An open letter to Elon Musk & South Africa’s investor community.
I read two articles recently, Duncan Alberts’ “Funding hurts SA tech start-ups” and Alistair Fairweather’s “Elon Musk: Pretoria’s billionaire space explorer and inventor.” Both of them resonated with me and I wanted to add my voice to the discussion based on my experience at Triggerfish. There is no doubt that a shortage of risk capital exists in South Africa. I see entrepreneurial activity all around me and I’m sure that if you went onto the campus of any university in the country, you’ll find some amazing ideas. I believe South African creativity, and indeed African creativity, is as good here as it is anywhere else in the world. Visionary entrepreneurs are out there for sure – ready and able to make a big difference to their communities – but visionary investors are in short supply.
Private capital is not finding its way to startup companies and high-growth opportunities.This does not lead to a healthy economy. South African investors are unwilling to take risks. I’m not sure how much genuine venture capital is available in this country, but I doubt it’s more than R1 billion, if that, a drop in the ocean of what’s needed to build game changing companies that compete on the world stage. If we are unwilling to take risks, if we are unwilling to accommodate audacious ambition, we are never going to get the innovative economy we need to build a prosperous and stable country. The companies that dominate South Africa’s economy are by and large the same companies that dominated the economy 10, 20, or even 30 years ago. There is little change.
Patrice Motsepe, South Africa’s billionaire mining magnate recently committed half his fortune to a foundation to provide for the poor. This is a magnanimous and noble gesture which should be celebrated, but if he had committed even $50m to a venture capital fund, on purely commercial terms, it would be the biggest VC fund in the country. What kind of impact would this have had? We’ll never know.
There is no shortage of capital in this country, from high net worth individuals to pension funds, family offices, and other large pools of savings. The custodians of these funds are not even allocating small sums of money to venture capital. Being an optimist by nature, I cannot understand how this can be. Diversifying your investments is science not wishful thinking.
Elon Musk was a keynote speaker at this year’s SXSW Interactive conference. He said, “I didn’t go into the space, car or solar industries because I thought I could make a risked adjusted return, I went into them because they were areas in which I wanted to make a difference.”
We need investors ready to make a difference.
Stuart Forrest, our CEO, was recently invited to speak at Stanford University’s Graduate School of Business. A two-time Oscar winning professor was astounded to hear that a small production company at the tip of Africa was able to produce two significant feature films outside the Hollywood studio system. Not even Pixar did that. And we did it here, in Africa. The reception he received in Silicon Valley stood in stark contrast to the obstacles we face in South Africa.
We can do great things, but if we want to go to space, like Elon Musk, we need investors ready for the ride. We cannot take on the giants by being timid. Nico Dekker of the Cape Town Film Studios once told me not to let people dismantle your dreams. You cannot walk around on-set at the Cape Town Film Studios and not be inspired. We have all the talent in this country to accomplish anything we set our minds to.
Triggerfish’s first film, Adventures in Zambezia, is Africa’s most successful film export since The Gods Must Be Crazy, released over 30 years ago. Zambezia was the first African film to be nominated for two Annie Awards – the animation industry’s Oscars. In half the territories it has released, Zambezia has either beaten or earned at least half the box office of its rivals in a country by film matrix. In Russia, it beat 3 Oscar nominated films and in territories like Poland, Croatia and the Benelux, it’s beating the majors outright – an incredible result for a first film. We expect our second film Khumba, starring Liam Neeson, to do even better.
Africa has a PR problem. We are all tired of the steady stream of negativity that emanates from our news. The sum of our hopes and dreams, and the potential that exists in this great continent, is worth more than the sensationalist stories that dominate the headlines. More than 2 million people around the world have watched Zambezia in the theatres. For many of them, it’s the first time they’ve been exposed to an African product. When Zambezia has finished its run on Pay TV, VOD, and free-to-view, tens of millions of people will have seen a story, from Africa, that isn’t about politics, murder, corruption, or poverty. It’s family entertainment; something kids can watch and get excited about.
We can change the way the world sees Africa. There is an unprecedented opportunity for us at Triggerfish to engage with the world in a way that better presents the hopes and aspirations of a billion people on this continent. We are building a global, film and entertainment company that showcases the best in African creativity and technical excellence.
Alistair Fairweather finishes his article by saying, “In some ways it is inevitable that we would lose a pioneer like Musk to the country that has specialised in welcoming them from around the globe for the last two centuries. But we should mourn that we could not offer someone like Musk more opportunities. And at the very least we should do more to celebrate him as one of our own.”
Triggerfish is already competing against the majors on the world stage. When I outline our plans to potential investors, I keep doubling our ambitions until I see the fear in their eyes. One day, we hope to meet an investor whose ambitions for us, puts fear in our eyes.
Elon, if you want to change the way the world sees Africa, call me.
Image Credit: ‘I dream’ The Imaginary Foundation