Global Entrepreneurship Week (GEW) takes place from 12 – 16 November 2018 and in an emerging market that needs to create millions of new jobs – most of which can only come from SME’s that Scale Up – this is a very significant week, representing the main hope of a more prosperous and more fair future.
But scaling up can be daunting. Out of every 1,000 businesses, 10 have the potential to scale and create wealth. That’s just 1%. What’s worse, of the elite 1%, 20-30% will make it to the ‘Promised Land’ while the rest get stuck in No Man’s Land – the Bermuda Triangle of growth – or fail
As entrepreneurs on this daunting journey, we need inspiration! Happily, SA has plenty of inspiring, award winning entrepreneurs to learn from.
Here, 10X-e shares insights from some of the award-winning Scale Ups on the 10X Scale Up Accelerator.
But who are 10X-e, and what is the 10X Scale Up Accelerator? 10X-e exists to help elite Scale Up novices to 10X their business. “Most of the best young entrepreneurs fail to scale first time around. We’re here to fix that” says Goldberg, 10X-e’s Founder.
10X-e partners with Sponsors to provide world class Scale Up support to SA’s highest potential ventures. Recently, 10X-e and AlphaCode came together to accelerate SA’s top Fintech Scale Ups.
“We offer a tried-and-tested 12-part formula for rapid growth and it all starts with a Business X-Ray which essentially exposes the strengths and weaknesses of your business, to ensure that the foundation of your business is solid enough to handle the rapid growth. If there are weak links that need work, the X-Ray will reveal them”.
Jason says that the company deals with ‘disruptors’ who disrupt markets and industries by scaling innovative new offerings or business models, typically leveraging new technology or new market circumstances that make new ways of doing business both possible and better.
Building Award Winning Businesses
“Many of our clients are achieving impressive things, and we would like to pay tribute to just some of these”.
“Click2Sure is innovating the insurance space with a full stack digital insurance platform that enables them to do things like insure your new cell phone at the point of purchase – whether that is in a store or online. Launched in 2017 and founded by serial entrepreneurs Daniel Guasco and Jacques Van Niekerk, Click2Sure is currently on the AlphaCode 10X Program” says Jason. The company recently announced their new venture with Greenlight Re Innovations – a specialist property and casualty reinsurance company from the Cayman Islands. This will add rocket fuel to their international expansion”.
A2d24 – part of the September 2018 10X Cohort – recently won Innovator of the Year award in Sanlam / Business Partners Entrepreneur of the Year awards. Muhammad, the Founder and ex-McKinsey consultant, has led the firm in developing an innovative app for Emergency Medical Services in Gauteng which reduces ambulance dispatch time and saves lives, a predictive model for a mobile phone network service provider in Cameroon, and a mobile application to assist in malaria prevention in Mozambique. More recently, they have created an unrivalled Internet Of Things Point Of Sale device to help merchants grow sales and improve service.
InvoiceWorx received a third-place prize of R750 000 from SAB Foundation’s 2018 Social Innovation and Disability Empowerment Awards for Spaza Credit – a micro-finance solution for retailers in the informal sector.
The Spark Education Group of Schools – on the 10X Program since 2017 – are transforming education using technology, preparing kids for a more complex and technology-dominated future. They have walked away with no less than 9 business awards for the business itself and the founding members.
So, what’s the secret to Scaling?
“Ask any successful entrepreneur and they will tell you: Scaling is incredibly hard!”
Jason says that this is for a lot of reasons; one being that as you scale is that you build up ‘organisational debt’ – the silent Scale Up killer. “‘Organisational debt’ is essentially a backlog of ‘Capacity’ (scalable systems, processes, skills, people, and general ‘fixes’) needed for your organisation to work well at your current scale”.
He continues saying: “The more you scale, the more capacity you need. You don’t have it, mostly because you’ve been so busy selling and delivering and dealing with people issues that you have not taken the time required to invest in scaling capacity. The ‘Capacity’ you need, and don’t have, is your organisational debt. It is invisible. And it is deadly”.
To kill your Organisational debt before it kills you, the first thing you need is to see it. “That’s why we created the Scale Up X-Ray – to provide X-Ray vision into your organisational debt. It will show you the systems and processes that will be the weak links that break when you scale, so that you can fix them before they break”.
Scale Up X-Ray
The start of any Scale Up journey and one that every one of the 10xe award winning businesses undertook, looks to expose the business and identify any fatal flaws and great strengths prior to the program. The Scale Up X-Ray will help you see clearly:
- Your company lifecycle stage and most important next milestones to prioritise
- Your current business complexity and required level of organisational developmental
- Your actual level of business development, relative to that required, in each of the core Scale Up functions
- Your Scale Up weak links –your most urgent business development priorities
- Automated recommendations on how to address your Scale up weak links.
If you are scaling and want to focus on the most important priorities, including fixing weak links that could kill your business, apply for a fully sponsored Scale Up X-Ray now.
Our team has helped some of the country’s most exciting high growth businesses scale up and reach their maximum potential. We tailor make workshops to the specific needs of you, your team, and your business, all facilitated by seasoned Scale Up leaders, to help you solve your most complex problems and remove the hurdles to 10X growth.
For more info on 10X-e, and to join their Path to Scale Workshop being held in Cape Town in February 2019.
Global Guide For Entrepreneurs, Innovators Launches In Johannesburg
Startup Guide partners with SAP Next-Gen, Tshimologong Precinct to bring global guidebook to Johannesburg innovation ecosystem; calls for nominations.
Calling all entrepreneurs, accelerators, innovators, co-working spaces and experts in the City of Gold: Startup Guide, the leading global guide for start-ups in high-growth innovation hubs in Europe, the US and Middle East, is open to nominations in Johannesburg.
Founded in 2014, Startup Guide is a creative content and publishing company that produces guidebooks and tools to help entrepreneurs to connect to communities and resources in the leading start-up cities around the world. Its global footprint covers some of the most innovative and thriving start-up ecosystems in the US, Europe and the Middle East, including those of London, New York, Berlin, Tel Aviv, and Stockholm. After launching in Cape Town earlier in the year, Startup Guide now moves to Johannesburg.
According to Sissel Hansen, Founder and CEO of Startup Guide, South Africa’s largest city is emerging as a key innovation hub for start-ups.
“Johannesburg has recently emerged as a growing ecosystem for start-ups and entrepreneurs in Africa, particularly in the tech industry. We’re thrilled to have the opportunity to create a comprehensive guide of resources for aspiring founders wanting to do business in South Africa’s largest city.”
Startup Guide Johannesburg was launched at Wits University’s Tshimologong Precinct, one of Johannesburg’s newest high-tech addresses in the vibrant inner-city district of Braamfontein. Tshimologong, which means “new beginnings” in Setswana, focuses on the incubation of digital entrepreneurs, commercialisation of research and the development of high-level digital skills for students, working professionals and unemployed youth. Lesley Williams, CEO of Tshimologong Precinct, says: “South Africa is fast-becoming a go-to source for innovation, especially in the tech sector. We believe the introduction of a dedicated resource for the startup ecosystem in Johannesburg will unlock significant opportunities for innovation hubs such as ours to more easily connect with entrepreneurs, experts and other roleplayers, ultimately providing a more supportive environment for growth.”
Startup Guide has partnered with SAP Next-Gen, a purpose driven innovation university and community for the SAP ecosystem enabling companies, partners and universities to connect and innovate with purpose linked to the UN Sustainable Goals for Development. Ann Rosenberg, Senior Vice President and Head of Global SAP Next-Gen says:
“We strive to connect digital innovators in an open innovation community to drive the future success and growth of industries through the use of technology. As we have witnessed in other high-innovation cities around the world, the introduction of knowledge resources – supported by opportunities for collaboration and partnership in an open ecosystem – enhances the overall success of entire start-up communities. Johannesburg’s world-famous energy and business acumen will greatly benefit from the launch of Startup Guide Johannesburg and the support of industry partners, including SAP Next-Gen and the Tshimologong Precinct.”
Cathy Smith, Managing Director of SAP Africa, adds that the partnership with Startup Guide aligns well with the company’s commitment to the UN Sustainable Development Goals. “As an organisation we are committed to achieving the high ambitions set out by the SDGs. However, it is virtually impossible to do so alone: the concept of partnership with likeminded purpose-driven organisations and initiatives is vital not only to realising the SDGs but to foster a greater and more inclusive innovation ecosystem in Johannesburg and across the African continent.”
Nominations for the Johannesburg edition of Startup Guide are now open. If you know a start-up, entrepreneur, programme, space, accelerator, or experts and would like to see them featured in the book, please visit https://startupguide.com/shop/startup-guide-johannesburg and submit your nomination.
Aspirations For SMMEs In South Africa
Research released earlier this year, revealed that there are only 250 000 formal SMMEs in South Africa.
Entrepreneurs who have started up a business over the past 10 years have done so in an environment that has been largely negative, with slow economic growth and an unstable political landscape. “So, all in all, a very difficult setting to launch, grow or even maintain a business,” says Bizmod MD, Anne-Marie Pretorius.
Pretorius says that many entrepreneurs who operate in South Africa can be forgiven for often wondering if the slog is worth it. Yet they continue – despite economic uncertainty, strikes, retrenchments and downscaling. “It is this tenacity that sets entrepreneurs apart, and I often wonder how much more successful they would be in an easier and more supportive environment.”
Below, Pretorius shares her ideal pro-entrepreneur outlook for the future:
- Greater policy certainty on all key government policies from land reform to regulations surrounding labour broking.
- Being able to do away with bad policy faster. An example of where this did not happen was in the changes of visa requirements; leading to an unnecessary dent in our tourism industry, an industry that should be targeted for growth.
- Lower compliance requirements for companies with a turnover under R50 million. The cost of compliance for smaller enterprises is significantly higher in comparison to their income and the cash they have available. Smaller companies need simpler frameworks where compliance is required. A portal similar to SARS e-filing, which makes compliance across various pieces of legislation clear and simple, would be ideal.
- The Labour Relations Act is a key piece of legislation that has done a lot to protect the rights of the employee. It has attempted to balance the power relationship between employee and employer. Some innovation is however required in labour practices, allowing for mutually beneficial flexible working relationships that keep pace with the changing work environment.
- Buy small, buy South African! A framework whereby large corporations and government would have to allocate a certain minimum percentage to buying from smaller local companies. There are encouraging signs that this is happening more, however this is still not an ingrained practice. In addition, consumers should be more informed on what items are South African produced, in order for them to be encouraged to purchase locally.
- Easier access to funds enabling entrepreneurs to grow their businesses. There are currently a few options available, but all of the options require significant governance and red tape. Whilst this is understandable from the lenders perspective, it does hamper the agility and growth of companies.
- Make good financial governance aspirational, attractive and easily accessible.
- The process for tenders to be corruption free and fair, enabling more companies to add value.
- Pay SMME’s on 30 days or less. Enormous pressure exists on smaller companies when not paid on time. They simply do not have the cash flow to carry a debtor’s book of 90 days and this inevitably hampers their growth.
- Tax SMME’s at a lower tax rate. Profit tax should be lowered in order to drive entrepreneurship.
- Creating a platform that makes it simpler to employ young individuals with potential and create support programmes for SMMEs to upskill them. There is a significant financial and time investment required to train a young person, which can make SMME’s sometimes wary to do so.
“If we are able to make only some of these ideals a reality, there is no doubt that we would see economic growth, entrepreneurial growth, and more employment opportunities,” concludes Pretorius.
Related: A – Z Easy Small Business Ideas
South African Students Win R50 000 In The Universities Business Challenge
Students from Mangosuthu University of Technology beat 500 students from 13 different universities across South Africa.
The Overlings from Mangosuthu University of Technology are the 2018 winners of Cognity Advisory’s Universities Business Challenge (UBC), sponsored by General Electric (GE). The winning team of four students are walking away with R50,000 to turn their business idea into reality.
Launched in July this year, the UBC has seen 500 students from 13 different universities across South Africa participate in a business simulation competition designed to develop entrepreneurship skills.
When the competition launched, all teams were challenged to form virtual companies and to virtually manufacture and sell bicycles.
The final 10 teams were from the University of Limpopo, Mangosuthu University of Technology, Vaal University of Technology, University of KwaZulu-Natal and North-West University.
During the two-day final, the teams played six rounds of simulations. Each simulation gave the teams a chance to re-evaluate their progress and better certain areas that needed improving. The winning team realised during one of their simulations that in order to maximise profits they would need to introduce two new products and market it differently from their initial product. They paid special attention to their customer’s needs.
The aim of the UBC was designed to tackle South Africa’s high level of youth unemployment. Statistics South Africa (Stats SA) that South Africa’s official unemployment rate increased by 0.3 of a percentage point to 27.5% in the third quarter of 2018.
Nkosinathi Sokhulu from the winning team said, “Even though we didn’t have a great presentation we made the most profit. This experience taught us a lot about ourselves and business. Most of the decisions that we made came from serious debates. We learnt that market research is crucial when starting a business. We learnt that marketing starts and ends with the customer.”
“Based on this market research information we realised that it was important for us to introduce two new products and this, in addition to the main product we were selling, helped us to maximise profits. We saw an opportunity to add more products and it paid off” said Mbali Tshozi.
Tope Toogun, development advisor and CEO of Cognity Advisory said, “All the teams showed tremendous promise and I was very impressed by their levels of engagement with one another and their tenacity.”
“We really want to ensure that students are equipped with the necessary skills to not only start a business but to run it effectively. While we have selected one winner, our hope is that each team has benefitted by having learned the skills needed in the workplace.”
“The competition is designed to develop the ‘soft skills’ that are important for those wanting to set up their own business or simply be successful at work. With rising unemployment and ongoing talent shortages, having these skills is crucial for those wanting to get a job.”
The UBC, now in its second year in South Africa, will continue into its third year in 2019 and will run as the Africa Enterprise Challenge (AEC).
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