Impossible, Yes, So Let’s Get to Work

impossible1
The merest attempt at estimating, the slightest unconscious recording is shrugged off as an absurd association with some never-to-be-realised dream…. as an exercise in futility….

I manage to whisper my first thought (whisper, so the demons won’t hear):

“I know it’s impossible. But I know I will do it.”

At that instant, the towers become “my towers.”

Once on the street, a new thought: Impossible, yes, so let’s get to work.

— from Man on Wire, a must-read diary of tightrope walker Philippe Petit’s conquest of the World Trade Centre

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A business that is not growing, is dying

metier
Entrepreneurship is about taking risks, about innovation, about closing a gap in the market but importantly it is also about growth. Below is a summary of the fascinating story about a startup company called Métier based in South Africa:

Métier Mixed Concrete is a private company that has been in operation since March 2007. The core business of Métier is the manufacture and supply of quality ready-mixed concrete products for the residential, commercial and industrial markets in South Africa. Métier has achieved significant growth by positioning its business in markets that offer strong and growing demand for its products.

Métier’s initial geographic focus was in Durban and Pietermaritzburg, KwaZulu-Natal, where it secured a fair market share, but the company has recently extended its footprint to the Gauteng market where it has established a number of operations. Métier supplies a varied range of products and is well positioned to supply a variety of standard and specialised concretes to the construction industry.

During the year to 28 February 2013, Métier’s revenue grew by 75% to R412 million, driven largely by new business in Gauteng and successful completion of work on two major projects in KwaZulu-Natal. Profits increased by 48% and while the company was able to maintain its gross profit margins it did not increase them for the first time in seven years. This is a reflection of the slow economic environment and the consequent increase in price competition.

In March 2013, six years later Sephaku Holdings (a company owned by Dangote, Africa’s richest person) acquired Métier for R365-million. A start-up company that started operations from nothing in March 2007 has been to grow to be valued at R365 million in March 2013, six years later. This is what we mean by growth. Entrepreneurship is about growth.

The basic definition of entrepreneurship is about starting something from nothing and growing it. Growth is fundamental to entrepreneurship. Entrepreneurs are different, there are those who happen to own a business of the same size for a number of years, from generation to generation, those are what we typically life-style entrepreneurs. Their businesses revolve around their lifestyle.

But for serial entrepreneurs, a business that is not growing is a business that is dying. The business environment is always changing and therefore if you are not innovating and growing, other new entrants will catch up with you and render your business less competitive.

Growth means exploring other markets, introducing new products, and sometimes even acquiring other businesses through mergers and acquisitions. It is about challenging the status quo, continous improvement. Entrepeneur change things even if they are not broken in the quest to do better.

When your business is not ready for big clients, take it easy, grow organically with small clients, perfect serving small clients to an extend where big companies will see value proposition. Keep selling to small clients, the big ones will come.

Be careful when you scale your business, don’t confuse growing too quickly with success

Ps: This is extract from my upcoming book: Start-Up Revolution. The book is to be launched in May 2014

The Global Entrepreneurship Monitor (GEM) Report 2013

South-African-Entrepreneurs-Share
The Global Entrepreneurship Monitor (GEM) report for 2013 has been released and having read it, I thought I will summarise some of the highlights of the report (with more emphasis to sub-Saharan Africa economies):

• GEM (Global Entrepreneurship Monitor) study represents over 75% of the world’s population and 90% of world’s total GDP.

• Namibia and South Africa are efficiency-driven economies. Angola, Botswana, Ghana, Malawi, Nigeria, Uganda and Zambia are factor-driven economies.

Efficiency-driven economies are driven by industrialisation and an increased reliance on economies of scale, with capital-intensive large organisations more dominant.

Factor-driven economies are dominated by subsistence agriculture and extraction businesses, with a heavy reliance on (unskilled) labour and natural resources.

• Among the factor-driven economies, the sub-Saharan African economies have the highest TEA rates, especially Zambia and Nigeria with 39% of the adult population (18-64 years old) involved in early-stage entrepreneurial activity.

• In the efficiency-driven group, the highest TEA rates were found in the Latin American and Caribbean economies, while lower levels were reported in MENA and Europe.

• Trinidad and Tobago and the United States showed the highest TEA rates among the innovation economies.

• Italy and Japan have the lowest TEA rates in 2013, 3.4% and 3.7% respectively.

• Entrepreneurs do indeed experience higher levels of job satisfaction than employees. Empirical research suggests that this is because they value the independence and lifestyle flexibility of running their own business

• Necessity-driven entrepreneurs have low well-being levels compared to opportunity-driven entrepreneurs

• Sub-Saharan African rates of female early-stage entrepreneurship are comparable to their male equivalents. Notable cases are Ghana, Nigeria and Zambia which exhibit more participation of women than men.

• Early-stage (startups) in innovation-driven economies exhibit highest degrees of well-being

• Individuals in factor-driven economies tend to report more positive attitudes on perceived opportunities to start a business

• Sub-Saharan economies exhibit lower proportions of new product with European economies. Growing emergent economies like Colombia, Chile, Taiwan and South Africa have high rates of new products (over 70%) but also high proportions in new markets (over 50%).

GEM Stats1

• 69% of individuals in the Sub-Saharan African economies often see good opportunities to start a business in the region

• 47% of individuals in the Sub-Saharan economies also exhibit having intentions to start businesses.

• Only 12.8% of South Africa’s population (18-64 years) have entrepreneurial intentions to start a business within 3 years. Uganda (60.7), Malawi (66.7), Botswana (59.2)

• Only 37.9% of South Africa’s population (18 – 64 years) perceives entrepreneurial opportunities to exist in the country.

• Only 42.7% of people in SA perceive to have entrepreneurial capabilities.

GEM Stats2

• South Africa’s Total Entrepreneurship Activity (TEA) level is now at 10.6% (2013) from 7.3% in 2012 and 9.1% (2011). Showing improvements.

• However South Africa ranks lower than other African countries in terms of Total Entrepreneurship Activity (TEA).

• TEA rate for other Sub-Saharan African countries are as follows: Zambia (39.9%), Botswana (20.9%), Malawi (28.1%), Angola (22.2), Ghana (25.8), Nigeria (39.9) and Uganda (25.2).

• Sub-Saharan Africa shows the highest regional TEA rates, there are high rates of discontinuance relative to TEA. Angola and Malawi have higher business discontinuation rate than TEA.

• The establishment rate for South Africa is 2,9% and the discontinuance rate is 4.9% which means South Africa’s economy is losing entrepreneurs more than it is establishing them.

• In the Sub-Saharan region, people between 25 & 35 years are the biggest (32%) group engaged in early-stage entrepreneurial activity.

• Primary solutions for improved TEA in the country: Primary education, health, infrastructure, macro-economy stability.

• Secondary solutions: Labour market efficiency, market openness, tech readiness, research and development transfer, cultural & social norms, commercial and professional infrastructure, physical infrastructure, access to finance, government policy and programs.

Below is the link to the full GEM 2013 report:
http://gemconsortium.org/docs/download/3106

Good ideas come from bad ideas

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When someone says to me, “I don’t have any good ideas…. I’m just not just good at that,” I ask them, “Do you have any bad ideas?”

Nine times out of ten, the answer is no. Finding good ideas is surprisingly easy once you deal with the problem of finding bad ideas. All the creativity books in the world are not going to help you if you are unwilling to have lousy, lame and even dangerously bad ideas.

One way to become creative is to discipline yourself to generate bad ideas. The worse the better. Do it a lot and magically you will discover that some good ideas slip through from the bad ideas.

Ideas

We are Surrounded by Bureaucrats, Note Takers, Manual Readers, TGIF Labourers, Map Followers and Fearful Employees

TGIF
The problem is that the bureaucrats, note takers, manual readers, TGIF labourers, map followers and fearful employees are in pain. They are in pain because they are overlooked, underpaid, laid off, and stressed out.

The first chapter of Adam Smith’s Wealth of Nations makes it clear that they way for business to win is to break the production of goods into tiny tasks, tasks that can be undertaken by low-paid people, following simple instructions. Smith writes about how incredibly efficient a pin-making factory is compared t a few pin artisans making pins by hand. Why hire a super-talented pin maker when ten barely trained pin-making factory workers using a machine and working together can produce a thousand times more pins, more quickly, than one talented person working alone can?

For nearly three hundred years, that was the way work worked. What factory owners want is compliant, low-paid, replaceable cogs to run their efficient machines. Factories created productivity, and productivity produced profits. It was fun while it lasted (for the factory owners).

Our society is struggling because during times of change, the very last people you need on your team are well-paid bureaucrats, note takers, manual readers, TGIF labourers, map followers and fearful employees. The compliant masses don’t help so much when you don’t know what to do next.

What we want, what we need, what we must have are indispensable human beings. We need original thinkers, provocateurs, and people who care. We need marketers who can lead, makers willing to be shunned if it is necessary for them to make a point.

Every organisation needs an entrepreneur, the one person who can bring it together and make a difference. Some organisations haven’t realised this yet, or haven’t articulated it, but we need such change-makers.

Entrepreneurs are people with a genius for finding a new answer, a new connection, or a new way to getting things done.

That would be you.

Professional wrestling is fake – learning how to see.

Wrestling
Professional wrestling is fake. Now some of you knew that before, but some of you just heard it for the first time.

When you learn to see wrestling differently, that moment when you realise that it was fake, suddenly you noticed the blood pack, you notice people pulling their punches, you notice that things are not the way you thought they were, you begin to see through the façade. Suddenly the people you thought were great athletes you realise that actually they are great actors, this changes how you see the sport.

What this means is that the way you see the world might be different than the way the world has become. As an entrepreneur, attending business seminars and thought leadership sessions are ways that can teach you how to see things differently.

The business environment changes all the time, it is when you are in the company of thought-leaders that you learn to see things as they are not as you thought they are.

Fit In or Stand Out

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There are countless people waiting to tell you how to fit in, waiting to correct you, advice you, show you what you are doing wrong.

And no one pushing you to stand out.

If you add up all the books, back-benchers, bosses, teachers, parents, co-workers, employees, religious zealots, politicians, and friends who can show you how to fit in just so, it’s sort of overwhelming. It’s clear to me that we are really good at establishing and reinforcing the status quo.

Fit in too much, though, and nothing much happens. Where are the self-appointed agitators and firebrands, the people who will egg you on and push you to stand for something?

They seem to be missing.

The thing is you can fit in or stand out, but you can’t do both