It’s the jewel of the Western Cape – and it might just be Africa’s next major tech hub. With 450-550 businesses employing 40,000-50,000 people, Cape Town’s industry is twice the size of Lagos’ or Nairobi’s.
But just because it’s a good place to run an innovative, forward-thinking business doesn’t mean it’s always plane sailing. A recent survey from the Cape Innovation and Technology Initiative of over 150 tech entrepreneurs in Cape Town, identified several common barriers to success.
If you’re a budding founder, they’re worth knowing about. Here are some of the most difficult hurdles to overcome with advice on how you can go about overcoming them:
Hiring the right talent
Good talent is hard to find, even if you’re only looking for one person. The right combination of cultural fit, competency, personality, and outlook may seem like a straightforward recipe, but one or more of the ingredients may prove elusive.
Not least because it’s easy for your essential ingredients to change. You might, for example, have an idea in your head of your perfect hire: someone young, enthusiastic, and ambitious. And that’s fine for certain roles.
But for roles that require a more subtle and sensitive touch, it can be wise to bring on an experienced professional with a background in your industry. Knowing your industry is the first step towards knowing your place in it.
The easiest way to get finance for your business is to have finance. According to Xero’s State of Small Business report, some 85% of entrepreneur respondents suggested that they were self-funded – and if you have the savings, the familial backing, and a willingness to spend either on an endeavour without any assurance of success, then it’s certainly an easy way to get the ball rolling.
Not everyone has the means to self-fund a business, and if you don’t, you’ll need to approach investors. Don’t walk before you can run. You’ll need a functional business plan, the right team, and a tight grip on your finance plan. Bring on an accountant or bookkeeper on board to oversee all tax requirements, consult with business strategists to see what your best initial move might be, and search for other relevant resources in advance of taking a single meeting.
Cloud accounting software can make this substantially easier – making it simpler to manage the financial and administrative side of things. There are a range of solutions available, and some will be better suited to your business than others.
Once you’ve set the groundwork you can start pitching VCs and angels. Some of the more common things they’ll want to know relate to your business’ senior management and leadership – and related experience – how you intend to leverage your plan and your resources to achieve profitability, and your customers. The more established you are the better. Then It will help if you can show off some initial results. When it comes to investment, the less uncertainty there is, the better.
A business needs to sell its products or services, and to attract customers you need a solid marketing plan. Ambitious marketing campaigns, cost money that many small businesses might not have. This is when some strong creativity can replace these cost implications. Even if you can’t afford to hire a full marketing team, make sure that you are up-to-speed with what you should be doing, and encourage other staff members to have a think about it. Working towards an understanding of SEO in your spare time, searching for the right long-tail keywords, creating content to support it, and investing in a modest campaign can work wonders. So can creating useful ‘How to’ blogs and cross-promoting them across your social networks.
If you fully understand your target audience, your customer base will only grow. Whether they use Twitter, attend a particular type of event or read eBooks – no two customers are the same, so prepare to experiment a little.
This is a good approach to take to running a business in general: sustained trial and error – buttressed by a thoughtful, strategic approach and some modest investment. Entrepreneurship has challenges, in Cape Town and elsewhere, but with the right tactics, the right attitude, and the right game plan, they’re never insurmountable.