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Facing down failure

Jan 19 2011 22:11 Marc Ashton

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IT HAS been an interesting, albeit hard and important ten days for South African technology entrepreneurs.
 
A few months back FireID was profiled in a host of financial publications as Reinet talked up their investment. Wicount was tipped as a company to watch in SA.

Fast forward to Tuesday 18 January and FireID has had their funding pulled, there is plenty of criticism going of the role of investors and venture capitalists and poor Wicount had a technical error which led to leaked customer data on the net.
 
Since Silicon Cape was launched there has been almost a romanticised idea about entrepreneurship.
 
That's excellent because you need enthusiasm to encourage start-ups. On the other it is a recipe for pain when every second person you meet tells you they plan to run "a start-up" and then mumble it has something to do with technology.
 
It sounds grand. But contemplate for a moment throwing your heart, soul, time and money into a business and then waking up one day to a message broadcast on the internet that somebody has found a weakness in your website and they've been able to yank out your customer data.

That is brutal.
 
For all the arm-chair entrepreneurs who spend their days commenting on blogs and websites, can you even begin to imagine how difficult it is to walk into a room of 40 employees and say "A few months ago we were being profiled in major financial magazines, but tomorrow you need to start looking for new jobs"?
 
I have had to do it with 4 employees and it took me nearly 3 years to sum up the courage to try it again. It's humbling to say that you have failed and that the people who put their trust in you need to find somebody else.
 
Don't get me wrong, failure is part of a market. Some will thrive and many - 96% in a 10 year period - will fail.
 
The question is how to respond to these failures. Do we point fingers at the Aston Martin driving venture capitalist and tell him to sell the car to save the jobs?

Do we slate the technology employed by one failure and expend energy criticising it?
 
Or do we learn from the mistakes, work out what went wrong and figure out how to take it forward?

Let's not waste the opportunity that these two companies and others will provide. Let's learn from them, discover what made them tick and what mistakes they have made and use that experience to bring the next good companies to market with tougher and more experienced entrepreneurs.
 
Before I sign off for this week and in the spirit of introspection, Allon Raiz was talking at the Gordon Institute of Business Science (Gibs) on Tuesday and he did an interesting exercise with the students which I thought would get small business owners thinking more critically about their operations.
 
He challenged the class to consider what they would need to change if they were:
 
A) A quadraplegic
B) They could only operate their businesses between 6pm and 6am
C) Had to offer food at every client meeting
D) Had to conduct their businesses from the Bahamas
 
I thought it made me think critically about my ventures and I could see the other entrepreneurs thinking hard - it definitely encouraged some laterally thinking.
 
Hope it helps!
 
- Fin24
 

NEXT ON FIN24X

The angel funding issue

2011-07-21 10:37

 
 
 

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