investing in start-ups should be our collateral beauty
GEN AFRICA | OCTOBER 15, 2018
Over the past weekend, I watched a movie called Collateral Beauty starring Will Smith. He plays a successful New York advertising executive who suffers a great tragedy when his family dies. This made him instantly retreat from work, which compromised his business, seeing him lose both his clients and staff.
Will sought answers from the universe by writing letters to Love, Time and Death on why this unfortunate event took place. His letters received ‘answers’ and he began to understand how these three constants interlock in a life fully lived and how even the deepest loss can reveal moments of meaning and beauty.
To set the premise for this article, collateral damage is defined as the damage left after an incident or tragedy to the unintended ‘victim’ or other persons, while collateral beauty is the positive or beauty of what comes after an incident or tragedy.
From an African experience perspective, our collateral damage is the continent’s high and rising unemployment rate, lack of risk appetite to invest in our start-ups and the severe absence of commitment from our leaders to improve the welfare of their citizens, especially the frustrated, market-hungry youth.
At this stage in our development, our experiences should be shaped on the collateral beauty that exists. The power, knowledge and opportunity that many of our youth present to us is undoubtedly a blessing for the continent, but why do we constantly turn a blind eye and not leverage their capabilities?
Every day, I meet many young bright sparks with brilliant concepts and I wish we could implement just 5% of their initiatives. Yet, nine times out of ten, their frustrations and the ever-present stumbling blocks force them to cower away and become just another nine-to-fiver, trying desperately to climb the never-ending corporate ladder.
Most governments try hard to offer big businesses incentives to create jobs. But the fact of the matter is they do not understand that big business cannot just create jobs, pull them out of thin air, so to speak. New jobs are needs-based according to the company’s business plan and must be budgeted for, no matter how rewarding the incentive is.
Last week, I spoke to several large corporate executives and many told me that it’s easier to pay R10 – 50 million to their advertising and marketing agencies than to create a single, entry level job for a low- or mid-skilled worker. Creating just one job is wrapped in red tape and requires memo after memo and signature after signature to justify it only for consideration.
But for small business owners, it’s a different scenario. Once they realise the need for additional human resources, they’re able to post the position immediately, justifying my opinion further that government needs to invest more in startups to help them grow, which in turn helps them to kick-start youth employment from the ground up.
Recently, one of our start-ups needed funding. She went through various DFI and government channels, yet was met constantly with the dreaded ‘F-word’. Frustration.
This stems from the fact that most in charge of funding and approvals do not actually even understand a business plan or a turnover forecast, as they have never run a business. I sit in boardrooms and often hear “that we have outsourced our most prized possession of investment capital to people that have no clue about what is going on”. Our start-up then chose the private capital route and boom, she got the funding she needed (and deservedly so I might add!) to take her business to the next level.
In his piece over the weekend, Andile Khumalo mentioned that the recently concluded jobs summit dilly-dallied over so many issues and lacked the strategy to advance long term benefit for the economy.
Minister Naledi Pandor in her published interview over the weekend also highlighted that platforms like the Jobs Summit are great and it’s good to talk about these things but talk should be followed by key actions and implementation. She also shared a story on how her kids took the courage to venture into starting their own businesses and are now doing pretty well. I believe entrepreneurship and investment in startups is that bold action that we can take. I argue that our strategy should be centred on the kind of economy we want to create. It should be centred on meeting real needs and also on the tangible power we possess as a nation and a continent. If we fail to strategically build our economy around our youth and start-ups, we will fail to make any difference. Those that come after us and take over in the next 50 to 100 years will judge us harshly and think we have failed them. This is definitely not the legacy we want to leave behind.
This is the time to embrace our collateral beauty from the collateral damage we suffered decades ago. The time for lip service is over. It’s time to invest in long-term, realistic strategies that will focus on building and creating new micro and macro economies – new giants – that will shape and secure Africa’s future. Many of our startups are doing amazing things from Agro-processing to Games Development, Mobile Development and all other sorts of industries. What they need is the belief and support to scale.
We must not be scared of the risk to invest in them. We must nurture, support and believe in our start-ups to reinvigorate our economy and mutually reap the benefits as one nation and continent.
As Franklin D. Roosevelt said, “There is nothing to fear, but fear itself”.
Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) – 22 on Sloane is Africa’s largest startup campus.