My biggest frustration with local entrepreneurs is their dogged approach to building local web businesses. My personal feeling is that it's difficult to reach critical mass building a product just for South Africa, as you're just fishing in a smaller pond (4m users in SA vs 1.4bn users online). I've always said that the Internet is "Geographically agnostic" - so why focus on a small segment and limit yourself when are the much bigger markets to tap into and potential for hard currency earnings. You can target advertising to consumers in any country in the world - why limit yourself to South Africa?

Some people may think that this is unpatriotic (and in fact, I've been accused of this) - but to me, patriotism is bring in foreign revenues and creating jobs & industry for local South Africans - something which I'm passionate about.

The question therefore is: Should people based in the Silicon Cape be focused on building locally or globally relevant startups (and yes, the right answer is probably in the middle!)...

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Vinny, here is my opinion for what its worth.

The South African mindset is in some cases still stuck in the authoritarian past. The issue is also about lack of experiential experience as in having lived in the rest of the world absorbing what the markets 'out there' want, so the result is people build for what they know.

Having built web sites for different markets the psyche of the nations concerned has a direct effect to the colour, design and content of that web site or business.

A simple example is http://www.newagelondon.com which has a local web site for South Africa on http://www.newagetherapies.com and the way it is presented is different. This is because of the local users thinking and a lot of the people have some form of undiagnosed anxiety and fears leading in part to one of the worlds highest drug addiction rates (this includes smoking which is a drug stronger than heroin according to an addict I spoke to). These things are all factors in the products.

A lot of South Africans are still suffering from fear marketing used by TV, news media etc. To see what I mean just think of that mobile phone applications that you can find your cellular phone for R5 a month. The TV advert is very violent and involves hammers and watches.

This also affects the way the average consumer views the web and online trading, that is to say with distrust. There is an answer and part of the answer is the new consumer protection act.

Trust, integrity and honesty are unfortunately not a given by some very very large RSA retailers who have no problem stealing , i mean taking without permission from their clients.

Also getting bank or DTI financing for projects is like pulling teeth for a small entrepreneur as I have tried as an ordinary person.

The biggest difference is in the framework. It can be easier in a country like the UK and USA to get the support than in RSA's still authoritarian red tape.

I do agree with you about patriotism and the USA has this nailed, they are patriotic every time they export their tech or systems.

As to the final question you pose, the solution of course is to build locally for local needs and research what international markets will take and then expand for those markets.

By teaching South Africans to trust again this problem will resolve itself. In the mean time my advice is to those who have local web sites is to improve the step by step information to 'hand hold' the clients and lead them to prosperity. Its a practice I started when I ran my first motor vehicle repair centre in Cape Town. I still have clients that trust me and I was glad to meet up with one again tonight at the event.

It works and people are people, after all we build what we do for people, not machines and unlike other countries trust is an issue that affects what and how we build.
Hi Justin

I, like Jono am a student though part-time and distance.

What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.

My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.

And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".

This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.

Justin Stanford said:
Jono,

Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.

What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.

Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Three quick points, Tatenda:

1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)

2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.

3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!

Godfrey Parkin

Tatenda Muregi said:
Hi Justin
I, like Jono am a student though part-time and distance.
What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.

My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.

And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".

This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.

Justin Stanford said:
Jono,

Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this. What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.

Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Godfrey a correction, code like any other writing is covered under automatic copyright, unless there is a specific agreement to the effect that the client gets to keep the code for exclusive use and pays the commensurate rate for that privilege.

The writer always does keep the copyright unless otherwise agreed to in writing.

There is an exception to that however, in that if the programmer works for a company and is not freelance then the code belongs to the company and again the process for the client is to stipulate they want to own the code. As it will multiply the cost as it can limit the programmer from reusing blocks of code in the libraries which are today common practice through the use of API's , script libraries belonging to others in the open source GPL ver 1 - v3, Berkly etc licences and so on.

I agree with your second point though, its better to have 30% of something than 70% of nothing and leading into your third point, this issue depends on the product and so it makes a difference in that way. I have always aimed at the international market where I have a bigger presence than local, to get the local consumers to buy I have had to build a separate web site with information specific to this market. This is fairly common as happens in numerous countries with biig brand name, Google, Bing, MSN,Yahoo etc are but a few examples.

Godfrey Parkin said:
Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.

3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!

Godfrey Parkin

Hey guys,

Great responses..Interesting points raised too!

I'm not an IT specialist like most on Silicon Cape..Rather, Biotechnology. However, I have gained a great deal of value from this network - especially with regard to putting structures in place in my startup ventures.

What I would like to mention is the fact that I was fortunate enough to find my first round investor/advisor here on this Silicon Cape social network- the gentlemen is based in California (USA), and yet, it has been relatively easy to manage and continue with an investor/entrepreneur relationship. (Sure, this is also due to compatible personalities of the two parties). This is largely due to the technologies available these days, and with extensive use of video conferencing; it has honestly felt like he is sitting in the office next to me!

And relevant to this thread, is that he has given me great international exposure and has helped me refine our product offering for a global market..
So my input: Thinking globally can be facilitated by bringing on an international business partner/advisor. Further to this, the Silicon Cape network has brought these key individuals to the aspiring entrepreneurs on here - so capitalize on this guys!
Tatenda, in some cases a trademark provides more protection. You can do a design patent at CIPRO in Pretoria for R60.00. If you need help in writing it please do ask. But the simple rule is do a search first on the patent search databases and then if you cannot find anything similar in any category, start to write a vaguely descriptive piece, do not be too precise as the cyber-squatter-types will rip it off after you publish it on the cipro database. Including images in the trademark bit is essential.

Tatenda Muregi said:
Hi Justin

I, like Jono am a student though part-time and distance.

What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.

My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.

And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".

This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.

Justin Stanford said:
Jono,

Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.

What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.

Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Hilary, you are of course right that code written by an independent (not-employee) programmer belongs to the programmer, unless the up-front agreement is that the code is a work for hire - in which case the agreement is that the programmer will assign ownership to the person who contracted it. My point is that anyone commissioning code should always establish ownership issues up front. At the very least, they should secure perpetual rights to use the code and, ideally, the right to create and use derivatives of it going forward. They should also (depending on the product) secure both exclusivity and reselling rights. Otherwise you can spend a lot of money building code, only to find your developer (or one of their later customers) then starts to compete with you.

If you are looking for VC funding, ownership of your code is a critical part of valuing your business.

Hilary Albutt said:
Godfrey a correction, code like any other writing is covered under automatic copyright, unless there is a specific agreement to the effect that the client gets to keep the code for exclusive use and pays the commensurate rate for that privilege.

The writer always does keep the copyright unless otherwise agreed to in writing.

There is an exception to that however, in that if the programmer works for a company and is not freelance then the code belongs to the company and again the process for the client is to stipulate they want to own the code. As it will multiply the cost as it can limit the programmer from reusing blocks of code in the libraries which are today common practice through the use of API's , script libraries belonging to others in the open source GPL ver 1 - v3, Berkly etc licences and so on.

I agree with your second point though, its better to have 30% of something than 70% of nothing and leading into your third point, this issue depends on the product and so it makes a difference in that way. I have always aimed at the international market where I have a bigger presence than local, to get the local consumers to buy I have had to build a separate web site with information specific to this market. This is fairly common as happens in numerous countries with biig brand name, Google, Bing, MSN,Yahoo etc are but a few examples.

Godfrey Parkin said:
Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.

3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!

Godfrey Parkin

Thank you Gordon for the pointers! Point 3 opens up my mind to an angle I hadn't looked at things before. Launching in SA to me was looking at "testing" out my concept with "local" users. Your point makes it a fact that with the internet, users are users, why not look at the pool as a whole. The one area of concern to me going local first is that the service in development will rely on the fulfillment services of print vendors (i have just let it out). This means working with a physical product in order to complete the process after the web based user function. Some would say shipping from SA to anywhere in the world for an internet company is not rocket science but I would still like to ask how do I work on that? I could opt to outsource the supply and fulfillment service to overseas based print vendors, but quality control is then out of my hands, or is it?

Tatenda

Godfrey Parkin said:
Hilary, you are of course right that code written by an independent (not-employee) programmer belongs to the programmer, unless the up-front agreement is that the code is a work for hire - in which case the agreement is that the programmer will assign ownership to the person who contracted it. My point is that anyone commissioning code should always establish ownership issues up front. At the very least, they should secure perpetual rights to use the code and, ideally, the right to create and use derivatives of it going forward. They should also (depending on the product) secure both exclusivity and reselling rights. Otherwise you can spend a lot of money building code, only to find your developer (or one of their later customers) then starts to compete with you.

If you are looking for VC funding, ownership of your code is a critical part of valuing your business.

Hilary Albutt said:
Godfrey a correction, code like any other writing is covered under automatic copyright, unless there is a specific agreement to the effect that the client gets to keep the code for exclusive use and pays the commensurate rate for that privilege.

The writer always does keep the copyright unless otherwise agreed to in writing.

There is an exception to that however, in that if the programmer works for a company and is not freelance then the code belongs to the company and again the process for the client is to stipulate they want to own the code. As it will multiply the cost as it can limit the programmer from reusing blocks of code in the libraries which are today common practice through the use of API's , script libraries belonging to others in the open source GPL ver 1 - v3, Berkly etc licences and so on.

I agree with your second point though, its better to have 30% of something than 70% of nothing and leading into your third point, this issue depends on the product and so it makes a difference in that way. I have always aimed at the international market where I have a bigger presence than local, to get the local consumers to buy I have had to build a separate web site with information specific to this market. This is fairly common as happens in numerous countries with biig brand name, Google, Bing, MSN,Yahoo etc are but a few examples.

Godfrey Parkin said:
Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.

3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!

Godfrey Parkin

You can also use vista-print.co.uk their quality only depends on your pdf quality, here is the link for the artwork specifications look at the bottom of the page. The stuff gets delivered normally within 12 days if you take the slow option and with a week if you pay the difference.

Sign up for a paypal account or pay by credit card.

Tatenda Muregi said:
Thank you Gordon for the pointers! Point 3 opens up my mind to an angle I hadn't looked at things before. Launching in SA to me was looking at "testing" out my concept with "local" users. Your point makes it a fact that with the internet, users are users, why not look at the pool as a whole. The one area of concern to me going local first is that the service in development will rely on the fulfillment services of print vendors (i have just let it out). This means working with a physical product in order to complete the process after the web based user function. Some would say shipping from SA to anywhere in the world for an internet company is not rocket science but I would still like to ask how do I work on that? I could opt to outsource the supply and fulfillment service to overseas based print vendors, but quality control is then out of my hands, or is it?

Tatenda

Thanks Hilary i'll look into your advice, do a bit of research based on your suggestions and be sure to ask you if direction is lost :-)

Hilary Albutt said:
Tatenda, in some cases a trademark provides more protection. You can do a design patent at CIPRO in Pretoria for R60.00. If you need help in writing it please do ask. But the simple rule is do a search first on the patent search databases and then if you cannot find anything similar in any category, start to write a vaguely descriptive piece, do not be too precise as the cyber-squatter-types will rip it off after you publish it on the cipro database. Including images in the trademark bit is essential.

Tatenda Muregi said:
Hi Justin

I, like Jono am a student though part-time and distance.

What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.

My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.

And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".

This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.

Justin Stanford said:
Jono,

Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.

What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.

Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Vinny Thanks for starting this post, though its seems to have drifted a bit , for me your main question was how to go from local to global, seeing that we are pre -local launch I would say the following:

1. Sort out hosting, its b***** expensive for start ups and most of the time you sit behind in the que to local corporates
2. Sort out tax: Give guys a break on paye/site for only a few years, that money will straight back into the company, that way you can build the support and sales base to be able to service the world 24/7
3. Build relationships for us with Brazil, Argentina, Australia and the like so we can get partners easily , even if its just for language support
4. Lobby the government so that we fix the ridiculous forex setup that means we are locked into a gilded cage.

You know how many politicians I see are part of this site? 1, and she doesnt respond to messages anyway.
You can tweet her, and encourage your local MP and counsellors to get involved. SiliconCape could also run an education fun filled evening for the politka by having famous models and actors who do use teh internet, like that actor from Hero's who has foursquare.

William Kleynhans said:
Vinny Thanks for starting this post, though its seems to have drifted a bit , for me your main question was how to go from local to global, seeing that we are pre -local launch I would say the following:

1. Sort out hosting, its b***** expensive for start ups and most of the time you sit behind in the que to local corporates
2. Sort out tax: Give guys a break on paye/site for only a few years, that money will straight back into the company, that way you can build the support and sales base to be able to service the world 24/7
3. Build relationships for us with Brazil, Argentina, Australia and the like so we can get partners easily , even if its just for language support
4. Lobby the government so that we fix the ridiculous forex setup that means we are locked into a gilded cage.

You know how many politicians I see are part of this site? 1, and she doesnt respond to messages anyway.

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