HOW TO GET STARTED IN SOCIAL ENTREPRENEURSHIP

 

I’m at the crossroad of teaching people to be more entrepreneurial in their career and life and 8 years in social entrepreneurship so I get asked all the time by confused students and mid career (even more confused) professionals how to get started in social entrepreneurship. I decided to write about it so I could structure my thoughts and hopefully help you move forward.

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1) Get inspired!

tart by reading and informing yourself — get to know more about the lingo, the trends, the challenges and the innovations through:

- Newsletters: A good list of can be found here. I used to read NextBillion and Business Fights Poverty, but I recognise many excellent ones on this list. There is as well a Social entreprise magazine online: https://www.pioneerspost.com/;

- The influencers (people or organizations): I personally recommend to have a look at where impact investors put their money for example;

- Books: plenty of books on the topic — a good list here

 

2) Be more precise

Social entrepreneurship to me is understanding that you are part of a community and society and wanting to have a positive impact of them. So yes, it is a wide concept:

- It is composed of many subsectors itself: health, education, energy, agriculture, impact investing, etc

- and it has all the jobs from marketing to strategy, HR to finance. Get inspired by browsing job platforms below the article

- finally people tend to mix up NGOs, social entreprises (impact before profit) and social businesses (profit before impact, self sustainable, not dependent on donations or on private or public grants to survive and to operate + profit reinvested in the business itself)

 

3) Know yourself (at least a bit) better

I spend time helping people navigate their career and really, the first step is always to spend time knowing yourself better, whichever sector you want to work in. In social entrepreneurship, you want to add these questions:

- Which group do you want to serve? Maybe a good way to start answering this is: are you more driven to impact individuals / organizations / or society around you? (I find the test from Imperative relevant around purpose)

- Which problems would you want to solve? Which frustrations do you have?

- What is impact for me? it seems that social entrepreneurship becomes a great place for people looking for purpose and impact but I find this dangerous > define the impact you want to have — who says being a chef doesn’t have an impact for example. Close your eyes and envision yourself having a positive impact > what does it look like?

- Why do I want to work in social entrepreneurship?

- Which environment do you thrive in? I here generally ask the question “would you see yourself more in village in Pakistan working for a tiny NGO or at the UN in New York?” — big or small organizations? social business or NGO? strategic or field work?

- What could be my role? you can be an entrepreneur, an intrapreneur, or an amazing implementer — there is space for everyone

 

4) Build a network

When entering a new field or / and looking for a job, it is crucial to build a network in order to get quicker insight but as well prepare the ground to be hired — yes, 85% of jobs are filled through some kind of networking so time to work on these skills! (pssst! I teach about this! contact me if its of interest)

- Find people you could talk to and ask them to either describe their jobs so you can see if its something you feel you would like, or tell you about trends from the sector;

- Go to events and get to know the players;

- If not based in a company, find a coworking space in social entrepreneurship such as the Impact hub and other social impact incubators could be good places to start. Paris has La Ruche or SenseCube to name a few.

 

6) Upskill yourself

- You can learn more about social entrepreneurship with online or offline classes. Online but in French, Ticket for Change has a MOOC for aspiring social entrepreneurs. Online but in english this time, ACUMEN has a good introduction to Social entrepreneurship and MIT a great course to learn about common challenges of global poverty. For more, I found a longer list of MOOCs on The Changer.

- Besides, there are actually specific skills you can learn depending on which subsector you want to get into. Start by looking at your profile carefully to see what is transferable. For example if you have worked in an investment fund, an impact investing role has a lot of common ground. Then do your research on which skills are missing from your profile by looking at people’s linkedin in positions you are interested in, or ask professionals and recruiters for insights.

 

7) Experiment

here is only one way to know what could be a good fit for you after all this, and it is to try for yourself. Now that you have spoken to people and understood the challenges and opportunities, and where you could fit — ask to get involved! Trying is not as hard as people think it is and it is all about taking little steps.

Start small:

- experimenting could be as small as going to a Makesense event and participating in a hold up;

- experimenting could be as well any type of freelance, consulting, interning, volunteering or experteering. Don’t be afraid to suggest it, it could be for a few hours per week for an organization. Be clear about your story, your ask and your skills, and then suggest it to organisations you have identified.

- If you want organizations to help you finding experteering opportunities, I recommend challenges Worldwide or MovingWorld.

 

8) Stop assuming, get listening!

This is one of the common thing i get frustrated about. I strongly believe that most of us under estimate how complex the problems we are trying to solve are (a MUST read article here), and how it is hard to land in a country and pretend we understand the populations we try to work with overnight. I see so many companies and NGO arriving and thinking they understand the populations or groups they target without spending enough time, without tracking closely how their products or service is received. Common occidental flaw.

So my advice is:

- think about who you want to target or serve and be ready to base yourself close (it should be a good motivation test too!)

- Be careful about working for a company that does not have a branch or entity close to its targeted population and that only sends people for a 2 days business trip. It has its limits. Yes, you might be able to do it in the future… but not when you start!

- Always always build products and services based on people’s feedback and data — Never about what you think problems are

A great TED talk to summarize the don’t assume and get listening mindset.

 

9) You still need support? Find the groups!

- There are plenty of organizations that will find you internships, volunteering experience and more. I personally prefer someone who has gone through the points above and contacted me on their own: It seems more resourceful and the market is competitive!

- There are programs as well that actually help you transition into the social entrepreneurship such as OnPurpose to get into an organisation or Ticket for Change to be an entrepreneur

- For one of one coaching and mentoring: Solene helps you online to create your own business: Creators for Good, and the amazing Julie does it in France in person (https://www.realidees.com/).

Would love from people to participate to this article and send their own tips so we can build a next version!

Thank you!

Cecile

 

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A FEW JOBS PLATEFORMS FOR SOCIAL ENTREPRENEURSHIP

CLEARLY SO http://www.clearlyso.com/resources/jobs.html

BUSINESS FIGHTS POVERTY http://careers.businessfightspoverty.org/jobs/

ANDE http://www.aspeninstitute.org/policy-work/aspen-network-development-entrepreneurs/careers

SKOLL FOUNDATION http://skollworldforum.org/jobs/?utm_content=buffer97867&utm_medium=social&utm_source=twitter.com&utm_campaign=bufferNEXTBILLION.NEThttp://www.nextbillion.net/jobs

IDEALIST idealist.org

MAKE SENSE http://jobs.makesense.org/

CSR CHICKS (UK) https://groups.yahoo.com/neo/groups/csr-chicks/info

THE GUARDIAN JOBS http://jobs.theguardian.com/environment/?guni=Section%20Front:crumb%20nav:Position5:Jobs

REWORK (US) http://rework.jobs/

JUST MEANS http://jobs.justmeans.com/

NET IMPACT https://netimpact.org/jobs

OMIDYAR JOB PAGE http://jobs.omidyar.com/

Social Enterprise Jobs Google Group https://groups.google.com/forum/?hl=en#!forum/social-enterprise-jobs

ECHOOING GREEN http://www.echoinggreen.org/tags/social-impact-jobs

ACRE http://acre.com/jobs

OPPORTUNITY KNOCKS http://www.opportunityknocks.org/

SOCIAL GOOD JOBS http://socialgoodjobs.org/

GREEN JOBS http://www.greenjobs.net/

COMMON GOOD http://commongoodcareers.force.com/careers

GLOBAL JOBS https://globaljobs.org/

DEVEX https://www.devex.com/jobs

THE CHANGER http://thechanger.org/

 

NOT ALL ENTREPRENEURS

This article was published in 2014

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The MFA – a centre for amazing “necessity entrepreneurs”

When I started my career, one of the first books I read about Development was the Professor Yunus famous’ book Banker to the Poor on Micro-credit and how it could play a role in eradicating Poverty. The message that I could not get out of my head is that every Human Being is an entrepreneur. I simply could not stop thinking about it! I spent some time wondering why… oh why I was not that entrepreneurial, how I could palliate to this gap in my life and really how I could become an entrepreneur anyway, since I thought it was the only way to be or be successful.

Well, it took me a few years of experience in Development (and probably a few more years of age too simply) and I finally accepted that not only we are actually not all entrepreneurs, but IT IS COMPLETELY FINE! I discovered that personally, I am a strong implementer, and there is no shame to the word: I can take a really good idea from concept to life, make it happen and grow it. And I can be actually really successful doing it too! Yes, entrepreneurs are needed in our society, but implementers are just as needed.

In 2012, after 4 years in India and being based out of a luggage for a year crossing continents with work (with a base in Kenya), I was looking for a new exciting challenge to implement and I wanted it to be in South Africa.
Decided to meet everyone I could, I got in touch with two incredible people: Tracey Chambers who is the CEO of The Clothing Bank (http://www.theclothingbank.org.za) and Egbert Wessels who runs the Business Place Philippi (http://www.thebusinessplace.co.za/Philippi/index.htm). After years of experience in creating, supporting and growing entrepreneurs in South African townships, they had experienced that 80% of the people they help in their respective organizations are in actual fact “necessity entrepreneurs”: they aim at being sustainable and supporting their family but clearly lack entrepreneurial attributes. To answer this gap, Tracey and Egbert both decided to create a centre that would answer the need of these necessity entrepreneurs and called it the Micro Franchise Accelerator, or MFA (http://www.changemakers.com/powerofsmall/entries/microfranchise-accelerator).
It simply clicked in my head and I fought to get to run the project: an organisation for great implementers that are not entrepreneurial – could not be better matched to my convictions!

The MFA caters perfectly to “necessity entrepreneurs”: it provides a portfolio of aspirational container-size business models that they could buy into and apply to succeed. In the MFA’s portfolio, each business model is proven, commercially viable and the franchisees have to be able to make R5,000 profit from it, which is considered attractive in the townships of South Africa. The business models have to be standardised and replicable at scale as well, so the MFA can actually be a real solution to the South Africa’s problems like the 25% of unemployment, the lack of skills or the education gap.

I have been running the MFA for about a year now and we have started the implementation phase in 2013. By now, I have 6 amazing (and happy!) implementers (that we call franchisee) running 2 of our proven business models in containers in the townships here in South Africa. All of them are making over R5,000 profit monthly too! We are starting rolling-out the models and should have a total of 21 franchisees by the end of 2013.

So are we all entrepreneurs? No! Can we still be successful? Hell, yes !

MFA’s facebook page: https://www.facebook.com/pages/The-Microfranchise-Accelerator-MFA/116893768465576

THE CHALLENGES OF RUNNING MICRO BUSINESSES

An article published in 2014

 

 

The challenges of running a small business in the Base of the Pyramid are numerous and under estimated. I decided to write a blog post to raise awareness on these challenges and prepare us that work in support of micro entrepreneurs to do so more effectively.

At the Micro Franchise Accelerator (MFA) here in South Africa, we spend a lot of time analyzing these challenges to come up with effective solutions and not solutions assimilated from the top down. I have seen these challenges across various countries, but here I focus especially on South Africa.

 

Here are the main challenges that I see and hear from:

1)    Education: Not only access to education is scarce, but on top of this, the public education level is generally poor. Our microfranchisees have often not even gotten to a Matric level (end of high school exam) and therefore lack basic tools when they start a business, such as numeracy to name one.

2)    Lack of specific skills: trainings and certifications are hard to access too! They are expensive, hard to find, and people struggle on having an idea of the quality of what they get.

3)    Lack of equipment. The two main challenges here are that machines are expensive and sourcing them is a challenge. I got to learn that people in townships here actually and have no means of knowing where to simply source this equipment. Yes, they all know each other and are resourceful, but that does not give them much choice since communities are small or option, even for second-hand machines. People often end up with very expensive and poor quality equipment. Think about us sourcing from the internet and how much choice it gives us!

4)    Access to financial mechanism(s) – and it is true globally, though in South Africa compared to other places like India for example, micro finance is not widespread. Micro entrepreneurs (or assimilated) battle to get start-up capital on the one hand, or working capital to grow on the second hand.

5)    Premises: this is one of the challenge I hear the most! People in the townships are as aspirational as you and me and want to be able to buy or rent nice premises. The additional challenge I perceive here is as well that buying/renting premises right from the start adds a strong financial burden on their shoulder that they are totally oblivious to!

6)    Lack of financial knowledge: I am always shocked during record keeping sessions with a new microfranchisee to realize how much they have no understanding of their financial situation! They have often no idea of the costs of their products of services: how much is this scone that I am selling is actually worth? How much is my time worth? And overall there is no clear picture between money in and money out, reducing the possibility of making a profit or saving. Similarly, managing a cashflow is a struggle. In low income communities, people pay very often on credit and one would need very strong cashflow understanding and planning to cope, which people have never been trained on.

7)    Security: this sadly prevails in South Africa and is one of the main challenges for micro business owners. In townships, your chances of getting your money, assets, stock, or all of the above robbed are incredibly high. In actual fact, I have not had one of my microfranchisee who has never been robbed in his “business life”. Moreover, the same people that are the most at risk do not have access to insurance and therefore they literally loose everything and might not be able to start over.

8)    Trust: staffing a micro business is actually really hard even for microbusiness owners that operate and know well their community. They find it hard to recruit people they can trust and there is no mechanism or services that helps them doing so.

9)    The last challenge is micro business owners’ environment. First, there is no difference between private and professional financials. But on top of this, emergencies are common in low-income communities and there is nothing like stability. As a result, I see strong microfranchisees going in the red because someone died in their family and they have to go to another part of the country, therefore not work for a while, and pay for funerals. Every life event impacts a micro entrepreneurs’s financials and has the potential of drowning the business: children getting sick, a sibling needing support or any supply discourse. Overall, savings are tough in these conditions, and people remain stuck in a poverty circle.

 

Starting a business is hard in any case, but at the micro level, access to anything is harder. Being able to locate which service to get and which quality is this service going to be is hard, whether it is a financial service, training service, or buying any equipment. Imagine a world where you cannot use the internet or information centers to research what you need and try to picture how hard it would be!

On a positive note, once you have identified the challenges of micro business owners, it is easier to think of solutions! At the MFA for example, I spend monthly meeting sessions brainstorming with my microfranchisees on how to solve these as part of my support role. They tell me what is the situation on the ground and I tell them what are potential solutions.

I have as well co-started a microfranchise association in South Africa where actors in Microfranchising come and workshop concrete solutions on these challenges and supporting their microfranchisees more effectively.

WHAT IS MICROFRANCHISING?

This article was published from South Africa in 2014.

 

Picture a happy woman running a small business from home. Her eyes are shining of motivation since she is running her dream job. She has a nice logo on her door, clean premises and a beautiful little home Nails Salon where she does 3-4 people per day, from her community, and makes about USD 500$ per month profit. With this she can feed her family and save some money every month. This is what microfranchise can be!

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Now let me take a step back and depict the situation.

In low-income communities, people struggle to get stable jobs, to get training and grow their skills, to get access to education and to source products to give a few examples. There are not many options to earn a living. A lot of these people survive by being what we call “necessity entrepreneurs”: they never planned or were looking to be entrepreneurs, but became self-employed out of life circumstances and necessity. 

Even if they lack entrepreneurial flairs, these people can still be good managers at the end of the day and can run a business if you make a few things simpler for them and provide them with support.

 

So what can microfranchise do?

Well Microfranchise is a great solution! It is about making the starting and running a micro business easier for the ones who struggle at the Base of the Pyramid. Microfranchise reduces the challenges faced by micro entrepreneurs. It designs small  and proven business packages, ready to use, for self-employed individuals, and then support them with a set of services such as training, mentoring or marketing to name a few.

In Microfranchising, people are paying to buy into this opportunity, but it is important to work around financial mechanisms to make the microfranchise affordable.

Overall, microfranchising offers an effective and powerful dual solution: a proven business-in-a-box formula that reduces the risk for the necessity entrepreneur, and a real solution to unemployment at scale for countries where unemployment is thriving.

In South Africa, I run the MFA (the Microfranchise Accelerator) in Cape Town. We act as a catalyzer of microfranchise opportunities for the low-income market in South Africa. Our vision is to be a center that offers a portfolio of micro business-in-a-box opportunities to match the needs and aspirations of these necessity entrepreneurs. All micro businesses are aspirational, proven, commercially viable, can generate at least R5,000 profit and are replicable at scale. Finally, all micro entrepreneurs have to be sustainable and independent after 2 years.

THE 5 PILLARS OF MICROFRANCHISING

This article was published from South Africa in 2014.

 

A few years in the space gave me enough insight to put a methodology of the basics you need in microfranchising from experience.

At the MFA we define success for our microfranchisees as a monthly net profit over R5,000 and them being completely independent after 2 years.

To achieve these indicators, we have built a full methodology that can be described in 5 key factors of success:

The first factor of success is an exhaustive micro franchise identification process. The MFA selects franchise models that must be proven, commercially viable, replicable at scale, aspirational and allow each franchisee to make a monthly profit of at least R5,000. The MFA tests and researches of course each model to ensure that all criteria are respected and practical viability in the field.

A tight recruitment process is the second factor of success: benefiting from the strong 15 years cumulated experience of TCB and TBPP, we have built recruitment processes and manuals that match the most motivated and skilled franchisees for each opportunity. The candidates are asked, for example to run market surveys, write small business plans and prove their interest in the business chosen by demonstrating experience and resourcefulness.

The third factor of success is to provide the candidates with training. Training involves induction training at the beginning of the program, followed by an on-going training curriculum with topics such as business skills, financial skills or even life skills. Each franchisee is as well trained on the franchise processes and has to work in one of the existing franchises for a month before starting their own.

The fourth factor of success is mentorship. Once the franchisees start their activity, they are assigned mentors that will go through performance management and record keeping on a monthly basis, support them by setting their targets and build action plans to reach targets.

Providing the network of franchisees and the whole ecosystem support through a range of additional services is the fifth critical factor of success. The MFA provides a range of services for 2 years to make sure that franchisee can focus on their core business and ensure long-term success of each franchisee. Feedback mechanisms to share best practices are as well in place to gain from franchisees knowledge and constantly improve the franchisees performance.

 

THE DRIVERS OF CHOOSING A MICROFRANCHISE MODEL FOR A POTENTIAL MICROFRANCHISEES

This article was published in 2014 from South Africa.

 

When you design micro franchise models, I recommend starting by analyzing two levels of the potential demand of this model:

  1. The demand from the market: is the market interested in the new product or service?
  2. The demand from the potential micro entrepreneurs: is this micro franchise attractive for someone unemployed or self-employed to take on?

The first one is pretty straightforward. I find the second one particularly interesting because it tends to be looked over, whereas it is be just as important and harder to evaluate.  What will make potential micro franchisees choose or not the model you have just designed?

To take a practical example, I have started conducting surveys within our organization (The Clothing Bank) and asked a few questions. The survey can be as simple as listing a few questions like I have done below:

“When you are looking for a job or choosing an opportunity, what are the most important criteria in your mind?”

…….    How much money can it generate?

…….    Is it my dream job?

…….    Do I have the skills to do this job? (have I received training or learnt)

…….    Is it cool / well perceived to do this job in my community?

…….     Is it an easy job to do?

…….     Other: ………………………………………………………………………..

Results are hard to analyze since people are not always conscious of their decision. So I added a few comparative questions that would highlight any discrepancy and help us read through the results.

 

Here are the results I collected from our community in the Western Cape of South Africa:

  • People do want to do what they want to do and have dream jobs. Even though this dream might be biased by their environment and what they perceive as success.
  • Employment or stability always win
  • Money remains the biggest driver as per the statistics: 40% of people would choose money over everything else
  • The more people are out of poverty, the more they tend to want their dream job, even if it earns a bit less
  • In order, people have ranked as first drivers money, then dream job, before skills, coolness and hardness of the job

One of the limits of this quick survey is people’s cultural bias. A micro franchise has to be aspirational, which is generally unconscious and can depend on a few factors: how well are these job and sector regarded in your community, how powerful the franchisor’s brand is, can you make a good and growing income, etc.

Now the bottom line is that the only way to confirm if your micro franchise model will be in demand is to ask who is ready to commit and put a deposit down – and wait to see the deposits in the bank to measure how attractive your micro franchise is!

 

Presentation of the Microfranchise Accelerator

Presentation of the Microfranchise Accelerator in South Africa. 2012.

 

 

BOTTOM-UP OR TOP-DOWN APPROACH IN MICROFRANCHISING

This article was published from South Africa in 2014.

 

I hear too often from people in “developed countries” jumping on me and telling me they need to give me their ideas on which microfranchise would for sure work. I hear too often about products, businesses and solutions that are designed by us, sitting in a completely different reality, and for people we don’t know or understand. But we keep being so sure it would work. 

What I have learnt being based in the field for a few years is to be surprised and try and be open to different realities. I remember myself explaining in a fervent way to my microfranchisees that they should absolutely sell sweets as an extra to make 100 extra dollars per month. I ended up so surprised when they did not do so. It took me a few months to face the reality: they were not interested in hassling to make an extra 100$! Another example was designing a flat pack furniture micro franchise model. Here again, we were so convinced that our model was flawless – but we had forgotten that local competition of carpenters, men at home that can build themselves for a lower cost. 

 

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In micro franchising so far, I have seen top down approaches and I am trying to push and focus more on bottom-up approaches.

Top down is attractive because it generally comes from a bigger organization or corporation that therefore can invest in developing the model and support high set up costs and micro franchisees. Bottom up works because it comes from people that are part of and know very well their communities. 

To read about this in detail, I recommend the book about J. Fairbourne: “MicroFranchising: Creating Wealth at the Bottom of the Pyramid”. 

 

I think we can go about microfranchising in a third way. There is definitely to be learnt from the top. My microfranchisees put a ceiling on themselves and have at times become too reasonable in their dreams. After all, they are not entrepreneurs and not visionaries! They cannot dream big enough and picture that they could own a swanky professional hair salon in the townships employing 3 people. In this regard, a top approach can widen their vision and help them set standards that have not been set yet.

The bottom up brings to the table the localization part: how to adapt the model to a community we at the top do not know. But the bottom up makes sense only if you really involve the community in the making of the model: their aspirations, their background, their cultural framework and model they can understand and work with.

 Lets take a bakery and illustrate this example. The top approach can bring new standards: a cleaner baking environment, more efficient processes, cheaper and straightforward supply systems.

The bottom-up approach adapts the model locally. Here I can only provide a few examples such as: a simple training around the financials of the business (how many breads you offer and how much they cost you to illustrate what I mean), selling the products in smaller format at adapted prices, different breads and delicacies that the community wants (and not me sitting in the big city hundreds of kms away) and involving the community in developing a brand that is perceived as successful.

 

That’s why I struggle giving ideas of a perfect global microfranchise that could be replicated everywhere. I think in microfranchising, as in franchising, should generally be adapted and developed locally.

I believe that we should definitely start at the community(ies) targeted by understanding business models that are aspirational, commercially viable, but as well make microfranchising sense. Then only, we can go out there and talk to bigger corporates that would want to get involved in the space, whether they already are working in the franchising business or not, and work together on adapting a model with their input to the low-income market.

Let me give another example here: our nail Salon. We knew and had validated through focus groups that there was a strong demand from self-employed women for Beauty related jobs. We therefore approached a big beauty franchise in the country and showed them the model we had developed, asking if they were interested in participating. They indeed were and we co-developed a model that would be a great beauty franchise with high standards, but adapted to township markets.

 Micro franchising should thrive being at the intersection of the two: top down and bottom up. It should be a dialogue between corporates that want to get involved, but are ready to adapt and learn from the low-income communities they are trying to reach.

 

More here on this video: https://www.youtube.com/watch?v=iHFulG5NkoY

 

GLOBAL ENTREPRENEURSHIP REPORT AND HOW TO SUPPORT MICRO ENTREPRENEURS TO BE MORE SUCCESSFUL?

This article was published in 2015 from South Africa

 

The GEM (Global Entrepreneurship Monitor) report is a study about different aspects of entrepreneurship published every year. The reports can be found there: http://www.gemconsortium.org/report

There was not as many Emerging Markets (here being covered under the terms factor-driven markets*) yet interviewed as North American and European, but it is still a good start to have a look at country profiles and differences.

The GEM report has a lot of information, but I chose to read it with the angle of learning more about how do micro entrepreneurs perceive themselves and their challenges in Emerging markets.

Entrepreneurship

GEM chooses this definition of entrepreneurship: “any attempt at new businesses or new venture creation, such as self employment, a new business organization, or the expansion of an existing business, by an individual, a team of individuals, or an established business”

In the 2014 report, GEM builds a conceptual framework based on three components to better understand the entrepreneurial energy in any economy:

  • Individual attributes – Note: obviously, the bias of the report is that it is subjectively based on perception from the individuals themselves and therefore for example strongly dependent on context, but it is still a good source of information.
  • Social values – which is how society values entrepreneurial behavior
  • Entrepreneurship indicators

 

Motivation for starting a business

Motivations to get into entrepreneurship, as I spoke in other blog posts here, are twofold:

  • The necessity-driven entrepreneurs who have no better options to obtain resources for living,
  • And opportunity-driven entrepreneurs

The highest number of necessity-entrepreneurs comes from Africa and countries that have a difficult economic situation such as Greece. In the Emerging Markets sampled here, necessity entrepreneurs represent about 26% on average of the total number of entrepreneurs. (chapter 2)

Individual attributes

GEM takes 4 individual attributes sampled here are: individual perceptions about opportunities in their immediate environment; capabilities to act entrepreneurially (required skills, knowledge, experience); entrepreneurial intentions (% of individuals who expect to start a business in the coming 3 years) and fear of failure (apply only to those who perceive opportunities).

Entrepreneurial intentions are higher in Emerging Markets which highlights the fact that starting a venture is dominant if there are not many (or enough) other options to earn an income.

In Emerging Markets, the biggest personal hurdles that people face to start businesses are a) the perception of their capabilities followed by b) the perceived opportunities in their immediate space. (chapter 2, figure 2.3). This information really helps on how to support better micro entrepreneurs. It should help on how to support better micro entrepreneurs.

 

For lack of capabilities, I would recommend asking both the concerned entrepreneurs and incubators in the region to grasp the gaps well before starting any support program.

For perceived opportunities, it is interesting to me since it is one of the clear challenge from necessity entrepreneurs whom I have seen in emerging markets simply lack the capability to see opportunity around them. One can address this issue with for example a microfranchising support program, a center that provides a few different business-in-a-box, or courses that focus on developing this trait in necessity entrepreneurs.

GEM does a great job at giving an overview and comparison between countries, but I still have many questions on entrepreneurs, non-entrepreneurs and micro-necessity-entrepreneurs, such as:

  • Could we try and measure individual attributes more objectively (not on perception)
  • How many of the necessity-entrepreneurs would rather be employed?
  • Could we measure other differences between necessity-driven entrepreneurs and opportunity-driven entrepreneurs?

 

*Markets that compete primarily on the use of unskilled labor and natural resources, companies compete on the basis of price as they buy and sell products or commodities.