The Silicon Cape Question
I first wrote about Silicon Cape in blog post at the start of 2009, in which I highlighted the challenges and opportunities for the Western Cape technology fraternity.
Paul Graham (Founder of startup incubator, Y-Combinator, based in Silicon Valley) also wrote a post about recreating Silicon Valley.
I'd like to really open the discussion to all the members of this forum, but posing a new question :
What do we need to do, to realize the dream of a Silicon Valley in the Cape Region? Please volunteer your insights!
Paul Graham (Founder of startup incubator, Y-Combinator, based in Silicon Valley) also wrote a post about recreating Silicon Valley.
I'd like to really open the discussion to all the members of this forum, but posing a new question :
What do we need to do, to realize the dream of a Silicon Valley in the Cape Region? Please volunteer your insights!
Views: 14
Replies to This Discussion
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Permalink Reply by Ross Allchorn on
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Having lived in Natal for the past year (following 12 years living in the cape) it has become more and more apparent that the cape is where the IT and specifically web industry is the most advanced.
We are moving back to Cape Town early in 2010 and looking forward to it.
To attempt to answer the question, I'd think the no 1 priority is education. Starting at a grassroots level through to the highest levels of computer science. We need to be at an international level to compete on a global scale and the only way to do that is to keep up to date and to innovate.
Secondly, and possibly even more importantly, connectivity needs to become more ubiquitous and more affordable. I won't get into the Telkom bashing side of things, but seriously, it's the biggest hinderance in the country's evolution on the IT front... IMHO
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Permalink Reply by Patrick Kayton on -
I agree, Ross. And I think that education goes even further than the formal. There are a number of experienced IT entrepreneurs in the Cape and I think it would benefit everyone if we could find efficient, undemanding ways of getting them to mentor younger, less experienced guys who have good ideas, but don't have access to the intellectual capital they need to move forward. Money can only get you so far. Smarts are what you need to see a venture through to success.
One idea may be to use a social space like this to allow local entrepreneurs to share their problems and source solutions from the crowd. Does anyone think this may be beneficial? Or does something like this already exist that I'm not aware of?
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Permalink Reply by Marc Katzwinkel on -
Besides the very crucial social aspect of sharing knowledge my understanding of Silicon Valley (having never been there before) is as the funding Mecca for internet start-ups and subsequently the hub of technology.
I would like to see the Cape develop into a similar hub where through a portal like this we can acknowledge and commend local or international VCs.
Do Venture Capitalists exist in SA and on what level? Is it necessary for start-ups to flee to Silicon Valley for funding? Does such information already exist?
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Permalink Reply by Justin Stanford on -
What makes the Silicon Cape?
Some of these ingredients could be... promising entrepreneurs + great ideas + the brightest talent + investors + a great place to live/work/play.
Do we have all of those things here in the Cape? Yes!
Do we need more of them? Absolutely... and there's a few other challenges to address too, such as creating a sufficient talent pool (bringing home expats and attracting even foreigners to our shores) and legal frameworks that make our country more investor and IP friendly from an international perspective. Andrea Bohmert from HP Ventures will be speaking more about the challenges facing the Silicon Cape dream at the event in October.
I think the key to the success of the Silicon Cape is creating an ecosystem that serves to attract all of these elements (somewhat of a chicken-and-egg scenario) by having an environment in which they can find each other and do what they do best, unhindered. This is the magic of Silicon Valley... all of the money and talent is attracted there because of people's perception that that is the place to be. And we can do the same for the Cape.
Here investors and technology entrepreneurs can create companies and products at up to a tenth of the cost of the US. Not a bad value proposition to begin with... but there are some challenges which various stakeholders need to apply themselves to addressing. For instance, our foreign exchange controls and restrictions on IP don't always make it that easy to invest in and build a global software company.
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Permalink Reply by Mark Allewell on -
We have amazing entrepreneurs in South Africa, but it's about giving both financial and mentor support. There are many SA entrepreneurs with International business experience, which is invaluable to local people wanting to start a business. I find alot of people that I deal with only think about business on a local level. Im my view these are the ingredients - creating culture of entrepreneurship, opening markets for business (which the Internet has helped with) - providing support - providing finance - providing mentorship. My two sense.
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Permalink Reply by Jonathan Weltman on -
3 Things
Venture Capital - Venture Capital and ummmm Venture Capital
As a naive outsider I look at Silicon Valley today and is see a symbiosis between technology and VC that has evolved into a well structured, money making, opportunity creating, machine that benefits ALL stakeholders.
VC in SA, IMHO, wants a premium which often derails otherwise viable projects and takes the oil out of our machine here!
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Permalink Reply by Justin Stanford on
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There are actually VCs in SA who DO want to invest, and they are increasing in number -- but their mandates have criteria that they need to satisfy before they can write a cheque. Often an obstacle I hear from local VCs for example is that they don't see enough business plans with global or at least continental ambitions -- they are often just SA focussed. SA entrepreneurs are also not as au fait with the VC investment process as Americans might be, and so sometimes grapple to come to terms with the mechanisms that are used, understanding their motivations, and how best to approach VCs and negotiate deal terms. An EXCELLENT book that I can highly recommend on just this is Raising Venture Capital for the Serious Entrepreneur by Dermot Berkery.
We also need to get the word out there about the Silicon Cape to the rest of the world, so that we can attract more foreign venture investors, who come to realise what an opportunity there is here to create global companies at a low cost with their powerful Dollars and Euros.
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Permalink Reply by Kevin Tucker on -
I'm not entirely sure Venture Capital is the main requirement. Some startups can manage very well with very little.
Ideas are important! Networks (not the computer kind) are important! The belief that if you're from this far-flung corner of the world, you can compete with the rest is important!
I think the biggest factor here is a need for targeted skills education. Not general education... We need a hub (a college, school, university) to drive startup-based skills education.
If it was a web startup, things like:
Programming
Web scripting languages
SEO
Design
Server setup and maintenance
DB optimisation
Security
Linux and cPanel skills
If it was a desktop software startup:
Programming
UI design
Security
Networking
Learning about how memory management on a Intel Pentium III works is irrelevant.
So, my belief is that if we can product skilled student after skilled student we'd be in a supreme position to create a region of development second to none. Then other problems become irrelevant: Internet speeds (skilled users would overcome with optimisation and scaling), hosting (skilled users could setup dedicated server hosting overseas), funding (initially hiring equally well-skilled mates for equity would alleviate the need to hire 3rd parties with capital).
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Permalink Reply by Tomas Van den Berckt on
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Education is not going to solve anything in the short term as people in South Africa are schooled to learn a particular job. To create a viable entrepreneurial hub in the Cape (or anywhere in SA) I strongly believe it is necessary to make it easier for skilled foreigners to live and work in SA. There are many bright young people in the world who'd love to take advantage of the Cape lifestyle while building a business.
Relaxing work permits would take the strain off scarce local intellectual resources in the short term while the exchange of ideas will benefit local entrepreneurs to develop a global vision.
Politically though this is going to be a sticky issue for many reasons.
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Permalink Reply by Kevin Tucker on
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Yes, great solution short-term. But hugely damaging to the local skills-base in the long-term.
Such a solution would only work if the foreigners were to spend part of their time upskilling locals.
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Permalink Reply by Andrew Thomas-Woolf on -
Kevin, have you ever worked in an environment where there are people that are smarter and more knowledgable than you? If so, did you find that doing so helped or hindered your personal development?
Would you think that bringing in foreigners would result in similar or different experiences?
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Permalink Reply by Kevin Tucker on
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I think you're missing the point.
Bringing in foreigners is great. But they need to share their knowledge as I said (and, which I think is the point you're trying to make).
But, I've also seen a few startups here that are started by foreigners and run by foreigners without involving locals. This can't happen. They should bring capital and expertise, but use it in partnership with locals.
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