Startupbootcamp (SBC) is one of the leading global, early-stage tech accelerator programmes in the world. Fast Company SA caught up with Philip Kiracofe, co-founder and CEO of SBC Africa, and Zachariah George, co-founder and Chief Investment Officer of SBC Africa.
Can you give us an overview of the Startupbootcamp organisation?
Zach: SBC grows startups globally by giving them direct access to an international network of relevant partners, content, investors and mentors in their sector in more than 30 countries. Founded in 2010, SBC operates 21 accelerator programmes in 20 locations annually around the world.
It is the only multi-corporate and multi-geography focused accelerator programme that helps corporations solve critical business challenges through disruptive innovation. SBC does this by engaging with top-tier tech startups that can integrate with SBC’s corporate partners and simultaneously grow and scale them quickly. Presently, 79% of SBC alumni teams are still active and 71% have gone on to raise additional funding from many of the world’s leading VCs and Angels.
Last year, the global Startupbootcamp network launched the first-ever Africa-based SBC programme in Cape Town. SBC Africa is a leading accelerator focused on high-growth startups in blockchain, connected devices, payment solutions, capital markets and asset management, integrated supply chain, e-commerce, FinTech, RetailTech, InsurTech, alternative financing, identity management, digital connectivity, data and behavioural analytics and enabling technologies.
The accelerator is anchored by leading corporate sponsors Old Mutual, RCS, BNP Paribas Personal Finance, Nedbank, Woolworths Financial Services, and PwC that will support and grow the programme and selected startups. Global sponsors include Amazon Web Services, Google Cloud and Cisco. The programme is also supported by several service partners including Cloudworx, VC4A, Inner City Ideas Cartel, Brevity Law and The Loudhailer. Due to the B2B nature of the companies SBC works with, the primary focus is to create strong commercial opportunities for innovative tech ventures, thereby providing them a clear route to market through strategic partnerships with leading banks, insurance companies, telecoms and retailers across the continent.
How would you define being an entrepreneur?
Philip: It’s a combination of passion, vision, audacity, and arguably a dose of insanity. There is a great quote from George Bernard Shaw that says: “The reasonable man adapts himself to the world, the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”
In more mature ecosystems in the US, Europe, and Asia, there are many stakeholders (media, investors, corporate partners, developers, and early adopters) who support and fuel the entrepreneurial process. In Africa, startups have even more hurdles and challenges, so entrepreneurs here must be willing to defy conventional wisdom and often walk a lonely road. Being an entrepreneur is also a lot about being resilient enough to accept setbacks and constantly learn from experiences – good, bad or ugly.
What advice do you have for ‘techpreneurs’ who are looking to make a name for themselves and bring their product to market?
Zach: There’s a lot of advice we can give based on our experiences meeting hundreds of tech entrepreneurs over the last few years in Africa.
But here are our top 10:
1. Evaluate technologies dispassionately before you get involved. Avoid falling in love with your idea or your product.
2. When developing an idea, understand the behaviour of the focus customer segment. It’s easy to assume wrong and just as easy to fail.
3. Customers don’t pay for the world record – they pay for a solution that either saves them money, makes them money or makes their lives better.
4. Be aware of the long-term impact of short-term benefits; it’s a long winding road to commercialisation.
5. Tick the “stupid” things first; incorporation, equity, defining roles and responsibilities and authority will enable you to focus on the core task of making it happen.
6. The market will frequently put a higher perceived value on the solution than what the technology team might imagine, but this will only be known once you get there.
7. Don’t assume that the tech team has all the answers simply because they are the best at what they do. Your vision may be the only right one, simply because you have one.
8. There is such a thing as too much rocket science. When you’re being enamoured by what the technology is, ask what it can do and how soon it can do it for real people.
9. When communicating, keep it simple. People hear what they want to hear –depending on motivation and relevance.
10. Identify team-related issues early and work on resolving them. They won’t go away. It’s ego – not lack of funding – that’s the primary cause for startup implosion.
What, in your opinion, does it take to run a successful company?
Philip: A successful company is one that remains in the perpetual pursuit of failing (vs failure). In order to be truly disruptive, companies must never hesitate to take risks, especially big risks. Fail often and fail fast is the modus operandi, as that enables companies to do customer validation and discover product-market fit so that they can scale as quickly as possible.
You launched your first Africa-based programme in 2017. What were some of the challenges and successes?
Zach: It took us around 18 months from inception to execution to get Startupbootcamp off the ground in Africa. The concept of corporate venturing in Africa was pretty much non-existent until about 3-4 years ago. Interactions between large corporations and startups in Africa, prior to 2014, was mostly limited to either CSR/CSI/enterprise development initiatives and/or pure
M&A, and innovation within corporates was mostly internally focused.
In 2015, we ran the first-ever corporate-backed pilot accelerator programme for tech startups in Africa supported by Barclays Africa, and followed that with an accelerator programme for the Allan Gray Orbis Foundation in 2016. Both these programmes were very successful and several ventures that were part of it ended up getting substantial commercial traction and receiving significant investment capital. Getting large corporations to source external innovation through light, lean experiments, pilots and proof-of-concepts (PoCs) with disruptive tech startups was a pioneering step forward and was made possible thanks to some truly bold and visionary executives at our corporate partners. Startupbootcamp Africa, which is based on a truly open innovation driven ecosystem around corporates, mentors, investors, talent and startups has now made it possible for corporates to be more innovative and solve serious business challenges and simultaneously get startups access to market, clients and distribution channels to help them scale and grow more effectively.
This year, SBC will be hosting FastTracks in several cities. What are some of the outcomes you are expecting from these events?
Philip: This year, we will host a total of 19 FastTrack events across Africa, the Middle East and Europe, with 14 on the continent. Each city offers a unique insight into the particular challenges of the region. In Zimbabwe, where access to cash is very limited, 4 out of the 10 startups at our FastTrack were cryptocurrencies. In Ghana, there were several intriguing AgriTech businesses. Lagos delivered some great FinTech solutions and also 2 startups tackling transportation solutions. In East Africa, we met some very exciting founders with big visions for digital commerce services and mobile-money.
While we always hope to meet founders who may end up in the SBC Accelerator programme, the simple reality is that we can only host 10 companies per programme, so the vast majority of the startups will not get in, despite being very promising. So one of the most important outcomes is that every startup that attends leaves with tangible and material benefits. Each team receives nearly 2 hours of feedback from 5 different sets of mentors which can help propel the company towards greater validation. FastTracks regularly result in collaborations between the startups and our corporate partners.
Why the need for accelerator programmes – especially in South Africa and Africa?
Philip: African startups and corporates operate at a significant disadvantage compared to their competitors in Tier 1 tech ecosystems. Accelerators help founders move along the validation curve much faster by providing opportunities to work closely with some of the most innovative corporates on the continent. We also invest a significant amount of time working with the senior leadership of the corporate partners who are fully committed to transforming their internal cultures to be more lean and agile. Startupbootcamp creates a safe sandbox where that collaboration can take root, risks are centrally managed and then launch takes place. Our estimate is that alumni of these world-class accelerators can compress 12-18 months of growth into 3 months.
Can you give a couple of examples of success stories that came from startups’ involvement with SBC?
Zach: One of the things we are most proud of at SBC Africa is how so many of the startups in our 2017 cohort have pivoted their business models to be smarter in the way they acquire customers and scale their businesses through ways that are both cost-effective and resource-light. By engaging commercially with our corporate partners (both inside and outside of our programme) through 32 proof-of-concept projects, experiments and pilots, they were able to shorten their route to market, prove traction and be much better positioned to raise capital. Although it is hard for us to choose just a couple of our success stories, it is worth highlighting specifically the extent of the impact across different sectors. Here are examples of startups from two seemingly diametrically opposite verticals, fintech and social-tech:
DusuPay – A payment infrastructure startup from Uganda came into our cohort with around 1,000 customers and a good track record of implementing cross-border payment solutions across several African countries. Through our accelerator, they have now added South Africa to their roster, tripled their customer base to over 3,000 users, established key strategic partnerships with several banks, retailers, lenders and payment aggregators, as well as completely restructured their legal and operational entities to make them more efficient and simpler to work with.
Brownie Points – Brownie Points originally came into our cohort as a social enterprise helping non-profit organisations get more volunteers on board to make the process of volunteering more structured, streamlined and coordinated. Through our accelerator, they have now developed a tangible and scalable commercial business model where small and large corporations can run entire CSI programmes that actively engage employees by combining all forms of giving – money, in-kind, time and skills through the Brownie Points tech platform. The platform, often touted as the ‘Discovery Vitality of Volunteering’, now simultaneously encourages, facilitates and incentivises individuals and businesses to volunteer and donate; helps nonprofit organisations set and reach goals for external support to improve and scale their impact; and promotes innovation-driven philanthropy by using online technologies to make a big difference.
Can you tell us the story behind the Green Eggs & Ham book?
Philip: The classic tale by Doctor Seuss helps illustrate the quest for Product-Market-Fit (PMF). To discover PMF requires extensive experiments to validate the assumptions. Through a series of build-measure-learn iterations, entrepreneurs can develop and refine PMF, as opposed to ‘discovering’ it in a magical Eureka moment. In the book, Sam I Am undertakes dozens of failed tests for his product in the market before he ultimately finds the right customer and achieves PMF.
How important is digital transformation/disruption in the future growth of Africa?
Philip: One of the most intractable and impactful trends that we face this century is the relentless population growth. According to UN projections, global population will increase by roughly 4 billion people in the next 80 years, and Africa will account for a staggering 90%. By the end of this century, the 3 most populous cities in the world, and 12 of the 20 largest cities on the planet will be in Africa! It is simply impossible to imagine how we can adapt to municipal growth rates of 400-800%. The only possible path forward will be a profound disruption across every aspect of life. At the risk of sounding hyperbolic, disruption is literally an existential necessity for Africa.
If one accepts that world view, then the next logical question is ‘where will the disruptors come from?’ We fundamentally believe that the entrepreneurs who are living here and facing these challenges every day have the best understanding of the market conditions and therefore the best chance to develop the disruptive solutions. Startupbootcamp is here to discover, support, and scale those companies so they can compete on a Pan-African and global stage.
What are some of the digital trends you can forecast for the upcoming year?
1. A.I. – The New Electricity: In every device, app and website, in every service interaction, Artificial Intelligence (AI) will be the norm – the default expectation. AI will become the new electricity. There will be a rapid rise in machine-learning methods, and a huge demand for data scientists.
2. Humanity 2.0 is Coming: Forget ‘Augmented Reality’. Think ‘Augmented Humanity’. What separates humanity from other species on the planet is our incredible ability to imagine and invent ways to “hack” the world and achieve the outcomes we want. A lot of use-cases will fundamentally upgrade human ability rather than replace humans. Our technology will be co-pilots, not auto-pilots, and together we will achieve new levels of efficiencies that have never been seen before – like real-time translation of foreign languages
3. Entering a world of Zero UI: We will start shifting to a world of seamless tech from the visual world to the intuitive, where emotions and expressions, speech and gestures will manipulate our data and devices rather than buttons, i.e. Zero UI. Screenless interactions with products and rather interactions with the world based on mood, tone of voice, etc.
Questions for Philip
Can you predict which sectors and industries will undergo major disruption in the next few years?
Not a chance. Trying to predict the specific verticals with the greatest potential is far beyond me. And this is one of the explicit reasons that we are not running a programme targeting any particular sector. We are betting on ‘Africa’ as our vertical and believe that there is potential for major disruption in literally every industry. One of the most critical lessons we teach our founders is to be relentlessly engaging and to constantly be searching for PMF. The market always decides which products have a chance and ONLY then can we help them scale. So we can be industry agnostic while still ensuring that the founders get the full benefits of our expertise.
Your trajectory spans from technology to real estate to various entrepreneurial ventures. You’re quite accomplished: you’ve summited Mount Kilimanjaro, completed Ironman triathlons and a Comrades marathon. How do you balance work and play?
My wife would certainly argue that I don’t balance work and play very well at all. Fortunately, she is also an entrepreneur so she understands – or at least tolerates – my intensity. Given my role as a CEO of an accelerator, it’s not surprising that I tend to take things to the extreme. The draw of these big challenges for me is how to shift one’s perspective to win the mental game. When I trained for Comrades, I was living in NYC and we had a group of friends that transformed endurance training into social outings. Instead of boozy brunches or bar-hopping, we spent our weekends on long, leisurely jaunts around the city. We once ran the entire perimeter of the island (52km) in the middle of a snowstorm.
What would you do with an extra hour in your day?
One of the secrets to getting more done is to find growth hacks in unusual places. I attended a military academy for university and one of the life skills they taught us was how to sleep faster than normal. This allows one to get the equivalent of 8 hours of sleep in 5 hours of elapsed time and those extra hours of ‘found’ time are invaluable. Sadly, I still feel like there is never enough time to achieve everything on my bucket list.
Questions for Zachariah
You were an investment banker working on Wall Street before you came to South Africa. What drew you to this country, and to Cape Town specifically?
Post the global financial crisis of 2008, after spending a couple of years at Barclays in New York, I came to Cape Town on holiday in 2010 to catch some of the action at the FIFA Soccer World Cup. Cape Town certainly lived up to the hype of being the ‘San Francisco of Africa’, with its stunning views of the mountain and ocean, the winelands, the art deco, music, food, theatre and culture. What I did NOT expect to find in Cape Town were 5 critical elements that create a self-sustaining, growing entrepreneurial ecosystem:
1. Young, talented, tech-savvy entrepreneurs – developers, designers and digital marketers from top-tier technical and business schools opting to pursue an entrepreneurial path by working with startup founders.
2. A growing pool of risk capital from high net worth individuals, families and Angel investing groups that are gradually becoming aware of early stage venture capital instruments as an alternative asset class.
3. Corporations looking beyond traditional ‘internal’ innovation and product development programmes by venturing into the realm of expedited external innovation through partnerships with startups disrupting ‘business-as-usual’.
4. The emergence of accelerators, incubators and high-growth entrepreneurial support organisations that provide the ideal channel and means for corporates to administer proof-of-concept pilots with startups.
5. An active, willing and ‘red-tape light’ government (at the national, provincial and municipal level) that seeks to promote greater economic development by providing incentives to small/medium sized businesses through incentives like tax subsidies, R&D grants, etc.
From mechanical engineer to Stanford University to venture capitalist to a parent to having an album on iTunes. How do you manage to do it all?
For starters, let me say this – it’s not easy. One side of me is very analytical, ambitious and purpose driven – always looking to pioneer big, impactful changes in business and society. Having gone to good schools and worked for top-tier firms, I have an inherent desire and responsibility to leave a lasting, impactful legacy through my work that goes beyond just a job or a career. But the other side of me is very creative and artsy. I have been a singer and musician since I was 13. I read and write quite a bit, enjoy competitive sport and am a big lover of the performing arts. But the one thing that grounds me through it all is being a parent. My 4-year-old daughter and two teenage stepchildren have the uncanny and beautiful ability to remind me that life is about experiences and moments that make you come alive, and that at the end of the day, we are all just human beings with hearts. Significance, not success, is ultimately what matters.
There are five tenets I try my best to live by (from ancient Toltec philosophy) –
1. Be impeccable with your word
2. Don’t take anything personally
3. Don’t make assumptions
4. Always do your best
5. Be skeptical, but learn to listen
What would you do with an extra hour in your day?
One of the things I cherish most about my childhood growing up in the Middle East in the 80s and 90s was the abundance of books on classic English literature, fiction, non-fiction, travel documentaries, etc. as well as the volumes of old-school music (rock ‘n’ roll, blues, jazz, classical music) that I was exposed to. In the insanely digital world we live in today, I would love to spend a magical extra hour each day reading classic works of fiction, listening to incredibly talented singer-songwriters or go for a hike in the mountains!
For more check the May issue of Fast Company magazine.