Diverse business partners help bridge demographic divides

WE NEED MORE PLATFORMS THAT BRING PEOPLE TOGETHER ACROSS THE DIVIDING LINES THAT MAR OUR COUNTRY

The business relationships that arise out of black economic empowerment are much like arranged marriages. They are calculated, hopefully sensible arrangements crafted under the cool supervision of elders, or bankers and lawyers.

When it comes to ownership and management, black economic empowerment is a deliberate attempt to create diverse businesses that are owned and led by teams that reflect the demographics of SA. This is now the established way in which South Africans build firms across demographic divides, especially race.

Some of these arranged marriages have flourished, but many have become nothing more than marriages of convenience and, in what has become a policy headache, some partners have moved on.

A few years ago, I had lunch with a white man a few years younger than me, who wanted to tell me about his business. He said that one of his co-founders was still finishing her term with her employer before making the leap to entrepreneurship.

He wanted to go into business with her soon after they met during their accounting articles. She is a black woman. It’s not the kind of story you hear often. We need more of these collaborations that arise out of shared passions.

The way we think about entrepreneurship, especially high potential start-ups and who creates them, is laden with racial assumptions. How many times have we heard that transformation is a disincentive to new business formation, with the implication that high potential start-ups are not transformed from day one?

But sadly, there is some truth to this assumption, given the spread of wealth and income, access to quality education and the degree of authentic inter-racial contact. As SA matures, we should expect to see more multiracial founding teams. I’ve read about a few: Domestly, SweepSouth and WumDrop.

It’s not a subject for which data is easily available. But a scan through AngelList yields the discovery that incubators and accelerators have mostly homogeneous founding teams.

There is a tension between the purported benefits of diversity and the tendency to stick to one’s tribe. Countless authors have argued that diversity within teams encourages creativity and enhances problem-solving. There is some debate over the type of diversity that matters, but it’s clear that a team made up of white men from the Western Cape runs the risk of succumbing to groupthink.

In an essay published by Adam Pisoni, In defence of diverse founding teams, the tech entrepreneur argues that the founding team and early hires set the culture of a business and it becomes very difficult to retrofit a diverse culture further down the line. Some challenges that empowerment partners face in being effective change agents at businesses bear testament to this.

To the extent that business partners in new companies still get together along predictable lines, the ideas and values that would emerge from the melding of different life experiences do not see the light of day.

There’s no easy way out of this — as in life, you can’t contrive chemistry in the boardroom. An incubator in the UK, Entrepreneur First, reports good results from a model that puts together a class of strangers with the aim of matching them up to create tech-focused start-ups.

Start-up partners don’t have to be childhood friends or bosom buddies. We need more platforms that bring people together across the dividing lines that mar our country — or we will be doomed to reproducing the patterns of the past.