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

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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Veeam passes $1bn, prepares for cloud’s ‘Act II’

Leader in cloud-data management reveals how it will harness the next growth phase of the data revolution, writes ARTHUR GOLDSTUCK

Veeam Software, the quiet leader in backup solutions for cloud data management,has announced that it has passed $1-billion in revenues, and is preparing for the next phase of sustained growth in the sector.

Now, it is unveiling what it calls Act II, following five years of rapid growth through modernisation of the data centre. At the VeeamON 2019conferencein Miami this week, company co-founder Ratmir Timashev declared that the opportunities in this new era, focused on managing data for the hybrid cloud, would drive the next phase of growth.

“Veeam created the VMware backup market and has dominated it as the leader for the last decade,” said Timashev, who is also executive vice president for sales and marketing at the organisation. “This was Veeam’s Act I and I am delighted that we have surpassed the $1 billion mark; in 2013 I predicted we’d achieve this in less than six years. 

“However, the market is now changing. Backup is still critical, but customers are now building hybrid clouds with AWS, Azure, IBM and Google, and they need more than just backup. To succeed in this changing environment, Veeam has had to adapt. Veeam, with its 60,000-plus channel and service provider partners and the broadest ecosystem of technology partners, including Cisco, HPE, NetApp, Nutanix and Pure Storage, is best positioned to dominate the new cloud data management in our Act II.”

In South Africa, Veeam expects similar growth. Speaking at the Cisco Connect conference in Sun City this week, country manager Kate Mollett told Gadget’s BRYAN TURNER that the company was doing exceptionally well in this market.

“In financial year 2018, we saw double-digit growth, which was really very encouraging if you consider the state of the economy, and not so much customer sentiment, but customers have been more cautious with how they spend their money. We’ve seen a fluctuation in the currency, so we see customers pausing with big decisions and hoping for a recovery in the Rand-Dollar. But despite all of the negatives, we have double digit growth which is really good. We continue to grow our team and hire.

“From a Veeam perspective, last year we were responsible for Veeam Africa South, which consisted of South Africa, SADC countries, and the Indian Ocean Islands. We’ve now been given the responsibility for the whole of Africa. This is really fantastic because we are now able to drive a single strategy for Africa from South Africa.”

Veeam has been the leading provider of backup, recovery and replication solutions for more than a decade, and is growing rapidly at a time when other players in the backup market are struggling to innovate on demand.

“Backup is not sexy and they made a pretty successful company out of something that others seem to be screwing up,” said Roy Illsley, Distinguished Analyst at Ovum, speaking in Miami after the VeeamOn conference. “Others have not invested much in new products and they don’t solve key challenges that most organisations want solved. Theyre resting on their laurels and are stuck in the physical world of backup instead of embracing the cloud.”

Illsley readily buys into the Veeam tagline. “It just works”. 

“They are very good at marketing but are also a good engineering comany that does produce the goods. Their big strength, that it just works, is a reliable feature they have built into their product portfolio.”

Veeam said in statement from the event that, while it had initially focused on server virtualisation for VMware environments, in recent years it had expanded this core offering. It was now delivering integration with multiple hypervisors, physical servers and endpoints, along with public and software-as-a-service workloads, while partnering with leading cloud, storage, server, hyperconverged (HCI) and application vendors.

This week, it  announced a new “with Veeam”program, which brings in enterprise storage and hyperconverged (HCI) vendors to provide customers with comprehensive secondary storage solutions that combine Veeam software with industry-leading infrastructure systems. Companies like ExaGrid and Nutanix have already announced partnerships.

Timashev said: “From day one, we have focused on partnerships to deliver customer value. Working with our storage and cloud partners, we are delivering choice, flexibility and value to customers of all sizes.”

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‘Energy scavenging’ funded

As the drive towards a 5G future gathers momentum, the University of Surrey’s research into technology that could power countless internet enabled devices – including those needed for autonomous cars – has won over £1M from the Engineering and Physical Sciences Research Council (EPSRC) and industry partners.

Surrey’s Advanced Technology Institute (ATI) has been working on triboelectric nanogenerators (TENG), an energy harvesting technology capable of ‘scavenging’ energy from movements such as human motion, machine vibration, wind and vehicle movements to power small electronic components. 

TENG energy harvesting is based on a combination of electrostatic charging and electrostatic induction, providing high output, peak efficiency and low-cost solutions for small scale electronic devices. It’s thought such devices will be vital for the smart sensors needed to enable driverless cars to work safely, wearable electronics, health sensors in ‘smart hospitals’ and robotics in ‘smart factories.’ 

The ATI will be partnered on this development project with the Georgia Institute of Technology, QinetiQ, MAS Holdings, National Physical Laboratory, Soochow University and Jaguar Land Rover. 

Professor Ravi Silva, Director of the ATI and the principal investigator of the TENG project, said: “TENG technology is ideal to power the next generation of electronic devices due to its small footprint and capacity to integrate into systems we use every day. Here at the ATI, we are constantly looking to develop such advanced technologies leading towards our quest to realise worldwide “free energy”.

“TENGs are an ideal candidate to power the autonomous electronic systems for Internet of Things applications and wearable electronic devices. We believe this research grant will allow us to further the design of optimized energy harvesters.”

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