The Big Lie of Small Business | Vusi Thembekwayo | TEDxUniversityofNamibia
Summary
TLDRThis powerful speech challenges the status quo and calls for a radical shift in African entrepreneurship. It emphasizes the need to move beyond small businesses and embrace big business models, highlighting success stories like 'gutter' food stalls and stock fells. The speaker advocates for a new mindset, focusing on building legacy businesses and leveraging the African diaspora's knowledge. He stresses the importance of infrastructure, capital, and mentorship to foster growth and innovation, urging Africans to have faith in their ability to change the continent's narrative.
Takeaways
- 🌏 The speaker challenges the status quo, urging African people to break free from being passive recipients in a global system that has historically disadvantaged them.
- 💡 The importance of entrepreneurship is emphasized, with the speaker advocating for Africans to move beyond just starting small businesses and to aim for creating large, impactful institutions.
- 🍔 The 'Gutters' example illustrates the potential of local food culture to be a significant export, highlighting the need to capitalize on unique cultural elements.
- 📈 The comparison between 'GOD' and 'Quarter Joe' shows how local businesses can outperform franchises, suggesting that local innovation and entrepreneurship can be highly successful.
- 🏦 The concept of a bank is demystified, explaining it as a collective investment scheme, and the potential of communal financial models like 'stokvels' is recognized.
- 📊 The speaker points out the need for Africans to understand and engage with the ecosystem and life cycle of entrepreneurship to build sustainable and scalable businesses.
- 💼 The speaker's own experience in venture capital underscores the importance of access to patient capital and the role of venture capital in fostering entrepreneurship.
- 🚀 The importance of building businesses with a philosophy that aims to change the world and not just for personal gain or quick profit is highlighted.
- 🛣️ The need for infrastructure that facilitates trade and movement of goods within Africa is identified as a critical factor for business growth and continental integration.
- 🤝 The speaker calls for a change in mindset, a culture of delayed gratification, and the creation of a supportive ecosystem for entrepreneurs to thrive.
- 🌱 The final message is one of faith in the African continent's potential, urging the next generation to believe in the unseen opportunities and to trust in their ability to shape the future.
Q & A
What is the main concern expressed by the speaker regarding the status quo for African people over the past 100 years?
-The speaker is concerned that the status quo has positioned African people as recipients of global forces, rather than active participants in shaping the world, and questions the lack of significant contributions by African people to global developments.
What is a 'Gutter' in the context of South Africa as mentioned by the speaker?
-A 'Gutter' is a type of street food in South Africa, made by cutting a loaf of bread into quarters, removing the soft center, and filling it with ingredients like french fries or sausages with ketchup, then covered with a soft pot. It represents a cultural food experience that is deeply rooted in the local soul.
What is the example given by the speaker to illustrate the potential of small businesses in South Africa?
-The speaker uses the example of 'Gutters' and the business 'T-Bolts Cortez' to show that even small businesses can grow significantly. T-Bolts started with a turnover of 53,000 rand and grew, while a franchise called 'Quarter Joe' that started later achieved a turnover of 20 million rand.
What is the concept of 'Stokvels' in South Africa, and how does the speaker relate it to banking?
-Stokvels are collective investment schemes where members contribute money and use it for collective purchases or savings. The speaker relates it to banking by explaining that banks operate on a similar principle, pooling money and lending it to creditworthy individuals at a premium.
How does the speaker describe the growth of a business from a startup to a larger entity?
-The speaker describes the growth as a progression from a startup, which is a one-person operation, to a success, which involves a team managing and delivering work, and finally to a growth level where the business is large and established, with the potential to own the entire supply chain of a product.
What are the six essential elements for entrepreneurs to succeed according to the speaker?
-The speaker identifies infrastructure, capital (patient money), access to markets, strong administration, assets, and people as the six essential elements for entrepreneurs to succeed.
Why does the speaker believe that many African entrepreneurs fail to build large businesses?
-The speaker believes that African entrepreneurs often lack a deep understanding of the ecosystem and life cycle of entrepreneurship, and they may not have access to the necessary venture capital, patient money, or supportive infrastructure that allows businesses to grow.
What is the speaker's view on the importance of building businesses for the right reasons?
-The speaker emphasizes that businesses should be built with a philosophy that is greater than the individual, focused on changing the way the continent works, bettering other people's lives, and creating unique innovations that are only available in Africa.
What does the speaker suggest as a solution to the problem of top talent leaving Africa?
-The speaker suggests reshaping the narrative to attract top talent back to Africa, leveraging the knowledge in the African diaspora, and creating a culture that values long-term growth and innovation over short-term gains.
How does the speaker define 'faith' in the context of entrepreneurship and the African continent?
-The speaker defines 'faith' as the ability to see the invisible, believe in the impossible, and trust in the unknown, encouraging the next generation to have faith in their own continent and its potential for growth and innovation.
Outlines
🤔 Challenging the Status Quo for African Empowerment
The speaker questions the current state of complacency among Africans in the face of global forces that shape their lives. Highlighting a narrative that encourages small business ventures, the speaker argues that Africans should aim for larger-scale business ownership and industry control, using examples like the South African 'quarter' bread business to illustrate potential untapped growth and opportunities.
💼 From Startups to Growth: The Journey of Entrepreneurs
The speaker outlines the stages of entrepreneurship, emphasizing the need for startups to transition quickly to growth. He discusses the various levels from startup to survivalist to successful enterprises, stressing the importance of infrastructure, capital, access to markets, strong administration, and talent retention to support entrepreneurial growth across Africa.
🌍 Building a Philosophy-Driven Business Culture
The speaker emphasizes the need for African businesses to adopt a greater purpose beyond profit, such as societal improvement and innovation. He advocates for mentorship, delayed gratification, and building legacy businesses, using examples of successful models from other cultures. The speaker also criticizes the reliance on connections and fast money, urging a shift towards sustainable growth and value creation.
💡 Starting and Persevering: Personal Story of Entrepreneurship
The speaker shares his personal journey of overcoming financial exclusion and failure to achieve business success. Through perseverance and faith in his abilities, he illustrates the importance of starting, making mistakes, and persisting despite challenges. He calls on the next generation to have faith in their potential and the future of the African continent.
Mindmap
Keywords
💡Status Quo
💡Narrative
💡Entrepreneurship
💡Innovation
💡Mentorship
💡Survivalist Entrepreneurs
💡Infrastructure
💡Capital
💡Cultural Shift
💡Philosophy
💡Legacy Businesses
Highlights
The speaker challenges the status quo and questions the impact of African contributions to the global world.
The narrative of Africans being content with small businesses is criticized, urging for a shift towards bigger ambitions.
The concept of 'Gutters' in South Africa is introduced as an example of a local business with potential for global export.
The story of 'Gear to Businesses' and 'Quarter Joe' illustrates the potential of local business models to scale up.
Banks are described as collective investment schemes, emphasizing the need for accessible capital for entrepreneurship.
The 'Stokvel' system in South Africa is highlighted as an example of communal saving and investment practices.
The success of 'Sangoma' and 'EPSA' showcases the potential of communal investment models to grow into large businesses.
The speaker calls for a change in mindset from small business owners to big business entrepreneurs.
The importance of understanding the ecosystem and life cycle of entrepreneurship is emphasized for business success.
Venture capital is identified as a key factor in the growth of startups into large businesses, with a focus on patient capital.
The speaker shares insights from running a VC fund and the importance of the entire ecosystem for entrepreneurial success.
The need for infrastructure that opens up markets and the importance of patient capital for entrepreneurs are discussed.
The challenge of attracting and retaining top talent in Africa is highlighted, with a call to reshape the narrative.
The speaker argues that businesses should be built for the right reasons, with a focus on legacy and changing the world.
The importance of mentorship and creating a culture of delayed gratification for long-term business success is emphasized.
The speaker shares a personal story of business struggles and the importance of perseverance and faith in entrepreneurship.
The call to action for the next generation to have faith in their own continent and to strive for innovation and success.
Transcripts
let me ask a question for how much
longer will you and I be happy with the
status quo that exists a status quo that
over the past 100 years continues to put
you and I as African people at the
recipients of all forces shaping the
global world so if I asked you a
question
what's happened in the world over the
past few years that we've done that's
shaped the rest of it how many of us
here would answer in the affirmative and
give an example and the truth is is
because of the narrative and
conversations that we've had we've had a
conversation that makes it okay for
Africans to just be okay and a part of
the conversation we see it in my
environment where we finance businesses
is this huge thing now about small
businesses like just start a business
and just get in and it's okay if it's a
small business well I'm here to tell you
something new and that is it's not okay
so in my own country South Africa we
have these things called gutters by the
way God does an institution and here's
how it works you take a loaf of bread
you cut it in half and then you cut to
what's left in half and you're left with
the quarter of the bread hence God now
what you then do is you remove the
centerpiece of it which is the soft
bread and inside you put in whatever you
like so the innards could be french
fries it could be sausages with a bit of
ketchup and you overlay it with a soft
pot and you eat it and please understand
it does something to the soul that a
McDonald's burger will never do it is
perhaps our greatest export except
here's the thing we're not exporting it
so gear to businesses t-bolts cortez
operates in Alexander run by an
interesting entrepreneur he started his
business in the Year 2005 he turned over
53,000 rand for the year last year
interestingly there is a listed South
African company which started a
franchise called quarter Joe and they
pumped in a bit of capital they started
in 2013 8 years after t-bo's doing the
same thing he does and last year they
did 20 million round and turnover my
point we are big business so maybe this
is an anomaly right here's a question
what's a bank a bank ladies and
gentlemen is nothing more than a
collective investment scheme we all come
together we put our money in the central
pot we put it there usually as savings
with the idea that when you unlock that
money and you needed future you can get
it what the bank does is it takes that
money and it says to people if your
credit worthy will lend you
money and will price it at a premium
hence our ability to buy a car or house
in South Africa we have these advents of
things called stock fells it's usually a
group of black women who come together
they put money in a pot and at the end
of the year they have money and they go
to the shop right and then they buy
stuff and then the next day the cycle
starts again right so here's an
interesting stock fell called sangoma
they operate in the Eastern Cape started
a year after we achieved our democracy
in 95 last year their collective
investment three hundred thousand now if
you bundle together three hundred
thousand over the past 20 years you can
do the math about the kind of numbers
were talking that they cumulatively over
the past twenty years ever put in the
same place
in 1991 four years before them a bank
was formed in South Africa known as EPSA
which does in essence the same thing the
stock fell last year 300,000 EPSA is a
4.6 billion around a year turnover
business my point our models of doing
business are big business you and I need
to unlock our thinking it's not okay for
us to start small businesses it's not
okay for us to be happy to be vendors on
the side of the road anymore selling
fruits and vegetables what we need to do
is own the place that produces the fruit
on the road infrastructure that moves
the fruit on the retail infrastructure
that sells the fruit and on the banking
system that transacts the whole platform
and by the way why don't we just take
the Texas as well so the idea here is we
need a radically new form of thinking
now that we clear on this let me explain
to you why we're not doing it because we
could blame colonialism and in my
country about a fate as long as we want
but there is a deeper problem and the
deeper problem is our inability to
understand the ecosystem and life cycle
of entrepreneurship all entrepreneurs
start out as startups whether you're
Bill Gates or Steve Jobs you start out
as a one-man show with an idea what
makes the Americans and now more
recently the Asians really good is
they've created a huge pool of venture
capital money easy to access cheap and
you can have it as patient money you can
have it forever and never have to pay
back that's why they building large
institutions so it's not a mistake that
Zhao me a Chinese mobile company started
five years ago is now the third largest
smartphone company in the world where do
they sell their phones eighty-seven
percent of their sales comes from China
the remainder from this continent we are
big business we all start out the
startups how do you know your startup
it's easy you're one guy you go to the
customer you deal with him you go back
you make the cookies then you come back
and you give them the cookies and then
month-end you phone him and say can I
please have my money and then he pays
you and if he doesn't you go to him and
say please I'm going to clap you until I
get my money
and usually given what I like to call an
a a K an attitude adjustment Club but
how do you know you're a start-up it's
easy if you are the value in the
business you're a start-up if the
customer wouldn't trade with your
business unless you were in it you're a
startup move a little above that you
become what I see a lot of happening now
and the rest of the continent so for a
bit of context I run a VC fund and in
our VC fund we own an advisory business
where we advise entrepreneurs now to
start businesses and enterprise
development businesses where we help
them get into the supply chains of large
organization and then a fund where we
actually finance them so the entire
ecosystem they need to succeed we're in
six countries in the continent so
southern Africa Eastern Africa and
western Africa I like to call us what we
are the best-kept secret in this
continent nobody knows about us and I
like it that way because then they can't
see us coming so we see a lot of them
start up as startups and they become
these survivalist entrepreneurs the
problem is a lot of them die at the
instance at which they become
survivalists what are survivalists I
really need money month-end to pay my
bills and how do you know you are one
it's usually one person with three maybe
four people in his team he's operating
in a small office and he's just barely
making it in every month he must make
money to pay for that month's bills
level above that is it then become
success right and a success you're one
guy you have a core group of people who
manage people and then a core group of
people who deliver the work and then
where we should be at growth level
here's the question how do we move from
startup to growth in as fastest time
possible minimize the risk and develop
our own industries the mindset has to
change
perhaps the deepest thing about this is
this sub complex entrepreneurs need six
things to succeed just six just six
getting an infrastructure and once the
chatters we have in our continent if I
manufacture something in Joburg South
Africa how do I get it to macoco in
Nigeria how do I get it to Luanda in
Angola it still persists in our own
continent that I can't put it on a
single rail track and move it to that
part of the world so we need an
infrastructure that opens up our markets
we need capital money funding and dear
governments here's the point the money
doesn't have to be cheap but it does
have to be patient it's not okay anymore
there were entre
failed in our continent we bank we Bank
them and after that we then put them on
these things called blacklist and they
can't access credit anymore
because what you've done is you've taken
somebody who's failed and learned from
failing and you've not made him that he
can't operate economically for the next
five years so they need assets they need
access to markets strong administration
and then people and here's the thing
about the people challenge what is the
first thing top talent does in Africa it
leaves think about it if you think about
the top Africans shaping the rest of the
world today they're not lightly doing it
in our own continent there's somewhere
else doing it and a part of the
narrative we need to reshape is how do
we bring them back here to build what is
jointly ours
there is a huge mass of knowledge in the
African diaspora we need to bring them
back in here and this is how we reshape
it so there's really four reasons people
start businesses for to live well to
leave something for your kids to sell it
or to change the world that's it so what
does google say Google says we exist to
do no harm apple says for the because
the people who are brave enough to think
they can change the world are the ones
who do so they live in a philosophy
space where it really is about changing
the world and the reward is much much
higher here we live lifestyles we get
access to public sector opportunities we
call them tenders
and here's the thing about a tender once
you get it people must know so the first
paycheck goes to getting you that
Ferrari and because because we don't
have Ferrari dealership what do we do we
import them in and not only that I must
NBC the scene to live in a certain
suburb so what we do is we encumber our
ability and opportunity purely by
wanting to live a fancy lifestyle the
Asian people are different
specifically Indians you see a lot of
this in my country they build legacy
businesses the great grandfather gets a
corner shop and he opens up a drycleaner
his son the father opens up a fast-food
joint
his son you opens up a hardware store
and your son will then open up something
else but here's the thing generation on
generation on generation they don't
close these shops down they keep them
running in the family as legacy
businesses the environment I work in is
where we sell businesses we build them
purely for the purpose of selling them
why because if you build to sell you're
built for value it means you're going to
live scrappy you're going to keep costs
low you're going to take a long term
view because you're building this thing
genuinely to create enough push pressure
in the market that you can sell it I was
on Dragon's Den in South Africa so I
invested in myself and the other dragons
actually invested in a business that is
fundamentally shaping the entire floral
market in the world not just here but in
the world they've created an uber but
for flowers so imagine a situation where
you would go on your phone and you
wanted to get flowers for your loved one
and when you pull up the application on
your screen it would show you the local
florist and what that local first has
available right now and the price you
would then buy from that local florist
he would receive the order and deliver
the goods
in a split second of a time why because
he's closer to you doesn't work cosa
does the local forest wants access to
the market you want to get the goods to
the customer and here's a business
that's reshaping it why do we do it
because we know it'll disrupt not only
here but globally and a huge opportunity
to sell so the question really for us is
why are we building our businesses I
would argue that we don't build them for
the right reasons if this is true and I
would argue that it is
how do we fix it we need to do four
things one we need to change the
conversation the conversation needs to
be how do you build a business with a
philosophy in mind it's got to be
greater than you it's got to be about
changing the very way our very own
continent works it's going to be our
bettering other people's lives and
making sure that in the innovations that
we bring to market we have something
that nobody else has in the rest of the
world and they can only get it here it
must be based on a philosophy anything
else is too weak second we need a strong
system of mentorship let me take a
moment to pause here so here's the thing
about the mentorship thing right in my
family and in South Africa specifically
we come from a deep past of subjugation
of the majority of the population black
people my people and because of that
black people were never allowed to own
businesses so in my family and I imagine
it's the case for most of us in the room
when I started my business everybody
thought I was crazy because you were
raised in a system where you grew up
went to school got good grades went to
varsity got good grades got a job and
got married and when you want to disrupt
the system society doesn't understand it
what it then meant was when I did start
my business I had nobody to whom I could
go and seek mentorship why because they
themselves didn't know what they didn't
know and so incumbent upon us is to
create a system in our social spaces
where we can access mentorship to think
differently this I would imagine is our
deepest challenge socially third we need
to start creating a culture of delayed
gratification fast money
was fast in but it's also really fast
out and here's the other problem with
fast money and this culture of delayed
gratification let's be honest here and
this is not political we also live in a
continent way in truth we have two
economies the connected economy and
everything else everything else is where
most of us here live the connected
economy is where the uber elite and the
politically connected live so it's not
by mistake for instance that the
wealthiest woman in the continent also
happens to be the daughter of the
president of Angola I'm not by any means
trying to put any spera jizz on her
qualifications or her abilities but I
would argue differently would she have
the same opportunities if she were not
the daughter of the president in my
country South Africa we've seen a huge
accumulation of wealth of family members
linked to our own president why because
we've created that narrative and we've
made it ok the connected economy where
if you're in you're in and if you're not
well that's just tough so it's about
creating a culture of delayed
gratification this is build it build it
for the next 10 years next 15 years
shaped generations send young people
through to varsity's create innovation
structures and platforms and processes
that we allow ourselves to build a
different continent but whatever you do
delay your own gratification and finally
this is the trick right
how do you know somebody is a good
entrepreneur that's simple they're very
bad at writing business plans it's true
we see a lot of it in our environment if
somebody has an MBA odds are they're
going to suck at entrepreneurship if
they can write a really well-written
business plan odds are they're going to
be really poor at this entrepreneurship
thing and in the context of this
conversation about the lie of small
business is a part of the conversation
we need to have which is how do we take
people who are naturally not inclined to
writing 60 page business plans and
attach an addendum of a twenty page
Excel spreadsheets of projections and by
the way eight years in finance as a
venture capitalist I have never seen an
Excel spreadsheet that says the business
won't make money the business always
makes money the revenue line is always
up costs are always down and profit is a
perpetual quest of cream and water
people who are good at writing the
document are usually very bad in the
real world and making the adaptations
that they need to make so we need to
create a culture that says start start
badly start scrappy make mistakes fail
start again but whatever you do just
start for our clothes let me tell you a
personal story so the air is 2004 I've
just been kicked out of its university
for something called financial exclusion
it's like a bad date but for money
it basically means you don't have enough
money to pay your fees so I go what am I
going to do and I go well I've got this
thing called public speaking it's a gift
I've won the World Championship maybe I
could do that right so I started public
speaking business I get a small little
office it's a nice little office I've
got a secretary and here's the thing my
business plan said I was going to make
money from month one the financial model
says month three I was cashflow positive
six months in I haven't received a
single booking not a cent in my bank
account
I've used up all the little savings I
had up to that point my secretary then
says listen I'm willing to come to work
for another month but after that if you
can't pay me I really can't come here
anymore the bank's chasing me because I
haven't paid off my car and if you don't
pay off your car the bank does this
thing I love the term it's called
early
possession which means when you sign the
contract you thought you own that you
didn't really we always owned it we just
didn't tell you so now we re taking it
back and so the bank rang me up and said
listen if you don't pay you some pay for
your car we need to take it back so I
absconded I left my home and I went to
live in my office because the other
thing about signing the bank contract is
if you ever sign a bank contract it's
got that thing called at Domus city MC
Tandy at execute Andy which is Latin for
where do we find you when we need you
so they had my home address right and
I've squandered and I went to live in my
office in seven months I lived in the
basement of my office the only meal I
used to have often was driving to my
then girlfriend now wives house her
father hated me so I always went there
during lunch when he was at work and I
would come back and continue around my
business was it tough yes have I'm
bankrupt
absolutely but ladies and gentlemen I am
privileged enough to stand here and say
to you I have made more money than I
never thought imaginable and I have not
done it because I am particularly more
able than other people I've done it
purely because I've been afforded the
opportunity to start yours and my task
is the next generation of this continent
is to have a bit of faith and here's
what faith is in my eyes faith is the
ability to see the invisible
to believe in the impossible
trust in the unknown
you and I today need to have a bit of
faith in our own continent thank you
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