The main challenges facing start-ups, the importance of global Awards programmes, such as the ITU Telecom World Awards, and the role of governments were among the key areas discussed by a diverse panel, spanning the full SME ecosystem, ably moderated by ITU’s Jose Maria Diaz-Batanero.
Panelists highlighted what they saw as the main stumbling blocks facing start-ups as they grow. For Deanne Friis Smith, Director Entrepreneur Search & Growth, Endeavor South Africa, it boils down to 3 key areas; access to capital, to markets “especially if they are scaling outside their own geography.”
Access to talent is also a key concern, according to Kerry Petrie, General Manager, Silicon Cape. Gary Stewart, Director of Telefónica Open Future and Wayra UK also explained how management talent is also important. The “Founders dilemma” illustrates this issue, someone who does well as an entrepreneur – possibly innately a disruptor- may not necessarily be the best manager once the company scales up. De Wet Swanepoel, Founder and CEO, Listen Longer explained how although some people maybe great in the start-up phase, they may not be the best to take it to the next level. His company had recently brought in a director of business for this purpose, he explained
Friis Smith agreed. At each stage SMEs almost need to asses if they have the skills capability to take their company to the next stage, she explained. “Hire above what you can afford to pay,” she cautioned delegates “Hire for a global team, not for where you are today.”
The panel also highlighted the issue of having the right network to provide support, as according to Friis Smith “We need to get better at providing the support structure so people aren’t so isolated”. For Petrie, it’s also about “identifying potential mentors who are relatable to you, and leveraging their networks and experience.”
The panel – who included Huajing Jiang, CEO, Shanghai TERJIN Information Technology Co, winner of last year’s prestigious ITU Telecom World Awards, considered the role of Awards programmes. For Jiang, although the application and pitch took a lot of work, he considered himself very lucky to win, he explained. Winning the Award, and having international recognition it provided have shown a good image of his company to an international market and helped win a bid from China’s Ministry of Public Security “It helped us stand (out) in the market” he explained. Friis Smith’s Endeavor South Africa also runs Awards, offering chance to join an exclusive, prestigious network. Nevertheless, there are a lot of Awards programmes, said Petrie, and SMEs need to be and make sure they gain the right amount of exposure. “Know what you want from the Award,” advised Friis Smith. Providing a contrasting perspective from the Silicon Valley side, Stewart explained that “What’s important for us is what’s happening in your business.” Sometimes he sees start-ups with a load of Awards- while they can certainly help exposure, “At the end of the day, the only thing that matters is your metrics.”
Working with major players such as international organisations, corporates and governments may sound like a dream scenario for an SME, however, due to speed and bureaucracy in obtaining work “To rely on them solely would be a folly” said Sabelo Sibanda of Tuseapp. According to Stewart, lots of start-ups don’t know how to pitch to corporates, they need to make sure they do their homework properly before pitching. “If you are a corporate and a middle manager, you need to understand exactly how an SME can help meet your KPIs” – something SMEs need to bear in mind when pitching.
Governments need to support SMEs, although this is done with varying degrees of success. Stewart praised the UK government’s approach- which he had recently had occasion to observe- in that they give start up tax breaks, allowing companies to invest in start-ups instead of paying as tax. Whilst the UK government approach is to “stay out of the way” of start-ups, they do also use their convoking powers at the same time to help them. Governments don’t always need to write the cheque he explained, they can support SMEs by, say, using their convening power on the SMEs behalf. The Chinese Government also encourage start-ups and SMEs through tax reform, explained Jiang.
Governments must take care not to sell entrepreneurship as a silver bullet, cautioned Petrie, when a government proclaims that its SMEs will turn the country around, and then they must go and make it happen. For her this is an incredibly risky endeavor “To sell entrepreneurship without putting in place a more diverse group of stakeholders to engage around it is risky.”
Summing up, Diaz-Batanero asked the panel to share their top message for SMEs.
Keep alive as long as possible, said Jiang, and be sure to watch your cash flow. For Friis Smith its key to focus on what’s your core business, be bold and audacious, flexible and adaptable.
There are similarities across ecosystems, explained Stewart, even in different countries. We are all trying to get entrepreneurship right and keep hope alive. Everyone agrees that entrepreneurship is the only way to grow the economy, so all stakeholders should come together to help achieve this. Grow your social capital if you are an entrepreneur, and if you are a government or corporate you must provide this, said Petrie.
SMEs need to focus, said Swanepoel, to build themselves a great team. Surround yourself with those that are better thank yourself, he suggested, and make sure you are partner-centric.
Sibanda wrapped up with an interesting point to ponder. A turning point for him was when he realized he shouldn’t fall in love with the product but with the customers, for it’s the customers that are key.