Business networks, entrepreneurial branding and innovation : strategies for promoting start-up success in Botswana and South Africa

Abstract

Start-ups have made a significant contribution to global economic growth. Research has revealed, however, that start-ups continue to fail during their early years of operation. Earlier research on start-ups and small and medium-sized enterprises (SMEs) has focused on failures rather than successes. Furthermore, there has been little research done in South Africa and Botswana on how start-ups use business networks, entrepreneurial branding and innovation to achieve success. Botswana and South Africa differ drastically in terms of size of population and GDP, however, they have some aspects in common such as trade relationships and regional integration. Both are members of Southern African Customs Union (SACU) and Southern African Development Community (SADC). Amidst the increasing levels of poverty, unemployment and inequality, South Africa looks to start-ups to create more jobs and contribute towards poverty alleviation. Similarly, Botswana is also faced with the problem of unemployment, particularly among the women and youth. Start-ups in the two countries are considered vital in creating employment and improving the livelihood of people. The aim of this concurrent mixed method study was to investigate business networks, entrepreneurial branding and innovation as strategies for start-up success. The researcher therefore does not intent to make a comparison between the two countries but instead find out if start-ups in Botswana have the same experiences as their South African counterparts. The study drew theories from the literature on business networks, innovation and entrepreneurial branding. A historical background for the three strategies was also presented to understand how they have evolved over time. To develop a theory based on qualitative data analysis, a strategic theoretical conceptual framework was proposed. The study concentrated on start-up owners and managers who were actively involved in the day-to-day operations of the business. A survey was conducted with 212 Botswana start-ups and case studies were conducted using online and face-to-face structured interviews with eight South African start-ups as part of a mixed methods research approach. The quantitative data were analysed with SPSS. A structural equation modeling (SEM) was used to test the hypotheses. The following findings were revealed: The impact of business networks on start-ups' success was negative and insignificant, supporting Ho1. The impact of innovation on start-ups' success was positive and significant, rejecting Ho 2. The impact of entrepreneurial branding on start-ups' success was positive and insignificant, supporting Ho 3. Therefore, the proposed innovative branded networks contribute to the success of start-ups. In addition, qualitative data were analysed thematically using the grounded theory approach. The findings revealed that the three strategies contributed positively to the success of start-ups in Botswana and South Africa. According to the qualitative analysis, innovation is at the heart of business networks and entrepreneurial branding, and it motivates the development, enhancement and growth of the other two strategies. However, to compete in the market, participants used the three strategies as marketing tools.