Paul Jacobson

Growing a small tech business in South Africa

I have a small business of my own that launched in October 2004.  When I started working on it in about June or July 2004 I was so excited about it.  After a fair sized payment to my web developer we got it off the ground and I soon had my first subscribers.  In the beginning I had grand ideas about how the business should be run.  My prices were half my closest competitor (well, the ones who were charging at any rate) and the site design was simple.  About 5 months later I have come to the realisation that my target market doesn’t want what I offered.  It was a really tough realisation.

I also realised that my web developer didn’t share my vision for the site and we parted ways.  When I met with new developers (the guys I now use for my hosting and development work), I came to see that for my venture to work, I need to turn the whole thing upside down.  This requires a complete redevelopment of the site to do it properly and that, of course, requires money.  Lots of it (certainly considering that the site isn’t producing much and I am funding this myself).

Once the disillusionment and unfortunate depression began to lift and I started to focus on the site once more (this involved a narrowing of my focus to one project from the 3 or 4 projects which I began to think about) it became clear that I must do more homework and I have to locate some seed funding to get the show on the road.  There is no point putting up an OK site or even a site that is like the rest.  One thing I have learned from my extensive (sic) blogging career is that your site has to be distinguishable from the rest and has to be dynamic if you hope to attract people to it and keep them coming back.  I am going through some older posts on Mena’s Corner and reading what she said about the different levels of funding Six Apart has taken on to develop and grow over the years.  I really admire what Mena and Ben did with their company and the awesome business they now run.  In many ways, I look to their stories for inspiration.

My question is how a small business owner goes about locating what may still be or was called Venture Capital these days?  Money tends to make things happen far faster and more effectively.  To me, it has become the oil that lubricates the many ideas that could become brilliant realities and help me make my business really great.

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Comments

  1. Anonymous avatar
    Anonymous

    Well, I don't know about South Africa but in America if you are a small business (and you sound really small) a venture capitalist won't be interested unless you have a really great/new idea. However, many businesses that are looking for funding start with an angel investor first. This is someone who likes your business plan and is willing to invest his own money in the venture.

    You do have a business plan don't you? If not, no serious investor will go near you. If you want to attract investors you need to have a plan for launching, running and growing the business.

    Be prepared to give up a large portion of your business and when all is said and done your investors may end up with majority ownership. Also be prepared to demonstrate that you have the experience and background to run this business. You started a year ago and bombed and by your own admission you didn't know what your target market wanted. You need to be able to answer tough questions like this. Venture capatilists want a significant return on their investment so they are very selective with choices for their funding.

    I don't mean to sound harsh but it sounds like you think enough money will make your new idea successful and this is not the case. True, a lot of start-ups fail because they are under-capitalized but there are many other factors that determine business success.

    Reply
  2. Anonymous avatar
    Anonymous

    Well, I don’t know about South Africa but in America if you are a small business (and you sound really small) a venture capitalist won’t be interested unless you have a really great/new idea. However, many businesses that are looking for funding start with an angel investor first. This is someone who likes your business plan and is willing to invest his own money in the venture.

    You do have a business plan don’t you? If not, no serious investor will go near you. If you want to attract investors you need to have a plan for launching, running and growing the business.

    Be prepared to give up a large portion of your business and when all is said and done your investors may end up with majority ownership. Also be prepared to demonstrate that you have the experience and background to run this business. You started a year ago and bombed and by your own admission you didn’t know what your target market wanted. You need to be able to answer tough questions like this. Venture capatilists want a significant return on their investment so they are very selective with choices for their funding.

    I don’t mean to sound harsh but it sounds like you think enough money will make your new idea successful and this is not the case. True, a lot of start-ups fail because they are under-capitalized but there are many other factors that determine business success.

    Reply
  3. Anonymous avatar
    Anonymous

    Well, I don’t know about South Africa but in America if you are a small business (and you sound really small) a venture capitalist won’t be interested unless you have a really great/new idea. However, many businesses that are looking for funding start with an angel investor first. This is someone who likes your business plan and is willing to invest his own money in the venture.

    You do have a business plan don’t you? If not, no serious investor will go near you. If you want to attract investors you need to have a plan for launching, running and growing the business.

    Be prepared to give up a large portion of your business and when all is said and done your investors may end up with majority ownership. Also be prepared to demonstrate that you have the experience and background to run this business. You started a year ago and bombed and by your own admission you didn’t know what your target market wanted. You need to be able to answer tough questions like this. Venture capatilists want a significant return on their investment so they are very selective with choices for their funding.

    I don’t mean to sound harsh but it sounds like you think enough money will make your new idea successful and this is not the case. True, a lot of start-ups fail because they are under-capitalized but there are many other factors that determine business success.

    Reply
  4. avatar
    Anonymous

    Well, I don’t know about South Africa but in America if you are a small business (and you sound really small) a venture capitalist won’t be interested unless you have a really great/new idea. However, many businesses that are looking for funding start with an angel investor first. This is someone who likes your business plan and is willing to invest his own money in the venture.

    You do have a business plan don’t you? If not, no serious investor will go near you. If you want to attract investors you need to have a plan for launching, running and growing the business.

    Be prepared to give up a large portion of your business and when all is said and done your investors may end up with majority ownership. Also be prepared to demonstrate that you have the experience and background to run this business. You started a year ago and bombed and by your own admission you didn’t know what your target market wanted. You need to be able to answer tough questions like this. Venture capatilists want a significant return on their investment so they are very selective with choices for their funding.

    I don’t mean to sound harsh but it sounds like you think enough money will make your new idea successful and this is not the case. True, a lot of start-ups fail because they are under-capitalized but there are many other factors that determine business success.

    Reply
  5. Paul avatar
    Paul

    Hi there!

    I was going to type up a lengthly comment in reply and have decided to do a post instead. Thank you for your comment, it is another valuable piece of information and guidance. Take a look at the main post for more.

    Reply
  6. Paul avatar
    Paul

    Hi there!

    I was going to type up a lengthly comment in reply and have decided to do a post instead. Thank you for your comment, it is another valuable piece of information and guidance. Take a look at the main post for more.

    Reply
  7. Paul avatar
    Paul

    Hi there!

    I was going to type up a lengthly comment in reply and have decided to do a post instead. Thank you for your comment, it is another valuable piece of information and guidance. Take a look at the main post for more.

    Reply
  8. Paul avatar
    Paul

    Hi there!

    I was going to type up a lengthly comment in reply and have decided to do a post instead. Thank you for your comment, it is another valuable piece of information and guidance. Take a look at the main post for more.

    Reply

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