“The idea is that tensions and challenges in the city region also point to opportunities for innovation and that effectively harnessing the city’s diversity could provide Cape Town’s innovation ecosystem with a competitive advantage and distinguishing identity.”
Last year, Cape Town made the top 30 global tech cities in the Savills Tech Cities Index, the only African city on this list. Another index, the Global Fintech Index City Ranking, placed Cape Town below Johannesburg, Nairobi and Lagos. Yet another, the StartupBlink Cities Global Ranking of Startup Ecosystems, recently saw Cape Town drop 17 spots to behind both Nairobi and Lagos. Clearly, competition is tough.
At insight2impact, we wanted to go beyond indices and rankings to dig deeper into the factors that turn specific city regions into engine rooms for tech innovation and successfully take solutions to market. We’re following a systems mapping approach to make sense of three of Africa’s top tech cities: Cape Town, Nairobi and Lagos.
Cape Town was up first. We mapped key enablers and inhibitors of the city’s tech innovation ecosystem by using research and knowledge from recent projects, such as our DataHack4FI Innovation Competition. Then we refined and reshaped this at a half-day focus group with tech companies, investors and ecosystem facilitators. This article summarises the key insights and main actions that have the greatest potential to increase both innovation and inclusivity in the Cape Town tech innovation ecosystem.
Cape Town can sometimes seem like two cites in one, regularly finding itself on “Top x” lists for reasons both very good and very bad. This is a challenge that also holds a promise: Tensions and challenges in the city-region also point to opportunities for innovation, and that more effectively harnessing the city’s diversity could provide Cape Town’s innovation ecosystem with a competitive advantage and distinguishing identity. This is already happening – think of companies like Abalobi, Yoco, JUMO, Zoona, Lumkani or WhereIsMyTransport. The question is, “How can we become better at it?”
Where is the buzz, and how to get there?
Transport emerged as a top concern. It reflects both the practical challenges of a spatially divided city and frustrations with the public transport system. Cape Town CBD – where much of the innovation buzz can be found – is tiny, with pricey real estate, and only a small group of Capetonians live there. The rest have to commute in from the far edges of the city. Without reliable or safe transport, getting to that meeting or networking event is a challenge, and working late is not an option.
While the rollout and the maintenance of public transport are a government responsibility, there are things that ecosystem actors can do, and some already are doing. For instance, Solution Space has a presence at both the UCT Graduate School of Business at the Waterfront and in Philippi, and Bandwidth Barn has campuses in Woodstock and Khayelitsha. For its part, the city has declared Atlantis (40 km from the CBD on the West Coast) a Special Economic Zone (SEZ) for greentech. Start-up events could make better use of these spaces to host sessions and to create places where investors become familiar and could be drawn for meetings. Tech company leaders in the CBD could be made more aware of the situation and come up with solutions that could enable those facing transport challenges to still grow and thrive at work. In addition, market actors should be deliberate about who to include in initiatives, where those are hosted and when – and consider providing transport options.
The idea of “low-pressure” convenings received a lot of votes. Whereas the Cape Town calendar boasts many innovation-related events, workshop participants reflected that these aren’t always conducive to valuable learning or expanding networks. This is because much of how ecosystems grow is around trust and who you know already. Not everyone is fluent in pitching, and where such events revolve around pitching your idea, many ecosystem actors from less privileged backgrounds may stumble. Those who did not go through schooling systems where confidence, presenting and debating skills were instilled in you from a young age are at a disadvantage – even more so for people who speak English as a second or even third language.
“Smart convening” involves events where you can connect with the right people in a low-pressure environment, but low pressure doesn’t necessarily mean easy to organise. There is skill involved in leveraging the right mix of actors and creating an environment where people can connect in a way that adds value. For example, Start-up Grind, which features an experienced entrepreneur speaker at each event, believes in “making friends, not contacts” and “helping others before helping yourself”. Market actors also wanted more opportunities to share learnings, including about failures. The example of Nairobi F*ckup Nights, where speakers share mistakes they’ve made and what they learned from them, was mentioned as something to consider for Cape Town. If done well, these could be rich learning events that also help to destigmatise the fear of failure and create a safe space for experience sharing.
Investors note that some solutions developed in the city don’t address a real need and don’t reflect a deep understanding of the problem it tries to solve. Participatory design processes like design thinking or human-centred design can help to deepen the understanding of a problem from a customer-centric perspective and to deliberately bring in diverse thinking and alternative ways of knowing.
These processes are not easy or always comfortable – especially in a context rich in diversity and potential tension – but if done well, they could contribute to the co-creation of solutions that meet a genuine need. In fact, sources of tension could also be sources of creativity. Cape Town has the potential to become a leader in these processes, but it needs a greater pool of skilled design thinkers who can apply these skills.
Training for scaling
Growing and scaling a business is one of the greatest challenges faced by start-ups in Cape Town. Developing a business, its processes, people and technology from a small to a medium-sized one, and to an established business, requires a broad skillset. A large gap was identified in the ecosystem for access to business training such as 10x scaling. Could business training be made more accessible to a more diverse group by, for example, advertising through hubs outside the CDB, and offering public transport and bursaries?
In addition, opportunities for training, blended with peer-to-peer learning and sharing for start-up executive teams, are currently missing. Investors such as the Omidyar Network run CEO gatherings for their investee companies to provide best-practice training from experts and opportunities to connect and share with fellow CEOs. Could something similar be supported within Cape Town, open to all?
Advice from experienced entrepreneurs and business people can add a lot of value for leaders of early-stage companies. This could include topics ranging from investment options, structuring the business, hiring and firing, boards and expansion. Having a mentor can also build confidence. Cape Town has many experienced founders and business people, some of whom are actively running businesses and others who are in consulting roles, or near retirement.
The challenge is that the right mentors may be limited to certain circles and/or have limited availability. However, trusted ecosystem facilitators can help to catalyse these relationships. Establishing a network of skilled and well-networked individuals, who are willing to have a regular call or coffee with a young start-up team, especially those that are outside of the inner-circle, could contribute to equitably strengthening the ecosystem.
Such initiatives should also pay attention to the selection of mentors, ensuring that a diverse set of individuals are brought in and that their stories are highlighted. Expanding the variety of role models available to local entrepreneurs also contributes to broadening mindsets as well as networks and a sense that “people like me” can do this.
Are you part of the tech ecosystem in Cape Town? What did we miss in our enabling and inhibiting factors? What do you think are the key leverage points for change in creating a more inclusive ecosystem? Share your thoughts with us in our comments section, or get in touch with Renée Hunter.