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craig-wingsa

Q&A: HackR House founder on why he invested entire savings on project

How passionate are you about your business? How far would you go to create a minimum viable product (MVP)? Would you, say, invest all of your personal savings?

Meet Craig Wing (pictured), a South African who has done exactly just that. Wing is the founder of HackR House, an initiative that aims to support tech entrepreneurs. Applications to its beta-pilot phase closed yesterday (2 October) while applications for its second round will close on 16 October. The full programme is scheduled to launch in February next year.

Wing believes that entrepreneurs need round-the-clock support. He came up with the concept around HackR House based on his experiences and on the belief that if entrepreneurs live together they will have a higher probability of success.

This is the concept around which HackR House is built on, live-in entrepreneurship.

Wing, an entrepreneur of note himself, has founded four startups. In addition, Wing has also worked at Google’s secret skunkworks lab, Google X.

Ventureburn caught up with Wing to learn more about the HackR House project, his thoughts on live-in entrepreneurship and his ideas on how entrepreneurship can overcome the issues facing South Africa today.

HackR House partners include HP Life, LEAP , Ignitor, GroundFlr and Growthwheel

Ventureburn (VB) : What do you see as the main issues facing South Africa and how do you think entrepreneurship can overcome them?

Craig Wing (CW): Undoubtedly, first it’s a lack of jobs. These new jobs are not going to come from corporates and certainly not from government. In order to realise the magical seven percent GDP growth to allow South Africa to double its GDP in 10 years, we need to create new industries by entrepreneurs willing to take a risk and push the envelope of innovation into new sectors.

We however need a more consolidated approach to creating new jobs in these fourth industrial revolution industries beyond necessity entrepreneurs.

Second, we need to become a country that embraces a work ethic where we are willing to work, not be given handouts and do something bigger than ourselves.

Consider the current malaise our country is in with corruption scandals, where state-owned enterprises like Eskom are embroiled in controversy or global giants like KPMG, McKinsey and SAP.

Many of the problems stem from greed and a way to “shortcut” the system through corruption and kickbacks. This mindset has taken hold at the upper echelons of business and government and is then replicated all the way down where many are looking to make a “quick buck”. This includes window dressing and tender-preneurs. Entrepreneurs need to work, through the highs and lows, not looking for a shortcut.

Finally and probably the most important, we seem to have forgotten about living for each other. The essence of entrepreneurship is providing value and solving problems, albeit driven by market conditions.

However the new entrepreneurs are driven beyond just profit, but also to know their “why” that often involved solving social issues. The more we can showcase this entrepreneurial spirit of solving problems and working to a joint “why”, the better South Africa will be for all of us.

VB: How do you think a culture of entrepreneurship can be cultivated and encouraged in South Africa?

CW: One of the challenges we have is that entrepreneurs are not celebrated and their stories show. Look at the “celebrities” in South Africa — they are those that create sensationalism or create controversy.

We tend not to speak about the entrepreneurs changing South Africa and I’m not talking about the Ackerman’s, Gore’s and Motsepe’s – but rather the new entrepreneurs coming through that need to start businesses in a different world: A globalised world, where connectivity and digital needs to drive the engines of their business, where platform business models rule like Uber and Airbnb, where the cost of starting a business is lower with cloud services, elasticity and access to a global pool of talent, but more importantly businesses looking beyond pure profitability.

The HackR House will solve part of this by highlighting the entrepreneurial journey from startup to revenue generation including the emotional challenges faced where each entrepreneur will record a one-minute daily video log to show the real journey, not a glamourised version where entrepreneurship is seen as easy and sexy, but rather reveal the hard work. These stories will help encourage potential entrepreneurs and a “hyper local” approach will help generate an appreciation of entrepreneurs.

VB: Tell us more about your journey as an entrepreneur, what challenges did you face and how did you overcome them?

CW: The first company I started was when I was finishing off my first masters degree in engineering and created to help partially sighted children better utilise their remaining vision.

Looking back now, the technology seems almost archaic but could have been a core component and building block for language translation using optical character recognition and speech synthesis. While I was able to raise limited angel investment, over 10 years ago there was little venture capital, especially for “social” projects.

The second was a services consulting business where among other things, I established the Wits University Innovation and Entrepreneurship office where I looked into the feasibility of creating an on-campus incubator. I was also one of the initial team that launched the Allan Grey Orbis Foundation Entrepreneurship fellowship.

The third was a non-profit operating in the CleanTech space in Silicon Valley. The premise was to create a platform where university students would start more businesses in the cleantech space and spread the learning both nationally (in the USA) and across the globe.

In six months, I launched at nine universities in the USA including Yale, Washington and Michigan as well as two in China – Beijing and Tsingua Universities – receiving enquiries from Brazil to Ireland. I raised over $200 000, had two people working for me and profiled at both TEDx and the Clinton Global Initiative.

The fourth was post Google and completing my MBA in the USA looking at helping companies create the culture they need to execute upon the strategies they have in place.

It was during this process that my path crossed with FutureWorld, a 30-year old organisation helping companies look at the future of their business and industries and how to create disruptive, exponential solutions. Subsequently I joined FutureWorld as a partner to create a more congruent and comprehensive future solution looking at the future strategy, corporate culture and work environment.

Many of the challenges — loneliness, lack of community, mentorship — are addressed through HackR House. It really is an expression of the support services I wish I had when I started my various companies. Often what I needed on my journey was just knowing that I wasn’t alone; that I wasn’t crazy (well a certain kinda crazy since you must be to be a serial entrepreneur!) and that I would get through it. I needed that support during the hardest times, at night time or when there was no-one around that would have made the biggest impact. For me, I just dug deep. Believed in myself and my vision even though many couldn’t or wouldn’t see it.

VB: Can you tell us more about your experience founding a startup in Silicon Valley, as well as working for Google?

CW: The culture in Silicon Valley is that of “neighbourhoods of entrepreneurs!”. Everywhere you go people are starting businesses; if you meet someone at a coffee shop they are doing a biotech or online or something entrepreneurial. The culture celebrates entrepreneurs and supports them.

Working at Google was likewise an incredible experience — everything you may have seen on documentaries or the movie The Internship is true! From the all-you-can-eat food to bicycles to crazy, interesting brilliant people you work with. But beyond what you see, I really learned the importance of truly innovative, disruptive thinking much like when I worked on skunkworks Google Project X — the epitome of innovation at Google. It really is about the culture and people you work with that makes Google such an amazing place — something I am looking to create at the HackR House, except at a hyperlocal smaller scale.

VB: How are these experiences influencing or contributing to the HackR House programmes?

CW: Completely! I believe it’s about the culture and people who drive you and push you to bigger and better things this is really the key thesis of the HackR House, that living alongside other entrepreneurs gives you a much better chance of success than being a “lone wolf”.

For every Steve Jobs, there was a Steve Wozniak, for every Larry Page there is a Sergey Brin — starting their businesses together. Can you imagine how incredible it would have been if it was more than just two, but eight entrepreneurs living together pushing, innovating, driving a greater South Africa? I can — this is what I hope the HackR House will be.

VB: How much have you personally invested into HackR House? How are you looking to benefit from it?

CW: A significant amount — almost all of my personal savings, well in excess of R2-million. But it’s beyond the capital, this is a labour of love that’s been in the making for a year. Finding the ideal location, buying a house, renovating to specifications and the sleepless nights.

This is over an above the other personal sacrifices. Why? I really truly believe in the concept and want to see high potential entrepreneurs succeed to create new industries and jobs — this is the only way we can raise the whole of South Africa — maybe we’ll have the first true Unicorn come from the HackR House.

Let me be transparent — I’m looking to initially recoup rental hence… the monthly rent from selected entrepreneurs, this will help cover my initial investment. However revenue generation isn’t the reason — there are much less risky, higher yield returns than doing the HackR House.

From a revenue perspective, I’m not looking at equity in the businesses, but will take five to 10% of capital raised (if applicable at the end of the programme) and will also refund the rental paid. This is to incentivise the entrepreneurs to give it their all. If they make it through the six months, become revenue positive and raise capital, the programme becomes free since the capital will come from the investor not the entrepreneur.

VB: What will the HackR House programme entail?

CW: Entrepreneurs living together have greater chance of success. During this process, there will be limited support (coaching, mentoring and HeyJude virtual assistant services) to iterate and validate. As such, entrepreneurs selected during this stage (until February 2018) will get a 10% discount on monthly rent and given first preference for the formal programme for full launch.

Fees range from R5000 to R6500 per team of two per month depending on separate cottage and shared or joint living (yes, you need to apply in pairs, find a co-founder if you haven’t got one) and there is space for four teams of two entrepreneurs each.

Support services include the following from partners and friends: access to Lean Enterprise Accreditation Program (LEAP), one of our partners Growthwheel will assist with entrepreneurs understanding their personal ambitions. Entrepreneurs can access HP Life‘s core entrepreneurship education material. GroundFlr will provide education material that is the best practice used at other incubators. Ignitor will provide a one day workshop on lean startup methodology.

There are also world-class mentors available that range from former Googlers to international thought leaders and experts in incubation. Further, once a month an entrepreneur or CEO will have “pizza and beer” with entrepreneurs to discuss their personal journeys in an informal, relaxed environment.

The house is also completely furnished with a pool and high speed fibre — this is crucial since it needs to be a place where entrepreneurs want to live.

VB: Are there any expectations towards participants?

CW: Every two months, entrepreneurs will need to meet an entrepreneurial “hurdle” — these are real market requirements and their “exit” will be determined by their (in)ability to meet market demands.

The first (hurdle) after two months will be a validated MVP, the next (hurdle) after four months will be first customer. By the time they get to the six-month mark they should be revenue positive — which by then I hope I will have lined up potential investors and additional “next stage” support such as accelerators or growth funds.

This is also by design. One of the worst travesties is an entrepreneur that spends months and years on a business they are so in love with that they cannot see it won’t succeed. I would rather be hard and help entrepreneurs see this by having the market say this then have them waste time, resources and energy trying to do something that won’t work.

VB: What will lead to participants getting booted out?

CW: It certainly won’t be me or any of the mentors! Rather allow real market economics and customer validation do this. As such, each one of the “stage gates” have been selected to mimic real life, and failure to create a validated MVP or find a first customer will lead to exit from the HackR House.

VB: What kind of startups are you looking for and what is the selection criteria?

CW: First off, they need to commit to live in the house (based in Bordeaux, south of Johannesburg) through the duration of the programme — a maximum of six months. I realise this is a hard commitment for some but this is an absolute must to give their businesses the best possible outcome in as short a time frame as possible.

I have no problems with significant others visiting on the weekend, but this is a live-in programme 24/7 with other entrepreneurs. While no age criteria exists, ideally since you need to live for six months full time with some experience, I expect applicants to be mid 20s to early 30s, preferably with some work experience — but I won’t disqualify on this.

The other criteria is that you must apply in pairs, research shows that companies with two founders are more likely to succeed. For the pilot phase, I will accept individuals, but this is a once-off exception

Finally, all the companies selected need to have a “technology” angle and/or be able to leverage off the internet. This really shouldn’t be stated since every business has the potential to be scaled via the internet, especially with the Internet of Things (IoT) becoming the norm in the next five to 10 years. In fact, I’m hopeful of the house becoming an IoT house where it becomes a real, living lab to create and test IoT businesses.

I do want to emphasise that in this pilot or beta phase I want the initial selected entrepreneurs to help me build this and create support systems that they believe will help them succeed. More importantly, I want entrepreneurs (and others) who believe in my crazy vision and help me create it to the betterment of all South Africans. I truly believe in this, and hope some of the readers will contact me to be part of this exciting journey with me — as an entrepreneur, support base or friend. Just like the entrepreneurs, I’m looking to create the support system for them and myself!

VB: What’s the long term plan for HackR House?

CW: Long term, the vision is to create localised versions of Silicon Valley all across South Africa. Neighbourhoods of entrepreneurs — all the way from Bordeaux South to Khayelitsha to Bishops Court — working together, hacking at ideas to launch, coffee shops where entrepreneurs go to brainstorm and meet others.

Beyond the “live-in” element — how do you decentralise entrepreneurship to create a platform for anyone to support an entrepreneur and small businesses from their spare room — think about it as Airbnb for entrepreneurs but backed and supported by a back-end system with real mentors who have done it. That’s the big hairy audacious goal!

Featured image: TEDx Talks via YouTube