SPORTS practiced on paved surfaces elsewhere in the world easily become extreme on the rugged slopes and rapids of the South African landscape. The same can be said for starting up hi-tech ventures.
Roderick Barrett, 32-year-old Cape Town tech entrepreneur, is into extreme sports. His company Mobii Systems has developed a tiny, rugged sports computer called Motion that takes very accurate and detailed measurements of the movement of anything from kite surfers, free fallers, kayaks and racing cars.
But none of these are as extreme as taking on the likes of global sport watch giants Garmin and Polar with nothing but youthful energy and ingenuity.
Mobii, run by Barrett, his wife Anna, his brother Brendan and a couple of equally youthful colleagues, have been quietly making inroads into the local mountain biking, motorsport and canoeing scene with the Motion, locally produced in their small Bellville-based production line which became profitable in March this year after four years of white-knuckle development.
But Barrett has now been thrust into the limelight as one of five “young entrepreneurs to watch” by the organisers of a youth entrepreneurship conference taking place on the Bellville campus of the Cape Peninsula University of Technology tomorrow and Saturday. The conference, and the Cape Town Entrepreneurship Week, which it kicks off, are billed to take stock of the city’s ability to nurture young entrepreneurs like Barrett.
If there is one entrepreneur with a measure of just how far South Africa has to go, it is Barrett. He paints a bleak picture of the lack of local business support, but also points to a number of surprising advantages of being based in Cape Town.
The UCT business-systems graduate contrasts his experience in South Africa with his first hi-tech venture in Sweden. It is like comparing an on-road race with an extreme mountain bike challenge.
He and Anna, a Swedish mechanical engineer, were accepted into a business incubator in Stockholm to commercialise their idea for a novel way of cooling computer processors. Barrett describes the intensive support they received, not only technical but also on the business side. “We learned a lot from that – all the fundamentals of running a business which is stuff that you don’t learn at varsity,” he says. Their idea showed so much promise that the incubator invested in their business in a deal that carried no risk for the entrepreneurs.
Apart from the support, their way was also paved by the deep levels of skills and manufacturing capacity in Sweden.
Finding designers and engineers willing to work on prototype components was easy and quick.
Their idea proved unworkable, however, and the couple returned to Cape Town in 2007 to decide what to do next. Barrett, a sailing enthusiast, had a frustrating experience with a frail on-board GPS unit, and that triggered what became the white-water ride of developing the Motion.
Sports applications of GPS devices were still in their infancy, and they soon developed a host of functions that professionals as well as amateur sports people use: heart-rate monitoring, pace, speed, position, mapping, acceleration, g-force, pitch, video synchronisation and an audio feedback function so that the user does not have to look at the device.
Naively, they thought they could bring the device to market in 18 months, and Barrett and his brother sold their flat to fund the venture. It took more than twice as long. Besides the usual development hitches, the lack of depth of the electronics industry in Cape Town meant that they could not find contractors with enough capacity or will to come up with the bespoke components they needed.
“We tried to draw on the stuff that we’d learnt overseas, but you start realising that there are big limitations to being in South Africa from all different points of view – from manufacturing to finding things. You can’t just pick up the phone book and find guys who can optically bond displays for you, for example. That is all done overseas. So you have to start learning how to make your own plan.”
They decided to develop many of the elements themselves that they would have outsourced if they were based overseas. In hindsight, says Barrett, they should have done more to find local subcontractors, even if it meant training them up.
What followed was a series of near-death experiences on the cash-flow cliff. At one stage Barrett’s father, a master mariner, returned home from a stint at sea to find his sons had flogged his car to pull the business through.
The Mobii team searched desperately for financiers or investors. A particularly low point for Barrett was with a local venture capital fund official who talked on his cellphone during their presentation before leaving halfway through.
Such an attitude is alien in a place like Sweden, says Barrett.
Their break came in the form of recognition from the Sports Science Institute where Professor Tim Noakes realised that a single Motion, costing less than R3 000, did better measurements of the movements of a canoe than an alternative system from Australia costing R80 000.
The doors creaked open and they were saved by project work, among others for the South African Olympic canoeing team, for an Antarctic race and for an equestrian enthusiast.
Based on business factors alone, Cape Town is not yet a friendly place for hi-tech entrepreneurship. Barrett says his choice to base his business here is almost purely emotional. But, he is quick to point out, there are advantages.
First, the lack of industry depth forces a kind of boer-maak-’n-plan (farmer-makes-a-plan) self-reliance which often leads to innovation. In their search for casing materials, for example, they stumbled on an outer layer that self-heals scratches with the application of heat. But on the other hand, in-house development self-reliance is more often than not too slow and too expensive for start-up survival.
Second, the huge diversity of Cape Town’s population makes it a great place to pioneer and test the take-up of a product in different markets, says Barrett.
And third, at least for their kind of product, South Africans are sporty, outdoorsy, and count among them a fair number of early adopters.
Despite the harsh local conditions, Mobii has survived its gestation, and is now ready to scale up its tiny factory into a full hi-tech production line.
Is Cape Town a friendly place for such an expansion?