In an exclusive article for HumanIPO, Jess Green, founder of Perk.co.za and the driving force behind a bid to set up Start-Up South Africa, explains what he thinks make a worthwhile and profitable new business.
The most successful tech or web businesses don’t just address a need or want that people have, they address a burning desire for something and solve a real problem.
If they don’t, the most successful they’ll ever be is for a few hours after they IPO, only to see their share price drop 90 percent over the following week.
In fact, real tech businesses aren’t about building a fart app or a recipe sharing website. They are all about creating something to improve people’s lives, actually increasing profits for businesses or bettering bottom-line manufacturing processes.
Don’t get me wrong, there’s a place for a gardening website and a knitting needle that can connect to your WIFI router. But when you’re 60, and you look back at the businesses you created, ask yourself – how greatly did they actually improve life for those who used them? Or was it all just hype?
I recently met Ludwick Marishane, at one of 88mph Cape Town’s Friday Drink Tanks. They’re awesome meetups of tech entrepreneurs, right in the ex-Google Umbono space. Ludwick is quite well-known as the founder of DryBath™, a patented dry soap and a company that has earned him Global Student Entrepreneur of the Year in 2011. And with 2.5 billion people without proper access to water globally, Ludwick is already filling a deep need with his product, which is bound to be successful.
But one thing the 22-year-old said struck me, and that is, word for word: “There is far more money to be made by solving industrial problems (than building websites).” The truth is, most often he’s right with this quote, and mainly because most websites don’t really solve a burning need.
Industry is definitely an area that the “tech” entrepreneurs we usually hear about are not close to. Google does try and give it a go with things like self-driving cars – but even this is still not really industrial.
Switch to a company I met last year in Somerset West called Stone Three Venture Technology, and their profits are rising dramatically as they solve mainly mining needs with innovative hardware and software solutions. Move to Stellenbosch’s Technopark and meet ikubu, a small, yet PhD- and Masters-filled team of gents who used Xbox Kinects to design a baggage handling system for international airports.
These companies are building sustainable, patentable technology products for industry, and getting paid handsomely for it. No Twitter or Facebook sharing, no one page eCommerce checkouts, just good, clean solutions for real-world problems.
Because that’s what really matters.
The point I’m trying to make is that before you rush off and start working on a cool idea, rather sit down and think whether or not it is actually something that will change people’s lives or business profitability. Otherwise, you’re building something for yourself.