- Posted by: Administrator
- Category: Finance
Youth unemployment remains Kenya’s biggest socio-economic challenge. So enormous it is that it shakes the core of the country’s dominance as an economic powerhouse. Statistics put it that one in every six young Kenyans is unemployed. In neighboring Tanzania and Uganda, the rate stands at one in every twenty on average. Ask any Kenyan youth about their occupation and they would respond that they are either gainfully employed (in a job), or self-employed (taken to mean ‘business owners’). Often, they venture into self-employment for lack of employment opportunities. They undertake business with neither the requisite skills nor passion for it. Nonetheless, are those who are self-employed truly in entrepreneurship? Is there a line between self-employment and entrepreneurship?
It has to be remembered that entrepreneurship is a philosophy of sorts, a lifestyle. An entrepreneur would identify a challenge and consequently task himself to provide a solution. His main motivation is to fulfill a human need and alleviate a pain point. Despite the challenges they encounter, they keep on trudging on the path to their objective. Take for instance, Thomas Edison, who invented the light bulb. Approximately 999 times, he failed but never gave up. He said that each time he failed, he discovered one extra way of how not to do it. His consistency paid off at last. Additionally, let us examine Jeff Bezos, who for some days beat Bill Gates to be Forbes’ Richest Man alive. When he started Amazon, his dream was to provide a link between producers and consumers, and build the world’s largest online retailer! The business took six years of operation to break even. Facebook, the world’s largest social media platform, took five years before it reported a profit. Alibaba took eight years, while Tesla, the world acclaimed innovative automobile manufacturer, is yet to be profitable to date!
Coming closer home, Parapet, the region’s leading cleaning company, took three to four years to stabilize and post profits. While it may seem business, leadership translates to super profits, Business Daily too proves otherwise. The paper is the country’s leading business publication and yet, seven years after launch, it is yet to post a profit. Did the founders of these businesses give up since they were unable to recoup their investments in the short term? Absolutely not. In fact, with the continued negative feedback on their financial positions, they persisted and got motivated by the need to fill their identified society gap until when their businesses broke even. Hence, entrepreneurship is a philosophy, a calling of sorts.
On the contrary, those who take entrepreneurship to be a profession (self-employment) look forward to financial rewards or compensation. As such, they would get into business to enjoy some free time (or so they think), to express their bossiness around, and most popular of all, earn huge payoffs from the business! Some even start a business to be able to live a defined kind of lifestyle. To others, getting their hands into business is an express ticket to wealth creation. Nonetheless, this is getting it all wrong.
Entrepreneurship is about value creation. The sanctity of undertaking business is to enrich the human race. Entrepreneur’s mission in life is made complete by solving a human need. It therefore, cannot be a short-term affair as for the ‘self-employed’. Entrepreneurs go for the long haul. For instance, Coca-Cola has outlived its founders, more than a century after its invention. When the firm started in 1896, it sold nine servings per day in Atlanta. The founder passed on two years after inventing the beverage. Currently, the firm sells an average of 1.9 billion bottles daily across the globe!
In addition, entrepreneurs are risk takers who dare to invest in a venture in pursuit of their objective. They would not fear failure. Failing is just but part of the process of success. Whenever they encounter failure, they keep on working their passion to fruition. A self-employed individual is risk-averse, choosing to play safe with the intention of reaping big from their undertaking. Failure discourages them altogether.
Even more interesting, is the ability of an entrepreneur to flex with dynamics on the ground. He/she appreciates that there are constant shifts on the ground and as such, he/she is prepared to change in tandem with the shifts. This is the reason why those who take entrepreneurship as a calling do not give up. Their flexibility works to their advantage. For the self-employed fellow, their rigidity works against them. Like the dinosaurs of old, their rigidity causes them to fail due to their inadaptability.
How else can we explain the findings of a study by CB Insights, who undertook a post-mortem on 101 start-ups that failed recently? In this study, they found out that the major cause of start-up failure (up to 42%), is lack of a human need. Lack of capital only came second with 29% of subjects alluding this to their failure. This is interesting since most business founders blame the lack of capital as the cause of business failure.
The crux of the matter is the motivation for an individual to get into entrepreneurship. That is what determines whether a business will last or not. Of concern is the fact that all the mentioned businesses that have outlasted the times had one common denominator – their founders had the right mindset. To them, business was not a means to earn a living; it was a calling, a vocation. If we re-evaluated our motivation to get into business, we would reverse this rate of failure of businesses in our country and region and reap big from the ripple effect in terms of economic growth and sustainability.
So then, would you rather be self-employed in business or choose to be an entrepreneur? The better choice is quite explicit!
Michael Okinda – Business coach