By Adam Wakefield
Being one of the most successful tech executives to come out of Africa, what about cutting your teeth in South Africa if anything prepared for your career in Silicon Valley when you took Yola out-country? Was there anything you were surprised by after making the move?
When I started incuBeta & Clicks2Customers, there was a strong short term mindset around focusing on revenues, profits and sustainable growth. We utilized very little capital and grew organically to a large extent. Although initially, we had 100% of our revenues for the first 3-4 years coming from the USA and Europe, we could not maintain our competitive edge in those markets without a physical presence and we lost out to local competitors. Luckily, we focused on South Africa and emerging markets and build a good footprint there.
With Yola, I raised tens of millions of dollars in capital and focused on acquiring millions of users initially – revenue was not a priority in the early days. With a land grab type model, you need to get to critical mass quickly but it was and still is a very competitive space and there are many players playing in it. I think I was just surprised by the sheer competition that came out of the market – we were the first to launch a browser based site builder back then, within 2 years, there were over 50 competitors worldwide. Eventually, the focus turned to revenues and inevitably, the user growth slowed but the company was able to become profitable as it monetized the user base.
Gyft was an entirely different experience. We focused heavily on getting the product right and finding product market fit and then adapting it to the right communities that saw value in the offering. When we were acquired, we had been growing rapidly and had very high customer retention rates – which was critical for the business.
Civic is an entirely new idea. We haven’t launched yet, so not much to tell at this point.
After departing South Africa, what was initially the most challenging aspect of adapting to overseas digital markets and why?
The markets here are vast and so product differentiation is critical. Go too broad and you risk having a mediocre product and if you go too narrow, you may not achieve scale. It’s a delicate balancing act.
Are there any universal truths?
Yes. That there are no universal truths. Every situation is different.
What can we expect to hear from you at the IAB SA Digital Summit?
I’m looking forward to talking about what I see the opportunities are for South African entrepreneurs and what we need to do in order to ensure that we are the leading tech nation in Africa, at the very least.
In an interview in November 2014, you recommended that South African entrepreneurs invest their time and money in building the next big thing for South Africa and Africa. Does your opinion back then still hold true and why?
Yes. I think the isolation from the rest of the world really means that no one is focusing on how to solve the problems of a billion people. And, conversely, how can you solve problems in markets that you don’t operate in. I highly recommend that entrepreneurs find their local success here first, before moving on. It only gets harder.
What led you to starting Civic and having recently secured $2.75 million of seed funding, led by Social Leverage, are there any basic rules of thumb you follow when on the hunt for funding?
For me, as both a tech investor and tech entrepreneur, I look for three things:
- Two to three co-founders, of which at least one has to be a high technical coder
- All willing to quit their jobs, sell their cars and downgrade their lifestyles in order to stretch investor capital as far as possible
- A big idea, with a solid starting point (MVP) that can help deliver traction and proof points. Grandiose execution plans are almost always doomed to failure.