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What it takes to make it as a start-up in SA

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While South African start-ups have the talent and drive to operate and compete in the global market, the failure rate of start-ups within their first year is truly staggering. The fundamental question therefore remains, what does it actually take to make it, asks DANIEL SCHWARTZKOPFF of DataProphet.

Daniel Schwartzkopff – Commercial Director and Co-Founder of Cape Town-based start-up and machine learning specialists, DataProphet – refers to the 2016 report, ‘The Small, Medium and Micro Enterprise Sector of South Africa’. Commissioned by the Small Enterprise Development Agency, the report highlights the growing concern related to risks that threaten the existence of SMMEs.

“This threat is supported by multiple reports and statements by leadership such as that of South African Minister of Trade and Industry, Rob Davies, who in 2013 noted that five out of seven new small businesses started in South Africa fail within their first year.”

“The Global Entrepreneurship Monitor (GEM) also found that the survival rate for start-ups is low and that opportunities for entrepreneurial activity appear to be at their lowest in developing countries.”

Schwartzkopff, who was just 19 years old when he first became involved in the establishing successful start-ups, notes there are a number of local and international hurdles entrepreneurs need to be prepared for on their journey.

His biggest piece of advice is to have a defined goal and a revenue strategy from day one.

“While selling the potential of your dream may open a door or two, having solid figures and a realistic plan to back it up will get you far further.”

He says, “Luckily, age is not as much of a barrier as it once was. There were times when young founders and directors would be quickly overlooked for their more experienced counterparts.”

“There has been a really positive shift in this regard, especially in the international start-up environment, where successful young business owners and entrepreneurs are recognised as being on top of their game and able to hold their own in a room full of clients or investors – sometimes double their age.”

If you have your sights set on entering the international playing field, Schwartzkopff – who spends part of his time in the US working with DataProphet’s Silicon Valley-based clientele – emphasises that the most difficult thing really is to get your foot in the door.

“Taking your start-up to a global level means that you have to make connections and get new clients from a region which may be completely new to you.”

“This is one of the hardest things you can do considering that this requires a permanent presence and a clear strategy of how to compete with existing competition who have already made a name for themselves – this takes time and can definitely not be rushed.”

“In addition, you need strong planning and networking skills as well as the ability to sell yourself, your business and the innovation which you are able to offer,” he says.

DataProphet, which was founded in 2013, recently entered into an investment partnership with one of the country’s top global investment and private equity groups – Yellowwoods Capital Holdings.

Schwartzkopff notes that, “Not only is this investment testament to the team’s hard work but it still allows us the freedom to do what we do best.”

He explains that while local tech start-ups are “up there” with the best in the world, it is difficult to find a potential investor and even more difficult to find the right one. “Spending a bit more time and effort to ensure the right fit however, is definitely worth it.”

“A priority for many upcoming start-ups, securing investment is often a source of frustration and worry. The landscape is limited in South Africa and it is easy to be tempted to accept your first offer,” Schwartzkopff explains.

He advises that entrepreneurs spend some time talking to others who have been in the same position and set out a clear vision of what is needed from an investor including their level of involvement in the day-to-day running of the business and their cultural fit with the organisation.

“Do your investors share your vision? Do they understand your business and your brand? Cultural fit should be a major deciding factor when considering an investor,” he says.

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Epic Games brings a
Nite-mare to Android

Epic Games’ decision to not publish games through Google Play inadvertently opens a market to Android virus makers, writes BRYAN TURNER.

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Epic Games, the creator of Fortnite, decided to take the high road by skipping Google Play’s app distribution market and placing a third-party installer for its games on its website. While this is technically fine, it is not recommended for the average user, because allowing third-party installers on one’s smartphone opens up the possibility of non-signed and malicious software to be run on the smartphone. 

In June, malware researchers at ESET warned Android gamers that malicious fake versions of the Fortnite app had been created to steal personal information or damage smartphones. A malware researcher demonstrated how the fake applications works in the Tweet below.

While the decision to bypass Google Play was a bold move on Epic Games’ part, it has been a long time coming for app developers to move their premium apps off Google’s Play Store. The two major app distributors, Google Play and Apple’s App Store, take a 30% cut of every purchase made through their app distribution platforms. 

The App Store is currently the only way to get apps on a non-modified iOS device, which is why Epic Games had no choice for Fortnite to be in the App Store. On the other hand, Android phones can install packages downloaded through the browser, which makes the Play Store almost unnecessary for the gaming company. 

The most interesting part of this development is that Google is not the “bad guy” and Epic Games is no saviour to other game developers. Epic Games is a company with a multi-billion dollar valuation and has resources like large-scale servers to distribute and update its games, a big marketing budget to ensure everyone knows how to get its games, and server security to protect against malware. 

Resources of this scale allow the game company to turn a cold shoulder to Google’s Play Store distribution and focus on its own, in-house solution. 

That said, installing packages without the Google Play Store must be done carefully, and it is essential to do homework on where a package is downloaded. Moreover, when a package is installed outside of the Google Play Store, a security switch to block the installation of third party apps must be turned off. This switch should be turned back on immediately after the third party package is installed. 

This complex amount of steps makes it less worthwhile to install third party apps, in favour of rather waiting for them to reach the Play Store.

From a consumer perspective, ESET recommends not installing packages outside of the Google Play Store and to ignore advertisements to download the game from other sources.

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How to take on IoT

The Internet of Things (IoT) is coming, whether you like it or not and organisations today will look to platforms and services that help them manage and analyse the streams of data coming from connected devices, says RONALD RAVEL, Director B2B South Africa, Toshiba South Africa.

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Today, we are witnessing an explosion in IoT deployments and solutions and are moving towards a world where almost everything you can imagine will be connected. While this opens the door to many possibilities it also comes with its own challenges such as privacy and security.

The Internet has become an integral part of everyday life; it has been a free for all on a daily basis. IoT is a difficult concept for many people to wrap their minds around. Essentially, nearly every business will be affected.

Managing vast quantities of data across increasingly mobile workforces can be tremendously beneficial if done well, but equally can be cumbersome and ineffective if not managed properly. This is why technologies such as mobile edge computing are becoming increasingly popular, helping to increase the prevalence of secure mobile working and data management in the age of IoT.

Unlocking IoT

The evolution of IoT, despite rapid and ongoing technological innovation, is still very much in its fledgling stages. Its potential, though, is demonstrated by the fact that by 2020, Bain anticipates a significant shift in uptake, with roughly 80 per cent of adoptions at that point to have progressed to the stage of either ‘proof of concept’ or extensive implementation. This means that technological innovation in IoT for the enterprise is progressing at a similarly fast rate with many of these solutions being developed with utilities, engineering, manufacturing and logistics companies in mind.

Processing at the edge

For IoT to be adopted at the rate predicted, technology which does not overwhelm current or even legacy systems must be implemented. Mobile edge computing solves this. Such solutions offer processing power at the edge of the network, helping firms with a high proportion of mobile workers to reduce operational strain and latency by processing the most critical data at the edge and close to its originating source. Relevant data can then be sent to the cloud for observation and analysis, thereby reducing the waves of ‘data garbage’ which has to be processed by cloud services.

A logistics manager can feasibly monitor and analyse the efficiency of warehouse operations, for example, with important data calculations carried out in real-time, on location, and key data findings then sent to the cloud for centrally-located data scientists to analyse.

The work of wearables

The potential of IoT means it not only has the scope to change the way people work, but also where they work. While widespread mobile working is a relatively new trend in industries such as banking and professional services, for CIOs in sectors where working on the move is inherent – such as logistics and field maintenance – mobility is high on the agenda.

Wearables – and specifically smart glasses – have started to gain traction within the business world. With mobile edge computing solutions acting as the gateway, smart glasses such as Toshiba’s assisted reality AR 100 viewer solution have been designed to benefit frontline and field-based workers in industries such as utilities, manufacturing and logistics. In the renewable energy sector, for example, a wind turbine engineer conducting repairs may use assisted reality smart glasses to call up the schematics of the turbine to enable a hands-free view of service procedures. This means that when a fault becomes a barrier to repair, the engineer is able to use collaboration software to call for assistance from a remote expert and have additional information sent through, thereby saving time and money by eradicating the need for extra personnel to be sent to the site.

The time is ripe for organisations to look to exploit the age of IoT to improve the productivity and safety of their workers, as well as the end service delivered to customers. In fact, Toshiba’s recent ‘Maximising Mobility’ report found that 49 per cent of organisations believe their sector can benefit from the hands-free functionality of smart glasses, while 47 per cent expect them to deliver improved mobile working and 41 per cent foresee better collaboration and information sharing. Embracing IoT technologies such as mobile edge computing and wearable solutions will be an essential step for many organisations within these verticals as they look to stay on top of 21st century working challenges.

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