10 Feb

What’s wrong with the South African start-up scene

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By Marlon Green

 

Well, what is right? I say everything is on the right track. So right that it comes out wrong whichever way you look at it. All the ingredients are there, we just need to cook the right dishes.

 

Firstly we need to get rid of the term start-up. Saying you're a startup attracts all the wrong attention and perceptions. If your business is registered…it has started, period! So what happens then? The startup mindset and mentality screws wannabe entrepreneurs who don't know how to navigate the eco-system. How many wannabe-entrepreneurs even know the true meaning of start-up? The longer you look at your business as a start-up the longer it will take you to grow it.

 

Secondly, all these service providers AKA accelerators and incubators (A&Is) aren't doing enough for wanna-be entrepreneurs. There's no cohesion among them. You can go to 5 different incubators at the same time and I bet you none of them would know whether you're on any of the programs or whether you've been through a similar program without you telling them. These incubators and accelerators probably make more money from these programs than all the desperate wanna-be (start-up) entrepreneurs combined. Yes some programs are really awesome and useful but not all of them. The winners in some cases are the entrepreneurs, in others the A&Is but in most cases the corporates who sponsor and write off donations to these programs as CSI or ED spending win and benefit greatly from a tax perspective.

 

Should A&Is be regulated? If yes, by whom? If no, why?

 

Thirdly, funding….the lack, abundance and misconceptions thereof. So we all know everyone complains more about funding than anything else in the Entrepreneurial ecosystem…locally and internationally. Lets break it down.

 

• Is funding available

 

Yes

 

• For everyone

 

Yes

 

• Does everyone need funding to start or build a business

 

No

 

• Do those who (really) require funding do enough do find it

 

No (me included)

 

In my view the funding issue is being misconstrued by everyone in the ecosystem. The real issues I personally faced though can be summarized as follows:

 

1. Funders want traction or paying customers

 

a. Paying customers want to see working (finished-not prototype) products that in some cases MUST be regulatory approved, I.e. SABS

 

i. SABS requires production -ready products to do testing and certification

 

- In order to give SABS working products it will require tooling to produce a finished product that is 100%consumer ready.

 

So who's failing who (to the tune of the Gap Band's Who's fooling Who). This is not money that we can get from the FFFs (friends, family and fools) unless you were born into privilege.

 

So are there programs that will fund? Indeed there is. Does it work…h2da NO!

 

The channeling of funds from the providers to the seekers need a more definitive and accountable structure.

 

So what's the solution? I certainly have some solutions in mind…so this is a call out to those in the ecosystem that want to make a difference by doing. Let's collaborate!

 

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Read 1115 times Last modified on Friday, 10 February 2017 11:37
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