Watching her first business venture fail, only worked to sharpen Katleho Tsoku’s entrepreneurial insights.
In 2009 at the age of 25, Tsoku set up shop at the trendy 44 Stanley lifestyle centre in Milpark where she opened up an upmarket cosmopolitan restaurant, Bliss Lounge, offering a boutique-style menu and concept design.
That the business did not survive past the three-year threshold is something she has been open about. Short-lived, as it was, the experience gave Tsoku valuable lessons on conceptualising and managing a business as well other business development skills.
Skills she has now put to use in her roles as CEO of Spark* South Africa, which is part of the wider Spark* International Group which identifies and supports startup impact entrepreneurs – entrepreneurs who are effectively changing peoples’ lives.
Within the year-and-4-months she has been heading Spark* South Africa, Tsoku launched SHE by Spark*, an accelerator focusing on women-led ventures that positively impact the lives of women and children in South Africa.
When it comes to female entrepreneurs the stats show that a meager 8% of South African SMEs are female-owned businesses despite the fact that 78% of women-owned small businesses are profitable, this is compared to 70% for men, according to the 2014 SME survey.
She is also the founder of Her Bliss, a platform for empowering emerging female entrepreneurs – a gap that has been left wide open by the significantly one-sided growth in the entrepreneurship landscape which has relegated women in the sector to the sidelines.
In the second of the Women in Entrepreneurship series, SME South Africa speaks with Katleho Tsoku about why the assumptions that women start “cute” businesses is part of the factors standing in the way of female entrepreneurs in the country.
Q: What has your experience of the South African entrepreneurial ecosystem in terms of gender representation generally and black women in particular been?
I do believe that more and more women are open to the idea of entrepreneurship, however the numbers are still quite dismal, less than 10%. Moreover, while more women may be starting businesses, they are not reaching scale in their businesses because skills such as negotiation, networking, leveraging key relationships become increasingly important as one scales.
The “first generation entrepreneurial struggle” is what possibly hinders black women. There are very few who have done it before them, so there is little guidance .
Q: Why does there seem to still be prejudice against women-founded startups is the entrepreneurial environment?
Perhaps that is a question better suited for investors! There is a belief/assumption that women start “cute” businesses, women start lifestyle businesses whereas men are considered high-impact entrepreneurs and thus a safer bet on investment. I think there are also cultural barriers that come into play, but these are not reasons to give up, but all the more reason for women to support each other and up-skill themselves.
Q: What are some of the biggest challenges that the black entrepreneurs who come to SHE by Spark* say they find the most debilitating?
The first generation entrepreneurial struggle that I mention above. They are young women in their twenties/thirties who in most cases are the first entrepreneurs in their families, so there are no examples of women who have done it before them to guide them on their entrepreneurial journey. And when there are no successful examples, it makes it quite difficult to garner support from family and friends.
Accessing capital is another challenge. When you are young, female, first-time business owner, the odds are against you!
Q: What can players in the VC space do to ensure they fund more of the overlooked and underfunded black women-led companies?
There is still a lot of work to be done in South Africa in building a solid entrepreneurship foundation period. Working with entrepreneurs in countries like Kenya, one realises just how much entrepreneurship is in its infancy here in SA.
I believe that collaboration and creating meaningful pipeline partnerships with organisations like Spark* International and others who exist who are somewhat the link between entrepreneurs and VCs. We do the filtering, we work on getting our entrepreneurs investor-ready and we work with other key players along the different stages of a businesses to match entrepreneurs with the right funders/investors and other forms of support.
No one is an expert at everything, so if we all plugged in our different expertise, the entrepreneurial ecosystem will be stronger, and that will see entrepreneurs thrive .
Q: What do you tell women who come to you looking to start their own company?
Start something that matters! Until you can identify a problem you are passionate about addressing, you have no business starting a business.