Sheraan Amod likes to think of Cape Town, South Africa, as the “Silicon Cape.”
“It’s the undisputed tech hub of Africa,” he said.
And he should know. A computer engineer, Amod is also the co-founder of Springlab, a technology incubator and joint venture partner that works on projects meant to tap the potential of sub-Saharan Africa -- one of the fastest-growing economic regions in the world.
Founded in 2013, the firm supplies seed capital, resources, office space and expertise to entrepreneurs with big ideas. Whether its an online medical booking service or a Web-based animation platform, co-founders Amod and Eugen Petersen are involved from the get-go.
“Springlab is different to other venture incubators in that if founds its own companies, sometimes with partners, and sometimes solo,” Amod said.
“We get married to the companies we start, so we expect to be highly involved over the long haul,” he added.
Amod, who has spent his career in the Internet and technology business, and previously co-founded Persona, a social media and personalized publishing company, spoke to International Business Times about the local startup scene, potential of sub-Saharan Africa, and what to watch in 2014.
IBTimes: What are a few projects you’re excited about?
Amod: RecoMed is a very exciting project because it fills a massive gap in the health care market in Africa -- being able find a good practitioner and book them online. The market is huge, and we are the first company to launch a truly world-class service into this space. We're happy that it's enjoying fantastic growth.
SpringGeist is also interesting because they are a new type of digital agency focused on being the best in creating animated and video content for the Internet. Bite sized, easily digestible chunks of engaging video are the new panacea for online marketers, and SpringGeist has figured out how to offer this to clients fast and very affordably, with a business model that can scale.
IBTimes: Everyone talks about sub-Saharan Africa “leapfrogging.” What does this mean for you?
Amod: Leapfrogging is about taking big jumps and bypassing entire industries or accepted practices in the process, all in the quest of becoming up to date. A great example is how the quality of last-mile wireless connectivity infrastructure (e.g. mobile phones) far exceeds fixed line (e.g. landline) communications. Another example is how small-business entrepreneurs in East Africa use M-PESA to transfer money via their cellphones instead of using cash or traditional banking methods. These are some pretty significant jumps.
IBTimes: Where do your employees come from? What are three things you look for?
Amod: We believe in hiring people with lots of raw talent -- brains, skills, motivation -- and then train them relentlessly. Successful training is all about sharing experience, providing ongoing mentorship, and bringing out the best in people. Springlab has a grueling internship program that is designed to produce rockstars, period.
For us as founders, it can be a draining process at the beginning, but is ultimately massively rewarding.
IBTimes: Your express mission is investment in sub-Saharan Africa. What are the most common misconceptions about the region?
Amod: The two biggest misconceptions about sub-Saharan Africa, in my experience, is that markets will never adopt new technologies, and that there isn't a lot great talent available for startups.
We've been pleasantly surprised with the sophistication of online user behavior after launching Internet companies in this market. Of course adoption challenges do exist, but they are nowhere near the level that is commonly perceived externally. That leaves some great business to be made for those brave enough to venture out.
As for the talent question, there are loads of smart, hungry people out there looking for jobs that startups can provide. The key to solving the puzzle is to have a great training program where people can be developed fully, as startup-type experience among new hires is, admittedly, a lot thinner then in other international hubs.
IBTimes: What is a “lean startup”? Why is this a priority?
Amod: A "lean startup" is a company that is continuously learning and improving in a systematic way. This generally relates to measuring things constantly and making regular, minor adjustments in the business that create huge gains over time, and minimize waste.
This is a huge priority because startups usually struggle with scarce resources -- so by taking on a "lean" methodology, we try to achieve the most progress possible with finite amounts of capital and time. This also produces greater value for shareholders.
IBTimes: What has been the most difficult part of this enterprise?
Amod: The hardest part has been knowing when to say "no" and choosing instead to hunker down on one or two critical focus areas at a time. There is always so much going on, and apparent opportunities appearing, that this can in practice be a lot more difficult than it sounds. You can't jump at everything. Donald Trump captured this perfectly when he said, "Sometimes your best investments are the ones you don't make."
IBTimes: What has surprised you the most?
Amod: I'm not sure if it happened by intention or by accident, but we've created a fun, hardworking company culture where everybody gets along well and seems to enjoy coming to work each morning. That's definitely not true of all companies, so I think we're very fortunate.
IBTimes: What’s the media getting wrong when they report on startups in Africa?
Amod: When it comes to Africa, the media likes to focus almost exclusively on talking about mobile-related startups. That's a huge, interesting space for sure -- but there is a lot more going on!
IBTimes: What do you think of the concept of “impact investment” ?
Amod: All investors, be they corporate, private or individual, can decide what types of investments they would like to support. Impact investment is a broad category but often relates to social or developmental objectives being met in addition to the profit motive of a business. As an entrepreneur, I believe that all startups offering a useful product to a needy customer have a positive impact on society.
IBTimes: Where are you based? Why did you choose this?
Amod: We're based in Cape Town because it's the undisputed tech startup hub of Africa. It's a beautiful place that we like to call the Silicon Cape. The New York Times recently rated Cape Town as the top holiday destination worldwide for 2014.
IBTimes: How will 2014 be different from last year? What trends should we watch out for?
Amod: I think that we will see greater activity at all levels of the startup ecosystem in 2014, with more funding rounds and acquisitions being announced, as well as several early stage tech startups entering growth phases. The work entrepreneurs and investors have been doing in building a robust startup ecosystem in South Africa and sub-Saharan Africa at large will show sharply more progress than ever before.
BTimes: What are you most excited about this year?
Amod: At Springlab, I'm excited to see some of the ventures that we've incubated grow up as fully fledged companies, at new stages of growth. Personally, I'm looking forward to enjoying the last part of my 20s!