Nick Durrant, managing director of South Africa’s Bluegrass Digital, spoke to HumanIPO about the digital agency, smartphone penetration in the country and establishing an agency in two countries.
HumanIPO: In your experience, is a global approach to business more profitable as opposed to focussing only locally?
Durrant: I don’t believe it is necessarily the case for everyone. It is simply the route as a business we have taken. There are many profitable local businesses in our sector. The global approach started when I decided to leave investment banking and do something on my own.
I joined the business in 1999, while deciding to set up the UK office as the digital revolution was underway in the UK and I saw opportunity in the market.
The business plan was to hedge the rand and make use of a lower cost production hub to generate better margin on our business. So our business strategy [is] an outsourced model, which still operates today [and] has performed well for us.
The digital channel is still emerging in South Africa to an extent as brands try to monetise the channel. TV and print still dominate in South Africa, so these reasons have meant budgets have been tighter in producing digital work and therefore margins on your work although this is slowly changing.
Do you find the reason for the large scale smartphone penetration in South Africa is due to the fact that South Africans are able to access the internet more easily through their phones as opposed to a computer?
The short answer is yes, but large scale penetration has some way to go still.
Accessibility via cellular/3G has meant that often many users first interaction with the internet (email, social) is via a mobile device. It is often the quickest and cheapest route to accessing the web. The cost of mobile and smartphone technology continues to fall meaning it is becoming more accessible to people who could not afford laptop, tablets, [and] PC’s.
There is also the cost to access ADSL, which is still very expensive in South Africa and has been slow to roll out to every point in the country…
What description best suits Bluegrass Digital, in terms of what the company does?
Bluegrass Digital is a digital production agency. We partner with creative, advertising and marketing agencies and provide them with quality-driven digital production capability and expertise to deliver their digital projects.
We are an agency for agencies. We have a strong technical focus and build solutions across web, mobile and social platforms, which includes anything from website builds, content management implementation and web applications, to mobile applications (for the iPhone/iPad, Android and BlackBerry), to Facebook applications.
What challenges have you experienced with running an agency in two different countries?
We have dealt with the normal challenges of businesses working across different countries and also the perception of South Africa. By normal challenges I mean aspects such as communication, processes and systems, and ensuring quality service delivery.
Most of these challenges we have overcome having been in this business for 15 years.
When you’re working on large digital projects for the UK market, which often have demanding timelines and delivery constraints, expectations are high and you still need to output a quality product.
Why do you believe Europeans are less wary about doing business in South Africa?
In the late 1990’s, when we set up the UK office, outsourcing was a much more foreign concept, and even more foreign was doing business in South Africa.
South Africans did not have such a positive perception in those days, but that has changed now. I think South Africa has opened up, confidence in delivery and general respect in [the] business world has meant that perception has changed somewhat.
Our re-emergence to the rest of the world has taken time and we have “grown up”. I would also highlight the UK and the fact that South African’s have become very much part of the London and UK culture and have generally gained a good name and work ethic among British people.
How does Bluegrass Digital work together with Silicone Cape?
We aim to support Silicone Cape with events and networks. In July we are partnering to take a group of tech businesses to Nigeria. Later this year we will be leading a tech trade mission to Ghana with Silicone Cape. Both these missions are aimed at attracting business opportunities and trade between South Africa and the respective countries. West Africa is becoming an important part of the Bluegrass growth strategy in Africa.
One of our directors, based in London, James Durrant, represents Silicone Cape in the UK through his involvement as a director of the South African Chamber of Commerce UK and Mamba Mentors, a seed investment program for businesses from and involved in business in Africa.
