Reflections on South Africa, 7 years on

by oneafrikan on May 21, 2009

I’ve just had the privilege of spending some time in South Africa, my longest trip there in 7 years, and I must say it’s been a totally different experience than I had anticipated.

I’ve come away much, much, much more interested in SA than I thought I would; more proud of my family, friends and people in general; more homesick of the land that I grew up in; and more convinced that it has a great responsibility to offer something unique to the world.

So what follows are my thoughts, primarily so that I can get them down in my own head in some sort of reasonable, thoughtful fashion; and of course so that others may benefit in some way.

Cape Town:
Amazing place, fills you with energy and a sort of peaceful quiet. Didn’t get to experience a proper CT winter, so mine were rose tinted goggles, but hey I’m allowed to fantasize. Very different vibe to Jhb though.

Johannesburg:
I can’t believe the growth that has gone on in Jozi. When I left, Jozi was pretty much up to the concrete highway and a little more in places. Now, it extends far beyond that, with construction everywhere. Office space is everywhere you look (which means there are lots of salespeople looking to fill space = deals to be had), and is relatively much cheaper than in Londres. Sandton seems to be the hub now, with central Jozi relegated to a no-go zone for most people. When the Gautrain is done, think it will have a huge impact on the central Gauteng area (Pretoria, Midrand, Jhb).

The bush:
I fell in love with the bush all over again, can’t wait to go back.  The smell of the veldt, the sounds of it, can’t really describe how it affected me, other than to say the sense of peace and quiet I felt was not something I’ve felt in London / Europe or much anywhere for that matter.  Why are we destroying our natural world?

Living there:
Everyone drives everywhere they go – definitely no walking culture for people with cars (at least in Jozi – maybe CT more so) – primarily because there isn’t a formal public transport system, and also because of the distances involved. In one day travelling to 3 meetings I did about 150km without thinking.

Shops in general aren’t open late, so there’s no such thing as nipping to the Spar or the booze shop at 8:30 for some quick chow and a couple drinks for the mates braai.

Costs
It’s really weird – some things are super, super cheap using the pound; but others are so expensive you can’t justify the expense even paying with pounds. Bread, milk, and other staples fall into the cheap category for obvious reasons, along with meat and veggies. Something like salmon is expensive, digital stuff is relatively more expensive, and photographic equipment 2x to 3x the price on Amazon in the UK.

Pound for Rand however, I think you’re still going to be able to buy more for your money in the UK – supply and demand economics would probably bear me out on this, although one day I’m going to do a sample shopping list in London and Jozi and see what happens. If you go to a bar or restaurant however, you’re going to get more for your money in SA, and generally you’re going to eat better food, which is kinda counterintuitive. That said, I didn’t go to the Gordon Ramsay spot at the new One & Only hotel in CT, so can’t comment on Gordon Bleu food ;-)

Internal flights are much more affordable than they used to be, but if you compare distance and costs with European carriers, I think that similiar EU options are going to be much cheaper = same supply and demand argument here. That said, factoring in flights for internal travel for business seems to be affordable.

The property rental market is cheaper than in the UK (people interested in property would already know this) so for the rent you would pay in the UK, you can get a relatively better and bigger place in SA.

One of the things I really, really didn’t enjoy, was the constant begging. At every street corner you’re confronted with that sinking feeling that you can’t keep doling out cash every time someone asks for it – probably 10 to 20 times a day – even though you want to, which made me feel uncomfortable. I started out givng R5 to “parking professionals” every time I parked the car I was using, and got a swift kick in the rear, to say that I was raising the prices for everyone else locally. Still, R10 to R20 a day is a lot to give away when you do it every day out of guilt.

Bank charges are prohibitive – it seems the SA banks have a nice little big business going there – everyone is aware of it, and “how to reduce bank charges” is a topic that came up a lot.

Bandwidth:
I paid R250 (£20 odd) for 500MB of hotspot bandwidth valid for a year, to use at participating hotspots. Not sure what you pay for something similiar in London, not used that for years now.

We went with WebAfrica ADSL based on a recommendation from a friend, and have to say the service was great, but the bandwidth not that great – approx R250 for 320k/s capped at 1GB is gold rush stuff, so can only hope that is going to drop with the new cable coming in.  In comparison, I pay £21 per month, for 25GB of bandwidth at 8MB/s (which is about 800k/s in real life). Sucks huh?  Good lesson in supply and demand though ;-)

The people
I’ll never forget the man that offered to pay for my parking when I said that I had to go and draw cash from a foreign account (first day, so no cash). His rationale was that the charges alone would be more than the cost of the parking. I didn’t take him up on it, and did swallow when I paid. Nice man though ;-)

There seems to be a general feeling of hope and optimism in the air, mainly around the different sporting events happening in the next two years (IPL, Lions Tour, Confederations Cup, World Cup – missing any?), as well as the recent democratic elections which went pretty smoothly. I found the people I interacted with friendly, helpful, smiling, and willing to go the extra mile.

I got sick and tired of Highveld Stereo after about a week of listening to it, so started tuning into 702, 5FM, RSG and Radio 2000 – and found that between them I was able to stay informed and not hear the same jokes, same jibes and same songs every day. Sad to see Jeremy Mansfield and his crew still doing the same stuff 7 years later, but I guess if it aint broke, don’t fix it….  Ummm, no.

The politics:
I’m no politician, and prefer to focus on results whatever the politics, but my overwhelming impression is that the country is expecting service delivery from the ANC, and JZ (Mr Zuma to the uninitiated) is tasked with overseeing that delivery. He’s got some great people in to help him so things are looking good, but we’ll see. I was gobsmacked by how much emphasis there is on government, and how much red tape (I could be wrong here but that was what I saw and heard) there is for private enterprise to jump through. I’m not gonna say much more here – until I educate myself more.

The Web scene:
I spent a lot of time meeting with people, getting a feel for what’s going on and how big the market is, and it seems to me that there is a pretty small layer of folks who are vocal (read: tweeting) and who are talking (again, read: tweeting and blogging) about stuff (maybe 50 to 100), and then another layer of folks who aren’t into the vocal social web (so I can’t comment on them). People seem to be working for themselves, in small agencies, or in much larger institutions (think banks, insurance companies etc) with relatively few in what I would call mid-size businesses, or startups. Apparently there is more (service / client) work around than there are good people to do it, which is refreshing – means there is a demand and I imagine there are a lot of folks trying to fill that demand.

All in all however, the internet market in Southern Africa (broadened intentionally) is very small, which leads me to a question I’ve been asking for a long time – if the local market is small, but there are people with skillz, why is there this persistent focus on building things for the local market? Why not build something for the global market?

As I see it, the primary constraints are amount of bandwidth, and the corresponding cost of said bandwidth – which is crippling to say the least… but that kind of pressure brings focus and ingenuity, which is what every good startupp needs more than anything else.

Which brings me neatly to my next point: Everyone is talking about the Seacom cable which is supposed to be opening up the bandwidth sluice gates come June / July. Assuming that de-regulation goes ahead, and there are no monopolies, I’m hopeful (along with everyone else) that things will change. Demand will create competition which will bring prices down, which should create more demand. Dark Fibre Africa are laying fibre optic cables in Jozi, CT and Durbs, which is great – awesome to see such progress. If this is the yellow brick road, I hope it leads to Kansas! In the meantime, everyone seems to be using 3G cards, and wireless is nowhere to be seen. Anyone spot an opportunity? ;-)

Business:
The smart money is on the massive growth of the middle market in the coming years. Some people say 3 yrs, others 5. Bottom line is there is a whole layer of people entering the middle market with disposable income to spend. The corresponding side effect of this is that there should be growth of the products and services this new market will demand, of which web based stuff will be one of them.

I’ve arrived back in London feeling that there are opportunities everywhere in SA for people with passion, focus, drive and integrity – who will provide a better product or service, or who spot the growth opportunities an emerging market economy creates. One of the key problems for this will be finding good people, as it seems that the good ones are already gainfully employed ‘cos they’re like hens teeth when you do the math (total population – working population – people in your sector – people with enough experience = a few good, ahem, men, to coin a phrase); but one of the corrolaries to this is that people at the lower end of the skills ladder or just out of the education system are going to be a lot cheaper than in most mature economies, and that those people (not yet dulled into socialist working practices) are going to be hungry for work and the opportunity to better themselves.

That said, most people I spoke to said the same thing consistently about entreprenuers and funders (angels, seed investors, VC’s), and that’s that there is a huge gap / mismatch / chasm between people looking to start ventures, and people looking to create wealth by funding ventures more risky than property or the markets. The starters say there are not enough funders, whilst the funders say there are not enough good starters…  I heard of at least 3 VC funds apparently not doing much locally – why is that?

Some people I spoke to mentioned that there is a stigma of failure in South Africa, holding people back from starting things, which I find interesting.  Coming from an entrepreneurial family, I’ve been around the smell of success and failure a lot (only realising how much of a differentiator it is now) so I’m not sure I can identify with that enough to comment.  Anyone got any perspective on this?  My humble estimation is that the internal fear of jumping off the ledge and starting is being confused with a cultural fear.  May be wrong tho….

Would love to hear your thoughts…..

Update:
This post has been added to the HomecomingRevolution site.

4 comments

Don’t know about there not being enough good starters for VC’s to work with, but a platform is needed. The opportunities are everywhere though.

Great post, it was great to have your input while your were here

by Mongezi on May 21, 2009 at 1:01 pm. Reply #

Nice objective [as much as you can be, anyway] post on SA from a broad perspective.

Love the comment re the web scene – “Why not build something for the global market?” – I agree in that we can build businesses that are locally relevant but that can be scaled globally. This then satisfies the local requirement for innovation while providing huge growth upside to the entrepreneurs. We’re going to get there, I believe it.

The VC matter is a problem – sounds like we speak to the same people here. Funders in SA need to address this, but entrepreneurs need to show some initiative. There are clear cases where this has happened and the businesses are growing. But as above, I also believe this will start gaining momentum over the next couple of years.

Hear you are coming back to SA. Awesome, hope you’ll enjoy being back!

by Darren Gorton on May 21, 2009 at 1:09 pm. Reply #

Hmmm,,, very interesting.

I had written a gang/load o’ thoughts about ‘lack of funding’ — changed my mind, I don’t like sounding like i’m upset/angry/yadi/yadi/yada

but, in the defence of the entrepreneur I’ll say this: the people, companies (and government), vc, incubators: tend to focus on tried/tested/business/ideas (and they have ridiculous requirements which go against the meaning of the word: entrepreneur; but like you said: supply/demand plays in)

alas, you perspective is inspiring in the sense that you see opportunity where we (speaking in the collective, but It could just be me) lost faith in.

by lebogang nkoane on May 21, 2009 at 1:30 pm. Reply #

Gareth – great post.

On costs – don’t forget the cheap wine… I still come back to the US with boxes and boxes of wine every time I go back to SA :)

On business/bandwidth – I agree (as I’m sure everyone does) that bandwidth is the biggest issue. I recently met with a guy from Media24. They just released an iPhone app for News24 (SA news source). The app is great, but the iPhone penetration in SA is tiny. To your point on the global market, why not turn this into a source-agnostic app, and market it worldwide instead! One example (that’s not making money, but still…) is Mobilepress – a WordPress plugin developed in SA that formats WordPress blogs for mobile phone. Great plugin.

On that point – I recently had a discussion with someone over where SA’s “Silicon Valley” is going to be. It seems like everyone thought Jo’burg, but that all the signs are now pointing to Cape Town. What are your thoughts on that? Where is the tech boom going to happen?

And lastly – yes, the bush. It’s the bush that I miss the most…

by Rian on May 22, 2009 at 5:04 pm. Reply #

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