Tapping support networks to succeed
Exposure to years of experience, advice and a supportive ecosystem is potentially priceless
Having access to advice, networks of potential collaborators and investors, and the opportunity to workshop and discuss ideas, is simply invaluable
After establishing your business as a fledgling competitor, vying for survival among industry veterans and giants, a young company (if successful) will continue to expand and probe into new markets and potential industries.
But as the organisation approaches its critical mass — the point at which the company’s current resources are insufficient to maintain its upward trajectory — external resources go from “would be nice” to a prerequisite for success.
Consider the fact that corporations commit to IPOs for the same reason that small vendors apply for business loans from local banks: both seek to expand or maintain growth in profits or revenue but require additional capital to do so. Not only is this aspect of economic life accepted, but modern economies have become wholly reliant on the cycle of capital-raising to power the investment landscape (underpinning pensions, mortgages and the societal wellbeing provided by an ability to build for the future).
But there is a catch. Naturally, additional capital allows for expansion; however, expansion also brings about greater complexity. A company has many moving parts, with the complexity of operations increasing as the organisation itself continues to grow. No matter what the industry or context, the greater operational complexity that accompanies success will put harsh demands on even the most dedicated and idealistic of teams.
Capital that is well invested in a company’s future bodes well for its ability to thrive despite pressure from competitors, and presents a net gain for customers, shareholders and society at large.
If this is the case, it is entirely foolhardy not to draw upon the wisdom and expertise of those who are better equipped at the tasks you cannot realistically compete with to evolve into an established player in the market. For those just starting out on this journey, being exposed to years of experience, seasoned advice and a supportive ecosystem to draw upon is potentially priceless.
Successful entrepreneurs and companies understand that reinventing the wheel presents a waste of time and resources, especially when your neighbour has already perfected the model. Instead, drawing upon the expertise and success of others frees a company up to focus on its own core business offering.
Consider the example of a relatively successful retailer that has watched its competition accelerate out over the horizon with its home-delivery services. Already, catching up will take significant investments in time, money and labour. At the basic level, such a retailer could compete on grounds of quality and price — but with the advent of the delivery economy, they must either adapt or die.
Without the necessary in-house talent required to set up such a system, you can either hire the required talent (and hope they are up to the task), compete on other fronts (usually requiring squeezing your profit margin even further), or let someone with the expertise and experience handle it. This last option is not only the progressive choice but also makes the most sense from a financial point of view.
Leaning on structures, systems and the expertise of others is an inherent quality of a successful business. The recent Founder’s Den event in Cape Town aimed to amplify this collaborative approach to entrepreneurial success in South Africa, and aims to leverage the development of this ecosystem in Cape Town to help 1million South Africans build tech-enabled businesses by 2030.
Entrepreneurs and small businesses generally have different access to support networks than their more established counterparts. The same is true for industries. In the software development space, very little is required to do your own work or to start a business. At first, the most expensive thing you will be paying for concerns the talent and skills of the developers.
For a perfect visual, just think of the fabled innovators who began their journeys in garages and dorm rooms but went on to define a service or product: Meta, Apple, HP, Dell, Microsoft. Since the barriers to entry are low, many entrepreneurs and start-ups can be found within the software development space. It remains true for Silicon Valley and in South Africa as well.
If you are one of the thousands of entrepreneurs and small businesses working in South Africa, the business world is already (comparably) more hostile than that experienced by your peers in many parts of the developed world. Having access to advice, networks of potential collaborators and investors, and the opportunity to workshop and discuss ideas, is simply invaluable. Just like vendors who ask for external assistance to afford more stock (and grow), these entrepreneurs and small businesses can make the most of the external assistance available to them.
Guidance, support and constructive feedback from their seniors, in this case, is not comparable to funding; without the advice from those who have weathered South Africa’s storms, expansion and success will remain seemingly arbitrary and based on luck. Once your direction and strategy are clearer and more viable, this entrepreneurial ecosystem and network can be leveraged to also secure knowledgeable investors.
Traditionally, an industry is seen as being made up of actors competing against one another to secure market share. This, however, is a gross simplification as, just like any functioning community, actors generally fill niches within a community by complementing one another’s actions and specialities. Competition among industry players exists, but it is just one part of a variety of interactions and relationships among peers.
Ignoring the role of those in the wider community will not only make your own journey more difficult but will stunt your company’s ability to grow and succeed. For your own future, and the wider community, we owe it to ourselves to engage and learn from one another.