What you think it takes to succeed may be all wrong, according to Perry Kamel, Microsoft 4Afrika’s Development Manager for SMEs.
There are many stories out there about the common traits of an entrepreneur, all written as if there are magical properties that you are either born with or not. They claim if you don’t possess them you will never succeed.
However, Kamel says many entrepreneurs that seem to display these ‘common traits’ still often fail, while those who don’t, make it. Here are five myths she feels need debunking.
Myth 1: You have to be a risk taker
Diving head first into your brilliant idea does not make you an entrepreneur, Kamel says. More important than risk appetite is how risk is managed when the wrong step is taken. She uses as an example iKubu, a South African business started by two engineers.
“They developed a radar system that alerts cyclists of potential hazards on the road. Leaving their corporate jobs to build their innovation is not what defined them. It was how they responded to failure,” Kamel says.
“They battled for nine years to sell the radar software technology – even trying door-to-door sales – but could not get a big break. They did not give up though. They adapted, learned and realised that they needed an accelerator. After getting involved with Knife Capital, iKubu was sold to Garmin last year. iKubu is proof that agility and determination is a better determinant of success than being able to take a risk.”
Myth 2: You must have startup capital
“Many businesses can start with very little capital, particularly those that operate online. The trick is sustaining and growing your business for the next 18–36 months. This is the most difficult,” Kamel says.
This is often where we see entrepreneurs sell their homes, work 18-hour days and borrow money from family and friends, doing whatever it takes to make the business work.
“That is what makes for real entrepreneurs. There is a saying in the SME ecosystem that if entrepreneurs are not prepared to invest and lose everything, they will not be taken seriously by investors,” says Kamel.
SpacePointe founder Sayu Abend ran into funding challenges relatively early on.
“The old adage of using other people’s money to grow a business helped greatly, as she first turned to family and friends, paying them back incrementally. By showing this commitment, it helped her secure US$1.2 million in funding from multiple investors,” says Kamel.
Myth 3: Entrepreneurs don’t know when to quit
“Oh yes, they do,” Kamel says. “There’s a saying that when you fail, fail quickly, pivot quickly. Quit what isn’t working, but never quit the dream.”
When an idea doesn’t work, or you’ve taken a wrong turn, her advice is to let go.
“Prepare just the minimum viable product or service to see if it will fly. If it doesn’t, move on. Good entrepreneurs don’t get so attached to their solutions that they are blinded by their desire to make that specific solution work,” she says.
Myth 4: Entrepreneurs are extroverted leaders. ‘It’s who you know, not what you know.’
Not every entrepreneur is an extrovert, according to Kamel.
“There are many ‘quiet’ leaders who demonstrate the resilience, listening skills and analytical insight to build great businesses. One of the best things an entrepreneur can do is to surround themselves with people who have different styles,” she says.
Myth 5: You must have a business plan
“A business plan is traditionally used to project financials to secure investment. However, many successful entrepreneurs have never had a formal business plan, and an increasing school of thought suggests that a better strategy is to explore and fine tune assumptions before defining a specific plan with financials based only on dreams and passion,” Kamel says.
“I would advise that instead of getting fixated on a business plan, rather focus on a business model. This complements the business idea by describing the customer journey, and more importantly, the channels to acquire new clients.”