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Forget funding: 5 things South African tech entrepreneurs really need to start caring about

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And it’s probably not bitcoin.

In the last couple of years, startups – especially within the tech sector – have (finally) been given a bit more time in the spotlight. I’d say that this has mostly coincided with endeavours like Silicon Cape and the passion of a handful of individuals (entrepreneurs, investors and geeks) to create more of an ecosystem for (tech) entrepreneurs to flourish.I’ve mostly been on the fence about getting overly involved or saying anything overly opinionated about this, as I’ve always sensed a bit of ignorance and arrogance in how we’ve (as South Africans and stakeholders) gone about this. The best example of this is branding this endeavour as Silicon Cape in the hope that we can replicate Silicon Valley’s success. Whilst this had a nice marketing ring to it, it was never going to be a sustainable or viable thing; evidence of this is how the initial hoo-ha and excitement has almost completely died down.And most worryingly, I don’t think that South African tech startups or entrepreneurs are much better equipped than they were before all of this.

In my mind, this is completely down to startups and entrepreneurs not considering an alternative approach that is aligned with the fact that we’re based in South Africa and unless you’re moving abroad, you need to consider the good and the bad that this brings.

A big part of entrepreneurship is being creative within constraints and being a South African entrepreneur is no different.

1. STOP WAITING FOR FUNDING

Right off the bat, we’re way too concerned with getting funding for our businesses; instead of just bootstrapping. South Africa historically hasn’t relied on venture capital to build great businesses; instead it’s mostly been down to hard work. So many industries in South Africa are thriving without having ever worried about venture capital, so why is this so different in the tech industry?

That said, I’ll indulge those that disagree with me for a minute.

I often hear that there’s not enough angel & VC money available locally. This is complete bullsh*t. I know that the likes of Andrea Bohmert, Keet van Zyl (both at Knife Capital), Brett Commaille (AngelHub) & Justin Stanford (4Di Capital) would love to give the right entrepreneurs & startups some money.

So whilst the local venture capital ecosystem may be under-developed compared to international markets, this isn’t the biggest problem we have.

Looking at South Africa on AngelList, you’ll find 318 companies listed. More importantly, there’s 1755 investors listed as being interested in investing in South African startups. Biggest bonus is that loads of those investors are foreigners who want to bring their shiny dollars and pounds (sterling!) into South Africa.

After that AngelList-induced euphoria though, do me a favour and actually have a look at the companies listed there: the quality just isn’t there and the vast majority of those businesses aren’t fundable.

The reality is that many businesses aren’t fundable as they can’t generate a 10x(+) return on investments in a relatively short space of time. That’s ultimately what angels and (especially) VC’s need, since that’s the way venture capital works. This however only applies to a certaintype of startup and there are many other ideas that could become great businesses without ever becoming fundable.

The further reality is that the local market simply doesn’t have (READ MORE)

Staff
Adii Pienaar, Ventureburn

This article originally appeared on Ventureburn. You can also follow them on Twitter. Copyright 2014. 

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