The Big Lie of Small Business | Vusi Thembekwayo | TEDxUniversityofNamibia

Summary

This 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

00:00

🤔 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.

05:00

💼 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.

10:02

🌍 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.

15:03

💡 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.

Keywords

💡Status Quo

The term 'status quo' refers to the existing state of affairs or the current situation, often implying a resistance to change. In the video, it is used to describe the ongoing conditions that have historically disadvantaged African people and perpetuated a cycle of inequality. The speaker challenges the audience to question their acceptance of this status quo and to consider the need for change.

💡Narrative

A 'narrative' is a story or account of events and experiences. In this context, the speaker discusses the prevailing narratives that have shaped perceptions and behaviors, particularly regarding the acceptability of being 'just okay' as Africans in the global economy. The narrative is seen as a barrier to aspiration and progress.

💡Entrepreneurship

Entrepreneurship is the process of designing, launching, and running a new business, which typically involves risk-taking and innovation. The video emphasizes the importance of entrepreneurship in driving economic growth and breaking away from the status quo. The speaker highlights the need for a shift in the mindset of African entrepreneurs towards building large, impactful businesses.

💡Innovation

Innovation refers to the introduction of new methods, ideas, or products. The speaker argues that innovation is crucial for creating unique value and driving change in African economies. It is presented as a key component of a new entrepreneurial mindset that seeks to challenge and reshape existing market dynamics.

💡Mentorship

Mentorship is a relationship in which a more experienced or knowledgeable person guides another. The video underscores the importance of mentorship in fostering a new generation of entrepreneurs. The speaker suggests that a strong system of mentorship is necessary to support and guide those who wish to disrupt traditional business models.

💡Survivalist Entrepreneurs

The term 'survivalist entrepreneurs' describes business owners who are primarily focused on meeting immediate financial needs, often at the expense of long-term growth. In the script, the speaker uses this term to illustrate a common trap that prevents businesses from scaling up and achieving greater impact.

💡Infrastructure

Infrastructure refers to the basic physical and organizational structures needed for the operation of a society or enterprise. The speaker mentions the need for improved infrastructure to support the growth of businesses in Africa, including transportation and logistics that enable the movement of goods across the continent.

💡Capital

In a business context, 'capital' refers to the financial resources available for investing in a venture. The video discusses the importance of access to patient capital—funding that is available over a longer term without immediate pressure for returns—as a critical factor in enabling businesses to grow and innovate.

💡Cultural Shift

A 'cultural shift' implies a significant change in the shared attitudes, values, and behaviors of a group. The speaker calls for a cultural shift towards delayed gratification, long-term thinking, and a focus on building legacy businesses rather than seeking quick profits.

💡Philosophy

In the context of the video, 'philosophy' refers to a set of beliefs or principles that guide actions and decisions. The speaker argues that businesses should be built on a strong philosophy that is greater than individual interests, aiming to bring about positive change and innovation.

💡Legacy Businesses

A 'legacy business' is one that is intended to be passed down through generations, often within a family. The video contrasts the concept of building businesses for short-term gains with the idea of creating legacy businesses that have long-term value and contribute to the economic development of the continent.

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