Live blogging at Silicon Cape Launch - Camps Bay

12:15 Premier Helen Zille

[I can't possibly do justice to the Premier's address so have simply transcribed parts of it here below to share it with others who couldn't be here. It was truly inspiring]

"I do like to avoid cliches but I do have to say that when we look back in ten years time we will have to say that this is an historical event

I have been fascinated and inspired and its not often that has happened because I have been around the block a couple of times.

We have also heard some fascinating things about the ingredients of the ecosystem, and the great opportunities and constraints on ecosystem in Cape Town. The good news for me is that all of the challenges that have been highlighted are things that can be changed through policies. We have the capacity to change the rules and the policies."

We need to have a sensible political conversation about which rules, laws and policies are needed to create an enabling environment.

Dr Rupert said government needs to treat SA's intellectual capital very well, but I want to take that further. If we want to take our people in SA out of poverty which is my key focus, we'd better treat our intellectual capital very well.

You don't grow your economy or create capacity to build platform to take people out of poverty, unless you keep build and retain your country's intellectual capital. When people take their talent and skills out of the country they diminish by that much our capacity to tackle the challenges facing the country.

We have limited powers. Local and provincial government cannot change tax law or exchange control regulations but we can infuse an intelligent conversation about what we need in a knowledge economy to attract, build and retain our intellectual capital.

I was thinking about start-ups and S Africa's democracy is a start-up democracy. We must get the political framework right. We must ensure that there is the rule of good and just law good polices. If we do that then you the next generation can focus on the world IT venture capital so that your children can take for granted a sound democracy and the beauty of living in a place like this.

So politicians are quite important because if we fail everyone fails.

What do we need to do policy-wise in order to keep South Africa in the wave of the global knowledge economy. That is the conversation that this kind of meeting facilitates, and drives and helps us to do across all barriers and particularly across all party politics.

Problems enthuse me. Obstacles get me going, especially when you see a long list of problems that politicians are supposed to be solving. The role of politicians, our job description is very simple - to protect people's rights and expand their opportunities.

I would like to underline what Justin said: if we can't export our IP we will export out talent and we absolutely have to keep our talent if we want to build a society that benefits all.

If we create the right environment and the right context we will see lots of expats following their heads and their hearts and returning home, which is where they want to be.

Justing and Vinny rightly said we are at the start of a a15 year dream because that is what it takes. I have really been inspired here today and will take a lot of these lessons and follow the work that you are doing and stay in close contact with the great minds that I hope will stay in South Africa and in the Western Cape.

We heard Barak Obama say Yes we can. I say Afri-can."

12:00 Dr Ramphela Mampela - Chair of Technology Innovation Agency

"This day will be forever marked in the calendar of South Africa's innovation as the beginning. I am really excited by what i have heard here today.

TIA's main purpose was to stimulate and intensify technological innovation in order improve economic growth and quality of life for all South Africans. But having heard what I heard this morning I think the most important role we can play is to have government create an enabling environment ... [applause] to address those regulatory problems. I can't believe we can't receive payment in dollars from people who want to pay us in dollars! How dumb can you be if you want to grow your economy!

This initiative comes at the right time when our government for the first time has set up a planning ministry and a real focus on this issue of innovation. TIA at the moment is an aggregation of little units that have developed over the past five years

We want to create a culture of innovation and the use of technology. Our government has a lot it can do to embrace that culture. Where I believe TIA can make a difference is to work with government and help to bolster skills development. We don't have skills because our schools are not delivering and our higher education is not as good as it could be. We need to up our game.

There is an extremely important role for TIA to play in terms of making sure that TIA looks outwards instead of always looking outwards

BEE was a good policy but the way we have applied it has made it extremely inward looking. When I look at the demographics of the audience today I see that patronage may be inhibiting to innovation.

We are charged with the responsibility of making S Africans aware of the importance of intellectual property. We need to learn how to protect our IP.

I am now on your doorstep and I am not going to leave until you have helped me to get TIA to be the enabler that it can and should be"

[Standing ovation from audience]

Vinny on the drivers behind entrepreneurship in SA

He finds it disheartening to see comments about issues of race with regards entrepreneurship and VCs. A lot of pale males become entrepreneurs because the country offers them limited opportunities for employment. They start their own businesses in order to survive. He would like to see that change in this country where entrepreneurs start businesses because they have a passion to do so. And it should all be based on meritocracy. VCs will back your business if you have a great idea, passion and vision - regardless of the colour of your skin.


11:27 am - the importance of being profitable early
Build something very remarkable now that people will want to use now. Aim to be profitable in 9 months not in three years.

11:23 am
Laurie Olivier talks about 'angel lounges' that exist in the States that bring wealthy people and entrepreneurs together. Is there a mechanism to do this in SA?

Panelist answers: its a great idea and something that hopefully Silicon Cape will be able to facilitate.

11:21 am - A PANEL ON THE STATE OF VC IN WESTERN CAPE AND SA - Some thoughts from the panel

How do we see the state the of VC and angel funding in the Western Cape

Venture capital is not the easiest thing to come by and the biggest challenge is that we have no idea who they are.

VC is great but its not just an achievement to receive VC - it’s not the end of the road. It’s a bridge and you have responsibility to investors and shareholders once you get it.

VCs here are not as open to failure as they are in the rest of the world.

The challenge was to get the kinds of partners who understood what we were trying to achieve in the business.

As much as entrepreneurs need VC, VC firms need to see an ability to execute on the part of the entrepreneurs.

There is a willingness to invest. The challenge is to get the requirements of VC aligned with needs and expectations of entrepreneurs.

The state of VC is pretty abysmal. There are too many lawyers and accountants in VC, too few self-made entrepreneurs, too few scientists and engineers. As a VC how will you recognise a remarkable product if you have no idea how to build one?

Don't assume that just because you have a good idea doesn't mean someone is going to give you money.

10:55 am Dr Johan Rupert:

"We cannot survive as a society if we rely on the export of raw materials. The countries that are net exporters of IP are the companies that are going to survive.

50 years ago you built a steel mill and couldn't move it, which meant you were tied to the country and the government of that country. Today the people in this room, the creators of IP, can move it anywhere. People with IP between their ears are mobile and sought after. Young entrepreneurs hold IP and the power of the individual versus the power of the state will therefore increase.

Governments had better treat these people very well. The Chinese have a great saying: Never scare the donkey that carries the china.

Societies that do not embrace, protect and encourage the creation of IP will become poorer. I am very glad to see Premier Zille here. I have discussed the concept, with the ANC and government, of having a tax free zone in the Western Cape.

In order to do good you firstly have to do well. Government can’t create jobs. Wealth and entrepreneurs create jobs. If we have an entrepreneurial centre in the Western Cape where IP is protected and valued, it will flourish. But we need proper incentivisation."

10:10 am
Laurie Olivier says, "In the words of Intel's Robert Noyce: 'Look around who the real heroes are. They are not the lawyers or the financiers. They are the guys who start the companies.' That's you!"

10:08 am
Role of Government
Laurie Olivier is talking about the success of the Israeli IT entrepreneurship space. One of the key success factors was the fact that government was not an investor, but an enabler. Its good to see initiatives like Silicon Cape being supported by local government, and initiatives like Activa being driven by local government. But national government needs to do more to create a truly enabling environment for entrepreneurs to thrive and prosper.

9:54 am

Inspirational message from Laurie Olivier, SA Venture Capitalist based in US and Chairman of Vinny's company Yola:

"Launching a start-up is not a rational act. Success only comes to those who are foolish enough to think irrationally. Entrepreneurs need to stretch themselves beyond conventions and constraints to reach something extraordinary." - Vinod Khosla

If you don't strive for the impossible, you will never achieve the unbelievable. So stay hungry. Stay foolish

9:23 am

Andrea Bohman is talking about the challenges facing the current South African entrepreneurial landscape. Here's her list of what we need in order to create a vibrant and successful ecosystem:

1. Top research universities: Stanford University catalysed Silicon Valley partly because of the great research coming out of its various departments

2. Skills: we need to stop haemorrhaging skills and we need entrepreneurs who are not only happy to do it once, but come back and do it again

3. Anchor corporates: they provide a market to sell into and are an important breeding ground for middle-management.

4. Professional services: we need banks, lawyers etc that understand what entrepreneurs need in terms of professional services, and understand their financial constraints.

5. Investor network: there are investors but they are thin on the ground. In Silicon Valley the investment of angel investors match the investments of VC firms. Where is Cape Town's angel investor network? Trying to find them is like a massive game of hide and seek! We really need an organised angel investor network.

6. Support network: there are LOTS of support organisations and initiatives, which is great, but they aren't talking to each other. Hopefully SiliconCape will be able to pull all these networks together into a cohesive whole.

7. Infrastructure: in other countries this is taken for granted, but we need more bandwidth and better infrastructure. Its a no-brainer. It needs to happen

8. Legal and regulatory environment: this is Andrea's 'make or break' point. It needs to change. There are problems around IP movement, Reserve Bank, work permits for foreigners in order to attract skills.

9. Local market - SA is between 0,6% and 1 % of worldwide market. Our local market is too small. We need to have a global mindset and look to where the bigger markets are as well.

10 Access to foreign market - Vinny and Justin have covered the challenges here, particularly of facilitating payments.

11. The brand: very important. South Africa does not have a brand for technology, R&D and business. Hopefully Silicon Cape can address this.

12. Culture of entrepreneurship: do we really have one. Is entrepreneurship seen as a respectable career or something you do because you can't get a job or got retrenched. Failure is part of success but does this society accept failure so that entrepreneurs can admit to their failures, pick themselves up and try again.

13. Mediocracy is simply not good enough: its not OK to just be OK. There needs to be a drive for excellence and a drive to conquer the world.

14. Lifestyle versus world-class: a lot of entrepreneurs want to live in Cape Town and having achieved the lifestyle they seek, they sit back and rest on their laurels. They need to push to be bigger, better, world-class.

15: Patents: not enough are being registered.

16: Success stories: yes we have them but they are not well-known and not profiled enough. Those people who have success need to come forward, stand up and be counted. We need to profile our role models.

17. Passion: we have it! In abundance. The SiliconCape Initiative and the turnout today prove that.

8:03 am
"I hear a lot of cynicism about Cape Town - people ask what start-ups there are here," says Justin Stanford at the launch of the Silicon Cape Initiative in Camps Bay this morning. "But there is an entrepreneurial ecosystem here that wants to develop. It might be fragmented at the moment and there might not be a great deal of mutual awareness, but we have the start of an ecosystem," he adds – and I'd have to agree.

I've spent the last few days in Cape Town, having travelled down from Johannesburg where I am based and have been immensely impressed by the vibrancy of the entrepreneurial community here. I've met with VC firms, incubators, mentors, the City of Cape Town and many others - all of whom want to see entrepreneurs grow and thrive.

As Justin says, Cape Town has a lot of the natural ingredients that has made Silicon Valley what it is today - its a beautiful place to live, it has great universities, it has a personality and culture, an entrepreneurial community, and a willingness from local government to support entrepreneurs. The costs of building a company or a product are also much lower here.

But building the Silicon Cape is about more than the place - its about the people. "So the question then becomes 'What do we need to do to attract the right people to Cape Town so that it becomes a hub of IT entrepreneurship?'" says Justin.

We need an abundance of venture capital - and we need to overcome the significant regulatory barriers that currently exist. South Africa is lagging behind the rest of the world and the rest of Africa when it comes to access to good broadband. "Legislation is a big headache. VCs fall under FAIS which makes it very onerous to set up a fund. Its difficult for local companies to get paid in foreign currency," Vinny Lingham points out. So we need to ensure that South Africa becomes a region that offers good commercial opportunities for venture capital firms, investors and entrepreneurs. "We have a wealth of talent coming out of universities here but are currently losing a lot of them because of these hurdles," says Justin. Part of what SiliconCape is about is creating a platform to debate these issues, connect entrepreneurs and address the challenges that currently exist. It needs to be driven by the entrepreneurial community.

South Africa has the potential to be the next IP exporter. And as Justin says, "If we don't become exporters of IP, we will become exporters of talent."

South Africans are an innovative and formidable people. They have the ability to overcome the challenges and make the Silicon Cape vision a reality. Get behind the movement. Make it happen.