Born from the Flames

Born from the Flames

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We’ve all heard about how regular forest fires clear the way for new life, making for a healthier ecosystem overall. The recent recession has worked in the same way, put millions of people out of work or threatened their employment. But if there is a silver lining to be found in the struggling global economy of the last few years, it’s that these unprecedented economic shockwaves has spawned a new breed of entrepreneur: the accidental entrepreneur – defined as a company founder who started his or her small businesses out of pure necessity rather than a lifelong dream of ‘being their own boss’.

The makings of accidental entrepreneurs

Accidental entrepreneurs tend to have one thing in common: they are agile, highly educated, tech-savvy, battle-tested business professionals and the companies they have founded are born to grow. They make decisions for their company based on analytics and market opportunities rather than emotion or gut-feel. In short, they are driven by profits, not passion. Unlike the butcher, the baker and the candlestick maker, these entrepreneurs are less likely to be fulfilling a life-long dream to own their own business or make their passion their profession.

Like a pack of velociraptors among a herd of herbivores, accidental entrepreneurs are quick to react and take advantage of changing conditions, which gives them an edge over their larger competition. These owners are resourcing and operating their company quite differently from the traditional small business; they understand technology, and they are more willing to adopt the latest trends, such as Cloud computing and virtualisation, to meet the current needs and future scalability requirements of their growing business.

Harnessing the virtualisation

To support this, we have found that South African SMBs are using virtualisation technologies as a steppingstone to the Cloud. Furthermore, the South African market is one of the fastest growing Cloud adopters in the world, second only to the UK. This is attributed to the bulk of SMBs that perceive the move to the Cloud as a cost saving exercise that allows for greater mobility and business flexibility. Some of the major concerns around Cloud adoption in SA, though, are that of security and the unknown, but this has not hampered its uptake.

Sizing up accidental entrepreneurs 

In the rubble of the recession, the impact of this explosive economic “tsunami” has been difficult to quantify, but the evidence has landed in the United States at least. New data from Forrester Consulting shows that 75% of US accidental entrepreneurs that are bullish about growth, expect their revenue to grow more than 10% over the next year, compared to just 39% of small businesses founded before the recession. And, 46% expect to double their number of employees in the next two years – that’s four times the number of pre-recession small businesses who report the same. With the right mixture of knowledge and technology, even a small business born of the economic crisis can have a real impact in the market and challenge larger competitors.

The Forrester’s study had a number of other interesting findings, for instance:

  • Profits not passion drive small businesses started post 2008. 54% of small businesses founded in the dark days of the recession consider their company a growth business (having an exit strategy) rather than lifestyle business, which is 15% higher than pre-recession companies. More than one-third of the founders of post-recession companies came from a position with a large (500+ employee) company
  • Recession-born small businesses take dramatic and immediate advantage of the Cloud. 21% of accidental entrepreneurs have zero servers versus 5% of those founded before 2008. These small businesses trust more applications to the Cloud, with 51% deploying Cloud software and 26% having implemented Cloud security, compared to just 39% and 16% of pre-2008 small businesses, respectively. Interestingly, the research found that all small businesses are aggressively adopting Cloud storage and backup.
  • Accidental entrepreneurs are better prepared to scale security. Accidental entrepreneurs are also 27% more confident that their current security solution will scale with their company’s growth over the next two years.
  • More self-sufficient in making software decisions. Whether financial/accounting/ERP, collaboration or security software, accidental entrepreneurs base their decision on what software the founder used in their previous job or that they used as a consumer. They also strongly prefer known brands. On the other hand, the majority of pre-recession small businesses base their software decision on the recommendation of a value-added reseller (VAR). For collaboration software, the difference is especially striking, with 50% of pre-recession small businesses acting on the recommendation of a VAR, while 36% of post-recession small businesses chose software that the founder used in his former job or as a consumer.

To this end, software developers globally are redefining their products and service to maximise value to the business owner. The growth and development of the IT and security industry means that services and infrastructure can scale with your business, and is no longer a barrier to entry in terms of cost, availability or functionality. Entrepreneurs can stop worrying about IT solutions and focus on what really matters – growing their business and realising their vision.

David Ribeiro
David Ribeiro is a Partner Account Manager at Symantec South Africa. He is responsible for managing the relationship between Symantec South Africa and the managed reseller Channels. During the past years with Symantec, David has been recognized for his dedication and achievements both locally and on a global level. In addition to receiving the Small Business Team of the Year awards for EMEA in 2008, he was also named the Small Business Salesperson of EMEA for FY10.