Five lessons from a seasoned entrepreneur and mentor
The small business sector employs approximately 80% of South Africa’s workforce, but two in five of these businesses (37%) report stagnation or potential decline, which is alarming. Mentorship, however, could be the gamechanger South African entrepreneurs need, especially as 70% of mentored businesses experience a five-year increase in survival rate. “Entrepreneurs are needed now more than ever since they see opportunities, capitalise on these, and, in doing so, create the businesses of the future. But they urgently need support if they are to succeed,” says Sam Clarke, CEO of Skynamo.
He explains that, not only do entrepreneurs create jobs, but they also boost economic growth through the development of innovative technologies, products, and services. “Where would South Africa be without the entrepreneurs behind the likes of Yoco, Sweep South and GetSmarter which have revolutionised the way we work, clean, pay and learn?”
“While each of these businesses are vastly different, they all have one thing in common: the entrepreneurs behind them had mentors and, today, they mentor others,” he says. “It is now more important than ever for today’s entrepreneurs to receive mentorship to help them navigate the current challenging environment.”
Clarke himself has founded two businesses thus far, with plans to launch more in future. He shares that he started tapping into the entrepreneurial spirit at a young age and could always be found building and selling products to his peers. After completing his studies in engineering, he started his first job for a company, as this was expected of him. The desire to start his own business, however, was reignited whilst pursuing his Master of Business Administration (MBA) postgraduate degree. This led him to start his first business, Magus Pty (Ltd), which helps engineers accelerate the antenna design and modelling process. Five years later, armed with a desire to make a difference to underserved businesses using technology, he launched Skynamo.
Over the course of his 14-year long entrepreneurial career, Clarke has learnt a number of lessons which he shares with the emerging entrepreneurs he mentors, and reveals his top five below:
- Revenue, revenue, revenue. The entrepreneurial community often references funding as a measure of success. But, in reality, the true measure of a business’ success is revenue. Funding may be necessary and it is a sure sign that someone thinks there is a strong chance of future success, but in itself, it’s not the true benchmark.
- Keeping a finger on unit economics. Understanding the costs and revenue of each and every deal helps a business to understand how much each deal contributes to R&D and overheads. Once a business comprehends its unit economics, it can show that, at a given scale, it will be profitable, even if it isn’t profitable today. Investors need to understand at what point the business will go from needing further funding to being profitable. This conversation starts with solid unit economics.
- Hire the right people. Hiring the wrong person can be a costly exercise, especially with the Small-, Medium-, and Micro-Enterprise sector accounting for 75% of jobs lost in the overall economy. Take the time to hire and onboard new employees and ensure that a lot of time is spent with them, so they understand the business and its objectives.
- Focus on a small beachhead. This is a market segment in which a business gains a dominant market share as well as the strength to attack adjacent markets with different opportunities. The temptation amongst entrepreneurs is for their product to have broad appeal initially so that they can build a big business overnight. Rather, they should start small and become the leader in a particular market before expanding into others. The earlier they can determine who their ideal customer is and zoom in on them, the cheaper it will be to build the business.
- Be coachable. Seasoned entrepreneurs are generally eager to share the wealth of experience they have accumulated, so budding entrepreneurs should join and take advantage of entrepreneurial networks. One way of doing so would be to plug into the network of other entrepreneurs supported by their funders.
Clarke concludes by saying, “Between 2010 and 2020, the contribution of South African entrepreneurs to the country’s GDP before taxes and subsidies increased from 18% to 40%. Now, with the economy possibly slipping into a recession, entrepreneurs hold the key to its recovery, but they urgently need support. One way that the private sector can help is through mentorship. I encourage other established entrepreneurs to step up and mentor the next generation of entrepreneurs.”
Established in Stellenbosch, South Africa in 2012, Skynamo is the leading field sales technology provider with close to 10,000 users at nearly 1,000 companies across a wide range of industries in Southern Africa, Australasia, the UK, Europe and the US. Skynamo’s field sales mobile app and cloud-based management platform are used by manufacturers, wholesalers and distributors with sales teams in the field, selling products to an existing base of customers. Skynamo integrates with a wide range of ERP and accounting software to improve order accuracy and fulfilment. Skynamo was named Sage ISV Partner of the Year for 2019 (Africa & the Middle East) and an Acumatica Certified Application and Customer Verified Application. Skynamo received $30million in funding from US based software investment firm Five Elms Capital in 2020 and forms part of the Stellenbosch-based Alphawave group of software and electronics companies, with more than 100 employees in South Africa, the UK and the US.
Submitted by Hook, Line & Sinker Communications