Back pocket wisdom

ENTREPRENEUR ECOSYSTEM

I DON’T THINK there are too many countries worldwide that have South Africa’s ability to inspire and infuriate at the same time. On the one hand you get the sense there’s a desire to support entrepreneurship and you see good little nodes of support in the form of the Innovation Hub, Silicon Cape, Small Enterprise Development Agency, Google’s Umbono Project and the likes.

Entrepreneurship gets more energy behind it when you read success stories, such as the world’s largest company – General Electric – buying local start-up CSense, which gives a huge boost to SA’s venture capital sector when the PoweredByVC guys can get a tick next to their names with a big money exit.

On the other hand you get the incredibly frustrating situation about things such as SA’s new Companies Act that’s finally been signed in but business wasn’t given a chance to comment on it.

It would really be nice to see our entrepreneurial ecosystem help contribute to doing business in SA.

Growth

More entrepreneur kudos for Lingham

SOUTH AFRICAN technology investor Vinny Lingham is among an elite group of entrepreneurs worldwide who have been selected in a report published by the World Economic Forum, Stanford University and industry body Endeavor. Lingham, founder of website builder Yola, was selected alongside other leading entrepreneurs from Mexico, Argentina, Turkey, Jordan and Colombia.

The report delved into the topic of global entrepreneurship and successful growth strategies of early stage companies and agreed entrepreneurs were an important contributor to job creation globally. A key finding of the report was that governments seeking to promote growth through entrepreneurship needed to learn what makes their local top 1% of companies successful, as opposed to just aiming to replicate the likes of successful technology ventures, such as Silicon Valley in the United States.

“This report offers compelling proof that to drive economies forward the key isn’t to generalise approaches for all entrepreneurs but to focus resources on high-impact entrepreneurs – those innovators with the highest potential to scale,” says Linda Rottenberg, co-founder and CEO of Endeavor.

“Understanding the elite few in their own ecosystem may prove a far more effective strategy than trying to replicate the success factors of other entrepreneurial hubs, such as Silicon Valley,” says George Foster, the Paul L and Phyllis Wattis Professor of Management and Dhirubhai Ambani faculty fellow in entrepreneurship at Stanford University’s Graduate School of Business, co-author of the report.

Commenting in the report, Lingham outlined a handful of key lessons for entrepreneurs:

* Trust your gut as an entrepreneur – although sometimes you will be wrong.

* Don’t be afraid of taking risks – that’s why you’re not working in a corporation.

* Follow the money: find where customers are looking for you and go to them.

* Always raise more money than you think you need – you’ll need it.

* Hire the right people fast – but fire them faster if they’re not what you expected.

‘All in one entrepreneurs’

WHEN Most People think of medical insurance, getting ripped off by over-priced brokers creeps to mind. But it’s that perception Senoelo Pheto and his partner, Muziwakhe Kone, are working hard to eradicate. The two former employees of insurance group Discovery Holdings began Phekon Financial Services in 2006 after meeting at a conference.

Phekon’s main focus is providing a brokerage service to South Africa’s lower income bracket market, starting with medical aid. “I’ve always wanted to run my own business,” says Pheto. “It was just a matter of waiting for the right time.” With 16 years of combined experience at the time, the pair decided to pitch their broker business idea to Discovery’s top brass. Pheto then received enterprise development backing from the JSE-listed financial services giant, which provided incubation facilities to help their start-up.

Pheto says the fact that not many black people are involved in the insurance sector boosted their chances of obtaining backing. “When we started, a lot of companies wouldn’t have opted for Phekon if it were not for the black empowerment compliance points they would earn for enterprise development. We were fortunate to get the nod. It’s never easy to break into any sector, because you need to build credibility to make people believe in your ability to deliver.”

He says the reservation of business for so-called strategic partners is hindering the growth of small businesses in the sector. “People aren’t given the same opportunities or a fair playing field. I don’t want to get business just because I’m black: it should be based on our merit and whether we can deliver.” _BONOLO MODISE

Business tools

Google powers SA’s entrepreneurs

More than a basic search engine
IF AS AN entrepreneur you think all Google is good for is looking up information about people or businesses you could be forgiven. But the global technology giant has a lot more to offer. It recently announced a support programme for South Africa’s entrepreneurs called the Umbono initiative, which will encourage small businesses in the technology sector.

For non-technology start-ups there’s an array of free tools SMEs can take advantage of. Google SA country manager Luke Mckend says these tools can help them gain more exposure, thus leading to improved revenues. “Many entrepreneurs and people in general use Google’s search function as consumers but not as competitors,” says Mckend. “There’s a lot you can use as an SME just on the basic Google page to understand the type of market your business operates in. So much can be achieved by understanding the other basic tools offered on the site.”

SMEs often launch websites, but as soon as the marketing campaign quietens, so does traffic to the site. With Web Optimizer you can find out directly from your target audience what content and designs work best for them. First choose the pages and content you wish to test and then try out the changes made on the website with the consumers who visit the site.

“What Web Optimizer helps you establish is which version of your site the visitors are more attracted to, so that you know which content and design will be more productive,” says Mckend.

Now that you’ve got traffic moving to your site, the next step is to know how to talk to your consumers in a way that’s appealing to them. The easy-to-use features of Google analytics let you analyse your traffic data, telling you which site referred the user to yours. It also allows you to see which features of the website they spend most of their time on. “The analytics solution tells you everything you need to know about your website traffic and how effective your marketing is towards them in order to improve your marketing and advertising campaigns in future,” Mckend says.

AdWords are text-based advertisements targeted by users’ search queries. When setting up an ad you select the keywords that will trigger your ad displays, which will only appear when people are looking for something directly related to your product or service.

This advertising tool is affordable because it resembles a pay-as-you-go model. If no consumer clicks on your ad you don’t have to pay.

For step-by-step guides on how to take your business from zero to success using technology-based products the Google channel on YouTube is the perfect tool to get you going. From instructions on how to set up a free website for your business to how to help your SME run more cost effectively, the channel provides information you can use to maximise your exposure on the Internet. _BONOLO MODISE
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