The aim of the trip was to expose South African entrepreneurs to the most cutting-edge companies, incubators, venture capital investors (VCs) and hi-tech startups from the Valley. The trip was also an opportunity for us as entrepreneurs to establish new global business relationships. Our group had the opportunity to engage with startup founders, angel investors, venture capital funds and multinationals and we made many connections. Key to deriving value from the trip was the open way in which founders and VCs answered questions and the clarity with which they described the differences in South African and American funding environments. A big takeaway was that founding teams should be focusing on operations and not fundraising – a big problem in our local context.
This trip also focused on the conditions enabling Silicon Valley to be arguably the centre of global technological innovation. While I truly believe that pound-for-pound we ought to have no inferiority complex in comparing to many of the startups we met on the trip, it is clear that the environment for startups is vastly different overseas. The good news is that as success stories come from Africa, more capital will make its way to our shores.
From meetings with Roelof Botha and Bill Draper to sessions hosted by Facebook and Google, there were multiple lessons to be learnt and much wisdom shared. I would encourage all Fellows who have tech-enabled businesses to seriously consider applying to this programme. It is both an entrepreneurial and personal journey of discovery and has provided new networks, new friends and new advice.
Some Valley lessons worth sharing:
- Venture Capitalists want to see scale in terms of decreasing unit costs and unique IP.
- Don’t think of your business concerns in terms of paying rent for the next month, but rather how you’ll expand in the next decade.
- Pivots / iterations on your business model should always be data driven.
- Grow a pipeline of add-on services or products that you could branch into before you choose which you actually go out to build.
- Spend time building tracking metrics before your business goes live so as to accurately monitor your successes and/or failures.
- Your funders should see growth as being more important than profit. If they don’t, disengage.
- Build a fantastic team, early.
- Dilute your ownership for growth capital – if you’re not growing you’re not working hard enough.
- Companies don’t have to go global to be great.