Lured by the lights of the startup industry, ARTHUR ATTWELL found himself as the product in someone else’s show. After closing his startup business, he made a few rules for himself.
Earlier this year, I closed my startup. So now I get to reflect on what I’d have done differently. Hindsight is unfair and inaccurate, but I still enjoy its lessons. This is one, a note to my future self: Don’t call your projects ‘startups’. It’s a semantic trick, but a really important one. Here’s why.
‘Startups’ have become a commodity in an industry of startup conferences, websites, courses and competitions. As founders of young organisations, we struggle to distinguish genuine guidance and support from the distracting pizzazz of the startup industry, where we’re just the product, not the customer. Lured by the lights, we spend valuable hours crafting slide decks, jumping on planes, giving presentations and filling out entry forms, almost always so that someone can sell tickets to the show. I worked it hard, and I didn’t see the return. I want that time back for my business.
Here are five new rules for myself.
1. No more startup events
I’ve been invited to four startup events just this week. Wait — checks email — that’s five. It’s a freakin’ craze. Startup seminars, breakfasts, retreats, showcases. Say no to all of them.
Startup events are supposedly ‘good for networking.’ I made an interesting connection at one or two, I think. For the most part they’ve sucked vast amounts of time I really should have put into working on my organisation.
Your next project may be in publishing, healthcare, engineering or another industry, but it’s probably not in the startup industry. At a startup-industry event, you’re only going to meet startup-industry people. They are not your customers. Only go to events packed full of potential customers in your industry.
Very occasionally, treat yourself to a dinner with a few entrepreneurs you like — it helps fight the loneliness. Otherwise, if you’re not out selling, get back to your office and work. Or go home and spend some down-time with your family.
2. No more startup competitions
Then there are the competitions. Innovation competitions, pitching competitions, business-plan competitions. Sometimes the prize is an investment in your company. (First prize, an investor! Second prize, two investors!)
Honestly, do you want an investor who comes shopping for startups at a cocktail function? Winning an investment is like your bank calling to say you’ve won an overdraft. Lucky you.
It can be worse. I got a call from a major international consulting firm to tell me we’d won a big innovation award. But I can’t tell you about it because I have to pay them a licence fee if I do. Seriously: they wanted 7500 euros just to let us tell people we’d won. Another time, I got interviewed on a startup-support radio show, only to be asked to sign a letter afterwards saying they’d given us R188000 in airtime. (I didn’t sign.)
You can also win ‘business support’, or well-meaning MBA students to ‘help you grow your business’ for their course project. I’ve spent days with teams who are new to my industry using my time to tell me things I already know. I want those days back.
If you’re certain that you have time to enter competitions, only enter the ones where they’re giving out loads of free money and you know you can win. Don’t be the product.
3. Beware the warm glow of startup media
The startup-industry press is so seductive. It’s pretty and says it loves you. Being a startup, especially based in Africa, is great for media coverage, more especially if you win a startup award.
At Paperight we kept a long list of posts and articles about us that came from startup-industry acclaim. We won startup and innovation awards in London, Frankfurt and New York, an Accenture Innovation Award, and public congratulations in South Africa’s national parliament. We were featured in several ‘startups to watch’ articles and were profiled on the websites of CNN, Forbes and others. We were even featured in a book about open-business innovation. We’re fairly certain that the awards made this coverage happen.
But in not one case did we see a corresponding spike in sales (or calls from investors), and for a young business running out of runway, sales are all that really matters. For a while, the acclaim is great for motivating staff, and to help inspire an investor’s confidence, but the effect wanes after a few awards. Don’t chase coverage in the startup industry. Find your own industry’s media outlets (they’re harder to find and less sexy than the startup press) and focus only on them.
4. Don’t tell customers you’re a startup
Every office-bound exec wants to love a startup. Like a pet. But no one wants to buy from a startup. Especially big companies. Big companies want to buy from big, stable businesses. They want to trust that you’ll still be around in a few years. And their people need to feel you’re a familiar name. At Paperight, we needed book publishers to trust us with their most valuable IP. It’s insane to think they’d give it to a ‘startup’. We could have put our whole business in a cupboard for ten years, then dusted it off and they’d be more likely to work with us, because we’d be too old to be called a startup.
5. Get real help
The startup industry appeals to a very real need for emotional, intellectual and financial support. But (except in very rare cases) it is going to distract you more than it delivers. It’s bad for focus. Instead, find experienced confidants from an industry like yours. If nothing else, their emotional support will mean more to you than a hundred hollow prizes.
I’ll be surprised if I stick to my new rules. So remind me, please, because I’ll probably forget: run a business, not a startup. You don’t have the time.
SA gets gaming awards
Reed Exhibitions Africa recently announced that the inaugural South Africa Gaming Awards will be hosted at Comic Con Africa 2019.
The South Africa Gaming Awards is set to become a key feature of Comic Con Africa and has been established to celebrate individuals, teams, developers, streamers, journalists and the like in the gaming industry. Categories and submission details will be announced early in 2019 for the awards which will take place in September.
Carol Weaving, Managing Director of Reed Exhibitions states: “On the back of the roaring success of the inaugural Comic Con Africa earlier this year we came to the realisation that there is no platform of this nature on the African continent where those who are excelling in the gaming industry have an opportunity to be acknowledged. We want to bring peers and like-minded individuals together to celebrate this industry and build this community across the board. To all future entries: Game on!”
Comic Con Africa 2019 will take place from 21 – 24 September 2019, at Gallagher Convention Centre in Midrand.
What tech’s 3 wise men tell us to expect
Advice from three wise men will lead SA into the 4th Industrial Revolution, writes ANDRIES BRINK, CEO of Andile Solutions
Over the past 50 years, 3 wise men made predictions that have become definitive in our time. Gordon Moore said data processing would double in capacity every 18 to 24 months, Mark Kryder predicted that data storage would expand at about the same rate, and George Gilder said the bandwidth connecting different nodes would double at three times that speed. Like the sages from the biblical story, they saw a massive star rising ahead of them.
Today we stand in the radiance of technology’s sun. My consumer grade phone is more powerful than most corporate data centres at the turn of the century. It has 200,000 times more memory than Voyager 2, which just left our solar system. In lockstep with this progress, today’s data centres produce decentralised processing power at incredibly cheap prices. These have found their way to humanity and are delivering on the promise of a new dispensation. Maybe LOCNVL had a point when they sang in 2010 that they had a sun in their pocket.
Let’s change our focus, for a moment, to Africa, which despite having nearly a billion people still only produces roughly $3.5 trillion in GDP. Apple, Alphabet, Amazon, Microsoft and Facebook have a collective market capitalisation of the same amount, yet do so with 0.08% of the number of people. To say Africa is missing out on the technology sun is an understatement. While everyone can benefit from this change, only a few will be positioned to lead it. It’s a fact quite visible wherever you look.
Over the centuries, we have learnt that only four composers (Bach, Beethoven, Mozart and Tchaikovsky) wrote almost all the music played by modern orchestras. Similarly, just a handful of authors sell all the books (of 1,5 million books published each year, only 500 sell more than a hundred thousand copies), and of the few scientists that actually publish papers that are accepted, only a very small percentage are then actually referenced by their peers. Business majors will note that this phenomenon was captured eloquently by 18th century Italian polymath Vilfredo Pareto and his 80/20 principle.
The question we should ask ourselves is: how can SA be part of the 20%, the mavericks that change the world instead of the 80% who end up as followers? For the answer, we need not look further than Lesetja Kganyago, the governor of our Reserve Bank:
“Lasting wealth… isn’t in a country’s soil but in its citizens’ heads. Countries get rich because people develop specialised skills, and because they find ways to cooperate so they can do things much too complex for any individual to do alone. To handle all this complexity and specialisation, people gather in firms, and firms interact in markets.”
He warned that when a state declares war against market mechanisms and wealth, it kills off investment and scares skilled people away. Natural resources don’t get used effectively, no matter how abundant they are, and the economy doesn’t develop other kinds of industries either.
It’s not hard to back this view: the mess in the DRC, the collapse of Zimbabwe, and the unbelievable accumulation of debt by Zambia reveal how disdain for market principles have hobbled what should be highly productive nations. Neither is it hard to find positive examples: India and Singapore have transformed their economies thanks to very business-friendly environments, and they have reduced poverty as well. The rise of the Asian Tigers had a lot to do with using market mechanisms effectively.
This brings us to the saviour part.
Minister Rob Davies recently declared that “there would be serious winners and losers due to the 4th industrial revolution (4IR).”, sounding vaguely familiar to a disturbing passages from the Holy Bible, a book that we can be certain the Minister did not mean to reference. In Matthew 13:12, Jesus says that:” For whoever has, to him more will be given, and he will have abundance; but whoever does not have, even what he has will be taken away from him.” (The reader should be aware that economists often refer to the Pareto principle as the Matthew principle in relation to the above)
A significant number of things have been taken away from South Africa during the Zupta era. Yet South Africa still has an incredible opportunity here:
Yes, since 2008 SA has plunged 22 spots from 45th position. Yet we are still in the game and can reverse the trend, particularly if we harness 4IR beyond mentions in speeches. To me the opportunity is obvious. We have the finance system, market size and innovation capability to create a hotbed for 4IR-fueled progress. Looking at my industry, we should find ways to bring the smartest fintechs to South Africa.
Therefore, during this festive season, let us listen to our favourite devices streaming Mozart and Beethoven whilst we study and embrace the wise words of Pareto and other trusted saviours. The governor has confirmed our course. If SA Inc. could open doors for that 0.08 % of innovators and give them a reason to bring their wealth and knowledge here, we can accomplish amazing things as a nation. The three wise men have shown us a great rising star that everyone, even our most Marxist ministers, can see on the horizon. In 2019, let’s hope, and pray, we can converge on the opportunity.