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We all know that running a business can be a rather personal affair. As in any relationship, you’ll go through ups and downs, celebrate here and grieve there. While the analogy might be apt, mixing one’s personal life with the professional might seem like a recipe for disaster. Apparently that’s not entirely the case.
At the Western Cape Funding Fair held this week, Project Isizwe founder Alan Knott-Craig Jr laid down five tips budding entrepreneurs should take into account. Essentially, he argues the importance for entrepreneurs to look to their inner circles before going out into the wild, wild world.
1. Put yourself out there and listen to destiny
With a glass-half-full approach of looking at problems, Knott-Craig explained that South Africa is a land of opportunity so it shouldn’t be difficult getting an idea for your startup. “[South Africa] is where the problems are, which means there are opportunities,” he said.
This was how he conceptualised the idea behind Project Isizwe. He noted that he simply started with the question, “How do get the best content to everyone in South Africa?” Wi-Fi connections of course. He also added that this is something that makes South African entrepreneurship special as people face different, unique problems with unique solutions.
“When coming up with your idea, you have to put yourself out there,” Knott-Craig stated. “Opportunity can’t come knocking if it can’t find your door.” He said that, in order for your idea to take shape, you need input from the people around you who can provide the right insight and the right connections.
He explained that it’s about getting as much ideas together from different people. “For me this was about getting a feel for where destiny wanted to take me,” Knott-Craig argued. “Don’t go where your head says you should go, you should go to where the world says you go.”
2. Find the right team
Similar to fleshing out your business idea, budding entrepreneurs should talk to their friends and family to help put them in touch with those in-the-know. This way, they’ll also find people they can trust.
“When it comes to finding a partner, you just have to talk to people who know you well enough,” he said. “Having a partner is a bit like having a wife or a husband: they have to compliment you. Only your family will know where you are weak and where you are strong.”
The former Mxit executive stated that you should find a partner to make up for your weaknesses. If you are technical, for example, you should try and find somebody with a lot financial services experience. “You need someone who can speak to the investors, bankers and insurers to make your life so much easier.”
3. Never forget your first customer
“You have to find the thousand customers and own them,” he stated, echoing the philosophy shared by author Kevin Kelly in his book 1 000 True Fans.
After struggling to find someone “in their right mind” to fund a non-profit company to roll-out Wi-Fi to the poor, Knott-Craig finally looked to government. “Local government has the responsibility to provide a safety net for all the services from sanitation to water and electricity, perhaps they would like to do the same with the internet.” And right he was. This year the initiative — alongside government — has rolled out over 420 Free Internet Zones in the City of Tshwane alone and is operating across the country.
“Eventually, you’ll get one of them, one of them bites. You should never forget that first customer,” he said.
The startup founder explained that once you start getting that initial traction it’s easy to lose focus. “It’s sort of like how it is with girls: when you find that first girl, you soon take start taking them for granted and start looking at other girls.”
He added: “I sometimes think that’s where Mxit got it wrong. They got their first few customers and immediately tried to become something for everybody. I don’t think they’ve ever lost those first customers, it has just lost its absolute core.”
As a side note, he stressed the importance of not taking government for granted: “In most cases, they are people trying to make a real difference. Their processes are just slow. Where the private sector brings speed, the public sector brings scale.”
4. Raise money though family, friends and Angels
Forget about the VCs. Entrepreneurs should look to their inner circles: family, friends and then Angels for money.
“The first step is that you’ve got to have a little money for yourself. It’s not easy getting off the ground if for the first six or nine months you can’t go without a salary.”
Secondly, if you’re lucky enough to have friends or family with money, you should go and ask them for money. The startup founder said that entrepreneurs should play the guilt card when they get the chance to, but convincing your family to invest is critical for your credibility going forward. “If you go to an investor, he’s not going to give you money if you haven’t had the guts to ask your dad for support,” he said.
The other place to get money is from Angels, he explained. “I don’t think you should go to Venture Capitalists because they don’t invest in people. They invest in businesses.”
One of the best pieces of advice I ever got — when I was raising money for Mxit — is that nobody will ever invest in a spreadsheet or a business plan. People invest in dreams. So sell your dream. Angels invest in ideas and people but mostly people.
The fourth place you can go look for capital is in the sort of unconventional markets, like the Western Cape Funding Fair or other competitions.
5. Get married…
Lastly, Knott-Craig pointed out that the most important thing for you to do before you start a business is to literally get married. “There are no distractions and you’re less hungover,” he argued.
Knott-Craig got married at 25 and said that it was good because between then and now, he hasn’t had any distractions. “I wasn’t dating, flirting or going out trying to come round. Today I’ve got a lot fewer distractions in my life and also, I’m less hungover.”
The second reason why marriage is a good idea is that there’s some financial security to the whole matter. “My wife got a job at Siemens and managed to pay the bills for the first two years while I took care of the risks,” he shared.
The third reason is that there’s a lot of support you can get from your partner. “You end up going through a lot of emotions when running a business,” he explained. “You need the support for when you’re succeeding and get carried away so they can bring you back down, and you need support for when you fail.” He reminisced of some “traumatic” experiences he’s gone through, and stressed just how important it was to have the support of a family for emotional support during the good and the bad.
“Another reason why having a wife is important is you can have kids, legitimately at least,” he quipped. He said that your kids will keep you humble and remind you that there’s a lot more important things in the world than when you’re making a profit or not. “They will keep you on the ground,” he said.
Lastly, “You don’t want to meet a guy or a girl once you’ve made your money because you won’t be sure why they want to talk to you,” he concluded.
Image by Billy Simon via Flickr