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.
Loadshedding keeps small business from the cloud
New research shows nearly half of South African small businesses struggle with internet connectivity
New research reveals South African small businesses aren’t able to adopt cloud technology because of their connectivity problems. The third annual State of Small Business report from accounting software firm Xero, conducted in partnership with World Wide Worx (WWW), shows that over half (53%) of small businesses haven’t adopted cloud technology yet, due to connectivity problems.
Over half (59%) said that scheduled power outages by the national supplier posed a significant challenge for their business. In addition, more than two fifths (43%) said that their internet connection was ‘OK but not 100% reliable’. Other challenges cited include new technologies entering the market (29%) and compatibility with customers (45%).
The research represents the opinions of 400 South African small business owners and 200 South African accountants. Almost half (47%) said their staff were highly tech-literate, but more than two thirds (67%) don’t allocate budget for training employees to use the software provided.
Colin Timmis, General Country Manager, Xero SA and professional accountant said “Our most recent State of Small Business report gives a real insight into what it’s like on the ground for small businesses in South Africa. In uncertain times like these, technology can provide stability. For example, cloud software can help overcome issues with connectivity. It helps to make your business more agile, meaning you can work from anywhere at any time. Being able to move when there are scheduled power cuts or patchy internet is crucial to keeping your business running.”
Nearly all who had adopted cloud technology said that they noticed an increase in profit (98%) and an increase in efficiency (99%). More than half (51%) suggested that it had improved their ability to work anywhere, and a quarter (25%) said it had improved security.
In addition, nearly two fifths (38%) said their IT set up was ahead of the curve. Over half (56%) said they use basic automation, whether in operational or accounting tasks. A quarter (25%) said they were using Internet of Things (IoT) technology, followed by cloud computing (19%).
“It’s great that South Africa’s small businesses are seeing the benefits of adopting technology. But there will be a learning curve for anyone using new software and employees shouldn’t be expected to self-teach. Because people are more tech-savvy than they used to be, training normally only takes a few hours. It could make all the difference in getting return on investment on the technology that you buy”, said Timmis.
Other key findings from the research reveal:
- Three quarters (79%) of small businesses claim that accounting software support is very important
- Three quarters (78%) of respondents use accounting software to manage financial records and over half (55%) are using desktop solutions.
- Only one fifth (22%) are using cloud accounting tools and nearly a quarter (23%) still do their books manually.
- Only a tiny proportion of respondents (0.25%) are using AI and machine learning.
Download the report in full here.
Uberising solar energy
A team of students from Strathmore University in Nairobi, Kenya on Thursday walked off as winners with R20 000 in prize money for an innovative concept to provide equitable energy access to remote villages based on, among others, “Uber(ising) solar energy.”
The team was one of four university teams participating in the African Utility Week and Powergen Africa conference and exhibition’s first ever Initiate! Impact Challenge. The 19th edition of the event gathered thousands of power, water and gas industry experts in Cape Town this week and ended on Thursday.
Student teams from Stellenbosch University, the University of Cape Town and the University of the Witwatersrand also took part in the three-day challenge sponsored by the Enel Foundation, the Innovation Hub, Lesedi Nuclear Services and the Russian Nuclear Agency Rosatom. The Initiate! Challenge aimed to create a platform for students and start-ups to drive innovation and share ideas for the energy sector.
The Strathmore University team included engineering students Ignatius Maranga, Raymond Kiyegga, Fredrick Amariati and Alex Osunga. One member of the team will also have the exclusive opportunity to join the 5th annual student fact-finding mission to Russia to visit several state-of-the-art nuclear facilities and dedicated Russian nuclear universities. Maranga said the team is happy and humbled especially because they competed against some of the top universities on the continent. He said the teams’ winning idea is rooted in real life challenges that Kenyans in rural areas face. “The solutions offered so far to expand energy access are not solving these problems as many are not financially viable.”
The team’s idea is to put a solar panelled container in rural villages that will also house a clinic and a knowledge hub like a school for vocational training to teach people about the use and benefits of solar energy. It will also include a shop where villagers can buy daily essentials like milk.
Maranga said: “The school will help with capacity building as villagers will see and learn benefits of electricity and as the business grows, they will want to have electricity in their homes and when that point comes, we will have solar powered tricycles. These tricycles will carry and deliver batteries like Uber does passengers to villagers in more remote areas. The system is modular so we will add another container to charge batteries. These batteries are ferried on trikes, so villagers in more remote areas can request a number of charged batteries on their phone.”
Maranga explained that it is common cause that Africa is big, and many people live in remote rural villages. “So, it is not always possible to extend the power grid to these areas as it is very expensive. So, what do we do instead? Most people own a cell phone, and everyone needs electricity, so you take it to them. They cannot exactly carry a battery for two kilometres so why then not Uber a battery?” Maranga said their company Kijiji, (Swahili for village) will now look at commercialising their idea, optimise it and do market tests. “If accepted we want to roll it out depending on funding.”
The team’s idea appealed to the judges because it was a simple idea that is easy to replicate beyond Kenya to the rest of the continent. Chief executive officer of Rosatom Central and Southern Africa, Dmitry Shornikov, said: “We are very pleased with the solutions presented by the students. The maturity and depth of their research gives us great hope and proves that young Africans really are devoted to solving Africa’s energy challenges.”
Business Development executive at Lesedi Nuclear Services, Shane Pereira, in an earlier interview said the company partnered with Initiate! because it is dedicated to the youth that will be the leaders of tomorrow. “The growth and development as well as training, coaching and mentoring of the youth is critical to the success of our future economy.”
The ideas of the other three teams focused more on mitigating the risk of climate change and came up with ideas ranging from vertical farms to energy boxes.