Andrew Thomas-Woolf, was probably one of the few people whose comments about my “Sillycon Scrape” post hit the right strings with me. Thanks for engaging Andrew, and I have to say that your words has left some lingering thoughts.
I agree that the Cape and it’s lifestyle has much to offer, and that it definately has a great many attractions for “the right” people. I never disputed this. I like your Cape. I don’t necessarily like all the fscktards living in it.
What I disagree with Thomas about, is that South Africa has too small a market to “attract” venture capital. Reason: You’re thinking about just South Africa!
The entire Silicon Cape initiative is soooo South African focused. Hello. We live on a continent.
It’s called Africa. I’ts fairly big.
Andrew said:
Our economy is just plain and simply too small. A 20% penetration rate on say 4 million Internet subscribers at R200 total lifetime value per customer == R160m or US$20m.
This is just such a typical SillyconScrape way of looking at things. Certainly, if you’re trying to build another Web2.0 company this is the case. The market is small. But Information Technology is certainly not limited to Web2.0 startups and doing business in the global internet economy. Unfortunately, this is all that SiliconCape appears to care about.
Infrastructure is where IT’s at:
There are many opportunities in Africa in that does not align with the “Youtube/Facebook/Web2.0” sphere of Information Technology. Just because Social Media is currently the “big thing” on the internet, does not mean that Africa has the access to it, or the opportunity for business in it.
Africa needs IT infrastructure before it can enter the blogosweer.
And that is the venture capital problem that REALLY exists. Very few venture capitalists want to invest in infrastructure, because it’s not exciting enough or in their mind doesn’t “promise” enough return.
On the other hand funds earmarked for infrastructure all over Africa is being misapplied by the largely corrupt governments in charge of said funding on initiatives that are too driven by hype and marketing than anything else !
Africa NEEDS basic infrastructure:
How are we ever going to eradicate the information poverty that exists within Africa ? What about telecommunications, data centers and the real nuts and bolts that makes IT work ? What about PCs for people? You need ROADS before you can have INDUSTRY. How are we going to address that poor “Internet penetration rate” ?
Perhaps if we focused on upping our “penetration rate” in South Africa, we’d have more venture capital. News24.co.za certainly seems to be able to profitably cater to a “very poorly penetrated” community. Ach, enough about sex then…
It appears that all the Silicon Cape is interested in, is in what the REST OF THE WORLD WANTS, and not what Africa NEEDS, because basic infrastructure like connectivity, computing facilities and the rest is simply not exciting enough for most people. “It’s droll”. It’s “plumbing”. I know a lot of rich plumbers though…
The opportunity I see, and have have a passion for is Africa. Not the “rest-of-world”. There are a great many opportunities north of the South African borders, yet unrealized and waiting to be picked. Opportunities that can make money, and on top if it make a difference.
Basic infrastructure DOES make money:
What Africa needs is virtual roads. Of course, that’s just simply not exciting enough for Venture Capital… However companies like Altech seem to be making a KILLING in this industry. Why ? Because they don’t take the short-term venture capitalists view. They know a lot about basic economics and ignore Seth Godin-like economics like the “long tail”. Even heavyweights like Dimension Data seems to have caught on to this fact.
My company is aligned with this African view. And I’ll tell you straight, it’s hard to do business “up there”.
We struggle on a daily basis to keep our customers happy, to understand contracts written in Arabic, French, and other languages. But the reality is that there is simply no better country, populous, or skill-set better than South Africans geared to doing business in Africa. We understand the continent. We live on it. We breathe it.
Idealistically, basic infrastructure is where I’d rather be involved. I was born African, and have a passion for remaining African. I certainly do not have a passion for becoming the next “Intellectual Property” export of South Africa. I have a passion for providing Internet services in Zanzibar, Lagos, Nairobi — and for applying technology in a way that makes a difference to people.
I don’t even have a facebook account, because I consider it stupid. Facebook is not infrastructure. It’s the Internet equivalent of an annoying tea-party with a bunch of people you’d rather call fuckwits.
It appears that the SillyconScrape is more interested in wasting venture capitalists money and enriching themselves. Because they can tote the success of Facebook, and others. Oh wait, perhaps that’s premature. Facebook isn’t actually profitable yet.
Conclusion:
I guess my problem is that what I’ve seen about SillyconCape is that in it’s entirety it simply misses the point of Africa, and focuses on the rest of the world and the global internet, when the reality of Information Technology on this content is abysmal.
I predict that the next company to make it “big” in this continent will be the company capable of doing business in Ki-Swahili. MX-It in Ki-Swahili anyone?
My roadmap to success, is based north of our borders in this content, rather than across the Atlantic or Pacific. Supplying Internet plumbing.
It’s a completely untapped market, and as MTN and others have shown, ready for the picking. Competition is low, revenues are high, and the ability to get entrenched is phenomenal.
I guess it just doesn’t fit with what SillyconScrape fanboys sees as “Information Technology”.
To end this post I could have quoted from Vinny’s presentation: “Yes We Can!” But that would have just been cliche, and I don’t do that kind of crap.
Honestly, I’d rather just fall back to the great British morons:
“Let’s just get ON with it dear…”