Opportunity Round Up – 25 June 2015

Vision to Reality Award Programme

The Vision to Reality awards programme celebrates emerging companies with tech-enabled solutions spanning across all industries. The programme aims to encourage companies with the best high-growth potential to become market leaders, and to inspire future start-ups..

INVENTORS GARAGE COMPETITION – SA Innovation Summit

Act quickly, as this opportunity closes on the 30 June 2015. Organisation or individual who has a proven concept, prototype or demo version of an invention Garage and Kitchen inventors who are crafting up a storm Entrepreneurs who are experimenting with new inventions Established companies with a new product launch Researchers with the latest tech at their fingertips
 

THE INNOVATION EDGE CHALLENGE – SA Innovation Summit

This challenge focuses on applying your existing profession, skills or hobbies – in any field! – to innovate early learning solutions. . The winning idea will receive a R30 000 cash prize at the SA Innovation Summit, as well as the chance to apply for up to R1mn in seed funding to facilitate the implementation.

MTN Business | App of the Year 2015

There is an app for that. South African app developers have a great opportunity to showcase their work, withe the App of the Year competition, sponsored by MTN. Each entry will be charged R250.00 (excl. VAT) per app/per category that is entered. In other words, if you enter one app into four different categories, you will be invoiced R 1000.00 (excl. VAT). Please note that entries close on the 26th of June 2015.

Technology for Women in Business (TWIB) Awards

The Technology for Women in Business (TWIB) Awards are meant to reward women achievers for the significant impact they have made in various sectors of the economy through the application of technology to create a competitive edge for their businesses. The awards also aim to increase the number of women searching for relevant technologies and applying these to grow and diversify their businesses.
Here is the link to the application form [PDF Download] www.dsbd.gov.za/assets/twib.pdf

 

Opportunity RoundUp – 18 June 2015

A couple more opportunities, some with some deadlines approaching quickly.
C.O.J.E.D.I. Internship Opportunities
Interesting approach by the City of Johannesburg to building skills through supporting internships.
Gauteng Accelerator Programme
The Innovation Hub is running four high profile innovation competitions for Gauteng-based researchers and entrepreneurs with plans to be global leaders in the Green, Medical, ICT, and Biotech sectors. Entries for the competitions open throughout the year to access more than R3 million in seed funding and incubation services.. Entries close 19 June 2015.
Innovation exchange – Innovation on the Edge
Here is a chance to redirect your profession, skills and/or hobby, to apply your brain to the development of young brains. Share your innovative ideas with us and help to transform young lives. A judging panel will assess the creativity and feasibility of innovations. If your idea is selected, you could win up to R30 000 in cash prizes at the Innovation Summit and have the chance to apply for seed funding (of up to R1 million) from the Innovation Edge.
Seedstars World – Seedstars Cape Town
Enter before the 20 June 2015, for an opportunity to pitch at Seedstars Cape Town. The teams pitching at the grand final, will compete for a flight ticket to Geneva and the chance to win up to $1.5 million in investment. You can look forward to an event filled with disruptive tech, inspirational keynotes and networking sessions.
 

What does set asides for South African small businesses tells us about economic policy making?

The Minister of Small Business, Lindiwe Zulu is championing the introduction of set-asides for small business in government procurement by September this year.The proposal is to set aside 30% of all government procurement for small enterprises. However, it is worth remembering that Cabinet on the 7 November 2007 announced a decision to do exactly that – create set asides for small businesses. How than do we explain the inaction on this decision for eight years?
The answer to this question cannot be answered by simply arguing that government is inefficient. Rather its the way economic policy is developed in South Africa. Three factors working together in a complex power play shed light on the delay.
First, after the Cabinet decision, the National Treasury blocked attempts to introduce set asides. The Treasury’s argument seemed to be based on two different arguments. On the one hand, they argued that the process of set asides was unconstitutional in that they preferred one supplier over another. On the other hand, they argued that the cost of services and products being supplied by the private sector to government would increase.
Second, is the broader tussle over economic policy. This policy process firmly pitted the Department of Trade and Industry against National Treasury during President Thabo Mbeki‘s administration. The tussle continued into the President Jacob Zuma administration, with the Department of Trade and Industry, Economic Development Department and now the Department of Small Business all arguing for the introduction of set asides. Zuma reaffirmed governments commitment to the policy of introducing set asides in the 2015 State of the Nation, and that potentially settles the issue.
Third, small business advocacy organisations in South Africa have a collective action problem. To impact on economic policy requires consistent lobbying and advocacy over a period of time and building support across wider groups in society. In the case of set asides being placed back on the agenda this collective action problem was solved not by better coordination of small business interest groups, but through activism within the government.
Eight years later, an agreement has been reached within government for the introduction of set asides. Treasury officials are apparently more comfortable with set asides, now that work on an online procurement system will make monitoring of contracts simpler and more transparent. Moreover, having a department focussed on small business — for which the introduction of set asides is one of its main priorities — influences internal discussions in Cabinet, as there is now a consistent champion for the idea.
Whilst, this agreement might be described as fragile, it is an important one. The agreement however took eight years to reach a point where it could be implemented and therein lies the core problem.
The 2007 plan was neither ideologically polarising nor posed a high risk of increased corruption. The green light should have been given to pilot the idea in some government departments, which would mean eight years down the line we would know whether set asides were a good policy or not, and not, as we are now, still waiting for the relevant regulations to be promulgated.
Instead we have lost years of experience in understanding how state procurement can support smaller players in the economy. It is an incredibly large lost opportunity.
But in other areas action has been speedy.
Notably, the Jobs Fund and Youth Employment Subsidy programmes run by Treasury have been fast tracked, suggesting that there are ways and means to ensure policy is implemented. Similarly, interventions in the infrastructure sector through the Presidential Infrastructure Investment Commission seem to suggest a concerted focus on resolving differences.
In other words, government might be better at solving macro-type problems, and not micro-type problems. However, it is in solving the micro problems — like selling services or products to a school or clinic, which set asides would support — that helps small businesses gain a foothold in the economy.
The eight year delay in implementing a Cabinet decision is cause for concern. If bureaucratic disagreements can stop Cabinet level decisions from being implemented then citizens have only a slim chance of impacting on government‘s agenda. This surely is not the democracy we hope to live in.
This article first appeared in the Sunday Times: Business Times (14 June 2015)

BRICS – Internet Users as a percentage of population

The South African Internet space is incredibly grumpy. In a couple of conversation, the outlook is described as incredibly gloomy, and there is a strong anti-government stance. The data now tells a more upbeat story. The diagram below shows that just under half the population in South Africa has internet access.  The data is drawn from the World Development Report, and compares South Africa and its BRICS partners on the measure, “Internet users as a percentage of population” (Latest data: 2013). Progress since 2009  in South Africa has been extremely good, and we are now comparable to our BRICS partners on this measure.
 
BRICS Internet
 
An interactive version is available at this link. 
Interpretations of the data for South Africa will no doubt be polarised. Some in the industry celebrate it as a triumph of markets, while government officials argue that Internet Services Providers are reaping the rewards of a rising middle class. Whatever, the interpretations, this bit of data begins to suggest that things are not as gloomy and grumpy as some suggest.

Automattic Buys WooThemes: Can you replicate the success?

Automattic vs Woo
 
Automattic, an American company that runs WordPress.com bought South African company called WooThemes for a reported $30 million.  Some statistics speak about the scale of business that WooThemes have built in eight years. Its ecommerce solution, called WooCommerce is estimated to power 24% of all ecommerce websites. This free plugin has been downloaded over 7,5 million times.  Automattic the buyer of the company is amongst the tech elites referred to as “unicorns” – which are companies with a valuation of over 1 billion dollars. The transaction is thus huge in possible impact, and all the more interesting as WordPress is open source software, and what it may mean for economic policy.

WordPress in South Africa

The deal shines a spotlight on WordPress in South Africa. The purchase of WooThemes by Automattic is a confirmation that South African companies are serious players in the WordPress space. The next most prominent South African WordPress company is called Obox are attempting to create a platform for non-technical users to easily make changes to their websites, which could be a game changer.  Smaller plugin companies and theme developers, such as Tiny Giant Studios, Site Origin and Promola, offer niche solutions and compete on the international stage. In the hosting space, smaller companies offer WordPress specific hosting, outcompetes on price, features and services many of the larger hosting providers. There are probably a couple hundred companies – mostly smaller ones – in South Africa selling services and products related to WordPress.
 

Open Source and Jobs

In our search to create more small businesses in South Africa, it is worth exploring what it would take to go from say 100 companies selling WordPress services or products to say 1 000 businesses. Assuming that each person would employ about 2 people, and that 50% of businesses succeed it could yield 500 new companies and around 1 000 jobs. All without the need for government to run expensive incentive programmes. To be clear, the government would need to play a role in supporting rapid skills acquisition and fostering a venture capital sector for smaller investors. To be successful, the market will require some support.
It may also sound as wishful thinking, given the skills challenges that we face in South Africa. Work opportunities in WordPress ecosystem are however not just about coding, with a range of employment opportunities being available. Skills needed in this ecosystem include skills of building communities, graphic design, warehousing and a range of other opportunities. Simply stated, expanding the South African ecosystem for technologies like WordPress could provide a way to stimulate jobs for people, with a short training period.
But, an ecosystem like WordPress requires world class coders. An interesting feature of both Automattic and WooThemes is that they have what are called distributed teams. Basically, employees in these companies work from wherever they want, and have no need to be physically present at an office. World class coders could thus be sourced from anywhere in the world. Moreover, South African already has a small number of world class coders, and with changes in our education system, a wide pool of coders could be developed over a 10 year period.
The foundation for expanding business ownership in South Africa are already there as companies like Automattic exist in other spaces, and allow for integrations with their core offering.  South Africa needs to quickly understand these opportunities, for in them lie potential areas for significant growth in the number of new firms being established, and for a radical revamp of education a nation of coders. It holds the promise of using the Internet to equalise our society, and with an expanded unemployment rate approaching 40% even the most doubtful should consider the prospects for service based jobs and businesses based on the Internet.

Strategy

Now, let us get a little more excited. If we widen the lens to include other open source companies and those allowing integrations to the core offering. Think about large Internet companies like Salesforce or Slack, and the many smaller ones. Our estimates would become much larger for new businesses, established businesses and employment. These businesses and jobs will be created in the services industry, but in a sector that is growing and international. In some respects, it resemble outsourced call centres. But, with one crucial difference: the cost of owning a business are much lower.
The deal reached between Automattic and WooThemes is an incredible deal, that places South Africa on the map. WooThemes is obviously an exceptional success story, but there are opportunities for smaller players. The signal however is not merely that WordPress is changing, but that as the Internet takes hold, it will not merely destroy jobs but will create opportunities to create new types of businesses.  If you an entrepreneur, what are you still doing reading this?
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