purposes, and material will be subject to

LET’S HEAR FROM YOU

our unrestricted right to edit and comment editorially.

This magazine is fully protected by copyright and nothing may be reprinted in whole or in part without

POLICE NEW AVENUE WATCH

written permission from the publisher. While reasonable

Send your comments, questions and feedback to letters@smmeopportunities.co.za. The best letter wins you this POLICE New Avenue watch. Enter before 31 December 2014.

publisher cannot accept responsibility for any damage or

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precautions have been taken to ensure the accuracy of advice and information given to readers, the editor and inconvenience that may arise therefrom.

2014/12/08 1:11 PM

THE INSIDE SCOOP

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DE CE M BE R 2 0 14 REGULARS 1 Editor’s Letter 4 Tech: Gadgets, Gear and Apps 6 Column: EduPower 8 Cover Story: Mo Ibrahim 12 Quick Facts: Business Truisms 32 Advice: Ask the Elder THE ENTREPRENEURIAL PROCESS 13 A Road Map to Success 14 Where Do Opportunities Come From?

16 Weighing Your Options 17 A Small Business Budget Template 18 Getting Organised 20 Funding Your Start-Up 21 Column: They Myth of Smooth Success SUCCESS STORIES 22 Siya Xuza: SA’s Rocket Scientist 23 The Vuya Solar Tablet 24 Reel Gardening 26 Action Hero Ventures REPORT 28 The Global Entrepreneurship Monitor: An Oil Check LIVING THE DREAM 30 Reward Yourself: The Ocean Sapphire Yacht SMME Opportunities Network (Son) is an independent, voluntary organisation that seeks to showcase business and growth opportunities to SMMEs and create a network of organizations interested in developing and supporting SMMEs in South Africa. www.smmeopportunities.co.za

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LIFESTYLE

GADGETS CLIP IT According to a 2012 Pew Research study, 82% of smart phone owners are using them to take pictures. If you want the fun of capturing images when you want and wherever you want, check out the new olloclip 4-in-1 quick-connect lens, which offers fisheye, wide-angle, and two macro (10x and 15x magnification) lenses. The four new quick-change lenses are similar to those available with larger DSLR cameras, yet fit easily in a pocket and the palm of a hand. Simple, elegant and unobtrusive, the olloclip 4-IN-1 lens connects to the iPhone within seconds.

Suggested retail price is R600. More info at www.olloclip.com

SNIP IT Grooming for men has become big business and Philips has a wide range of products aimed at making these necessary tasks simpler and quicker. The new Philips Norelco Do-It-Yourself Clipper can multitask almost better than your mother can. It has a unique 180° rotating head that makes it easy to reach even the most difficult spots and the head shave attachment, should you be so inclined, can deliver a perfectly smooth pate without those pesky nicks or cuts. If you don’t want to go all the way, there are 14 built in length settings from 0 – 15mm to choose from. For added convenience, it operates with or without a cord and battery power lasts up to 60 minutes after a 1-hour quick charge. Now you can spend your time on other, more pressing business.

Available from www.loot.co.za for R762

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NAB IT Wearables are all the rage but this one from Razer – the Nabu – might just be IT. Engadget fans recently rated it the best wearable to hit the market. Most wearable devices deliver app notifications to your wrist, but Razer’s Nabu takes the social element to a new level by incorporating two screens: a Public Icon Screen and a Private Message Screen. So, the wristband displays the regular array of alerts for personal texts, phone calls, bio data feedback, etc, but it also communicates with other Nabu devices to exchange fun social information like finding nearby friends, identifying mutual acquaintances and other data based on userdefined settings. What is particularly cool about these guys is that they have developed it on an open platform and it will be available on both iOS and Android devices. The Razer Nabu will be available for sale worldwide in late Q1 2014 (retail price still tbd), but developers can sign-up now and get the band at the developer’s price of approx R500.

Learn more at www.razerzone.com

WATCH IT If you prefer the more traditional device, the Runtastic GPS watch will record those all-important parameters including pace, laps, calories, distance, heart rate, speed, duration, and time, as well as altitude and target heart rate zones. With the Runtastic connect software it is extremely easy to upload all tracked activities to the Runtastic fitness site. Connect the Runtastic GPS watch via USB to a computer and all activities will be transferred to your profile at www.runtastic.com. There you will find all the important statistics and graphs and you can edit your sessions.

You also get five different training profiles, training alarms and a nightlight.

Available from www.mantality.co.za at R1,999

TOUCH IT Attempting to use a touchscreen device when you’re wearing gloves is a little like trying to cross-stitch while wearing oven gloves, i.e. almost impossible. Thanks to the special conductive material discreetly woven into the forefinger, middle finger and thumb tips of these stylish gloves, you can keep your fingers toasty and activate your touchscreen devices at the same time. The fingertips are designed to be conductive but the material will not scratch or damage your touchscreen in any way. (Phone, of course, not included.)

Get it at www.mantality.co.za for R127

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GUEST COLUMNIST

EDUPOWER POWER A

t the start of your varsity education – or even midway,

during your first existential crisis – it is tempting to believe that it’s all a waste of time when you hear tales about college dropouts who made billions. Why not just dream up the next paradigm-shifting app or social media venture, and get rich quickly?

But for every “uneducated” Bill Gates (Microsoft founder), Mark Zuckerberg (Facebook) or Steve Jobs (Apple), there are other billionaire entrepreneurs who got degrees from prestigious universities before starting their companies, such as Jeff Bezos (BSc Princeton, founder of Amazon) and Larry Page and Sergey Brin (both MSc Stanford; Google).

Most forget that Gates, Zuckerberg and Jobs dropped out of university simply because they were done learning ahead of time and did not bother to collect their degrees; **not** because they did not believe in the value of education. It is telling that they went on to hire bright sparks from top universities as their successors and peers. Steve Ballmer, who took over from Gates has a bachelor’s degree from Harvard (though he did not complete his Stanford MBA), Tim Cook, Job’s successor, has BA and MBA degrees and Zuckerberg appointed as his COO Sheryl Sandberg who completed her BA and MBA degrees at Harvard. A university education is a prerequisite to run companies founded by dropouts.

The 2014 **Forbes** Billionaires list confirms that the sure-fire way of becoming one is to start a world-class company or inherit one. But analysis shows that even then the odds are stacked in favour of getting a degree, or at least entering university. Of the 25 richest people in

BY RJ VAN SPAANDONK

the world, 15 are self-made business people (equal to 60%), 3 were bequeathed companies

to immediately start and run companies, and might have completed their studies without

and grew their size considerably (12%), and the other 7 merely inherited their wealth (28%).

Leaving the heirs aside, of the 18 entrepreneurs only 2 don’t have any degree at

this time pressure. In conclusion, more than 75% of self-made billionaire entrepreneurs globally saw it fit to enter university, and the great majority finished school.

Furthermore, most of these individuals would probably admit privately that their fortune is a bit of a “Black Swan” which, according to Nicolas Taleb, is a large, improbable and highly consequential event that is often inappropriately rationalised after-the-fact with the benefit of hindsight by others. They themselves know that despite their skill and effort it was really the luck of the draw that awarded them their riches.

Therefore, if you haven’t made your first million in high school from running the cool-drink concession at your local golf club, and unless you are dating the heir to a considerable estate or have an absolute killer idea that will revolutionise the world, finish your degree first. Only then venture out to start your own business, and fail, whereupon you must join a number of failing startups in succession so as to gain enough experience for the one successful dropout to hire you as his successor. A comfortable and rewarding life will be yours, albeit most likely without the billions.

RJ van Spaandonk, Enterpriser & Gastronome, loves bringing consumer brands and retail formats to Africa and pursuing (and pontificating about) epicurean delights, and credits his moderate success in life to firstclass degrees from universities in the Netherlands and the United States. all (but started businesses as youngsters), 4 dropped out of college, but 12 completed one or more degrees. Of the two dropouts, 2 did so

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R

The Billionaires List HOW THEY MADE THEIR MONEY

Self-made Inherited

Various

UNIVERSITY DEGREE Dropout to No start degree Yes company Dropout at all

1 Bill Gates

x

2 Carlos Slim

x

x

x

3 Warren Buffett

x

x

4 Amancio Ortega

x

5 Larry Ellison

x

x x

6 Charles Koch 7 David Koch 8 Christy Walton

x

x

x

x

x x

9 Jim Walton

x

10 Alice Walton

x

x

11 Robson Walton

x

x

12 Liliane Bettencourt

x

13 Michael Bloomberg

x

14 Mark Zuckerberg

x

x

x x x

15 Bernard Arnault

x

x

16 Stefan Persson

x

x

17 Sheldon Adelson

x

18 Li Ka-shing

x

19 Jeff Bezos

x

x

20 Larry Page

x

x

21 Sergey Brin

x

x

22 Carl Icahn

x

x x

x

23 David Thomson

x

24 Michell Ferrero

x

25 Jack Ma

x x

x

x 15

7

3

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ICON

MO IBRAHIM

BY CHARL DU PLESSIS IMAGES: MO IBRAHIM FOUNDATION

back to Africa, or is going back to Africa.”

Much has been written on the confluence of Africa’s “curse of commodities” and the “big man problem” – political leaders who cling to their positions far longer than they should.

As recently as December 2014, for example, the 90-year old Robert Mugabe was touted

by Zanu PF in Zimbabwe as their Presidential candidate for 2018, which will be 38 years after he first came into power. Mugabe

”

M

o Ibrahim was recently ranked as the 1,536th richest man in the world.

And although he was born in Sudan and made his fortune in telecoms across parts of Africa and the Middle East, he now lists himself as a citizen of the United Kingdom, which ranks him as its richest black person.

Regardless of where he ranks, what places Mo Ibrahim solidly in the spotlight and at the centre of an enlightened outlook on Africa’s future is his Foundation’s African Governance project. The project was launched in 2006 and is aimed at tackling the scourge of Africa – its “Big Men” – head-on. Ibrahim funded his project in part through the 2005 sale of his telecoms giant, Celtel, for $3.4 billion to MTC Kuwait in a deal where he personally pocketed $1.4 billion. As Ibrahim stated in a 2009 interview with the Financial Times: “I’m the same African boy who grew up, came here and worked hard. And I was fortunate enough that the things I have done worked. So there’s nothing unusual or fantastic. I’m the same person. I still drive the same type of car. I live in the same house. Most of the money I made has gone

We all have our faults but we are dusting ourselves off and trying to move ourselves forward and we have a better, new generation coming through.

”

is not alone across the African political landscape in relentlessly refusing to let go of the reins of power. In light of these trends, the Mo Ibrahim Foundation now publishes the Ibrahim Index of African Governance (IIAG), ranking governments by their ability to ensure sustained economic opportunity and the rule of law. The scorecard measures

progress under four main conceptual categories: Safety & Rule of Law, Participation & Human Rights, Sustainable Economic Opportunity and Human Development.

In addition to the IIAG, Ibrahim has also introduced a $5 million incentive, prize or stipend, whatever you think may best describe the money, payable over 10 years, for African leaders who stand down after their political term and who leave their countries substantively better governed. His Foundation looks for exceptional and dedicated leaders. And if there aren’t any, the prize is not awarded.

To date, the award has only been made four times, notably with not a single government leader being deemed a worthy recipient since 2011. It would surprise nobody that President Nelson Mandela is an honorary laureate (2007), given the central role he played in delivering the South African democratic state and, despite his enormous popularity, opting to stand down after only one term as President. During the same inaugural year, Mozambique’s President Chissano was the first recipient of the award, focusing on the manner in which he reconstructed a post-war nation. In 2008, Botswana’s President Festus Gontebanye Mogae received the accolade,

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a o leav Re develo pave H

e

46

South Africa Africa South Region

Southern Africa

Head of State

President Jacob Zuma

since

9 May 2009

REC SADC membership(s)

Rank/52

Score/100

4th

73.3

Country Results RANK 2013

CATEGORY & SUB-CATEGORY

SCORE/100 2000

•

2010

2011

2012

2013

4 Overall Governance

71.1

...

72.8

73.1

73.3

73.0

73.3

72.5

...

69.3

69.2

71.0

69.9

68.1

-1.2

3 Rule of Law

88.3

...

85.2

84.9

85.9

86.9

93.0

+7.8

+0.5

4 Accountability

72.8

...

71.3

68.1

66.9

66.9

67.4

-3.9

42 Personal Safety

38.9

...

30.6

29.0

36.1

30.6

30.4

-0.2

25 National Security

90.0

...

90.0

95.0

95.0

95.0

81.7

-8.3

4 Participation & Human Rights

75.4

...

76.5

76.3

76.1

75.9

74.4

-2.1

4 Participation

91.0

...

81.9

80.7

79.6

79.6

81.1

-0.8

3 Gender Scores higher than the African average (51.5) and ranks 4th (out of 52) overall.

Scores higher than the regional average for Southern Africa (59.3), ranking 3rd (out of 12) in the region.

2009

8 Safety & Rule of Law

10 Rights

•

...

CHANGE '09 -'13

69.4

...

71.4

71.3

71.2

70.6

67.8

-3.6

65.9

...

76.2

76.9

77.3

77.4

74.3

-2.0

2 Sustainable Economic Opportunity

61.8

...

69.1

69.1

67.7

67.6

71.9

+2.9

1 Public Management

69.6

...

76.5

74.5

73.7

71.5

74.5

-2.0

3 Business Environment

66.4

...

71.0

72.1

72.1

72.6

77.6

+6.6

3 Infrastructure

62.4

...

64.3

65.2

66.0

67.5

77.1

+12.9

19 Rural Sector

48.9

...

64.4

64.5

59.1

58.9

58.4

-6.0

6 Human Development

74.6

...

76.2

77.6

78.5

78.7

78.8

+2.6

4 Welfare

79.1

...

75.2

75.2

76.8

77.4

77.9

+2.7

7 Education 10 Health

73.7

...

74.6

74.1

73.4

73.1

72.7

-1.9

71.0

...

78.8

83.6

85.3

85.7

85.7

+6.9

THE INDEX Sub-category Scores 2013 The IIAG provides THE PRIZE Last year, South Africa ranked a framework for citizens, The Mo Ibrahim Prize fourth, with Mauritius first for the RULE OF LAW SAFETY & RULE OF LAW governments, institutions and for Achievement in African Leadership is eighth consecutive year. But there is much 100 HEALTH ACCOUNTABILITY 100 the private sector to accurately awarded to a democratically-elected African chief still to be done: South Africa’s ranking was 75 75 EDUCATION PERSONAL SAFETY assess the delivery of public of state who pursues good governance and then affected negatively because of poor results in the 50 50 goods and services, and leaves office according to the constitution. The award: category of personal safety, due to high crime rates, 25 25 WELFARE NATIONAL SECURITY PARTICIPATION RecognisesHUMAN and celebrates African as well as declines in scores related to participation 0 leaders who have policy outcomes, across 0 DEVELOPMENT & HUMAN RIGHTS the continent. developed their countries, lifted people out of poverty and and human rights and human development.

RURAL SECTOR PARTICIPATION Category Scores

paved the way for sustainable and equitable prosperity Highlights exceptional role models for the continent Ensures that Africa continues to benefit from the SUSTAINABLE ECONOMIC experience and expertise ofOPPORTUNITY exceptional leaders when they leave national office, by enabling them to continue in other public roles onPerformance the continent Overall Governance 100

80

Score

60

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2009 2013

The IIAG Scores and ranks are available for all years from 2000, allows users to enabling the analysis RIGHTS of trends over time. All of the INFRASTRUCTURE benchmark governance underlying data used in the construction of the BUSINESS ENVIRONMENT GENDER performance across a number PUBLICIIAG are freely available and transparently MANAGEMENT of dimensions at the national, published alongside a comprehensive regional and continental levels. methodology.

The Ibrahim Index measures Additional Country Information* 88 variables of YEAR performance.

Population (millions) 53.0 2013 Population growth (annual %) 1.3 2013 Urban population (% of total) 62.9 2013 SMME 9 GDP per capita (US$) 6617.9 2013 Inflation, consumer prices (annual %) 5.7 2013 2014/12/08 1:12 PM Unemployment, youth (% of total) 52.0 2012 Gini Index 63.1 2009

$916 million and reinvested his profits into Celtel, who was now rolling out mobile networks across 14 countries in Africa. By the time Ibrahim sold Celtel in 2005, users of his company’s networks grew to 76.8 million, representing a 58% annual growth rate average. And after two mega deals, he got to go home with $1.4 billion to show for it. Not bad for the poor Sudanese boy from the rental flats of Egypt’s Alexandria.

Archbishop Desmond Tutu receives a Special Award from Mo Ibrahim at a ceremony organised by the Mo Ibrahim Foundation in Dakar on 10 November 2012. significantly for the progress his country made in tackling its devastating HIV/AIDS crisis under his leadership. In 2009 and 2010 no awards were made, but in 2011, President Pedro De Verona Rodrigues Pires of Cabo Verde was honoured for converting his tiny island nation into a model of democracy.

It probably says a lot about the state of governance in Africa that it was deemed not only necessary to introduce such a prize, but more so that it has not been awarded as often as possible. At the time of closing out the MTC deal that solidified his fortune, Ibrahim made it clear that he was able to create value in Celtel because of good governance and ethical business practices. The establishment of the Foundation appears to be simply a continuation of his commitment to these practices and values. But where and how was his worldview formed?

Young Mo Ibrahim was the son of a rather poor Sudanese clerk who left for Egypt.

In Alexandria, during the 1950s, he grew

up in a rented flat and dreamed about becoming an Einstein or a Curie, a famous scientist who would be recognised for the power of his ideas. His father sacrificed all in a hand-to-mouth existence in order to send his son to school and then to the University of Alexandria to study electrical engineering. After a brief stint working for the Sudanese Telecoms company, he secured a scholarship to study further in the UK, where he completed a Masters degree in electronics and electrical engineering from the University of Bradford, and obtained a PhD in mobile communications from the University of Birmingham.

British Telecom recognised Ibrahim’s talent and he left teaching in order to join their operations, where his team rolled out the first-ever cellular solution in 1985. By 1989, he set out on his own with $50,000 in his pocket to start a telecommunications consultancy, which soon grew to over 800 people and 17 international subsidiaries.

This entity, MSI, he sold for a handsome

At a recent Washington, DC, conference on investment in Africa, Ibrahim chided the West for their misconceptions about the continent, and most commonly, for lumping all 54 countries into a homogenous entity.

He pointed out that he had done business, with evident success, across the continent and in 15 countries without ever paying a single dollar in a bribe. He further shared his Foundation’s data, showing that over the past 10 years, 94% of African people live in a better-governed area than when his Foundation started gathering data. He continued: “Come on, you had Miloševic, you had Berlusconi, you had Hitler, you had Mussolini. You had all those guys. So I just hope for the day that the West recognises that Africans are just normal people, like everybody else, who are blessed with a huge continent. We have a lot of resources and we have mismanaged it sometimes…

We have had some failure in leadership; we accept that as well. We all have our faults but we are dusting ourselves off and trying to move ourselves forward and we have a better, new generation coming through.”

Mo Ibrahim has made his mark on the African continent and in the global business arena with distinction. True to his roots, he has opened the doors of learning to a next generation with a variety of scholarships and fellowships he supports. One cannot but help thinking that if there were a prize or an award for African Leadership in the business community, Mo Ibrahim should be the honorary first recipient – the Nelson Mandela of Good Corporate Citizenship.

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BUSINESS TRUISMS

CASH IS

KING

COLLECT EARLY PAY LATE

THE CUSTOMER IS ALWAYS RIGHT

NEVER PUT OFF UNTIL TOMORROW WHAT YOU CAN DO TODAY

THINK OUTSIDE OF

THE BOX

LEVERAGE YOUR TALENTS

STACK THEM HIGH MARK THEM LOW

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THE ROAD MAP

The Entrepreneurial Process Identifying the Opportunity

Deciding to Exploit

GE

TS

Gathering Resources

Getting Going

GH W SMME 13

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ORIGIN OF IDEAS WHERE DO

OPPORTUNITIES

DR CJA DU PLESSIS

COME FROM? (PhD in Entrepreneurship, Darden Graduate School of Business, University of Virginia)

I

t is surely the toughest part of becoming an

entrepreneur – spotting that one opportunity that everyone else may be missing, or spotting it earlier than anyone else. Good news is that you can get better at it than the regular person on the street if you know where to look. In fact, you will fall backwards once you realise how many opportunities there are in our society. The streets are, indeed, paved with gold, and even though we are not suggesting that it is easy, nor that each opportunity will make you a fortune, it should not be that difficult to get started.

That, really, is the most important secret: Just get started: • Once you have skin in the game, new and bigger opportunities will present themselves regularly, because you are out there and mixing within a particular industry; and

•

You will end up making more money

from an opportunity you have not yet even spotted in this business you have started, than what your wildest dreams about this business can currently imagine. It just happens that way.

You chisel away at it and you chisel away at it, and on a good and unexpected day, you get that one call and one client that takes you to a new height you did not imagine. As long as you are trustworthy and good at what you do...

Here are where to look for the next opportunity: SHIFTING DEMOGRAPHICS Is the population getting older? Maybe they are, therefore, also getting sicker and in need of better care, equipment or particular services.

Or else, there may be a shift in where people want to live, and many other indicators. Track the Government’s Census data. And also set

yourself up to follow some key international lifestyle barometers and indices, as they are actually rather good imitators of international trends and market patterns. Good news is that you get to watch some telly as part of your research – spot the latest series that are big in the US and on BBC. It may show you some demographic trends in advance. Imagine you built a Friends style coffee shop 15 years ago before wi-fi and couches, how far ahead of the competition you would have been today.

CHANGES IN MEANING, MOOD AND PERCEPTION The best example of this category is surely the green economy and enviro-friendly everything.

If you are anything over 40, you will remember a time when these issues sounded just too far-fetched and hippy, and you could still

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dream about doing a cross-US drive in a 30 foot Chevy with a back seat large enough for two to sleep on. How old were you when you first heard of fracking and of ice-caps melting?

It is a new ball game. And do you know that

the next trend may be? Our best suggestion is to regularly track what new phrases and words are trending and being included in the dictionary. That would be indicative of new emerging meanings, for a start.

NEW KNOWLEDGE Without computers and the Internet, millions of people could not have worked in the ICT industry today. New and incremental knowledge opened the doors for so many new billionaires and millionaires as well as regular people to have a rewarding career. If you want to be a little ahead of the curve and spot the emergence of new knowledge, you have to fish ahead of the curve too. Subscribe to a couple of good science journals or magazines (Scientific American is awesome, as is National Geographic.) Join a few Facebook groups

and sign up for some blogs and newsletters from those scientific communities. And keep your eyes open for lamppost signs and newspaper listings on more obscure events in your area about things you know nothing about. Go drop in. And if they start mumbling mantras and asking for money at the door, get the hell out of there as soon as possible.

You want to grow capital, not join a cult.

INDUSTRY & MARKET STRUCTURE CHANGE Global competition and innovation, as well as government regulation all tend to reshape the manner in wich certain markets and industries function. Take the oil and gas area at the moment, for instance. Since 1973, when OPEC started putting the squeeze on the West with oil prices, inflation and the high cost of imported oil has shaped the world in one direction. Now, as the US shale gas industry has shaken of this grip, and can produce cheaper energy, the US has become a net exporter of energy and international oil prices have plummeted. On a more local kind of level, remember the opportunities that came when the Group Areas Act was repealed? So, look for the big industries, as well as for the Government Departments who change the rules of the game so that you may be the first to play by the new rules.

PROCESS NEEDS Speak to the old-timers, the people who can tell you where their company is having problems serving customers. There lies your gap, namely to come up with a product or service solution that streamlines problem areas in the regular business process. Restaurants battling to serve customers during high season? Start an agency employing contract chefs that can rotate to where the need is highest. Clients have to walk too far? Launch that overdue shuttle service and drive them there in comfort.

Process needs may be small, but they offer you a foot in the door in the business to business

(B2B) environment from where you are in a good vantage point to spot and exploit further opportunities. Think of what Bidvest started off doing for companies? Toilet paper and office plants, somewhere along the way.

INCONGRUITIES This category is the easiest source of good ideas. In its simplest form, it simply means that you should look for areas where things are not working and then offer a solution. Sit with a small notebook around the dinner table with your friends and listen to what they complain about. Telkom was late with the installation of an Internet connection. Woolworths does not stock enough clothes in the children’s area and is always three months out of sync with the season. The vet never has the right dog food for a particular breed of dog and how great if they could just deliver. The list goes on as long as people love to whine. If not your friends’ moaning, look carefully at the customers’ complaints at your or your partner’s current place of employment. That could be your key to starting your own business.

LOOK FOR THE UNEXPECTED Learn to look at the world with the eyes of a child, where nothing is taken for granted and everything is open to be discovered. You do that, and you will see the unexpected. Think of Uber, where someone simply figured out that while there are not enough taxis when one needs them, there are empty cars standing around or driving past while you wait for those taxis. Connect the dots... And if it holds true for cars, why not for trains, helicopters, yachts, ferries and planes?

The seven areas may certainly be useful in setting yourself up for spotting opportunities, yet at heart, we believe the entrepreneur to be someone who is looking out for opportunities to make the world a better or easier place to live in. So, it is an attitude of looking and pushing for constant improvement. You get in that frame of mind and the opportunities will present themselves tenfold, so stay aware.

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THE DECISION TO ACT

WEIGHING YOUR OPTIONS There are many analytical tools available to help the start-up entrepreneur decide whether an opportunity is viable or not. Here follows two of many useful approaches. There are no right or wrong way to use these frameworks. They are just devices to assist you in organising your thoughts and market information in a systematic manner so that you may be in a better position to assess whether an opportunity is worth pursuing.

Useful Frameworks CUSTOMERS Is there a demand & by whom?

How many are demanding?

What are they demanding?

How much will they pay?

Can we service them?

COMPETITION Is anyone already in market?

What are they providing?

Why are there gaps?

Can they emulate my plan?

Can they block my plan?

STRENGTHS

What do I or we do well?

Can we leverage off these skills, assets and/ or processes to start the new venture?

Are our strengths good enough to create a barrier to entry for competition?

OPPORTUNITIES

What is the demand not yet fully supplied?

What is its potential Rand value?

Are there new tools with which one can approach this market?

COMPANY

What are we good at?

What do we need to be good at?

Can we bridge the gap?

Do we have the resources?

If not, where to get them?

WEAKNESSES Admit that we suck at some things.

How much better are our competitors at it?

What are key skills, assets we need to obtain to benchmark against best in class?

Are we capable of shaking off these issues?

THREATS

Who are the bigger players in this area?

Can we rely on the people we are most dependent upon?

What do we give up when going after this?

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Other

Staff sundries

Marketing

Stationary

Security

Insurance

OfďŹ ce rental & utilities

Entertainment

Travel

Recruitment ads

IT & Web

Postage

Equipment & Furniture

Telephones

Training

PAYE & UIF

Staff Salaries

Overhead Costs

Other

Unit cost

Sales Commissions

Variable Cost of Sale

Other

Stipends

Sponsorships

Subsidies

Minus: Discounts & Rebates

Sales Turnover

Revenue

Month

1

2

3

4

5

6

7

8

9

10

SMALL BUSINESS BUDGET TEMPLATE 11

12 TOTAL

USEFUL TOOLS

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GETTING ORGANISED

PEOPLE PRODUCTS PLACES

Y

ou have identified your business opportunity. You have decided to take the plunge. No risk is too big when it comes to this dream. But, time for dreaming is over. Now, you have to start putting the pieces in place. You need to get the right people. You need to produce your products. And you need to take it to market. In the next feature, we tell you how to find funding for all of that. Here, we try and offer some guidelines on getting started: PEOPLE • Start with a skills audit. What actions need to take place to make this busy idea a reality? We know you can do most of it yourself, but will you have the time to do it all?

Allow ample time for management responsibilities. It is the most underestimated task of them all.

• Benchmark what good people cost in each field. There are plenty of Internet resources, and groups like Mercer or Grant Thornton who run databases that may be of assistance when you need to know, for instance, what a good Web Developer costs.

• Start recruiting. You can go one of two ways. You advertise directly, screen applicants and arrange to interview your favourites. This is the cheaper but more time consuming route.

Seek out an industry magazine or an on-line forum like Bizcommunity to advertise. We recommend that you publish starting salary guidelines so

•

•

•

that the wrong candidates filter out early by themselves. Take your time, collect the lot, be nice and send other candidates a polite rejection letter (it could be you on another day, not?).

Alternatively, you may approach a recruitment agency to find you the right candidate. This is helpful if time to market is of the essence, as they may have people on their books already. But, it will cost you. Read the fine print very carefully so that you know what happens if the candidate does not work out after three months’ probation (always insist on that).

But, be prepared to dish out at least 10% of the candidate’s first annual salary as your recruitment fee (they pay for all advertisements, at least).

Make an offer and sign a contract.

There are plenty of resources on the Internet where you can find good examples of solid job offers and employment contracts. Or approach the Department of Labour for assistance. Take careful note that Labour Law in South Africa is very strict and that you need to take compliance very seriously, or it will come back and bite you if an employee falls foul of your system.

Induction and training. An employee is only as good as what her manager allows her to be. Good news is that there is plenty of funding available for sectoral or industry training,so take your employees’ growth and

•

•

•

development seriously and invest in their capabilities. It will come back to you exponentially.

Delegate and trust, yet remember to verify frequently. Give your employees wings, but make sure you stay on top of what they have to achieve and offer early support and encouragement if they fall short.

Reward and punish. Make sure employees who do good work get recognised. And likewise, make sure slackers do not create a culture of underperformance by getting away with sloppiness.

Lead by example. Need one say more? The tone of each firm is set by its leaders.

PRODUCT / SERVICEThe KISS principle should apply to all start-ups: Keep It Simple Straight. If you can make one product and sell it profitably, rather stick to that initially instead of diversifying too fast. Better to be one good thing to one good client than trying to be everything to everyone. It is a sure way of being nothing to nobody.

• Companies compete through low cost strategies or through diversification strategies. Low cost production is a must under either direction you choose. If you cannot get to market with some price-competitive position,

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•

•

•

•

•

your ability to beat the market with the alternative diversification strategy becomes seriously hampered.

Focus on quality and service excellence. In a world where Chinese junk flood the markets only to break within one day, quality has become an important localised strategic advantage. And no Chinese supplier can sort out problems real time, so offer your clients your constant vigilance and availability.

Empower your suppliers. The success of your own suppliers’ business will affect your own fortunes, so create a good working relationship with them from day one. Learn to understand what makes them successful and trade with them, where possible, in ways that also drive home their success. They will reward you with better quality, price and service in recognition of your attitude towards their success.

Invest in your brand. A brand, by definition, is the promise of a predictable experience. It is worthy of a whole separate conversation.

Stand by your product. The most famous case studies of the 1980s include the story of tyres being returned to a particular outlet, no questions asked. Except, this particular outlet did not even sell tyres. The lesson was simple – it was extremely valuable to this outlet that consumers knew that they stood by their product and would exchange it if customers were not completely satisfied.

Efficiency and cost. Ask yourself whether you need to do everything in-house, or whether some or all of the steps in putting together your offering could not be produced better and/or cheaper by outsourcing to a

•

specialist. Remember to always own your own core process or asset; the rest can be outsourced, though.

Make just enough to sell, yet never be out of stock. Planning, planning and more planning, especially during the start-up phase when capital is scarce and should not be tied up in dead inventory.

PLACES • Identify where your target customers are spending their money on your kind of product or service and get yourself on the shelf.

• Start local, as logistics become a major investment if you go national or beyond too early.

• Packaging matters so invest to make sure your product reaches the shelf in good shape.

• Where possible, support your product with advertising and promotions.

• There are several channels in the SA market environment. Many start-ups test their first Business to Consumer (B2C) concepts in the informal sector, signing up for any of the gazillions of flea markets and community markets.

The overhead is low – normally a low daily rate or a percentage of sales.

Make your displays attractive and offer something different, maybe a free cup of coffee or the likes on the side.

• The next step would be to join the brick and mortar brigade. Open you own shop, or sell through other shops? Or is it better appointing direct sales agents who sell to their contacts and clients, yet at a high commission structure?

• On-line shopping is growing, yet requires payment solutions and costly secure delivery solutions, becuase the high levels of fraud and crime in South Africa make shoppers sceptical. At least, get an

•

early foot in this door as it will grow to become the way of the future.

The toughest windmill to chase is the national listing with a mega-group like a Pick n Pay or a Shoprite. Beware. I repeat. Beware!! On paper, it sounds great, and many an entrepreneur went out to order the Porsche the day they got that listing. Why beware? Because

you are now in the cage with the 800-pound gorillas. They will squeeze you on price, four times a year. They will insist on rebates and settlement discounts, as well as demand regular advertising contributions. And if that is not enough, they will sit on your cash for 120 days and then place the burden on you to resolve any discrepancies in the paper trails.

Best to wait till you have the cashflow before you tackle this route.

• In the B2B arena, trade fairs are it.

Make sure you get yourself out at industry events and get your sales people to mingle aggressively. Also, many a good business lead transpired at seemingly tangential trade fairs, so cast your nets a little bit wider.

If you are in the ICT game, take a stand at next year’s auto and boat show. Trust me, each of your fellow exhibitors, as well as some visitors, will need your business at some stage. And voila, you are the only team from your game at this venue.

In our next edition, we will look at two further areas where careful planning and preparation is required, namely Corporate Documentation & Admin, such as incorporation, appointment of auditors, BEE certification, FICA status and more; and Tax compliance: Registering for VAT, UIF, PAYE, and more.

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GATHERING RESOURCES

FUNDING YOUR START-UP BUSINESS PLAN COMPETITIONS One of the most frequently discussed and tended to areas in the start-up process is the question of funding. In an upcoming edition, we will do a special focus just on support from the South African government and other private initiatives. This month, we look at a very unusual and highly underrated source of funding, namely funding your start-up from the prizes or awards you may win by entering different business plan competitions. We strongly advise that you pursue this route quite aggressively, as it not only brings you closer to the money, but you will also get the extremely valuable validation and comments from experienced judges who have reviewed your ideas and plans.

There are an infinite number of competitions.

Once you have a basic business plan and set of good financial forecasts produced, it becomes easier every time you enter. So, get the first one under the belt quickly: AFRICAN LEADERSHIP NETWORK AWARDS An annual continent-wide competition for small and medium sized, for-profit enterprises who are headquartered in Africa. A local subsidiary of an Africanheadquartered company may apply provided it meets the eligibility criteria on its own. Please note the minimum qualifications of turnover between US$ 1 – 15 million; demonstrated profitability; and more than 10 employees. www.africaawards.com

BELIEVE, BEGIN, BECOME This is a business plan competition developed by TechnoServe to support and grow new businesses in Africa. It is an incentivised, practical training and business development program to help entrepreneurs turn their business ideas into fundable and implementable business plans. The program is currently being run in Kenya, South Africa, Ghana, Tanzania and Swaziland. www.technoserve.co.za YOUNG ENTREPRENEUR PROGRAM (YEP) The Young Entrepreneur Program (YEP) promotes the development of the entrepreneurial spirit in young South Africans. The program starts with classes in South Africa then takes the “YEPers” to the United States where they are paired up with local entrepreneurs for 6 weeks. After this experience YEPers are ready to turn training into reality. www.yepsa.co.za AFRICAN ACCESS NATIONAL BUSINESS AWARDS The National Business Awards were first introduced by Topco Media in 2002 to recognise and honour the top performers of the year in both industry and commerce, for individuals and companies.

The event is presented in association with the annual business publication, SA’s Top Performing Companies. www.topco.co.za/national-business-awards

METROPOLITAN OLIVER EMPOWERMENT AWARDS (MOEA) These are SA’s most influential awards recognising leadership and innovation in Empowerment. The Awards are now in their 10th year and have become hugely prestigious and are considered the ultimate accolade by winning companies for their transformation activity. www.topco.co.za/oliverawards CAPE TOWN ENTREPRENEURSHIP COMPETITION The competition focuses on technology and innovation in the fields of Biotechnology, Telecom and Media, Information and Communication Technology (ICT), Clean Technology, Healthcare and Social Entrepreneurship.

The winner of the Cape Town competition will have an opportunity to participate in the Global Entrepreneurship Competition overseas each year. www.ctec.org.za

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ON-GOING MANAGEMENT

ON-GOING MANAGEMENT

THE MYTH OF SMOOTH SUCCESS

BY SHERAAN AMOD

W

hen most people see entrepreneurs succeeding, they often think or remark something along the lines of, “Wow, that guy [or girl] really has it figured out. They just keep rising.”

While it may be true that the entrepreneur is doing a great job and operating at an advanced mental level, the mistake often made is that their rise has been smooth, either professionally or personally. Everybody knows that founders work incredibly hard, but so many are fooled that hard work and clever decision-making on their own are enough to succeed, over and over again.

In my limited experience, I’ve found that there’s a little more to this game than just smarts and laboriousness. After all, people need those to succeed at just about anything in life. In startup entrepreneurship, however, there are a lot more unknown and difficult variables to contend with.

These could include issues like market timing, tricky investor relations, co-founder politics, or managing a difficult cash runway. It may sound straightforward, but dealing with any of the above when pushed to extremes can feel like a life-threatening situation, and raise a person’s

stress levels to dizzying heights.

As such, “success” tends to show up when the founder has learned to continuously weather these variables and survive – while working hard and cleverly, of course – until good things happen. That’s what people often refer to as “getting lucky.” Even founders, when speaking of their successes will make statements like, “I got lucky there,” or “That deal came out of nowhere.” Was it luck? Well, yes, to an extent. But in my view, if you stay in the game long enough you’re bound to get lucky at some point. That’s really what it’s all about – being tenacious enough to survive the difficult scenarios; again and again and again.

On the surface and to the outside world, though, everything can seem hunky dory.

Founders tend to hide their struggles, internalizing them and not wearing their hardships on their sleeves.

When viewed in perspective, victories are unimaginably hardwon at times, yet this is unseen by most. And therein lies the myth of smooth success.

That’s really what it’s all about – being tenacious enough to survive the difficult scenarios; again and again and again.

Sheraan Amod is the Co-founder and CEO of Personera, the first personalized photo products platform for Facebook. Personera launched internationally in 2009 after acquiring investment and winning the FNB Enablis Business Launchpad – the biggest small business competition in Africa. Sheraan is passionate about technology, startups, and Internet culture. He started the Cape Town edition of StartupDigest, a localized weekly events list for entrepreneurs that set the record for highest subscribed newsletter outside the US and has been called one of the “Top 200 Young South Africans You Must Take to Lunch” by the Mail & Guardian newspaper.

His latest venture, Springlab (www.springlab.co), is a technology incubator and business development partner that helps build lean startups to solve real-world inefficiencies. Sheraan holds a degree in Electrical and Computer Engineering from the University of Cape Town.

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SUCCESS STORIES

SIYABULELA XUZA

Xuza began experimenting with rocket fuels in his mother’s kitchen when he was 12.

SA’S ROCKET SCIENTIST

H

e’s been called everything from “The darling of NASA,” to South Africa’s own rocket scientist. Now, one of engineering’s highest-fliers, Siyabulela Lethuxolo Xuza’s latest accolade has been his selection as the country’s newest Audi Ambassador.

A born innovator, Xuza says he got hooked on science at the age of five, while standing on his rural plot near Mthatha in 1994 when he saw a light aircraft for the first time. Xuza began experimenting with rocket fuels in his mother’s kitchen when he was 12. He built his own rocket after watching Mark Shuttleworth’s space flight in 2002, but it exploded on the launch-pad. His next attempt a year later, broke the national amateur altitude record at nearly 1,000 metres.

This passion turned into a serious science project that culminated in him developing a cheaper and safer rocket fuel. The project won gold at the National Science Expo and the Dr Derek Gray Memorial award for the most prestigious project in South Africa. This led to an invitation to the International Youth Science Fair in Sweden in 2006, where he attended the Nobel Prize ceremony in Stockholm.

In 2010 Xuza was elected as a fellow of the African Leadership Network, a group of dynamic, influential and successful leaders and entrepreneurs in Africa who are poised to shape Africa’s future over the next decade. He recently became the youngest member of the African Union-affiliated Africa 2.0 energy advisory panel.

Regarded as one of South Africa’s top scientists, he graduated from Harvard University’s School of Engineering and Applied Sciences in 2013 and returned to South Africa. In 2011 he attended the launch of the space shuttle Endeavour as a guest of NASA, and met US First Lady Michelle Obama. A large asteroid, Siyaxuza, was named after him in honour of his work developing a record-breaking rocket fuel and creating safer, more energyefficient rocket fuel.

Ryan Searle, Head of Audi South Africa, says that Xuza, who is now driving an Audi A4 2.0T Quattro, was chosen because he “is part of the young generation of Africans who are committed to developing the continent’s potential. His passion for his subject and his enthusiasm is truly inspiring.”

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HOME-GROWN

SOLAR POWERED TABLET PC

PHOTOGRAPHY BY DEON OF THE CHANGE AGENT

T

wo Eastern Cape young entrepreneurs who founded a company called Millbug recently announced the launch of their Vuya Tablet PC, a solar powered tablet that will facilitate mobile computing in areas with intermittent access to electricity.

Less than 1% of content online is created by Africans and Millbug believes that this alarming statistic needs urgent attention. The Vuya Tablet PC, therefore, is aimed at allowing for greater participation by Africans in the digital economy. Instead of celebrating the rise of the African consumer, they say, this device seeks to catalyse the rise of the African producer.

The firm was founded by Sabelo Sibanda (30) and Thulisile Volwana (23) in 2012 as an e-commerce company that sold fashionable women’s clothing to millennials.

The company was nominated for a South African e-commerce award in the same year and gained many valuable insights on e-commerce, Internet proliferation and technology use habits across the continent.

“Our conversion rates told a very interesting story about how our fellow millennials use the Internet,” says Sibanda, now CEO of Millbug. Volwana, the COO, explains, “People are more inclined to purchase tactile products online from devices with larger screen sizes – such as tablet PCs, laptops and desktops – and are more inclined to purchase digital content from mobile devices – such as tablet PCs and mobile phones.”

It was through this discovery that the pair embarked on the development of a rugged, yet aesthetically pleasing tablet that effortlessly runs on the Android 4.4 KitKat operating system. The tablet has a 1.2 GHz processor, 512 MB of RAM, 4 GB of storage a photovoltaic (solar) power source as well as the ability to be charged using USB or a traditional power outlet. The tablet will retail for no more than R1,499.99 to ensure that it is within reach of its users.

Millbug received financial assistance from the SEDA ICT incubator for the certification of the device as well as consultation and mentoring from Ellen Fischat and Sipelo Lupondwana of the same Incubator. Millbug is incubated at the Port Elizabeth chapter of Shanduka Black Umbrellas. Volwana is currently an Economics graduate at NMMU and Sibanda is an MBA student at the Edinburgh Business School at Heriot-Watt University in Scotland.

Asked what they have learned about entrepreneurship in Africa, they say, “As it is anywhere else, it is dependant on an understanding of people’s culture. We have been and always are in the process of learning about and observing the cultural norms of our clients. Ultimately, it involves learning and collaboration – the very same tenets to which many attribute the success of Silicon Valley.”

Their advice to young people who think they have a great idea is to first create a product from that idea, start selling it and then look for venture capital, if you need it. “We’ve learnt in our experience that investors are interested in businesses, not ideas.” They also stress the importance of reading. “We would love to encourage all young people to read. The secrets to success are only hidden to those who do not read good books or stay current.“ Learn more: http://millbug.com/category/Tablet-pc

Vuya means “be happy” in isiXhosa and it is the intention of the Millbug founders to bring happiness to those that need it the most.

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SUCCESS STORIES

REEL GARDENING A Schoolgirl’s Vision Seeds Success

BY CAMERON BARRY-DOW

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manufacturing process as it aligns with her dream of maximum job creation through the production of a product that will enable people to feed themselves. Reel Gardening initially entered the retail sphere with a range of 27 products – then custom branded and corporate products followed. Claire continued to find a way to get Reel Gardening into the rural areas for which it was designed through the invention of the “Garden in a Box”, for which Reel Gardening won the inaugural SAB Foundation Social Innovation Awards in 2011.

Today, Garden in a Box is making a difference in the lives of thousands of school children and community members across peri-urban and rural South Africa with the help of the a nonprofit organisation called Reel Life. www.reelgardening.co.za

I

n 2002, at the age of 16, Johannesburg schoolgirl Claire Reid found herself sitting in her vegetable garden with a tape measure between her knees and centimetre marks drawn on her fingers. Claire knew she wanted to grow vegetables to sell to her parents for extra pocket money. However, she soon became frustrated by the wastage of seed and fertiliser and her inability to get the seed to stay in the soil at the correct depth and distance apart.

She asked the family’s domestic worker, Meggi, to help her with this overwhelming task by holding the seed packet and passing her the seeds while explaining the instructions on the back of the packaging. Meggi was unable to instruct Claire on how to plant the seed as the instructions were only in English and contained mathematical language that Meggi was not able to understand. It was at this point that Claire decided she needed to create a way not only to plant and keep the seeds and nutrients in the soil at the correct depth and distance apart, but also a form of planting that needed no mathematical or English education to understand. She needed a way of planting that was simple, effective and easy to do in a short period of time. And Reel Gardening was

the solution.

Claire began to make seed strips with newspaper and encased the seed using a paste made from flour and liquid fertiliser. This craft-type project was entered into the Eskom Expo for Young Scientists in 2002 to gain Claire some extra marks for Grade 10 Science.

The public response to the simple idea was overwhelming and Ronnie Kasrils, the then Minister of Water Affairs and Forestry, requested information on the water saving abilities of this new form of planting. Claire conducted tests with the help of the University of Pretoria and was able to conclude that Reel Gardening was able to save up to 80% of the water consumed during the germination phase. Subsequently she went on to win the International Stockholm Junior Water Prize for South Africa. A number of awards followed, including Woman in Water for Scientific Research below the age of 35 and The United Nations Environmental SEED award.

Reel Gardening was able to secure a loan from Anglo Zimele in 2009 to enable Claire to develop the idea into a commercially viable and manufactured product. Reel Gardening opened its doors for business on the 12 February 2010 and soon began expanding and grew to a team of six. Claire chose to develop a handmade

Reel Gardening is a biodegradable, colour-coded paper tape that encases organic fertiliser and seeds at the correct depth and distance apart. It takes only five minutes to plant and uses 80% less water and will provide hours of joy and months of food. Reel Gardening is a simple, cost effective and convenient means of growing vegetables, herbs and flowers from seed. Reel Gardening enables and empowers communities to implement their own sustainable food projects throughout South Africa through a userfriendly and educational medium, which can contribute to alleviating food shortages and promote self-sustaining communities.

Products include 10 vegetables, 10 herbs and 3 companion planting flowers that keep insects at bay. Reel Gardening is an environmentally-friendly organic product which has been taken up positively by consumers from diverse walks of life. Reel Gardening markets its products in a three tier approach: retail, social development initiatives and corporate gifting.

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SUCCESS STORIES

ENTREPRENEURIAL EDGE

ACTION HERO VENTURES THULA BABA BOX

A

ction heroes are characters who portray bravery, strength, adventure, imagination and fun. So when Ernst Herzog, an industrial engineer and artist, decided to launch his very early stage angel fund in 2013, it appeared to be the ideal name. And so, Action Hero Ventures was born.

The fund made headlines when it rolled out its Thula Baba Box project and was recognised in the official programme of the World Design Capital Cape Town 2014. The concept and the objectives were not new. Yet, nobody had yet cracked its application in the SA market.

This is the idea. As far back as 1938, the Finnish government recognised the importance of early childhood development and care, and so started supplying new mothers with essentials like blankets, clothing and toys.

Where once the infant mortality rate in Finland stood at 65 deaths per 1,000 live births (1938), it has now dropped to 3 deaths per 1,000 live births in 2013 – one of the lowest in the world. In contrast, in 2013, South Africa's infant mortality rate was between 40 and 50

deaths per 1,000 live births, which is higher than about 75% of all the world's countries.

It should be evident that the kind of early intervention pioneered by the Finnish could make a huge difference in South Africa, but it has been Action Hero Ventures who have only recently risen to this challenge in a very pro-active manner with the Thula Baba Box. The company describes its box as “a survival kit for low-income mothers of newborn babies.” A simple, plastic box, it contains essential items such as clothes, sheets, nappies, health products and toys.

To add to its utility, the box itself can also be used as a bath or a safe storage space.

According to Action Hero Ventures, the purpose of the Thula Baba Box is to improve the overall wellness of mothers and babies, focusing on the first 1,000 days after conception; to validate the baby as a new human being with rights; and to reduce the cost of raising a baby for mother and father as well as the government.

This joint project between Hertzog and

Frans de Villiers, a marketing executive with CSI experience, is currently in its pilot phase with the Western Cape Government Department of Health as well as several other stakeholders such as the Department of Economics at Stellenbosch University and the J-PAL Africa Incubation Fund who is financing the pilot phase. What makes the initiative particularly interesting is how the founders are also trying to package useful information as well as behaviour-changing incentives into the concept. As an observer notes: “This is the equivalent of that old saying – you teach a man to fish…” The Thula Baba Box empowers new mothers and fathers to become better parents and enables the wellness and future of the child to take centre stage.

Once the learning from the pilot phase has been incorporated into the project, the team hopes to deliver a Thula Baba Box to each expectant mother in the Western Cape by 2016, and nationally by 2020. www.actionheroventures.com

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SCORE CARD

OIL CHECK SA ENTREPRENEURSHIP

THE ORIGIN

The Global Entrepreneurship Monitor (GEM) is the world’s largest study of entrepreneurial activities, attitudes, aspirations and associated dynamics. It started in 1999 when Babson College and London Business School conducted a study of 10 countries. Since then, more country teams have joined each year, now covering 75% of the world’s population and 89% of global GDP. How does South Africa compare in the entrepreneurship ranks? More info: www.gemconsortium.org FIRST INSIGHTS (2001)

• SA ranked 14th out of 29 countries ito entrepreneurial activities • A lower firm survival rate than the international average. Our start-up rank is 13th yet our new firm rank only 25th • Low confidence level in own ability to start a firm. 22nd place only • 1 in 18 South Africans is an entrepreneur • Men are twice as likely as women to become entrepreneurs • Metros at 1/10 have more entrepreneurs than small towns at 1/22 people • In metro areas, the rate is very similar between racial groups • 83% of activity in rural areas is out of necessity, rather than for exploiting a real business opportunity

The South African GEM team is based at UCT’s Graduate School of Business and is headed up by Mike Herrington.The first South African GEM Report appeared in 2001, coauthored by Amanda Driver, Eric Wood and Nick Segal. In the most recent report, 2013, Jacqui Kew joined Prof Herrington as author.

The latest report includes two special sections – on the youth and on the Western Cape.

2001 ISSUES • Poor education results in lack of both basic skills and high-level technical skills

• Apartheid legacy has damaged self-esteem and confidence, motivation and creativity

• Culturally, entrepreneurship is not celebrated and there is a stigma to business failure • We look to others for solutions, yet with low levels of trust in personal and business relationships

• Venture capital industry is young • Lack of assets and capital among large parts of population • Financial institutions do not relate well to entrepreneurs’ needs • Labour policy deters job creation among entrepreneurs • Government puts huge administrative burden and cost on start-ups

LATEST INSIGHTS • Compared to sub-Sahara, we have only about onethird the perception that there are either good opportunities or that we have the capability to exploit them • Despite this comparatively low confidence in our abilities, we have shown a 92% increase in perception of opportunity and 40% in perception of capability • Compared to 2001, there is a 54% increase in the perception that being an entrepreneur is a good career choice; a 56% increase in perceived status and a 65% increase in perceived media attention • Total early-stage entrepreneurs as part of the population sits at 10.6%, which is just above the global median yet lags behind other sub-Sahara countries significantly • The gender gap has narrowed by only 1% since 2002, with males (now 58%) still outstripping females (42% significantly as entrepreneurs • The overall percentage of black opportunity-driven early-stage entrepreneurs have increased by more than 154% from 22.9% in 2005 to 58.3% in 2013 • 58.7% of early-stage entrepreneurs are in the age bracket 25 – 44 • A quarter of the age group 18 – 25 believe they can make an own business succeed, and in this same group, males are 1.7 times more likely to start a business than their female counterparts 28 SMME DECEMBER 2014

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REMAINING ISSUES • The lack of quality basic education remains a problem, and especially the low percentage of learners who conquer mathematics • Concentration in key industries makes it difficult for young entrepreneurs to enter the market • Government is urged to develop an IT infrastructure that can support significant entrepreneurial growth • The lack of labour market flexibility still inhibits growth • Corruption has cost SA an estimated R700 billion since 1994, yet the real cost is when entrepreneurs rely more on who they know than what they know • Recommendations include linking large and small firms and integrating supply chains • Of note is another recommendation to develop large scholarships and bursaries that encourage the youth to study and become the next generation of maths and science teachers

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REWARD YOURSELF

DREAM A BIT

30 SMME DECEMBER 2014

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Before you even step on board, Ocean Sapphire will take your breath away. This is a futuristic looking vessel that was designed with a strong emphasis on space and a healthy focus on the good life

O

cean Sapphire has five suites where you can host up twelve guests, and a professional crew of seven who will be at your every beck and call. The elegant master suite situated in the bow and facing forward with two private balconies, full-length windows, and state-of-the-art mood setting lighting will certainly make you feel like king of this castle.

Maximizing natural light reigns supreme on

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board Ocean Sapphire. Each of the four levels on this luminous vessel have floor-to-ceiling windows which give a sense of space and openness.

The panoramic saloon on the upper deck offers wide, unobstructed views of the horizon. Natural materials, such as solid teak and coconut husk fibre flooring, also help to bring a sense of continuity between the lush interior and the sleek, chic outer deck.

When it comes to entertainment, head up to the sundeck with sun beds, bar and gym

equipment. Alternatively, the main deck is wellequipped with a home cinema in the saloon; while the upper deck saloon offers a beach hut feel and is equipped with cappuccino bar, games station and exterior deck ideal for al-fresco dining.

Luxury yacht Ocean Sapphire cruises comfortably at 16 knots and is an excellent charter yacht for luxury vacations. Indulge yourself, or indulge your fantasies at a cool 130,000 Euros a week. www.floatinglife.com

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ASK THE ELDER Elder Tree: a genus, Sambucus, of flowering plants in the family Adoxaceae. Ornamental varieties are grown in gardens for their showy flowers, fruits and lacy foliage.

Caz Networking is both a skill and a massive gamble. You are effectively gambling on the odds that someone will give you useful information or introductions. The skill is to improve your odds. Firstly, I see nothing wrong with the listening part of what you say. If anything, most people talk too much and listen too little at these events. It would help, however, if you were clearer on what exactly you do, what your challenges are and what solutions you may be looking for. Sit down and write those down, three bullet points each, and even rehearse them in front of a mirror. By being clear and articulate on these matters, you are able to shape the conversation around your informational environment and needs. If shy, also practice to walk up, stick your hand out, and say: “Hi, I am Caz, and I am sure we have not yet met. May I ask what brings you here and what you do for a living?” Never, and I repeat, never, spend the evening hanging out with the people you already know. That is not why you are there. Invite them for a beer at your house next week – friendship is a different matter and not what networking is all about.

The Elder

Good Day Sir I have this idea that I think can help my former company make lots of money. I worked on their production line for almost 13 years and spent many an evening working on plans in my garage on how I could improve this one bottleneck that always gave us problems. That was until I got laid off last year. Understandably, I do not trust that the company will not steal my idea. What do you recommend?

Keith Owen, Inanda.

Dear Keith You are wise to be worried. You must have seen the long-running court case where a major South African cellular operator was taken to task by a former, quite junior employee, for the “Call me” idea he gave them? Sad but true that we sometime really need lawyers, and I would suggest you speak to someone in the area of Intellectual Property Law. But, now that you have been laid off, I assume money may be tight, so you might want to take your changes with just a good Non-Disclosure Agreement, available for free all over the Internet. Even if it does not cross all t’s nor dot all i’s, it at least establishes a record that you introduced some ideas to their company. But now, if I were you, I would have taken it straight to their biggest competitor!

The Elder.

Dear “Thabang” It is fraud and he should be locked up. Just because everyone is doing something does not make it right. But everybody knows that, yet still ignores it, not? Do not submit false claims. More taxing is how to make your company aware of the problem. Do they have an anonymous Suggestions Box? Or any other manner in which to blow the whistle on fraud without being victimised? If worried, draw up an anonymous memorandum and slip it under the CEOs door when no-one is watching. What do you think?

The Elder

32 SMME DECEMBER 2014

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T TYo

Dear Sir My company sent me on a trip to Welkom with my divisional manager for a week.

He was very pleasant company and we worked pretty hard on a client’s site. But, what bothers me is that at end of week, he showed me an elaborate scheme he concocted with the guesthouse owner to claim back from our company the cost of three meals a day, even though the guesthouse actually fed us without us having to pay a cent. Then, he also suggested that even though we drove with one car, both of us claim the mileage and wear and tear on our different makes and models of cars. He says that everyone is doing it.

Thabang (Not my real name)

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O Yo the O the

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Mr Elder I go to so many network events, but I just do not get how to make them work for me. I am shy and I end up listening for hours to other people talk about themselves. What should I do?

Caz Shekhani

Fo ca Fo ca

55

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At Citi, we are as unique connected At Citi, we areand as unique and to Africa as connected you are. to Africa as you are.

Across the continent, someone in our firm is meeting a client, closing a transaction or Across the continent, someone in our firm is meeting a gaining the skills to pass on to the next generation. client, closing a transaction or gaining the skills to pass

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Doing business in more than 40 countries across the continent, no other bank knows Africa For over 50 years, we have worked tirelessly to help turn like we do. dreams into reality across Africa. Doing business in more

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For more information on available positions knows Africa like we do. and exciting opportunities, please contact us at: africa.careers@citi.com www.citigroup.com

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Citi never sleeps™ Citi never sleeps

SM

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