This is really big news. Gareth Knight (Tech4Africa) conference has managed to persuade the Seedcamp guys (like Saul Klein, who is a SAffer) to bring the Seedcamp concept to South Africa.

For those of you not familiar with Seedcamp Week, you can read more about it on their site. But in a nutshell, it’s an intensive competition for startups, that happens in September in London. About 20 startups are selected, go through a rigorous presentation program and 5 winning teams are invested in, in return for a 5%-10% equity stake. The investment is between 30-50,000 pounds.

As with most competitions of this type, the real value is in the networking, exposure and mentoring, although the money is not to be sneezed at. There are over 400 mentors, with European connections, in the Seedcamp pool.

Seedcamp also runs mini seedcamps throughout Jan-June so that it can identify hot players to take part in the main event. South Africa is going to host an event like this, and this is a first for Africa. The winner will may get to participate in the main event in September, in London.

Gareth will begin taking applications mid June, and he will soon post more info on the Tech4Africa site. He is looking for 20 startups to participate in the local competition. Mentoring is going to be a huge part of the selection process, and the winner will be announced at the Tech4Africa conference.

I am particularly excited about this, because Crowdfund should have some exciting projects to enter into the competition (although not by mid June). Also, I see a lot of ideas that we cannot fund for various reasons, and it will be super to offer the entrepreneurs a chance of participating in this competition instead. And of course, we might spot some winning gems that don’t get to win, but that *we* can still fund.

Awesome.

(Gareth Knight is on Crowdfund’s board)

I have been waiting a *really* long time to be able to say this, but after many attempts, and dozens of viewed properties I am happy to say that the hot desking concept we have all been talking about for ages is READY TO GO!

Geekspace will be 500m2 devoted to helping entrepreneurs conquer the online space. Most of us are (or know of) coders who sit huddled in their bedroom, separated from the rest of the civil world, and who would really benefit from being a part of an ecosystem that could “feed” everyone in it symbiotically.

I am working out the finer details (including lease negotiations) but all of these are semantics: the Geekspace will be ready to launch July 1, and the space should be available June 1 if you don’t mind working in slight chaos while we set up.

The place I have in mind is in Bryanston, 5 minutes away from William Nicol and thus relatively close to the highway. Plenty, plenty of FREE parking (HUGE issue, trust me…most buildings want from R400 per bay). (But the lease hasn’t been signed, and I have 2 back up locations).

Should you be accepted into the space, you will get a desk, chair, Internet connectivity etc etc. There is a super entertainment area, including a bar (yes!) and loads and loads of built in fun. Also: free use of the boardroom, meeting rooms, etc. Private offices are also available, but very limited. Hoping to get DSTV and TVs in time for World Cup etc. There is a training room, a library, kitchens, etc etc. In other words…. truly AWESOME.

Oh, and the space will be a 24/7 so it will *never close*.

I am looking for a diverse mix of tenants, so it doesn’t all have to be “online people”, but it does have to be people that feed the online ecosystem. So, aside from coders, it can be marketing, strategy, legal, financial etc. Diversity is the key. Yes, also when it comes to colour.

The cost will be kept to the lowest possible. Still finalizing numbers, and dependent on sponsorships etc, but I wouldn’t want to cross the R990 per desk, per month fee. This includes the furniture, parking, facilities etc, but *might* not include bandwidth. You have to bring your own laptop.

Leases are month to month.

If you are starting up a venture, or have been accepted into the Crowdfund programme, you would most likely not incur any cost at all for the first 3 months. Also, if you are busy playing here, but really cannot afford to pay, you should just talk to me. This isn’t so much about revenue as it is about making things happen.

I will post much more details soon (including a dedicated website to this), but I just wanted to get the word out and start gathering some feedback of interest.

If you are interested in renting a desk for about R1,000, please email me directly, asap. First come first served, and space is limited. eved@ideabank.co.za, with GEEKSPACE in subject line, please. I need to know how many desks, who you are and what you do.

The Crowdfund is looking for The Next Big Thing. Not much less.

And why not? Pretty much every single big thing was started by two or three guys, sitting on a worn couch, drinking a couple of beers and shooting the breeze. One thing led to another, an idea was born, and with perseverance, sweat and luck was taken to market.

We have the guys (and gals), we have the couches, we have the beer. And god knows we have the ideas. What we might be lacking in is the confidence that Big Ideas are worth taking on. We can’t blame ourselves: it is tough to get any product to market successfully, and it is particularly tough to do so from South Africa.

What I am really hoping though, is that initiatives like the Crowdfund, and Silicon Cape, Tech 4 Africa etc are beginning to awaken the entrepreneurial, fighting spirit in the really smart people that we have here, and that they begin to realise that taking three months out of their lives to “give it a shot” is a risk they owe to themselves.

I don’t really know how to define the Next Big Thing. I guess that when we see it, we will know it. (Well… I hope we will. Or we will be kicking ourselves real hard.) I do know it must check all the usual boxes: innovative, valuable, simple to use, have global appeal. I also think it must be really, really simple in concept. If you need more than 30 seconds to describe it, it probably isn’t it.

It’s very likely that the Next Big Thing is mobile based, although I personally am still a fan of the web as seen on my 24” monitor. It will almost definitely be a filter of some sort, because that saves time, without draining it. Localisation is big.

Whatever it is, if you are applying for Crowdfunding, try to find it. Think big. We are. Remember, with enough passion, skill and perseverance there is nothing separating you from those two or three guys drinking beer on a couch in Silicon Valley. Get to us, and we’ll help you get there.

Any investor in a business is ultimately looking for a positive return on investment (ROI). But in the online space “positive ROI” can be achieved by a product that does not in fact make much, or any, money. In fact, it is very possible that angel round investors, or seed accelerators, make a fortune out of an initial investment in an online product that will never, on its own, make any money at all.

What a startup does need to do is prove, or at least strongly suggest, is at least one of these:

• that it will be able to generate sufficient revenue on its own
• that it will attract a wide enough audience, that can eventually then be monatised
• that it has technology that will be desirable to a bigger player, and will be acquired

All three of these can work hand-in-hand, and having more than one potential revenue source is obviously a good thing.

At the end of the day, just like in any other business, an online product needs to add enough value to those who will be paying for it to justify the money spent.

Unfortunately, it is very difficult to get money out of consumers, advertisers or the “bigger” players. Consumers are used to getting things for free online, and will most often only shell out money if doing so will save them time or money. Advertisers have a plethora of advertising options, and simply offering them a “just another” new platform to speak to consumers is usually not a strong enough proposition. And the Bigger Players often have their own development teams or at least access to unbelievable coding talent, so will only acquire companies if doing so will offer a shortcut to them developing a similar product themselves, or if that is the only way they can get their hands on a patented technology.

Reddit.com is a case in point.

One of Ycombinator’s earliest success story, Reddit.com, is very similar to digg.com: it creates a “front page” of the web, listing and linking to interesting stories as voted up by the users (readers). It appeals to a tech savvy crowd, and gets about 7 million page views per month.

It was initially funded by Ycombinator with $11,000 and went on to attract about $70,000 in angel funding, and rejected a buyout offer from Google five months after startup. (Interesting enough; when the two Reddit founders first approached Ycombinator for funding, it was with a completely different idea that YC didn’t particularly like. What they did like was the team, so together they developed an entirely new idea, which resulted in Reddit.)

When Reddit launched in 2005, it had no advertising on the site, and no revenue stream or model. What it did have was an extremely low burn rate (money needed to exist, over and above revenue generated) and a strong focus on growing traffic. About six months post launch, it started displaying advertising. It also sold merchandise. It allowed people to buy placement of headlines on the front page (which would have been most controversial, had it also not allowed the readers to vote those headlines up or down). But the key to success was licensing their technology to a bigger player – in this case Conde Nast. In the end, Conde Nast was so impressed with the product, and the team, that they acquired the company for an undisclosed sum (but rumored to be between $10 and $20 million).

Today, Reddit relies on advertising and licensing as revenue generators.

Lessons learnt:

• Keep the bigger picture in mind, over and above everything else. In Reddit’s case it was about providing value to the readers (at no cost) so that there was a strong, cohesive audience.
• Think outside the box. Reddit allowed its technology to be licensed by other companies, which made it a proveable concept and led to an acquisition.
• Stay cheap. Even at time of acquisition (18 months after startup) Reddit’s highest expense was rent.

(Just for the record, I consider Reddit a success story only from the founders and YC’s point of view. I do not think it was a particularly successful acquisition for Conde Nast. That, however, is no fault of the Reddit founders, and is a topic that deserves a blog post on its own.)