Brazillian Victory Lap Brazillian Victory Lap Brazillian Victory Lap Brazillian Victory Lap Brazillian Victory Lap Brazillian Victory Lap Brazillian Victory Lap Closing Ceremony Rudolph Muller from 

Notes from Net Prophet 2010

Net Prophet 2010

Net Prophet 2010

Last week I attended the excellent Net Prophet conference which is an annual business and technology event hosted by the Ramp Group in Cape Town.

I took a fair amount of notes at the conference (something I haven’t done for a while!) and I thought that they may be of interest to people that weren’t able to attend so I’ve decided to post them here. I also wrote an article for Memeburn about a very inspiring entrepreneur who is passionate about improving the state of science, engineering and technology in South Africa and training tomorrow’s geeks.

Erik Hersman – Ushahidi

  • 40% of Kenyan mobile users don’t keep a credit balance
  • – sms app store
  • Build what people need not what the elite debate
  • “Tropically Tolerant Software”
  • – these places (Hubs) draw interesting entrepreneurs and innovation
  • “Kenya is proving more lucrative per subscriber than South Africa” – mobile advertising network
  • “Future is not SMS, present definitely is”
  • Barriers to entry in Africa are very low

Vinny Lingham – Yola


Yola started in March 2007 with 5 people in Cape Town
Pitched to over 25 investors – getting investors is tough
Raised over $25m to date
Over 3.5 million active users
“Don’t lose sight of what’s really important in life”

Stages of launching a startup:

Stage 1 – Friends & Family

  • Build momentum
  • Business plans aren’t as valuable as building something that works and iterating
  • Get products out to market quickly
  • Don’t be secretive – overemphasis on business plans and NDAs waste valuable time
  • Pitch to investors – don’t get excited until you have a term sheet
  • Present, pitch, get exposure
  • Bootstrap – keep it lean

Stage 2 – Series A: Proof & Concept

  • Investment: $5 million
  • Targeted user base before next round of funding: 1 million

Lesson’s learned:

  • Going global is expensive
  • Hiring cold (i.e without a network) is difficult
  • Building a product team is critical for funded companies
  • Splitting engineering (dev teams) is very difficult
  • Making friends in the valley is tough

Stage 3 – $20 million

  • Target user base before next round of funding: 5-6m users
  • User analytics to make data driven decisions
  • Viral growth is critical
  • Focus on a target audience
  • Don’t give too much away for free
  • Good customer support is critical

Secrets to securing investment:

  1. Great team
  2. Good plan
  3. Good networking (not necessarily great)
  4. Great pitch! (1 or 2 sentences)
  5. Good demo (helps a lot)
  6. Persistence
  7. Passion for your business
  8. Show potential
  9. Prove execution
  10. Build products, not services!!! (service businesses don’t scale)

“SA technology re-investment conundrum”
Most entrepreneurs are in their 20’s (typical age group is 19-33 year olds)
Most SA 30yr olds net in a position to give back and re-invest in other SA businesses
As you get older you risk profile decreases

Reasons to be in the valley:

  • Building a global business
  • Depth of talent and skills (ppl who have been there, done that)
  • Networking
  • Fund raising
  • Being ahead of the latest trends
  • Conferences
  • Biz dev opportunities
  • Acquisition/liquidity!!! (hampers investment in SA)

Reasons NOT to be in the valley:

  • Expensive in general
  • Emerging market focus
  • You’re not a good networker
  • You are very attached to your family and social networks back home
  • Your funding is limited
  • You think you can be successful in SA

How to get to the valley:

  • Fly Emirates
  • Setup an offshore subsidiary
  • It’s easier than you think – you just need to want to do it!
  • Total cost to establish a business in SF – R100k

“Unless you’re trying to build a business and not just a product, you need capital”
“Freemium model is great, it’s just not enough”

Q: “If you have a prototype should you spend more time building the product or getting funding?” A: Tough question, but both!
“Take a long time view on your career (don’t be greedy)” – with regards to giving away ownership for capital in order to grow your business

Adriaan “Adii” Pienaar – WooThemes

Theme idea copied from Brian Gardner who was the first designer to make money from themes

PNT Launches – Make contact with Magnus
2nd theme launched

2008 launches
More themes, club subscriptions

All founders still doing design and development (Mark, Magnus & Adii)
First WooTeam meet
Jeff joins core development team

Featured on TechCrunch
Expression Engine becomes 2nd development platform
Drupal 3rd

Current site traffic:
3m+ pageviews
600k uniques
26k users

“We charged from the beginning” – made it easier to build the business

Lessons learned:

  • Everything has happened from SA
  • Objective was always to start an international business from SA
  • No funding needed: Bootstrap & monetize
  • $100 in sales from the beginning but grew quickly
  • Marketing the stigma – use the fact that we’re South African as an advantage “market it!”
  • Branding: be unique and personalize
  • Listen to your audience – release and iterate
  • Force their attention – don’t always ask for permission
  • “Design is more important than tech” – tech is only half important
  • “Customer is even more important than design” – Woo don’t offer tech support via phone calls or email to ensure that energy is spent on paying clients
  • Stay on top of trends (just) – “nobody likes a copycat”
  • Make sure you stay on top but don’t stop innovating
  • Diversify your income – identify business risk such as dependency on only 1 platform
  • Limit your exposure to risk as much as possible i.e contingency plan!
  • Smile & enjoy – you need to enjoy what you’re doing

Q: Has PayPal made business easier? A: Doesn’t like PayPal Woo use for payments which has an API and also supports PayPal payments

Stefan Magdalinski – Mocality

Fastest bandwidth explosion ever – referring to current environment

Internet in Kenya – far more advertising for Telcos & broadband than in SA (more sophisticated market)

“Netbooks are going to see a huge explosion in Africa”

“Can’t talk about Kenya without talking about M-Pesa” – allows you to send cash via SMS
3 years young
9.5 million users (50% adults)
18 000 agents *change cash into SMS)
370 million USD p/m (50% YoY growth)

Why is mobile money important at the BOP?

  • Productivity
  • Transparency
  • Safety
  • Regularizes income & protects you from shocks (“rainy days”)

Users in Nairobi:

  • Brand conscious
  • Open-minded
  • Mobile power users
  • Multi-modal access
  • Connected and always online
  • Everybody is on Facebook in Kenya (Facebook optimization as well as SEO)

Still it is Africa so be careful out there!

Rich Mulholland – Missing Link

“Social media is cocaine for the connected” – like any drug it has side-affects
“When it comes to content, objective #1 should be to retain, not repeat!”
“Objective #2 Using Twitter for chit-chat is like having a conversation with a megaphone”
“May kill conversation!”
“140 characters do not make a conversation!”
“Side Effect 4 social media can blow things out of proportion”
“Side Effect 5 elevated sense of self-importance”
“Side Effect 6 could make you believe that people actually care”
“Side Effect 7 privacy is dead!”

People are the network, everything else is a tool! – what would you do in real life? – newspaper based on tweets/hash codes a tool for aggregating and sculpting a stream of data.

We need a network agnostic social score – like/dislike
“Twitter is a social sharing network”

Patrick Kayton – Cognician

Innovating to shape the future:

  1. Pick an important problem to solve
  2. Slay a sacred cow
  3. Invent a solution

Important problems in publishing?
“We are much better at creating content than managing it”

There are lots of Sacred Cows in publishing
“Social Media is reviving conversations”
Problem with information overload

Content should be more intrinsically:

  1. Social
  2. Sensory
  3. Conceptual offers deep links into social media that allows you to discover what’s meaningful – community rating system for all the content

Dynamic book is an e-book that allows people to rewrite them

“The way you structure the content will have the most influence over how useful the content is”

Panel Discussion (Sarah Lacy, Stephen Newton, Stephan Ekbergh)


  • Passion, risk-taker, entrepreneur
  • “To be honest, I don’t think people in America think about Africa”
  • If you’re driven as entrepreneurs anything is possible
  • People pay for transactions in places like India even with their poverty level
  • “The Web has compressed what you are able to charge for things and so has cloud computing to a large extent” – e.g. Cost of ads in Business Week vs. TechCrunch
  • We always overestimate what technology can do in a year and underestimate what it can do in 10 years

Stephan EkberghTravelStart

  • Company as profitable in SA after 3 years compared to 10 in Sweden
  • Definitely go mobile, the future of online
  • “I want less devices, not more devices, I hate devices and when I saw the iPad I almost threw up”
  • “The problem we tend to want to solve as entrepreneurs is getting out of poverty”
  • “I don’t know a population that whines as much as South Africans”
  • One of the most important tasks as an entrepreneur it to encourage other people to learn and go off and start their own companies


  • It’s developed here, but only for a minority
  • There are some problems that need to be fixed but everyplace has its problems
  • Technology depends largely on infrastructure and cost of data
  • “The Internet is a platform, it should be a right, not a privilege”
  • Don’t forget about the grass in your own background – lots of opportunity in SA
  • The big thing is getting access, once you have access then there’s nothing stopping the big success stories coming from Africa
  • “Don’t sit on ideas, put them out there and see what happens”

Stuart Ntlathi – SNSET Institute

The most influential young South African you’ve probably never heard of is Stuart Ntlathi


  • Started as a science club of 4 13-year old teens that were passionate about science, engineering and technology in 2010
  • Now in it’s 10th year, it operates throughout all the provinces in SA as well as Taiwan and Singapore
  • 21 000 people registered in South Africa
  • Internet Cafes in townships to bridge the digital divide
  • “Giving young people the platform to be part of the developing world”

“The Stuart Ntlathi Science, Engineering & Technology Institute is a non-profit organisation that inculcates and sustains quality interest of Science, Engineering & Technology amongst the youth of South Africa.”

14 hours to come up with a new invention that will change the world and mustn’t contribute to global warming. They also need to build a prototype.

“The Infinity Dream” – strive for what is unattainable

Some of the inventions that have come from SNSET (all built from recyclable materials):

  • First electronic vuvuzela pre-loaded with the SA anthem
  • Portable shoe polisher
  • Auto cooling umbrella
  • 14-in-1 Microwave

“The young people you meet today are the consumers of tomorrow”
Paramount that we support sc education for young people

CNN & Reuters making documentaries on SNSET in 2010

1 Response to “Notes from Net Prophet 2010”

  1. 1 Vanessa Alberts Aug 19th, 2010 at 3:43 pm

    Thanks for this… for taking notes. So sorry I wasn’t there – especially since my excuse is PATHETIC.

Comments are currently closed.

Who is youngBLOOD?

I am a passionate entrepreneur and co-founder of a technology start-up called Grenade which is based in Johannesburg, South Africa » read more