Developing the Entrepreneurial Spirit in Ghana - Part III

By
William Yaw Adufutse, Ph. D.

From all my readings on Ghanaweb it appears everyone wants the government to do everything for every Ghanaians. University graduates want the government to create jobs for them; they want to be employed by the government. That however does not work and, should not be the case. Explore the talent within you. Find a niche that is not being explored, and work it out. Learn to be an entrepreneur. I gave some examples in my previous articles about young entrepreneurs who, in their 20s, created facebook, PayPal, and many other organizations. I mentioned that the role of a democratic government is to create laws, and environment that are conducive to creating and running businesses. It is businesses, built by entrepreneurs, which employ workers. Let me expand on some of what Ghanaian entrepreneurs should be doing to promote their enterprises starting with a recent example.
Snapchat is a typical startup organization. The company was started two years ago by the entrepreneurs, a 23-year-old Evan Spiegel, and Bobby Murphy. Recently, Facebook which was started by another young entrepreneur, now in his mid-20s offered to buy Snapchat for $3 billion but founders turned it down. Highlight the link below, copy it, paste it in your browser and read it to motivate you about entrepreneurial spirit. If these young people can do it without startup money, you too can do it. It may not be on the scale on which they did it but you will succeed: http://www.dailymail.co.uk/sciencetech/article-2507136/Snapchat-turns-3-billion-Facebook-offer-hopes-receive-higher-bid.html
Entrepreneurs, who are also known as founders, are the engines that drive economies such as that of the United States of America. When discussing entrepreneurship, Silicon Valley comes to mind where in the 1970s through the 1990s, several technology companies came into existence through the efforts of enterprising entrepreneurs. Entrepreneurs are innovators, hardworking individuals, and in many cases risk takers (Feld & Mandeldon, 2013; Wasserman, 2012). Their risk taking leads to failures on numerous occasions but eventually success. It is for that reason that Wasserman’s statement “entrepreneurship is a battle, most casualties stem from friendly fire or self-inflicted wounds” (2012, p. 3) is true. It is estimated that 65% and more of entrepreneur and their entrepreneurial activities fail within few years of their organizational activities.
Some researchers attribute the sources of some of the entrepreneurial failure to the startup management team. Others attribute the failure of entrepreneurial activity to personal issues among the team. Clearly the great majority of the problems are “people’s problem” (Wasserman, 2012). The problems begin right at the inception of the start-up organization and continues throughout the stages of the organizational development. Some of these people’s problems have to do with the entrepreneur’s inability to strike a balance between control of the organization, the necessity of building a solid financial value which is attractive for investors, and as Wasserman (2012, p. 4) identified, “maintaining a grip on the steering wheel.”
Some entrepreneurs who toiled so hard with their blood and sweat to innovate or build an enterprise, become so passionate and optimistic about the organization that they become blind to the economic realities of business and the general outlook of the economic outlook for the market in which they operate. Silicon Valley once again provides a good example of what can happen at the height of the technology revolution. Some entrepreneurs who continued to nurse the enterprise as their baby, and closed their eyes to the economic realities of the environment, suffered great losses when the bottom dropped off the technology industry in the late 1990s.
The discussion above provides food for thought for prospective, and current entrepreneurs to be cognizant to the fact that there are issues that have to be thought through carefully when contemplating embarking on being an entrepreneur. There should be an awareness that the life of the entrepreneur, the innovator, and the founder is not one that is led in isolation. Neither, can the entrepreneur be the sole driver with hands on the steering wheel all the time. Willingness to bring others on board and learn from them is an essential hallmark for success.
The Team
Whether the organization is small, or large, successful entrepreneurs have teams that they work with. There are the lawyers who provide legal direction as well as handle important corporate documents for the founders. There are also the Venture Capitalists (VC) who provide financial resources with equity position in the organization. There are other associates some of who are co-founders, or analysts and the like. There are teams for special projects within the organization. There are several different types of Venture Capitalists. Some fund small to mid-size startup organizations while others fund only large organization. Venture capitalists can help provide financial resources, and in some cases guidance that will help the entrepreneur succeed.
An entrepreneur should research the subject of venture capital and decide well ahead of time which type of venture capitalist to seek for funding option. Word of mouth from friends who have used venture capitalists on their projects is a good way of getting to. The type of resources the entrepreneur wants from the Venture Capitalist, financial only, or both financial and guidance, should be thought through carefully and the financial amount to be determined with some type of accuracy.
It is noteworthy to remember that many startup organizations did not go the venture capital route. They did it with their own resources that is on their own bootstraps until the enterprise is well on its way. With a track record of success, they go the bank financing route. With that strategy, they avoid the equity position that a venture capitalist will want.
As the we continue with this conversation in the future, we will discuss several aspects of entrepreneurship such as how they go about finding the various sources of funding, the type of team that can help the enterprise succeed, and when to let the enterprise go.
References.
Feld, B., & Mendelson, J. (2013). Venture deals (2nd ed.). Hoboken, NJ: John Wiley & Sons Inc.
Wasserman, N. (2012) The founder’s dilemmas. Princeton, NJ: Princeton University Press.

Dr. William Yaw Adufutse is from Anfoega in the Volta Region, and a Professor of Leadership and Organizational Change in the US. He can be reached at adufu1wy@yahoo.com