SOUTH Africans who are serious about making a success of entrepreneurial ventures could do well not to rush into their endeavors.
Last week I had the pleasure of lunching with Itumeleng Kgaboesele and Aadil Carim from Sphere Holdings, a local investment house.
Itumeleng is quite an interesting guy as apart from building up Sphere, he was also recently elected president of the South African chapter of the Entrepreneurs' Organization, a global body with about 7 000 members focused on developing entrepreneurial skills.
The conversation quickly drifted to the subject of entrepreneurship and how South Africa builds entrepreneurs, as well as some of the challenges they face.
One of the intriguing topics that came up was that South Africa has the impression that entrepreneurs are sneaker-wearing 20-somethings, when in fact the Sphere guys reckon many successful business starters are in their late 40s and early 50s.
Their experience has been that many 20-year-olds have little practical experience, few mentors to guide them and don't understand very much about running a business. This is why Sphere sees business mentorship and hands-on management support as a vital part of its offering.
Case history which proves a point
Obviously some young entrepreneurs do get it right, but they are more the exception than the rule and many only see the fruits of their labours after making their fair share of mistakes.
Frustratingly, despite this lack of practical know-how many of these youngsters are the same people hitting up banks, venture capitalists, private equity firms and other funding organisations for start-up capital and then complaining when they get turned down.
People often throw out the name Adrian Gore - the CEO of financial services firm Discovery who as a fledgling entrepreneur grew a South African business out of nothing - as an example of what happens when people take a chance on a promising young prospect.
While I don't deny Adrian is a great businessman, some people don't appreciate just how important professional networks, contacts and skills were in getting that Discovery business off the ground. This was emphasised when he spoke at a presentation at the Gordon Institute of Business Science a couple of months back.
Get your act together first
Before getting into Discovery, Adrian worked for six years as an actuary in Liberty Life building relationships and understanding the sector he was in. He had an idea where the need for a product was and what was needed to exploit it.
On the education front, he completed an honours degree in actuarial science ? no mean feat on its own. We're talking about a well-educated guy who could speak the financial lingo needed to get a backer, and somebody with real industry experience to call on.
On top of that he could count a heavyweight like Rand Merchant Bank as an early client, which helped immeasurably.
It is an extreme example but if you are a financing institution, who are you going to support financially - Adrian Gore with experience, a heavyweight tertiary qualification and a real client or my domestic worker's grandson with limited education and no real employment history who is looking to start a business?
They both might have great ideas and a heap of enthusiasm, but only one of them realistically has the skills and experience to execute a good business strategy.
Hopefully, here is a clue for hungry young South African entrepreneurs: if you rush in before you are ready, you could be brewing a recipe for disaster.
- Fin24.com