Market Update: Why building sustainable businesses matters more than growth in today’s economy – Full Analysis

Why building sustainable businesses matters more than growth in today’s economy

In South Africa’s operating climate, sustainability is the difference between survival and closure of any business.

Karabo Makete, Partner and Investment Principal at Aions Ventures, says that building a sustainable business means designing it for resilience from day one. “A business must be able to survive changes in the economy, shifts in the market, and the realities of where it operates. As a business owner, you need to assure shareholders that returns remain possible, even when variables change.”

Sustainability is not one-dimensional. It has distinct components, each of which must hold under pressure.

The first is financial sustainability. “If you are scaling to serve more customers but losing money as you grow, that is not sustainable. There is no use servicing seven million people if you are strangling your margins in the process.”

For venture-backed startups, rapid expansion often feels like validation. But Makete cautions that growth must be interrogated through unit economics. Founders are encouraged to return to the numbers: What does this expansion cost? Are economies of scale being reached? “Excitement around growth is natural. But the maths must still make sense.”

The second dimension is operational sustainability, critical in South Africa’s unstable infrastructure environment. Electricity disruptions are recurring. “You cannot assume bulk infrastructure will always function seamlessly; therefore, you have to understand where your biggest downtime risk lies and plug that gap.”

For some businesses, that means backup systems. UPS solutions buy time while solar remains expensive for early-stage companies. The goal is not total independence from the grid, but intelligent mitigation. “You do not have to take on the entire burden of infrastructure supply yourself. But you cannot operate as if disruption will not happen.”

In sectors such as construction, operational risk can extend beyond infrastructure. Community dynamics and the construction mafia can halt projects overnight. “Downtime is not just an inconvenience. It affects cash flow, costs, and delivery timelines. You need a granular understanding of your sector.”

The third dimension is governance and contextual sustainability. Businesses must align with regulatory and developmental priorities in the markets in which they operate. Environmental and governance standards differ across regions. “What sustainability means in South Africa may differ from what it means in some parts of Europe. You need to understand the context and build accordingly.”

The fourth pillar is human capital sustainability. Startups operating in unstable conditions require teams that are aligned and are easy to adapt. “When margins tighten, you rely on people who understand the mission. Financial sustainability is critical. But the right team is what carries you through difficult periods.”

Companies built around market trends may achieve short-term valuations, but risk irrelevance once the trend fades. “If you are building to exit quickly, you may chase what is hot. But if you want longevity, you must ask whether the problem you are solving is recurring and meaningful.”

This becomes particularly important when large corporates enter the picture. Makete has seen founders lock themselves into exclusivity agreements in pursuit of validation, only to find that they have limited their own market access. Others have secured major partnerships before understanding the cost implications, and later “got their fingers burnt” when capacity realities caught up with them.

At Aions Ventures, we work closely with portfolio companies to stress-test these decisions. Our mentorship sessions go beyond surface-level advice, often unpacking opportunity costs, pressure-testing assumptions, and modelling multiple growth scenarios before any major commitments are signed, because the aim is not simply to scale, but to scale sustainably.

“And to do so, sustainability must be deliberately built into the structure of the business from the outset “says Makete.