There are a lot of programmes out there to help entrepreneurs, and many of them offer excellent services. After interviewing 50 people, including 38 entrepreneurs in one-on-one discussions in Johannesburg over four months and writing our own entrepreneurship study, the 2016 Entrepreneurship Research Study: Voices of Entrepreneurs in Johannesburg, we came to the conclusion that what’s really missing is an overall vision for the sector.
Why is an entrepreneurial ecosystem important?
Entrepreneurs need much more than funding. They also need mentoring, networks, markets and access to services to help grow their businesses. But finding these on your own can be tough. Where do I find mentors? Networks? Good financial, legal and labour services? Are there non-governmental institutions that can assist me? How can I find staff, skilled and unskilled, or maybe new college graduates? Where do I find new markets and customers?
These are all elements of an entrepreneurial ecosystem. It’s hard for entrepreneurs to find everything on their own – it’s often luck when good resources fall in our laps. This is why entrepreneurial ecosystems are important. And entities like government and educational institutions are well-positioned to help create these systems. The private sector will play a role, but driving these systems requires organisations with the capability in the long-term (20 to 30-years) and enough dedication to social drivers to make it happen.
This model is based on Isenburg’s model of entrepreneurial ecosystems and growth-oriented entrepreneurship. Entrepreneurs can grow on their own, and often do, but when the forces come together to create systems to help them, the growth can be exponential.
In the 2016 Entrepreneurship Research Study: Voices of Entrepreneurs in Johannesburg, we identified six partners that are important for the development of an entrepreneurial ecosystem. These include: educational and entrepreneurial institutions, which can include incubators; government; financial partners; support services; and markets, customers and entrepreneurs themselves. What tends to happen in South Africa is that these segments work in silos without significant cross-over.
Learnings from Silicon Valley and other successful ecosystems indicate six partners that make up the “secret sauce” necessary to make an entrepreneurial ecosystem work:
- Educational and entrepreneurial institutions – where universities play an important think-tank and research and development role – incubators, private, CSI and non-governmental institutions;
- Government, especially at municipal level, to provide the platform, enabling legislation and potentially physical spaces, support and infrastructure;
- Financial partners, including venture capital and angel investors;
- Support services, including technical experts, mentorship and legal services;
- Markets and customers to ensure the nal products and services are viable;
- Entrepreneurs themselves in different partner roles – as recipients to the benefits of the system, customers, advisors, investors and networks.
However, bringing key people from each segment together is vital. And including entrepreneurs in the mix is critical – they are often left out of the policy discussions. What made Silicon Valley successful, or the ‘secret sauce’, was that successful entrepreneurs worked as mentors, funders and networks for new entrepreneurs. This helped create new generations of entrepreneurs who in turn created new business sectors. Tapping into entrepreneurs’ needs and continually hearing their voices on their challenges is equally important.
So where do we start?
It all starts with dialogue. Identifying the key people, bringing them into the room, is a good start. The process can begin by asking critical questions:
- Who needs to be in the room, at what level and for what impact?
- How can we bring everyone together to create an overall entrepreneurial ecosystem?
- What role does each person play and how will everyone work together?
- What are the critical issues for the sector and how do we prioritise them? (Remember: entrepreneurs’ ideas of what’s important and those who assist them can be di erent – be guided by those who will use the support.)
- What are the quick wins and what are the long-terms strategies?
- Who will drive the action plans and how will we make sure they are sustainable?
- How do we measure success, and how will we monitor and evaluate our results?
An entrepreneurial ecosystem sounds like a complex model, but it’s made of parts. It’s about how the people who are passionate about helping entrepreneurs can come together and create a plan and a vision. The ingredients are there: how do we move forward from here?
Managing Director | Z.A.ZEN Consulting