The Red Car and the Domino Effect (Part II)

Out-of-the-box questions require out-of-the-box thinking. Out-of-the-box thinking requires out-of-the-box knowledge. Out-of-the-box knowledge requires a positive, global mindset.

Around this time last year, an out-of-the box question was posed, “How do we attract Venture Capital (VC) into Eswatini to create jobs for the youth?”

As luck would have it, London-based Zimbabwean billionaire businessman and philanthropist, Strive Masiyiwa, recently did a four-part series on venture capital in his Facebook page with a following of over 6 million entrepreneurs globally. His latest article, “Why does a VC invest in a Startup?” explains and advocates for domestic venture capital mobilisation.

Eswatini is not different from other African countries, whose entrepreneurial ecosystems are yet to attract venture capital funding or even better create a vibrant domestic venture capital industry.

As Strive puts it, “There is potentially enough domestic capital in every African country for a successful Venture Capital Fund that could help thousands of entrepreneurs grow their businesses into huge multinational companies!” The purpose is simple: creating wealth and jobs for all.

From afar, VC funding looks like a high-level, theory-based talk when thinking of a small country of 1.2 million people, don’t you think? Some would argue that it does, but for me it’s a big “NO”. Domestic venture capital that Strive is advocating for is not only possible for Eswatini, but it is a must – of course, complemented by other VCs with deep pockets.

But how do we get there? The answer lies in spotting the Red Car. What Red Car?”

The “Red Car Theory” originates from the concept of selective attention in psychology, essentially stating that once you start focusing on something specific (like a red car), you begin to notice it more frequently in your environment, even if its actual occurrence hasn’t changed. This is because your brain is now actively looking for it.

To illustrate this further, imagine yourself about to buy a car that is red in colour. Suddenly, you will start noticing red cars everywhere. This is not because there are more red cars on the road, but because your mind is tuned to start noticing them.

Last week, one of the South Africa VCs, Tafara Tsoka, flew to Eswatini under the auspices of Pinaco & Co and Youth Enterprise Revolving Fund – Eswatini to see the “Red Cars” we believe exist in Eswatini. Our “Red Cars” as the Kingdom are high-growth startups that may one day become unicorns (privately held startup companies valued at over US$1 billion).

Mr. Tsoka, a highly experienced global investment professional, met with Chief Executives from various entities including Youth Enterprise Revolving Fund – Eswatini, Eswatini Stock Exchange, Royal Science and Technology Park, Eswatini Energy Regulatory Authority, SNG Grant Thornton Eswatini, Small Enterprises Development Company (SEDCO), Eswatini National Industrial Development Corporation ENIDC, Pinaco & Co and STREEC – a renewable energy project in Nhlangano.

A key highlight of his 4-day visit was a Venture Capital Masterclass for Eswatini entrepreneurs held at the Royal Science and Technology Park which covered the basics of venture capital, actionable strategies to prepare for funding, venture capital’s role in tech development, and Eswatini’s potential for venture capital investments.

This little light of ours – we are going to let it shine until VC firms spot the Kingdom of Eswatini, the “Red Cars” therein and the potential of one big startup success story that would have a domino-effect on the entire African continent.

The term “domino effect” is an analogy to a falling row of dominoes – a principle rooted in the idea that one action can initiate a sequence of events. In the context of entrepreneurial ecosystems, this could mean a single positive change or decision can set off a series of reactions that propel startups forward.

To set off a series of positive reactions in our entrepreneurial ecosystem, Eswatini needs three out-of-the-box interventions;

1. National Innovation Strategy – to articulate the vision to make Eswatini one of the most innovative small nations in the world. This could include prospects of building Eswatini Innovation City.
2. VC Fund(s) – setting up domestic venture capital funds to fund innovation. One of such could back women-led climate-smart businesses with socio-economic returns.
3. Startup Ecosystem Ranking – conducting a health check of the Eswatini Startup Ecosystem, prepare the ecosystem for listing in the Global Startup Ecosystem Index, produce annual Startup Ecosystem Reports and improve country’s ranking in the Global Innovation Index.

TO BE CONTINUED…

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Note: In case you missed Strive Masiyiwa’s articles on Venture Capital, here is the link.

• Venture capital series: Why does a VC invest in a Startup?
• How to get VC funding: the biggest thing you should know.
• Before you can get VC money you need to understand how they work!
• How African countries can enable high-growth entrepreneur-led businesses that create wealth and jobs for all, with domestic venture capital.
• How African countries can enable funding of entrepreneurs and grow unicorns.