The 2017 Ventureburn Tech Startup Survey found that successful startup founders are still most likely to be white males from the Western Cape and that while the number of black startups in the country is up, they are struggling with 61% of black startups yet to generate an income because they are either still working on their concept or are still in the seed stage – compared to 30% of white startups.
In 2017 the I’M IN accelerator launched to help change the fortunes of black-owned tech startups.
“The I’M IN accelerator seeks to transform South Africa’s ICT sector by funding a pipeline of black-owned, high-growth potential startups,” says Bernard Moshabane, the accelerator’s growth hacking specialist and founder of PR & Digital Marketing Agency, The DefintivEdge.
I’M IN’s inaugural cohort launched in September 2017 with 10 startups. Earlier this year they announced that they intend to launch an all-women cohort of the programme.
A career in tech has only in the last 10 – 15 years become exciting to pursue
Moshabane says the good news is the tech sector is attracting more attention. “The lucrative opportunities in the tech sector coupled with the attractive work environment i.e. flexible hours/remote work is a big drawcard for young black students looking to decide what career path to pursue,” says Moshabane.
Despite this, much still has to be done to develop both the necessary tech skills needed and attract existing black tech talent into entrepreneurship.
One of the factors holding black entrepreneurs back is many cannot afford to take the leap into entrepreneurship because of the financial burden that it presents, says Moshabane.
“Our local startup ecosystem is in its infancy and funding opportunities for seed stage businesses are scarce, making it difficult for tech practioners to consider leaving their comfortable corporate jobs to risk it all by launching a startup of their own,” says Moshabane.
This is a major hurdle and one that is beginning to be considered more seriously. Standard Bank this year launched a campaign that aims to offer a “soft landing” for entrepreneurs. They are offering to provide young budding entrepreneurs with funding equivalent to as much as one year’s salary in order to encourage them to take the plunge and start their own business without the fear of losing their monthly income.
We speak to Moshabane about tech’s pipeline problem and possible solutions.
The local tech scene has previously been dominated by white, male-owned tech companies for a number of reasons, some of which include: the tech sector was only accessible to the lucky few that could afford to study IT-related courses at a tertiary level.
A career in tech has only in the last 10 – 15 years become exciting to pursue, meaning that only now are we seeing millennials in the tech space blossom, especially the few black aficionados.
Transformation has played a major role in putting a spotlight on the lack of black practitioners in tech and has motivated a number of corporations in telecommunications, ICT and banking to launch a number of initiatives targeted at developing young black talent to introduce into the tech sector.
Enterprise and supplier development has opened up the value chains of large corporations looking to transform their supply chain, specifically for small businesses who offer tech-related products and services.
Black techpreneurs who possess highly sought after development skills are now at the forefront of corporations seeking the latest enterprise solutions and smart innovations to use internally or even acquire and onsell onto their own customers. Multiple technology incubation programs and growth funds have also blossomed in recent years to assist black techpreneurs to build scalable solutions for high growth markets.
A lot of talent is held in the corporate world as a result of the high salaries and perks corporates generally offer to highly skilled tech practitioners, especially black tech practitioners.
Many black tech practitioners who possess 10+ years of work experience have responsibilities that require high paying salaries to maintain e.g. children in private schools, expensive bonds and cars, etc.
More corporates must explore how to use their enterprise and supplier development funding to unlock the seed funding space with lower thresholds for eligibility i.e. startups with great technology, but with little to no traction must qualify for such funding.
All in all, in order for the tech sector to see more startup success stories coming to the forefront (real startups making real revenues), investment into the development of tech skills and early stage tech startups must be a priority.