Geek Retreat
The South African tech community is making waves in the international market.
When Vinny Lingham opened a Google AdWords account to advertise his new online business, he noticed there were already 50 000 searches for that topic. “Now that’s a business,” he said.
Vinny is now the chief executive of Yola.com, a web-based way to build websites that now has about two million users. Based in San Francisco, Yola raised 20-million in venture capital funding earlier this year, on top of an initial 5-million. Business Week has named Yola number 19 in the top 50 global start-ups this year, a significant achievement in any age, but especially in the Great Recession.
The humble and likeable Capetonian was back in South Africa in June and spoke at the inaugural Geek Retreat, a conference organised by Heather Ford, a passionate woman who has championed Creative Commons (a nonprofit organisation committed to the legal sharing of creative works) in South Africa.
Geek Retreat brought together 40 or so Internet, media and PR professionals to discuss how to grow the Internet in South Africa, how start-ups can find funding, and the general direction of Internet use in the country.
Get More People Online
Interestingly, but not surprising given the nature of such open-minded geeks, there was a strong emphasis on finding ways to get more than the present four million people online — and especially services for the grass-roots users.
I was lucky enough to be invited and was amazed at the quality of people and the achievements they’ve made. It was a master class on entrepreneurship, as many of the delegates said.
Mark Shuttleworth is arguably our most famous export as an Internet entrepreneur, but, as I’ve written previously, I think that honour goes to Elon Musk. The Pretoria schoolboy has founded three pretty impressive, headline-grabbing start-ups: Zip2 (which he sold to Compaq); a little payment mechanism called PayPal (which he sold to eBay) and the slightly larger rocket-building Space Exploration (SpaceX).
In between challenging Nasa with more modern, cheaper rockets, Elon also started Tesla cars, which is making news with its electric and zooty sports cars.
Gareth Knight has launched seven start-ups from his London base, and there is a young woman called Barbara Mallinson. She is piloting something called Obami.com, a social networking site for schools that uses the Facebook paradigm for education purposes — the best idea I encountered at Geek Retreat.
Not only does it harness social media, the hottest new trend in online communication, for education, but it may well be more helpful to teachers and parents because it allows them to converse with the kids in their (new) natural habitat.
‘A New Breed Of Can-Do’
It’s not easy being an entrepreneur, especially after the Dot Bomb of the early ’90s. But it hasn’t stopped a new breed of can-do South Africans.
The discussion may have been about Internet start-ups, but it applies to any new business venture.
I think South Africa’s best export is South Africans themselves. A look around Geek Retreat confirmed that, but the challenges of working in a global marketplace can count against us, as Vinny remarked. “The Internet is the world’s largest economy, everyone lives within one square inch of each other,” he says. But if your servers are hosted in South Africa, your site appears on google.co.za not google.com. Server location also affects latency (essentially the speed it takes for data to hop between servers), and Google ranks via latency too — so slow SA-based servers get lower search results.
Launch a company and service in SA, by all means both Vinny and Gareth advise, but if you want to take it global, you need to be in one of the epicentres like San Francisco or London.
Says Vinny: “On the business side, we’re based in San Francisco, and we’re doing deals with the biggest companies in the world. But don’t try cutting the deal from here, it’s never going to happen.
“We’ve got good coding (programming) skills, but South Africa sucks at project management skills, and user development skills,” Vinny adds.
Lack Of Funders
Worse still, venture capital has numerous problems in South Africa, not least that most funds are run by accountants and there is a lack of early funders. There is also a stigma attached to early stage investors, who take a bigger risk, when they want to exit after a few years when other venture capital funding is sought. This is seen as a lack of confidence in the project, despite it being a common practice internationally. Not that these problems stop South Africans from innovating. The secret, I believe, is to have a good idea, believe in it and, most importantly, be hungry.
Gareth, who most recently launched family social network Kindo.com, thinks it is essential that people starting a business should be passionate about it.
“There are two elements: you’ve got to do something that people need. There has to be some kind of demand. If you don’t know whether it’s needed, do some testing.” Second, “if you do what you love, the money does come. Eventually. If it’s in demand, the money comes quicker. If you feel passion for something you’re doing, you’ll make stuff happen.”
One of the most essential components about starting a new business, he adds, is imparting that passion to others — from the people who work for you to bank managers and financiers.
Just Get Started
“The other thing that’s essential is just starting,” says Gareth. Many people put up their own obstacles, and don’t back themselves to make their big idea a reality. Kindo.com, Gareth’s latest venture, demonstrates this. After just six months, the family social networking site was available in 17 languages and 150 countries, and showed huge growth. It was bought by Israel-based My Heritage, which is the second-biggest player in this market with 35-million users.
Gareth, who splits his time between London and Joburg, is working on another project to use South African resources to generate a foreign revenue stream.
“There is a coding community here but they need to be more active within themselves, meet up more and be more vocal,” says Gareth, who can be contacted via OneAfrikan.com. “South Africans are very good at putting their heads down and working, but if you don’t tell people what you’re doing, people won’t know.”
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