Being a groundbreaker and a pathfinder in the family means that, within that family, there is no familial guidance as the ‘employee’ and not ‘employer’ mentality is rife in that family.
Founding entrepreneurs or first-generation entrepreneurs are the first people in their family to start a business. They take the bull by the horns and throw all caution to the wind as they enter the entrepreneurial fray.
They are discouraged by family members and friends because, generally speaking, the socialisation in the family is, “go to school, get a job for life, retire and die earning a pension.”
Being a groundbreaker and a pathfinder in the family means that, within that family, there is no familial guidance as the ‘employee’ and not ‘employer’ mentality is rife in that family.
Do not get me wrong here. Being employed for a life can itself be a profitable undertaking. In predictable market environments, always prevalent in the northern hemisphere, a job for life, coupled with frugal and good financial management sensibilities, has led many to enjoy decent and comfortable lifestyles and retirements.
In Zimbabwe, the yo-yo and unpredictable public sector policies have created an uncertain, unstable, capricious, and hostile business environment.
Over the years, those who have thrived and succeeded in employment are those who have remained top dogs at the apex of food chains in the C-suites. That is why, it is not uncommon to find people remaining in C-suites, for 10 years or more, in Zimbabwe, in organisations they have no skin in the game. They are acutely aware of the risks associated with untenable risks in the game of entrepreneurship, so they stay in employment, whilst having side hustles.
Many of those side gigs, have never truly constituted genuine entrepreneurship, because often, when the champions of these kinds of entities leave their C-suite positions, some unwillingly for that matter, they are forced to fall back on those gigs full-time and many of those gigs have floundered. But this is a story for another day.
What is apparent is, unless you are chowing at the apogee of food chains, full-time employment could be riskier than entrepreneurship.
During the last two weeks, we have had thought provoking revelations about the fact that 70% of families worldwide tend to lose their fortune by the 2nd generation, while a staggering 90% lose it by the 3rd generation.
Be that as it may, it has been observed that, particularly in under-developed communities across the globe, fortunes have been lost by those who toiled to start them. Zimbabwe is no different.
Everywhere we look there are carcasses of evidence within the black community where the 1st generation entrepreneurs have found and lost wealth, essentially failing to have that wealth graduate to intergenerational wealth. There are several reasons for this reality,some of which are listed below:
Black tax
You cannot pour from an empty cup and neither is it wise to pour from a cup that belongs to a fledgling business, in essence eroding the capital base of that business.
While now used globally, black tax is a term whose origins are located in South Africa. It seeks to describe the ‘pay back’, through periodic, often monthly remittances, back home, by a family member, perceived to be ‘advantaged’ sending these monies to parents and other family members, who are yet to climb the ‘advantaged’ ladder. It is an expectation by the family back home, to fund the upliftment of the younger ones.
It extends to funding ad hoc expenses like funeral expenses of extended family members, medical expenses of parents and other family members, in some cases, contributions towards lobola payments, etcetera.
In many cases, the moment one gets a good job, gets married or starts a business, there is a huge expectation from parents, for the ‘advantaged’ member of the family to take on more responsibilities from the parents.
It is expected from both men and women. Oft times, when a first born son marries, they are given one more school going children to live with, whilst educating them full-time. These could be young brothers and sisters, a brothers’ or sisters’ children, and so forth.
It is perceived as a tax because those benefitting from this practice, do not see anything wrong with it. It becomes tricky when one’s business which is in its infancy, is expected to take on large familial bills through the founder withdrawing large amounts from it.
Sometimes ego plays a huge part as the ‘giver’ garners more respect within their family and neighbouring community. The more the giver, parts with resources, monetary and otherwise, the more their ego is fanned, to the detriment of the business!
Whichever way one looks at it, diversion of resources in the name of “ubuntu” or our culture, as a form of investment within the family, can be ruinous to the 1st generation entrepreneur, who might have borrowed to fund the greenfield venture.
Premature scaling
There is always a good case for scaling a business. But timing is everything. Some businesses when they attempt to scale prematurely, might lose sight of the key factors that catapulted them in business, thereby ending up being all things to everyone, when their initial value proposition had a specific target audience. This can easily lead to failure.
A story is told of a local entrepreneur who scaled up too fast and yet there was no economic merit to do so, because turnover at store level was mediocre.
Instead of shutting down some of the stores, he went on a borrowing spree, escalating his financial commitment to keep the scaled up stores, that were unprofitable, open. As a result, corporate failure ensued and bankruptcy was declared.
Failure to diversity income streams
In a country like Zimbabwe, where government missed the memo on consulting sector stakeholders before policies are devised and announcements made, diversifying income streams has become a business imperative, in order to spread out the sector risk.
You do not want government to make an announcement and out of the blue, your business is rendered irrelevant in the marketplace. Diversity of income streams is crucial so that, if one source of income declines or fails in one sector, the impact on your overall business financial situation is not reduced, because other income streams from other sectorsare able to offset the loss.
It is unwise to put all your eggs in one basket in an unstable market like Zimbabwe.
Diversification of income streams serves as an astute business strategy in order to provide more financial stability over the long term. For example, where a business has multiple revenue streams, across different sectors, it mayserve to strengthen the financial well-being of the organisation, reduce the business’s vulnerability to economic downturns, changes in consumer behaviour as a result of affected disposable incomes, or unexpected events. Many a 1st generation entrepreneur who did not master this point, failed to weather tough times and maintain their positioning in their marketplace.
Multiples relationships, households
It is certainly a free world and right thinking adults are allowed to do as they please as long as they remain law abiding citizens. Polygamy is part of Zimbabwean culture and when practiced according to the rule book of our traditional culture, multiple relationships yielding multiple households, do not always lead to corporate failure and the depletion of generational wealth at the 1st generation level.
Unfortunately, Zimbabwean men keen on polygamous settings, have failed to mobilize their first wives to buy into this justified cultural practice.
As a result, we are witnessing an all-time bastardising the of whole practice, into something not even resembling our traditional culture.
Having a small house or several small houses is not our cultural practice. What is our culture is when there is buy-in from the first wife and because of her positioning in the family, she champions the receiving and installation of all future wives in the family.
When the first wife lives in Shawasha hills and the first small house is having a house rented for her in Greendale, a second one is located at a site in Greystone Park and the third one is in Strathaven, that is not polygamy.
It is called switching bedrooms. Switching bedrooms is lust and fails to take into consideration the bigger picture of generational wealth building and preservation. Switching bedrooms and bearing children is a recipe for disaster because each and every household is pulling sideways, towards their own benefit.
There is no unity, only war and the head of the household, the father of the family, loses his influence and positioning in the family.
The remaining builder of the family’s wealth becomes the first wife because the small houses are in conspicuous consumption and primitive accumulation mode.
On realising that who her husband has invited weevils, to come and plunder that which they built together with him she will, as a survival strategy, join the fray in the plunder, before everything gets depleted.
In the past, sustainable polygamy had compelling reasons for its justification, that is why it was allowed in our society and the first wife sanctioned it.
Successful polygamous families all lived in one compound with the first wife emerging as the top dog ruling the roost in order to maintain fairness and ensuring that generational wealth is not plundered.
Unfortunately, entrepreneurial founding families have lost everything as the competing women jockey for power, position and resources.
As a result, the wealth built by the first and only recognised family, is depleted during the 1st generation of creating it.
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