Whilst having an open discussion over breakfast with a few entrepreneurs recently, I came to the conclusion that a significant contributor to the failure for new startup businesses is that a number of the entrepreneurs tightly couple their basic income needs for day-to-day personal expenses with their entrepreneurial journey.
This is a huge problem in the South African startup community where our version of entrepreneurship is driven by a bias towards feeding ourselves rather than allowing our startups to contribute new value to the economy.
This ‘I am in it to feed myself’ mentality creates a difficult situation in that the growth and success of a new startup is tightly linked to the founder’s personal bank account. Ultimately, this creates a tough hustling attitude in our entrepreneurial community – making it impossible to even think we can ever compete with thriving garage startups in the developed world where mom and dad serves hot meals all day long.
I agree that each startup must have a strong motivation to survive, but a survival-only mentality seldom leads to a thriving business environment.
You see, innovation happens everywhere however there’s a big difference between sustaining vs. disruptive innovations where the latter deals with big (bold) exponential ideas that help create new value to the economy (a step change to human existence, which is what our emerging economy needs right now).
A lot of you out there will probably say I’ve gone crazy, and that I’m reflecting from a point of privilege. However, it is important we start reflecting on some of these hard topics and find ways to create a thriving entrepreneurial environment, otherwise we will keep playing victim forever and claiming that VCs don’t support our local startups instead of accepting the hard truth that our entrepreneurship in current state is not adding real value to the economy. Our entrepreneurs cannot even do basic math, but talk digital all day (this is a story for another day).
We need to understand that sustaining innovations encourage scarcity mindset and are limited to an existing market which means a chance for crazy profits is impossible and one mostly deals with a commoditised space, which by nature means it will be really difficult to make a dime. Unfortunately, more than 90% of South African entrepreneurship finds itself in this category (We might as well throw away the shiny suit and all the gadgets, and go sell bananas on the street, the old lady is making much better profits).
If a creative thought or your startup’s revenue is linked to your immediate personal day-to-day expenses it becomes difficult to go for stretch goals that may require the entrepreneur to go even deeper into their creative self as this can be expensive and without an immediate pay (WhatsApp comes to mind, amazing and disruptive innovation initially launched without a clear commercial model).
The COVID-19 pandemic has shown us how quickly businesses that were based on traditional and unsustainable business models (mostly commoditised space) were quickly squeezed out of the market resulting in a lot of job losses. Just think about brick and mortar businesses that could not survive the heavy lockdowns across the globe, or even worse all those grey suit self-employed guys who confuse themselves to be entrepreneurs without relevant digital talent or offerings. I don’t even want to mention the so-called ‘seasoned speakers’ who believe digital means selling and running useless webinars everyday, the countless catering tenderpreneurs, etc.
Entrepreneurs must change their mindset from scarcity to abundance thinking in order to take advantage of a new underserved market, taking advantage of opportunities presented by surveillance capitalism (aka digital).
This would mean a big change in mindset for the new age entrepreneur, an entrepreneur that must never link personal (daily) expenses with their entrepreneurial creativity, atleast not in the short-term whilst building your startup.
By separating what feeds you today with your ambition to change the world (your entrepreneurial journey), you allow for freedom to create truly exponential innovations that have a chance in improving our GDP.
A lesson from this is that as an entrepreneur it is important that you are clear on your reason to be an entrepreneur as this journey may not improve your bank balance in the short-term. If all you need is income for your daily expenses, entrepreneurship maybe an unnecessarily difficult way to feed yourself as you can just get a 9-5 job as a more predictable way to pay your bills (I know you gonna cry and say there are no jobs hence you’ve created your own gig, don’t lie just build the right skills).
I hope our startup community will continue to be filled with more hungry entrepreneurs, hunger to change the world instead of simply starting businesses to address immediate personal expenses. By the way, being angry at your boss is no reason never to ever want to work for anyone – this is foolish behaviour as you will always have a boss as long as you have a customer.
Abundance is the name of the game!