South Africa’s startups scene may be small compared to that of the US, yet the country has produced some amazing global success stories. Entrepreneurial superstars with South African ties such as Mark Shuttleworth and Elon Musk are often highly regarded for their pioneering spirit, but does that carry through to the rest of the South African startup space? What are the majority of the country’s entrepreneurs driven by and what do they look like?
The Ventureburn Startup Survey, which aims to uncover the “true picture of the South African startup landscape”, partnered with First National Bank (FNB), investment advisory firm Clifftop Colony and analytics company Qurio, to poll just under 200 tech startups. Each of the startups were asked 42 questions that covered (among other things) funding, the profile of their founders, revenues and everyday challenges.
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One respondent set the tone for many founders, saying that he is motivated by the need “to build my legacy and positively affect millions of people”.
Most tech startup founders are motivated by “opportunity”, or a “gap in the market” (17%) and to become “pioneers”, or “innovate” (15%). On the other hand, few are driven to “make the big bucks” (4%).
Less pale, less male, but still a long way to go
For the most part, founders are white and male. There are signs that more black entrepreneurs are forming tech startups, but there is still a significant gender gap.
The survey found that 17% of startups in the country had black founders. This is a significant increase from a national survey undertaken in 2012 where just over six percent of startup founders were black.
The gap is even larger when it comes to the number of female founders. The survey found that just six percent of the country’s startups have female-only founders. By comparison, 68% of startups have male founders, while 27% are run by combined male and female founder teams.
‘Silicon Cape’ home to most startups
There is a long-held belief that tech entrepreneurs, who are highly mobile, choose to work in aesthetically appealing places. This belief is supported by the Ventureburn survey finding that the majority (59%) of startups are based in the Western Cape. This also adds to the general belief that Cape Town’s natural beauty and appealing lifestyle resembles that of Silicon Valley, which was one of the big contributors that led to the establishment of The Silicon Cape Initiative.
This doesn’t however mean that startup life is all sunshine and light. Some 25% of startup founders indicate that they would not recommend the startup life. A further 33% remain “passive” while the majority (42%) refer to themselves as “promoters” of this way of life.
With the majority (47%) of founders between 25 and 35 years old, it’s likely that they’ve used their professional backgrounds as a runway into the startup world. Most startup founders have corporate backgrounds (70%), while a further percentage (66%) of those add that they won’t be going back to corporate life.
Venture capitalists say they often won’t back a startup unless at least one of their founders is a developer or programmer. The good news for South Africa’s startup industry is that the survey found that most startup founders are technical, either being the main developers or programmers (52%), with a further 30% noting that they “assist in development strategy”. Only 18% of startup founders said they were not technical.
Better together
The majority of startups surveyed (57%) also had more than one founder, which from a risk perspective is always preferable to investors.
More information on the Ventureburn Startup Survey:
Ventureburn survey sheds light on SA’s tough, but pioneering startup industry
No surprise: funding the biggest hurdle for SA’s startups
Working for SA startups may be exciting, but not at all that glamorous
Go big or go home: most SA startups need to scale fast to survive
SA’s startup industry: all the stats and numbers you need to know [infographic]
Ventureburn Startup Survey: the full results [Slideshare]
