Along with some of my colleagues at the Stanford Business School, I spent last week traveling to South Africa to meet with local businesspeople and politicians. While not exactly the crazy Spring Break involving beer and bikinis that some people crave, it was an extremely interesting week.
When Mike, Scott, and I go around the U.S. talking to small business people, we hear the challenges the little guy faces from regulations, the lack of available skilled employees, and large competitors. Those issues are multiplied in South Africa where the pro-labor government has put in place a set of labor market regulations that makes it very hard to hire people (so that the point of the laws backfire), the education system is so ineffective that nearly half of the working age population is functionally illiterate, and the country’s long-time reliance on large-scale industries (especially mining) have made the environment quite uninviting for entrepreneurs and other little guys. We heard all week about the importance of changing all this if the country is to revive its economy.
While it is unclear if and how the overall South African economy can be turned around and made more entrepreneur-friendly, I was very inspired by the small business people we saw making the best of their dismal situation in Khayelitsha. This township sits on theoutskirts of Cape Town. While Cape Town is beautiful and has many prosperous areas that look like American cities and suburbs, Khayelitsha is a collection of about a million Black residents who, despite having political rights they long wished for, still live in Apartheid-era economic circumstances (as this picture suggests.)
But there are many enterprising residents of Khayelitsha doing what they can to better their lot in life. For example, among the many hair care establishments I saw was this one operating out of a repurposed storage bin:
It seems unlikely that this business will ever scale up to be very big, but it’s nice to see an enterprising person finding a way to make a living while providing a useful service.
And this business tried to make some money while finding an upbeat way to sell a not-so-upbeat product:
As we discuss in the “Managing Your Brand” chapter of our forthcoming book, we talked to an American funeral operator who explained to us the importance of advertising in his business. But while the American funeral home focuses on TV advertising, TV is not widespread enough in Khayelitsha. So the funeral home there uses billboards instead.
I didn’t get a chance to sit down with a lot of small business people in Khayelitsha or elsewhere in South Africa. So someday I’ll have to go back with Mike and Scott when we get down to working on Roadside MBA, International Edition. But next time we’ll get the timing right – it was very hard to get updates on March Madness and MLB’s season openers in South Africa. Cricket updates were not hard to come by, however.
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