In the heart of San Francisco, not too far from the Golden Gate Bridge, lives one of Africa’s most successful technology entrepreneurs, Vinny Lingham – an erstwhile university dropout from the University of Cape Town.
It seems that almost any chance encounter could spark the imagination of the entrepreneur, who became a Global Young Leader in 2009. A simple moment in a coffee shop gave birth to an idea that would make him millions.
“I walked into Starbucks in San Francisco and paid for my coffee using a mobile gift card on my iPhone. It was then that I decided to build an app that could let consumers do this for any merchant out there.”
His research showed a great demand for such gift cards. So in 2012, without hesitation, Lingham left his job as the CEO of Yola.com, one of his start-ups, to launch Gyft – a digital gift card app. The app sells gift cards and makes it easy for businesses to offer loyalty programs to consumers.
Gyft grew into a success and became one of the top gift card services in the world. It also appeared on the Ellen DeGeneres talk show.
Last year, Lingham sold Gyft to First Data – a global payment processing company – for $54 million. This was another great feat for the man who gained international success from his other start-ups, including the Silicon Cape Initiative and Clicks2Customers.
But Lingham’s new-found success in the United States (US) was miles away from his humble beginnings in South Africa. He grew up in the Eastern Cape and later moved to Cape Town where he studied Information Systems at the University of Cape Town. In his final year, Lingham dropped out to pursue his own ventures.
Lingham relocated from Cape Town to the US is 2008 with hopes to compete in the global technology market and take advantage of the opportunities that Silicon Valley offers. The US market promised platforms and billions of dollars for tech-entrepreneurs to develop and test business and technology ideas and has made household names of companies such as Snapchat and Uber.
“The South African market is constrained by both capital and the skills to execute and therefore the approach has had to be different. Investors in South Africa by and large do not understand how to finance, grow and support early stage start-up technology businesses – the balance sheets, financing and execution strategies are not well understood here – but in the US it’s become a well-oiled machine,” he said.
Lingham says there are few opportunities for investors in South Africa to exit their start-up companies as larger companies are not interested in mergers and acquisitions.
“Almost every business in Silicon Valley, doing more than $50 million a year in revenue, has a corporate development person who has a full-time job finding companies to buy. That culture has not permeated into South Africa and so the upside for angel investors is quite limited when it comes to making a return on investment in a short space of time.”
He says there is a need for entrepreneurs in Africa who are focused on shaking up the system and drive down margins of larger companies. This could draw the bigger companies into mergers and acquisitions.
In 2014, Lingham served as a judge on the South African version of Dragons’ Den. The television show, which originated in Japan, allows entrepreneurs the opportunity to pitch business ideas to a panel of businesspeople in search of financing.
“Through this experience, I learned that I really have an affinity for consumer products – I really loved the entrepreneurs who were pitching ideas that consumers would want to buy, such as TodPod and CandyWasted – which recently aired.”
When it comes to advice for budding entrepreneurs Lingham keeps it simple.
“Focus. Do one thing really well, and try to be the best you can be at that one thing.”
He says far too many entrepreneurs try to do too much too soon.
“I meet too many entrepreneurs who are doing five different things in their business and making money from either none of them or some of them – both being bad strategies. You need to find a product market fit and focus on your core business. That’s the key,” says Lingham.
When he’s not launching businesses or advising budding entrepreneurs on new ventures you can find Lingham on the golf course, with family or even in the line of a coffee shop awaiting his next million-dollar idea.