Entrepreneurship in Zimbabwe has in the past been dotted with amazing stories of fortune and very inspiring individuals whose business models not only inspired business growth and sustainability to their operations but also changed the wholesome business landscape.
You can put the names James Makamba, Kukura Kurerwa, Strive Masiyiwa, Shingai Mutasa and Nigel Chanakira to count for just a few of the icons who dominated Zimbabwe with their businesses from the late 1980s and some of them as you well know to present day. These entrepreneurs built empires worth of the title legendary and it takes more than just wit to pull off some of the moves that got them to the helm of their industries.
Fast forward 30 years from our 1980 independence and you land in the new millennium, where with the emergence of internet as a consumable, more doors are now open for start-ups to carry over the legacy ignited by some of the legendary entrepreneurs mentioned above. I am bound to think that, in this age, so many founders have access to mentorship, specialized business education and training, a connected market and more so when you put internet as a competitive tool, a global market. With all such resources at our disposal, start-ups should surely be equipped to at least continue the legacy that was set by their predecessors if not surpass it, but alas, a close look at the industry tells a different story.
We do have the new age icons whose generation falls immediately after Dr. shingirai Munyeza, probably the Gabriel Shumba, Munyaradzi Gwatidzo, Genius Kadungure and Chamu Chiwanza’s but for an economy that has set entrepreneurship as a default setting for financial freedom, we have far more start-ups whose stories are not at all worth our celebration because an objective examination will show that above 70% of start-ups in Zimbabwe are a far cry from sustainability in the long term.
How is that so? I would like to think that a couple of factors substantiate the fall and although there are many other reasons, some even justifiable, the ones I list below are based on my own observations and experiences.
- Lack of Focus – concentrating on producing a business plan instead of planning a business.
I have witnessed many businesses change direction more than five times within a period of two years. While some may want to justify this by citing the ever-unstable economy as chief catalyst and credit their maneuvers for being swift in decision-making, the truth is not too far from their conscience. At best, this is just an excuse for an unfocused and unplanned business venture.
When you plan your business, you have a focus that will not change regardless of all other factors. Your wit is calculated by your ability to use creative strategies that ensure that your focus is maintained and the goal is achieved. Changing your focus in times of despondency is failure in it’s own. What it means is that your business has failed to stand the changing times and you have decided to change your focus.
Take this as a cue: Econet Wireless came in the business to offer new age communication services to the market. They have added a lot of other complimentary services to their core, but they have not changed their focus regardless of how convenient it could have been at some point during their growth
What would you say of Astro Mobile if they put out a statement tomorrow stating that due to the congestion in the smart phone market, we have decided to venture into fashion?
- Unsustainable and Unrealistic Pricing Regimes
When one is starting a business, it is very important to do a comprehensive market research to ensure that with the information you obtain, you are able to create your unique selling point, which becomes your competitive edge in the long run. Unfortunately a lot of start-ups down the food chain are just interested in finding out how the business next door is making their money, invade their space, underprice and call it a strategy.
My mentor, Dr. Goodwill Shana once told me that the fastest way to get out of business is to compete on price alone. You may not believe this, but there are some very ridiculously low prices out there that at the end if not making a long-term loss, the founder may well be circulating the same capital value in 24 months.
At the other end of Samora, you will meet start-ups with prices so high they will only get gigs from their relatives. While I have no problem with premium pricing, one should take it that people are willing to part with the exact value they think your product/service is worth.
My wife and I started a restaurant in Newlands sometime last year. We certainly couldn’t start by charging both arms and a leg and in light of that reality; we gave ourselves time to let the market value us. We had an exact idea of how much our clients where willing to pay for our services during the promotions hence when the promotion ended, we have no problem retaining our clientele.
Unless you are selling drugs or a rare mineral, you 200% markup may not do well for you in the long term. There is a time to charge that much, as long as you don’t have someone offering better value at a lower price because that way you become expensive instead of premium.
- Ganging Up instead of collaborating
You will agree with me that the genesis of the Affirmative Action Group (AAG) brought about a collaboration of acute businessmen whose common thread was the access to top dollar business opportunities and nemesis was the possibility of failure under restrictive conditions.
Many business people who collaborated within AAG then surely walked away with a piece of some cake. You can argue all your life that AAG was largely political, but the question should be, was it illegal? Any business icon worth their salt will manipulate and exploit any loose ends, politics included if they will get to walk away with an additional stake to their business’ core focus.
The sad observation I have of late is founders find their space on social media and quickly dissect themselves in to these cool to be in cliques that have nothing to offer in terms of their capacity or business expansion. I call this neither networking nor collaboration but just gangsterism. It really doesn’t help you to party with the well to do people of this generation if you can’t get an opportunity for a table talk with the gang on business matters. What is the use of the network if you can’t manipulate if to your benefit?
Another interesting observation
A start up will need a least three cores in existence to function properly and progressively. These cores depending on the business are usually; technical, marketing, management. They can work in any hierarchy as long as they are in place. If you take a look at all the businesses around you, you will observer that there are always three struggling business run by an ace in one of the respective disciplines and to say the least, the three businesses are competing.
My simple thinking will strive to get the three to work together under one fit, as they will achieve far more as a whole but the reason they wont is below…
- Ownership Fallacy
In 2013 I sold my first start-up Kreative Republic, to an agency whose owner I had consulted for over a long time. This gentleman had become obsessed by the idea of owning my company that I ended up giving in. The set-up was that I would surrender my brand, all the clients and for at least six months heard the new division which I did diligently.
I have always considered myself as a creative rebel and staying in that setup after the prerequisite six months was not going to work for me. I left the agency and started my new outfit – The Brand Guy & Associates. Two years later I see that I have become a competition of my former self as the agency that bought my business is really struggling for its size.
Here is the lesson.
Had the agency bought into my business and not bought my business, I could still be part of the system and executing my vision (the very one that got them asking to buy the business) with them and doing amazing things together but what they wanted was to own the business and employ me. Too bad that couldn’t happen, I trusted myself with my creative ability that I would gather again and reboot myself.
Most people in my position then would not have sold their business if it was their pride as was mine, they would certainly miss out on the money that was already at the table. The lesson here to entrepreneurs is that sometimes ownership is not the money, its an entitlement and can be to a blank cheque.
And to investors, it’s is possible to own someone’s time and commitment depending on what you put on the table but his/her abilities are entirely theirs and for them to exploit. You can only collaborate with people in that area.
Thank you for reading my article, what in your view are the pitfalls for start-up growth and sustainability in Zimbabwe?