Ideas are free. Developing them into viable businesses, not so much. Developing them into viable online businesses…well…take a number. Especially if you live in South Africa.
Entrepreneurs with exciting new ideas for online ventures usually have two problems:
1. They are unable to get funded for the first stage of developing their product
2. Their team is not rounded enough in technical, business and marketing skills. In fact, very often, there is just one person behind the idea, who thinks he can single handedly take the product to market. Sometimes he can, but most often he is too delved in programming to understand the importance of a business plan and market research.
So the solution has almost always been to work on the venture as a sideline to a “real” job, or to fund it out of your own pocket. Neither of these is a good solution, nor a long term one.
Which is why I think that the new initiative from the Innovation Hub, GIBS and IdeaBank (my company) is particularly exciting for online entrepreneurs. Called Business Beat, the program is a collaboration between the GIBS MBA students and online entrepreneurs and “techies”. Aiming to bring together experts from all necessary disciplines (finance acumen, marketing, innovation and technical expertise) the program will create 15 teams which will produce a prototype and business plan for a viable online venture. Along the way, the teams will be mentored and the aim is to plan out at least 15 excellent ideas that can be taken to market.
At the end of the program, the plans will be evaluated and the three best ones will make it into the Innovation Hub Maxxum incubator for full-on development.
The first stage of the program happens this coming Monday, Nov 3 at 2pm at the Innovation Hub in Pretoria. It is an introduction session to the program, and is compulsory if you want to participate in Business Beat. There will be venture capitalists there, as well as existing online entrepreneurs to set the mood and answer any questions. Attendance is free and strongly encouraged!
If you are interested to participate (whether you have the ideas, the business skills or the technical skills) and are committed to seeing the project through to the end then please sign up here, visit the wiki for more information or email me on eved@ideabank.co.za.
South Africa has a very weak venture capital structure for online entrepreneurship, and an almost non existing structure for first stage or angel funding. In the ideal world, I would like the US VCs to wake up to the potential of Africa not only as a new market, but as a new source for highly skilled technical expertise and innovation. I think it will happen in due course. Certainly, we are a place where you get more bang for your buck.
In the meantime, we will continue to find innovative ways to support our online entrepreneurs. Hopefully, Business Beat will produce the ideas – and the actual online applications – to feed the entrepreneurial spirit and encourage innovation in this field. And, equally hopefully, it will prove to the potential funders that without supporting the first stage of development, there is little opportunity to even have a second stage.
Join the evolution!
Kudos are due indeed Eve and goodluck with a real exercise in creating wealth
South Africa does, indeed have an appalling record of not supporting start up businesses.
Our own business was kyboshed after one of our two directors (the one with the required formerly disadvantaged status) depleted our startup capital on flatscreen TVs and the like.
Having lost our BEE component, we were closed down by the so-called Development Agency in spite of the potential of the project to enrich the earnings of thousands of young school leavers from the local township.
It seems that ‘Empowerment’ is not about giving these youngsters the opportunities to develop careers with the potential to earn thousands of US dollars every month, and so help support their families and communities.
No, it is about selecting a few faces from the black elite and handing them the keys to the corporate safe.
Okay, rant over.
The significance of online businesses is that the startup costs and overheads are affordable, even for township dwellers.
A coza TLD will cost R50 per year and space on an American hosting server less then ten US per month for an unlimited number of web sites.
Just, additional to my post above, the reason I mention American hosting servers is that servers in South Africa are about twenty times more expensive.
I suppose the local companies take their lead from Telkom?
Online business in South Africa is an oxymoron until more than 10% of the South African population get online and with our current governent and single supplier of Internet model I don’t see that happening soon. Better to give someone a job handing out pamphlets at the robots and you will get more business than paying 20 geeks Major bucks to put up web 2.0 site that will be ignored by most because the lack of critical mass and hits make whatever product you’re trying to shift 10 times more exspensive than buying it from an overseas website which is probably superior to the what the local site could ever offer. Oh well good luck….
Please pay for advertising like everyone else. This is the second blog of this nature.
Lets leave Thought Leader for opinion pieces…
@me
I agree that the Internet usage penetration is very low – (although, in real numbers we still have more Internet users than, say, Belgium). I guess the trick is to develop applications locally that have instant global appeal…
@Doug
I’ll pay for advertising once you pay to read my free blog posts
“we have more users than belgium” is up there with people in birmingham saying “we have more miles of canals than venice”. while technically it’s true, practically, it isn’t.
and, ugh. the *costs* of having internet in south africa will suppress any real development of e-business here. i am at a serious competitive advantage to people who do what i do in the states because i have to pay twice as much [and it was 4x as much, in dollar terms, before the dollar went on steroids], for an inferior internet product. my phone bills approach R1600 a month just to have an internet/phone package to keep me in business.
that is merely 2 phone lines, a 4Mb connection, and a 7Gb bandwidth allowance.
someone needs to smack some sense into “dr” casa-burro [sic]; it’s clear that she is deep in the pocket of telkdom, right along with the rest of the government.
i had to deal with british telecom 20 years ago. i did not think that i could have a *worse* telecoms experience…. until i moved here.
I think your initiative is a good start Eve and I commend you. Pooling the minds of so many experienced tech savvy folks should have some interesting results. Somehow though you need to focus them less on what their great minds can achieve, and more on what the real market needs are that are crying for solutions.
Far too often I see guys who are convinced the market will love their product but it is either not compelling or not unique. You can’t be bringing out what everyone else is doing thinking you can do it a little better. This global market means that a guy in another country can bring out a product and in no time take out your market, a week before you go live. You’ve got to get smart and not look at technology but rather at the market – then create the technology to solve the problem.
And finally, it’s worth nothing if you cannot monetize it, and that does not mean ads. You’ve got to find a real way to turn your idea to money. If add revenue is in your top 3 lines of revenue sources, you have a problem.
And that’s my 2 cents – Good luck with the competition.
Great initiative Eve, and fair response to Doug, I must say
Hope we will see more coverage of what comes out of this, as well as the parties involved. Putting together the skills is crucial, and hopefully it will be well utilised and appreciated.
As you say, VC and seed capital is a rarity south of the equator in Africa – it would be awesome if this helps global funders to sit up and take notice. Good luck with the programme! We will watch the results with interest.