“We’ve bridged a time when entrepreneurship was an unknown word. Incubation was about chickens and babies and certainly there was no funding for what we were doing because no one knew what we were doing,” says Allon Raiz, founder and CEO of Raizcorp – one of the oldest and most established incubators in South Africa.
Established in 2000, Raizcorp is practically an ancient institutions compared to other incubators, although the organisation prefers to be called a “prosperator“. Raiz has been in the entrepreneur space before SMEs were being touted as the next big thing and entrepreneurs were idealised as rock stars.
Entrepreneurs, postman, candle-stick makers
“The unintended consequence of the celebrity of the status of the entrepreneurs is a sense of arrogance amongst entrepreneurs, which is unpalatable to me” says Raiz.
The self-made businessman, whose parents were entrepreneurs themselves, has worked with small businesses since his early twenties.
“The belief is that ‘because I’m an entrepreneur, I’m better than anyone else and not a sense that this is my role in society’, when really I’m a risk taker and a challenger, like the postman or the candle-stick maker – everyone has a role in society.”
Another consequence of the celebrity of SMEs, according to Raiz, is his belief that government is overplaying the role of entrepreneurship as a solution to all of South Africa’s problems.
What’s sorely missing, says Raiz, is the telling of the responsible story of entrepreneurship.
“What’s not being told is the hundred thousands failures. It’s not just add water, just add cash to an idea and it happens.”
Raiz says he continues to see people who think they have a brilliant idea that no one has thought of, thinking it’s going to be easy.
“It needs to come with a little label that says ‘beware, entrepreneurship can hazardous for your health, for your wealth, for your family’.”
“It’s a damaging path to take. What we need entrepreneurs to know is first off, it takes more than you think, it takes a lot longer than you think and you have to have the right way to handle that.”
What entrepreneurs lack
Raiz has first hand experience from working with entrepreneurs on a daily basis. Business owners approach Raizcorp when they know their businesses can do much better, but just don’t know how exactly.
Raizcorp differentiates itself by backing the entrepreneur, not the enterprise says Raizcorp marketing head, Corné Botha, the business provides full service business support programmes that guide entrepreneurs to profitability. Over 900 companies have graduated through the Raizcorp programme.
“The programme is an intellectual investment in the entrepreneur,” says Botha.
South Africa’s issue of skills
Raiz, who has advised African government on incubation and entrepreneurial development models, has received his fair share of questions about the introduction of the Small Business ministry, headed my Minister Lindiwe Zulu. He says he has chosen to take a positive stance.
“It’s very easy to criticise it and to say that it won’t work, but rather than do that, rather try to make it work and make it a positive thing” he says.
According to Raiz, the ministry will only work if the minister uses it as a way to deregulate, not create more regulation including a topic close to his heart, that of labour.
“You can’t start the conversation without labour law. I think our labour laws are inflexible and rigid,” he says.
The labour laws, he says, are not conducive to current needs, having been designed for a time when it was necessary to create a balance between big business and labour.
“The power differential between small businesses and employees is the wrong way around,” he says, referring to the labour issues faced by many small business owners.
“People are saying: I don’t want the risk of full time employment, if I get it wrong, it destroys my business.”
Raiz says South Africa needs to address the issue of skills to fulfil the entrepreneurship hope. South Africa needs to understand from the rest of the world what the reality of not having skills in the country can be.
“If there aren’t skills you can’t build businesses. Skills create jobs, they don’t take away jobs.”
Searching for blue hearts
What hasn’t changed, says Raiz, is what’s required for an entrepreneur to be successful. According to the author of two books, Lose the Business Plan and What to Do When You Want to Give Up, Raizcorp continues to pick entrepreneurs with what they have termed, ‘a blue heart’.
“It’s about your character, your ability to persevere.
“Are you able to keep adjusting your tactics and strategy according to the feedback?” he asks, adding that South Africa continues to be a land of opportunities. Real entrepreneurs are still able to identify opportunities everywhere they go.
“Successful entrepreneurs look for opportunities where everyone else isn’t looking” he says.
In this regard, Raiz is following his own advice to a tee. The company has made moves into the rest of Africa with one prosperator in Angola. They have also looked at Nigeria and Ghana, which Raiz calls “one of the nicest economies to look at”.
The move has not been without its difficulties, particularly when it comes to infrastructure on the continent. “There is huge opportunity out there, people are still trying to get their heads around how to get around infrastructure”.
The business is currently adopting a wait-and-see approach when it comes to other entrepreneur trends like the American accelerator concept and the use of shared spaces.
Raiz says he has always been good at spotting opportunities and seeing them around corners. He says they are currently weeding out the faddish from the game-changers in the incubator space. Although he concluded that the focus for the business is to remain on course and to continue to answer the question of “how we can be better, how can we improve”.