Woodstock and Stellenbosch in South Africa’s Western Cape are mere dots on the world’s IT map, but they could be Africa’s answer to Silicon Valley in the United States.
Tech entrepreneur Vinodan Lingham wants to make sure South Africa does get its own Silicon Valley and is putting his money where his mouth is.
Five of Africa’s top 20 tech companies are based in this small area of the Western Cape. Some of these companies are making waves on the global tech scene. One of them is internationally recognized Yola, which came second in FORBES AFRICA’s Top 20 Tech Start-Ups in Africa.
Yola is designed to assist small businesses by creating websites for free, initially. You only pay when your company advances and needs a more advanced website.
Lingham founded Yola in Silicon Valley in 2007 and lives there now. He says although adjusting to American culture was difficult, it only took him six months to get funding for his brainchild from JSE-listed Reinet Investments.
With offices in both San Francisco and Cape Town, Yola started out with venture capital of $25 million, but Lingham admits that starting Yola from scratch was not easy and credits naivety for his courage.
“Naivety breeds confidence. If I knew then what I know now, I wouldn’t have gone,” he says.
Seeing a large market opportunity, the likely chances of success crushed any doubts or fears the then 28-year-old may have had. Now 33 and one of Africa’s shining tech stars, Lingham was born in the Eastern Cape in South Africa during apartheid to a poor family, and was raised in a segregated area designated for Indians. With the end of the regime, his family rose to middle-class status so he could go to multi-racial Hudson High School, and then on to the University of Cape Town to study information systems.
“I was a total technology geek at school—definitely very entrepreneurial and probably the only person in school who could program when I was there.”
A successful entrepreneur with a third business to his name now, being a varsity drop-out has not deterred him along the way.
“I dropped out of varsity because my family couldn’t afford for me to study there.”
Being a permanent resident in California’s Silicon Valley for nearly five years now, Lingham has been around some of the tech world’s best brains, and says South Africa still has a long way to go.
“The skills are not at a high enough level. A lot of people go out and do theoretical stuff. There aren’t enough partnerships with businesses. Students come out of varsity with no skills. ”
Matthew Buckland, founder of Creative Spark, a digital agency based in Cape Town and a member of the Silicon Cape Initiative, agrees with Lingham.
“Universities also need to come to the party. Many of the world’s great start-ups were conceived at universities. We have a long way to go, but we’ll get there. Entrepreneurs are the future.”
The entrepreneurial spirit appears contagious in the Cape air. And people like Lingham make it look more attractive and tangible.
“I think Vinny is a machine. He’s an inspiration to many and it’s tough making it in San Francisco. I think it is positive for tech entrepreneurs in Africa. Vinny will gain valuable skills and networks that he’ll bring to the continent,” says Buckland.
Lingham criticizes that entrepreneurial spirit and says that, unlike back in California where most of the tech fundis started their companies during their university studies, he thinks the quality in SA is there but it could be better.
“The quality is there, but there’s not enough [of it]. There are about 50 honors students graduating a year from computer science and even less graduating with a Masters.”
Alan Knott-Craig Junior, owner of MXit, and digital media guru Matthew Buckland agree.
Knott-Craig Junior and Lingham cite the lack of updated cable infrastructure of the cables. Lingham criticizes Telkom’s monopoly as having a direct hand in the slow growth of the technology sector.
All three have a vision for the tech industry on the continent.
“I think there is a burgeoning start-up scene in parts of Africa, but it is still miniscule by world standards. Local venture capitalists need to put down real money on the table. They are far too cautious here, talk a big game and deliver little,” says Buckland.
Knott-Craig wants to conquer Africa through his social networking application; it enables users to use Instant Messages at a cheaper rate than SMSes on any applicable phone, not just smartphones.
Lingham sees the light at the end of the tunnel, but in his view it is obstructed by a confused giant.
“Law makers are getting in the way. South Africans just get ripped off on everything and the money isn’t even going to the poor. The Telkom monopoly hasn’t ended.”
Buckland agrees: “Government needs to come to the party with incentives and tax breaks for start-ups like the governments in the UK and France do.”
Hence the inception of the Silicon Cape Initiative, a vision that Lingham (among others) hopes will produce a mini Silicon Valley. It’s a 20-year non-profit vision, based on the same idea as Silicon Valley in San Francisco. It serves as a networking community, enabling self-started companies to have access to each other, and share knowledge and make it global. Funding for the initiative is foreign, and the aim is to expand SA’s talent to new shores.
“The innovation locally is doing well, but the problem is that globally we’re nowhere close to competing with the world. Companies coming out of Cape Town are trying to build new companies for a new market.”
Buckland acknowledges the efforts made by Lingham and company.
“Silicon Cape is an amazing concept. It’s run as a non-profit company by very busy people who do it on a pro bono basis. For the resources it has at its disposal, it has made amazing strides. Silicon Cape is both an idea for inspiration and a reflection of a reality taking place on the ground.”
He credits the guys in the Cape, saying: “The easy part is joining a corporate and learning the ropes. The hard part is coming up with something innovative—most people shy away from that. South Africans need to embrace failure. Young people have little to lose and can still take chances before reaching 30. Just focus on a certain problem that people aren’t working on.”