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Entrepreneurs Need More Than Just Capital

In a recent interview, Malik Fal, managing director of Endeavor South Africa, outlines some key challenges for South African entrepreneurs, as well as some suggested solutions (HT): South Africa has its own unique issues when it comes to to battling poverty and empowering entrepreneurs, but Fal’s brief overview of South Africa also provides some basic lessons for how we might contemplate improving entrepreneurship in the West, or at the very least, retain what we have. Most importantly, Fal argues that the problem in South Africa is not (primarily) “red tape” and access to capital. It’s successful implementation:
What seems to be the case in South Africa is that entrepreneurs are going into industries or businesses without really studying the gap—without studying the opportunity to a level that is required. And then a lot of them sort of struggle, if they do stumble into a good idea or concept, to develop a business, because developing a business is not just about having an idea. It’s also about all of the structural aspects that come to support it.
As Fal notes, 70% of new businesses in South Africa fail. This rate is considerably lower in the U.S.—depending on how you look at it—but what seems notable is an ever-growing passion and admiration for new ideas and our accompanying assumption of rapid or guaranteed success. As I noted in my previous post on Instagram, such passions need to be properly aligned and channeled. Many innovators have it easier than others, and the ideas that actually succeed are extremely hard to plan for. Here, I only want to emphasize (yet again) that although our culture seems to be oozing with ideas and creativity, we also seem to be losing a bit of our sense of reality when it comes to risk-taking, which seems to be accompanied by a lack of tenacity and self-discipline in execution (the type of which Fal notes is so problematic in South Africa). Given our own success rates compared to the rest of the world, we’re ahead of the game on many levels, but it’s important that we don’t lose ground. Fal argues that entrepreneurs in South Africa need things like more help from venture capital firms (e.g. IT and financial management support), and although I trust this is also true for American entrepreneurs, though likely in lesser degrees, our broader society seems to be slipping in its grasp of the challenges and risks that are required for authentic flourishing. This poses an issue for the real creators and producers, for when the rest of us lack patience and understanding in how value is actually created, it will tend to muddle the process with the types of short-sighted, zero-risk pseudo-solutions our public is currently craving. Our society’s current inability to address its deficit crisis is another indication of this. We need to focus on individual visions, objectives and implementations. We need to focus on the basic structures and institutions that empower individuals to succeed and stay accountable, stemming well beyond traditional commerce to include morality-instilling institutions like the church. Entrepreneurs need much more than mere capital. Yet from observing our current cultural behavior and outlook, I’m not so sure we have much else on our minds.