en-us https://www.intensedebate.com/users/313023 Comments by SheraanAmod http://www.vinnylingham.com/silicon-cape.html#IDComment14525327 In the USA, market size and economies of scale allow VCs to invest comfortably in "national" opportunities, but this logic does not hold for South Africa. Our entrepreneurs need to start attacking global markets, and in a big way (Israeli startups have done this quite successfully with a strong public-private VC-backed model). Of course, when competing globally, it helps a hell of a lot to be doing something original. The entrepreneurial model that I am touching on here is the one designed to generate a high amount of success in a relatively short space of time. This is profoundly different to growing a small business with a limited market organically and profitably over 10 years. There are different kinds of entrepreneurs out there, and one is not more noble than the other- it all depends on their personal goals and tolerance for risk/failure. When I was at the United Nations Internet Governance Forum in Rio just over a year ago, Vint Cerf (co-inventor of TCP/IP and regarded as the "father of the Internet") referred to the Internet as a "scaffolding to design and build something new" ("www.intgovforum.org/cms/Rio_Meeting/IGF2-EmergingIssues-15NOV07.txt" -- I got my two cents in as well: "www.youtube.com/watch?v=Aqi6sX-9uh8"). He was referring to the architecture of the Internet, but I think we can extend that metaphor to online business as well. The Internet is the perfect structure for setting up businesses with massive scalability and customer (i.e. user) potential. Just ask the people who started Facebook. Or Twitter. Or Synthasite. What makes more sense, designing web products/services that could appeal to a few million people at best, or doing something that could add value to over 1 billion? That's the kind of web innovation that I think Vint (and Vinny :P) would want to see more of. Last off, thanks for giving Mine Bang a mention in your hot list for 2009. As a social media startup, we will take Vincent Maher's polemic on South African offerings in the space to be a challenge. We were pleased to recently win the FNB Enablis Business Launchpad competition ("www.bizcommunity.com/Article/196/160/31949.html") and look forward to the bigger things that lie ahead :-) If you've made it through this entire 3-part comment, thanks for reading! Sun, 1 Feb 2009 06:12:51 +0000 http://www.vinnylingham.com/silicon-cape.html#IDComment14525327 http://www.vinnylingham.com/silicon-cape.html#IDComment14525246 5. "Lack of global experience." I think that there's little excuse for this, because the Internet is a fundamentally globalized structure. Even if one doesn't make it overseas to physically "see" what's going on, what prevents an entrepreneur in SA from starting a conversation with anyone in the world? The benchmarks are right there in front of our eyes. All we have to do when building a product is say, "Ok, this is the world standard- how can we do it better?" 6. "No liquidity events." Not much to say here, but I would hope that a startup perceived to be a global leader in its space should be able to get acquired or make a public listing without major external blockades. The question I ask instead is, "Why haven't there been more leading startups?" 7. "Too much focus on advertising." I concur that "me too" advertising is likely to go nowhere, but real innovation that delivers high ROI back to marketers will be rewarded, and considering the current global situation, probably carve out a permanent space in the business landscape. There's no reason to give up on advertising, but companies looking to jump onto yesterday's bandwagon are going to suffer terribly. From my own experience in working with others on international platforms from Prague to London to Rio de Janeiro, as well as in two diverse universities and cities back home, I can easily state that the best talent South Africa has to offer is as good- if not better than- anywhere else in the world. The problem with our potential startup stars is that South Africans (and my experience comes mainly from dealing with the younger variety) tend to be allergic to risk, and addicted to security. Despite the "risk calculator" argument I put forth earlier, a lot of faith is required to build a mental bridge between some rosy vision and the present harsh reality. Our generally conservative and corporate-reliant culture is much to blame, but I also think that aspiring entrepreneurs need to have more confidence in themselves. Self-confidence creates the faith necessary to "lose sight of the present shore in order to discover new lands". It's tough to be an explorer while your feet are still firmly rooted in a full-time job- at some point, one has to take the plunge. [cont] Sun, 1 Feb 2009 06:04:24 +0000 http://www.vinnylingham.com/silicon-cape.html#IDComment14525246 http://www.vinnylingham.com/silicon-cape.html#IDComment14525243 Excellent post Vinny! The strengths and pitfalls of the local online entrepreneurship scene is something that I've often wondered about. This (very lengthy) comment is broken down into two sub-sections, viz. analysis of your fact list, and some personal thoughts on Silicon Cape and its future direction. In this post, you mentioned 7 key facts: 1. "Punishment for failure". South Africans do tend to over-punish entrepreneurs for not getting it right on their first try. In my first company, Trafik Student Networks, I failed to achieve my objectives for the business, and admitting that openly was perceived negatively by many people. The level of punishment and associated skepticism expressed by the community tends to increase with the entrepreneurs age. I quit Trafik when I was 21 (after 3 years of operation), so the associated relational backlash was still much weaker than it would be for someone older (e.g. a 27 year-old). 2. "Failure to take risks." This is a big one. After co-founding Mine Bang Media last year, I chose to back out of the best corporate job offer (for a graduate) that I'd ever personally heard of. Never mind my MSc, which currently lies in tatters. That took some guts, but then again entrepreneurs are supposed to be risk calculators, and the math did make sense. More about risk later in this comment. 3. "Unavailability of Capital." I'm ambivalent here, because I believe that private sector capital follows real potential and measurable success. Call me a capitalist. Investors join the game to make large returns first, not to contribute to social development factors (not primarily anyway). As Andrea stated earlier, South African web entrepreneurs need to shift their model of what VC-funded companies really should be about. Perhaps your personal arduous experience in this space is the exception, and not the rule? (Investors will tend to prefer an idea where the earning potential is immediately obvious, and scaling can occur in line with revenues). 4. "Too many consultants." Absolutely. If someone is an incredible chef, we would think that they would want to open a restaurant and prove themselves (and get rich) before trying to sell off their recipes and teach others how to cook. [cont] Sun, 1 Feb 2009 06:04:07 +0000 http://www.vinnylingham.com/silicon-cape.html#IDComment14525243