The Awethu Project: A big vision for growing small businesses
- Theresa Mallinson
- 22 Jun 2011 06:41 (South Africa)
Yusuf Randera-Rees and Ryan Pakter founded the Awethu Project in April 2010. Fourteen months later, the project is supporting four hand-picked young entrepreneurs, has R3 million in funding from Discovery Holdings and has just won the prestigious Echoing Green social entrepreneurship fellowship. If things go according to plan, this is only the beginning. By THERESA MALLINSON.
Youth unemployment is, unequivocally, one of South Africa's biggest problems. In Statistics SA's last quarterly labour survey, the number of unemployed people between 15 and 34 stood at 3 million – and that's not including discouraged work seekers, or those studying.
When Yusuf Randera-Rees moved back to Johannesburg after studying and working overseas, he decided to contribute towards creating a solution. The premise of the Awethu Project is simple: Look for entrepreneurial potential in young South Africans who've never had access to systemic opportunity and develop that. “We think there's talent equivalent to anywhere in the world in Johannesburg, and across South Africa,” says Randera-Rees. “This applies to any developing country where the social system has not addressed the aspirations of the majority.”
Awethu's method of identifying this potential is what differentiates it from other similar initiatives. “We wanted to create a model that's not using traditional metrics... A model that's not looking if you have a business, if you have the financials, if you have a matric,” says Randera-Rees. “If everyone had all that stuff, there wouldn't be a problem in the first place.” So, the only criterion is young South Africans who show entrepreneurial promise through Awethu's talent-identification process.
Enter Chris Pienaar, Lesika Matlou, Sekhabile Legoate, and Nketsi Moorosi. They're Awethu's first four high-impact entrepreneurs, selected from more than 1,700 applicants. They cracked the nod by doing the best in a battery of cognitive and psychometric tests – in fact, Randera-Rees used the example of Moorosi's test score in his pitch for the Echoing Green fellowship.
“In poor communities in Africa, we are wasting world-class entrepreneurial talent that should be driving the continent's development. I have here an internationally benchmarked cognitive test, taken by Nketsi when he applied to the Awethu Project. His score on this test placed him in the top 1% of cognitive ability in the world, but when he applied to Awethu, he was running a single taxi in a Johannesburg slum. Four months later we've invested in him, he's in our incubator and he's already generated revenues of $15,000 in an online IT retailer and is employing two people.
“We have a number of similar success stories, but there are thousands of entrepreneurs across Africa like Nketsi who are constrained simply by lack of formal training and inadequate access to resources. The Awethu Project aims to identify them and provide them with the training and resources they require, so they can lead Africa's development.”
Watch: Yusuf Randera-Rees' Echoing Green pitch (8:16 to 9:20)
Randera-Rees says he had a few concepts for the one-minute pitch, but figured that the judges would be swayed if he included concrete numbers. He was right – he's one of 15 Echoing Green fellows this year, out of an original 2,854 applicants, and 27 finalists. The award comes with $60,000 in seed capital, but more important for Randera-Rees is the benchmarking aspect.
Echoing Green is a world-renowned organisation focusing on social entrepreneurship and the fellowship programme has been running for 25 years. “What [the fellowship] really means is they looked at all the new ideas about social entrepreneurship and social impact in the world right now, and they chose ours as one of the most promising. The most important thing about it is that international stamp of recognition,” says Randera-Rees. “We can now, hopefully, raise a whole lot more resources to have a real aim at working on this problem [youth unemployment].”
Randera-Rees is returning to New York in July to attend a new fellows workshop, where he'll be meeting with several Echoing Green funders. And the day he won the fellowship, the Skoll Centre for Social Entrepreneurship in Oxford contacted Awethu and invited Randera-Rees to speak at the Emerge conference in October, which focuses on all the best ideas in social entrepreneurship.
But while growing the Awethu Project's international profile and funding will be crucial to its ultimate success, for now it's still about proving the concept. There's a familiar start-up vibe at the project's offices in the Main Change building in the Maboneng District: cheap furniture, blackboards covered in semi-legible ideas, and a scattering of young people typing, talking, and buzzing with ideas.
Moorosi now runs Free Oranges – an online retailer selling technological equipment. “We sell computers, printers, anything information-technology related,” he explains. “It's been a challenge, but a good one. I've been learning a whole lot of things about retail I didn't know: How to deal with supplies, looking for supplies, marking up my price properly, making sure it's a competitive price.”
The four entrepreneurs currently in the incubator stage receive start-up capital of up to R50,000, accommodation, a stipend, office space, technology and admin support. Even more importantly are executive coaching and mentorship, and the opportunity to study a course in advanced entrepreneurship training at Wits Business School. As Randera-Rees says: “Chris [Pienaar] was selling beer in Alex, and now we're asking him to be a world-class entrepreneur. It's about practising the right kind of mentalities to be successful.”
Pienaar is responding well to the challenge. His business, a bread-delivery service called Straight to Your Door, has already hit its first profit target of R6,000 a month. “We're trying to reach our target market by going directly to their homes,” says Pienaar. “We're focusing on bread for starters, from then on we're going to be moving on to other products.”
A lot of research went into conceptualising the Alexandra-based business, and finding out what the target market wanted. “The nice thing about being in Alex is that the houses are close to each other. We actually went door-to-door and we told them about our product,” says Pienaar. “It's more convenient and cheaper.”
Watch: Yusuf Randera-Rees talking about the Awethu Project at TEDx Stellenbosch, 2010
But there's nothing easy about starting your own business, however much research you put into the launch, and the entrepreneurs are learning this through experience. “The one major problem we encountered was something we never thought we'd have a problem with,” Pienaar says. Straight to Your Door is looking for more salesmen, but – counterintuitively in a country with such high unemployment – has struggled to find enough applicants. “People aren't really attracted to that type of job. So that's prevented us from growing the way we want to,” Pienaar says. Nonetheless, he already employs two people to help with deliveries and recently gave a talk in Alex to attract more recruits.
Matlou's business is tourism, and he's formed a company called Ek Sê Tours. “What I want to do is tell a different story about Joburg; right now most tours are telling a single story,” he says. “If you just hear about Hillbrow, all you hear is about the crime. But if I had to take you just three blocks you'd probably bump into 10 different nationalities. So it's about showing the positive side of Hillbrow.”
But before he takes on Hillbrow, Matlou is starting with Soweto. “What I did was interview tour guides. I want to reinvent the Soweto tour, as not always the same, regardless,” he says. “When I start it's going to be international tourists, but even local people are welcome. Because I'm trying to change the perception of how people see Joburg from outside.”
The Awethu philosophy is all about testing your ideas on the ground before launching full-scale into the big projects. So, while Matlou's been conducting research, finding guides and constructing a website, he's also been getting some practical experience under his belt. “What I'm doing right now is taking people to events, which is not the core business, but part of it,” Matlou says.
Lekgoate has taken the same measured approach and applied it to fast-food franchising. “What I'm trying to do is taking normal boerewors rolls and normal South African food, and trying to build them to be in the same frame as well-known fast-food chains around the world,” he says. “What I'm doing now is working on my product: I'm still trying to define which boerewors works the best, which salads work the best and which sauces work the best.”
Like Matlou, Lekgoate is slowly building up his experience before taking his chain, Bra Wor, bigger. “Now I usually sell outside events. So far it's going well; so far I haven't had a day when I didn't make a profit. I'm learning a lot. Once I start with this on a final scale, I'll know a whole lot more about the industry than when I started.” And it's all about working towards a bigger goal. “The way it's gonna be is I'm going to try to start off by franchising normal small stands, where people are going to be selling 100 to 200 rolls a day. Next stage I want to actually establish a shop. By the time I get there, my name will already be out there – I'll be a brand.”
Although only four out of 1,700 people made it through to the incubator stage, this doesn't mean it's only these four entrepreneurs that have benefited. “Every person who applies gains access to opportunity, not just the entrepreneurs,” says Randera-Rees. Awethu, together with Crawford College, is creating a numeracy training programme for those people who failed the numeracy test that's part of the application process. It's currently in its pilot phase.
Then, if applicants make it through the numeracy round, they are eligible for a basic entrepreneurship programme. “They have to raise R250 themselves and start their own business. We provide the reporting structure,” says Randera-Rees. “That framework, and the discipline it creates, really helps. We piloted that in March. Of the five people who started, only one didn't get off the ground.” The biggest success story from this basic entrepreneurship programme was a woman who raised R350 in start-up capital and transformed it into R2,500 profit. “She bought handbags from China Mart and sold them to people around her,” Randera-Rees says.
Randera-Rees views this programme as very scalable. “You can put thousands of people through the programme; it's not resource-intensive. All [participants] need is a cellphone. They report using SMSes and their mentors are volunteers,” he says. “If you get through that, you come through to us. It's about helping people to build their skills, and grow scalable businesses and not just things for themselves. If you prove you can do it for yourself, then you can do it for other people.”
While Randera-Rees, together with his partners, is mentoring and nurturing his four stars, he's also looking for more young entrepreneurs. The next recruitment drive starts on 11 July, and he hopes to have 2,000 people apply. Only five will be selected for the final phase. Randera-Rees says with the Awethu Project's current funding, they could probably recruit 10 to 15 more high-impact entrepreneurs, but he'd rather focus on developing the concept with a smaller group of people before taking it further.
And this is the biggest challenge the Awethu Project faces: Translating its small-scale, individualistic approach of nurturing entrepreneurs into a fully scalable model. But, as Randera-Rees emphasises, it's all about “learning by doing”, both for himself, and the young people the project develops. If there's one thing that's certain, it's that all the members of the Awethu Project are infused with entrepreneurial spirit, not to mention a can-do attitude. We're pretty sure they'll keep trying and testing different approaches to expanding their concept until they find a way to make it work. DM
Main photo: Chris Pienaar, Nketsi Moorosi, Jordan Saltzman, Yusuf Randera-Rees, Mbali Njomane, Sekhabile Lekgoate, Lesika Matlou.