James Caan on the entrepreneurial journey

On a recent visit to South Africa to promote his new non-profit venture that has seen 19 600 new companies established to date and helps start on average 41 businesses a day, James Caan of Dragon’s Den fame and acclaimed entrepreneur spent some time with Finweek journalist Lisa Illingworth unpacking his thoughts on the future of small business development and the impact that it will have on the economy. He also related the lessons he has learnt from the school of hard knocks. Caan spoke to Finweek at a launch for the schools based programme for Grade 10, 11 and 12 learners held at Gold Reef City, Johannesburg recently.

Why is entrepreneurship so important to stimulating the South African economy?

To me, the biggest challenge this country faces is job creation. And I think if you look at it from a global perspective, I think there is a common trend that corporates are not creating jobs. It is down to the SMME and if we do not embrace that then we will be left behind. And I think what the school-based programme like Step Up 2 a Start Up is doing is pioneering the beginning of that journey.

Every successful vision or strategy needs a beginning and what I love about this programme is that it is the first critical step and if you can change the mindset of the youth – if you can introduce the concept of entrepreneurship – I think it is the most critical phase of the journey. And today is about reinforcing that message in front of Government and in front of the ministers and most importantly in front of the business community in South Africa. This is not about one individual – this has to be about a nation, about a collective.

In the room today are nearly 200 CEOs and each one of them can make a contribution because you need to demonstrate to the youth that entrepreneurship is a viable option. If you talk to the youth in this country today, the sentiment is that success is about joining Government. Government is important and we need to hire people but we also need to build an economy and compete with the rest of the world. 

Is this type of ethos that also underpins your new organisation designed to fund local enterprises?

Absolutely, in any kind of new initiative you need a beginning and I think these types of programmes are that beginning that we can work in collaboration with to ensure that we are delivering the message outside to the country at large. We need to show them that there is a beginning and a middle because that is where entrepreneurship is born. A lot of people ask the question, "Can an entrepreneur be made or are they born?" My honest belief is that in everything that I have learnt in life, is that knowledge is power and therefore if you can engender knowledge into the entrepreneur at a young age and you can help, coach and mentor that young person, all you are doing is making his chances more viable. I absolutely believe that the concept of mentoring, like StartUpLoansUK – that concept of boot camp like the Step Up 2 a Start Up – is critical because if I had had that opportunity when I started I probably would have made fewer mistakes.

You come from an entrepreneurial family where you developed an entrepreneurial mind. Your history is one of immersion in entrepreneurial activity but what you are supporting is coming from the angle of imparting knowledge and skills through education. Do you believe that your immersion in the entrepreneurial world and being ‘in the trenches’ got you to where you are instead of being formally educated?

No. I don’t. The world of formal education as opposed to immersion is not better, it’s different. And different doesn’t mean it’s not as good because what I was doing was stumbling and I wasn’t consciously making informed choices. What we are doing today is conscious and the difference is that the activity was happening around me subconsciously, this is a conscious approach by an organisation that has a vision, and that embraces that vision through the youth and communicates a message to the youth.

I also think that the approach to this is now being done at a national level across the board. When I started StartUpLoansUK everybody said to me that they didn’t understand why I was doing this, I had an amazing business and I was really successful, [that] it wasn’t my challenge to face, [that] this was the responsibility of the government and [that] they should be doing this type of initiative. But I fundamentally believe and I maintain the philosophy that it’s not what your country can do for you but what you can do for your country.

Too many of us love blaming somebody else, we love finding an excuse so to me, right from the very beginning, I’ve always fundamentally believed that great nations are created by leaders and people that have a clear vision. It’s not about looking for excuses, it’s not looking to find a problem, but true entrepreneurs are about finding solutions. I don’t get paid for StartUpLoans and I receive no benefits and I have no financial interests but as a consequence of my vision for the country we’ve started over 19 000 businesses in two years and we are creating thousands of jobs every month. It’s got very little to do with the government – it’s about recognising the we as entrepreneurs have a responsibility to the country and education programmes like this one, create tomorrow’s leaders for this country.

James, in your opinion, what should we be teaching entrepreneurs?

I think, firstly, to me, one of the things that prevents entrepreneurship is the fear of failure. So many people don’t enter the world because it is the unknown so the first lesson that I learnt is that failure is part of the journey to success. You cannot be truly successful if you are not able to take knocks. Every entrepreneur will get knocked down but that is what the journey is about and even if you look at the guy who launched MacDonald’s he was 63 years old, how many businesses had he failed in up to that point before he found a successful idea? He embraced failure and he recognised that it was part of the journey. We need to educate the youth about accepting and understanding that your first idea doesn’t have to be your best idea but you have to be resilient and continue.

Besides low-level skills like drawing up a business plan, what else is important for entrepreneurs to be able to demonstrate?

A business plan is a tool but it is not the engine. What is more valuable to teach people is that you need to have an idea, the idea has to make sense and the business plan can be used as tool to evaluate the idea and whether it makes business sense.

Even more importantly than that is we need to impart to entrepreneurs is that building great businesses from ideas starts with the person and not in the product. Too many people get obsessed because they think “I’ve come up with the most ingenious idea to do X” but the message I would give them is that X is not success, it is the fire that you breathe into that idea that creates success. 

Is it the person’s attitude that makes the difference?

It is the attitude, the confidence, the perseverance, the tenacity, the determination, the drive. These are the qualities and ingredients of success but I think the youth today are slightly misinformed because they focus too much on the product and idea because they think that is what is going to make them successful. It is the person driving the idea that will determine success or failure.

What are the qualities that you look for in a successful new entrepreneur that we should be instilling into children?

I think that entrepreneurship should be taught on the principal of fairness. I live by this principle that to me has been so fundamental is when I enter the concept of business. The perception is that business is ruthless but I’m not sure I agree with that, if you are someone who is an entrepreneur who is driven, where you have to win at all costs, you time as an entrepreneur will be short lived. Business is not about transactions but about relationships and I have based my businesses on a win-win formula where both parties have to win from a transaction. When you both win, you build relationships and relationships last much longer.

Is that because no one feels as though they are being taken advantage of?

That’s right. If you go in with an attitude of winning at all costs, it means that someone has to lose, so I believe the principles and the values that we teach children is understanding the principle of fairness because what we will then be doing is building entrepreneurs that will be built to last. They won’t be a flash in the pan because they will have a great run and do an amazing deal but can’t do another.

Thank you for your time James, we appreciate you taking time to share your lessons and build our entrepreneurs.

It’s been a pleasure.

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