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Startup accelerators are tricky things. The idea of putting together some business fundamentals for a company in a couple of months sounds crazy, yet startups the world over tend to thrive on it. South Africa, however, still needs to find that one recipe which compliments its specific local needs. Startup 90 thinks it’s up to the task. The relatively new accelerator on the block is hoping to create a uniquely South African programme to help tech startups scale while staying relevant to their environment.
Ventureburn sat down with accelerator founder Sandheep Ramluckan (pictured above), who explained that accelerator models shouldn’t follow a one-size-fits all adoption process, especially in South Africa which carries very different dynamics than, say, Silicon Valley. It’s a bit more complicated than that.
A flexible accelerator for a complex environment
Startup 90 is different than other ones in South Africa. It looks at startups from a local perspective. “We challenge our applicants to solve a problem in their community at the same time making their products relevant to the general African market which is young and mobile-oriented,” Ramluckan explains.
Thus, the accelerator wants to stay as much flexible as it can, operating in a complicated environment that’s still being developed.
As is the case with building a top-notch startup, developing the right accelerator model takes time. “Each programme will be a reiteration of its predecessor,” he notes, highlighting the need to stay adaptable in a market which dynamics still needs to be discovered.
Startup 90 stems from seeing a need in the market where the conventional incubator model wasn’t working. Ramluckan argues that the general accelerator model works best with a specific type of startup: a tech company that can be agile while having the ability to make impact.
However, implementing the conventional model in South Africa is much more difficult than aboard — for one, the local ecosystem doesn’t take kindly to failure as much it does in the US.
“The user adoption rate is very poor as opposed to international markets,” he says. “Also, mostly because of an underdeveloped infrastructure, there’s not a culture of paying for apps which makes monetisation slightly more difficult for instance.”
Where are the corporates?
“The ecosystem is still very young. Corporates need to get more involved, making resources available to those who understand how startups work,” Ramluckan suggests.
South Africa is unique in that a lot of the innovation comes from the top. FNB is a classic example. The major bank is seen as a world-class innovator. How exactly its latest partnership with Silicon Cape is going to pan out remains to be seen though.
Apart from the fact that JCSE’s annual ICT Skills Survey found that 59% of businesses struggle to find skilled workers, most skills end-up with the corporates.
“A lot of the time you find your IT guys tend to move into corporate because they get offered a better salary with benefits.” He further points out that it’s understandable because the startup scene is high risk and is yet to really prove itself. “It’s still early days and we haven’t seen that many success stories.”
“Innovation should come from the bottom,” Ramluckan argues. “Let the big guys focus on structuring and enable the little, more flexible guys to focus on innovating.”
This year, of the four startups who took part in the Startup 90 programme, three graduated of the total fifty who applied. These include events app CrowdHop, video education app Matriculate and iTend which provides small business with real-time access to tenders.
The participating startups commit three months to the programme where they receive tools, workspace as well as access to renowned mentors. Some industry names include Justin Hartman from Deloitte Digital Africa, Silver Tree Capital’s Manuel Koser and Nic Robertson from Naspers.
Its next in-take will be February 2015.
“The biggest challenge has been getting good quality entrepreneurs. Though we were fortunate enough to eventually get good applicants, getting a committed technology partner on-board is tough,” Startup 90 founder says.
Largely though — going forward — Startup 90 wants to expand its support services post-graduation. These include giving startups easier market access as well as funding. Both areas where corporates can help.
“The biggest competitor ten years down the line, is going to be a company that hasn’t started yet,” quips Ramluckan. “You see this trend where big corporates decide whether to compete or collaborate. Those who compete tend to struggle.”