Technology start-ups and the entrepreneurs who lead them should tackle the “many great opportunities” in South Africa and Africa more broadly rather than trying to emulate his decision to move to the US, says Gyft founder Vinny Lingham.
Lingham, now one of the “dragons” in the South African version of reality television series Dragons’ Den, tells TechCentral that there are so many business opportunities at home that technology start-ups should “focus their energies on building the next big thing for South Africa and the African continent”.
In July, Lingham hit pay dirt in the US when he agreed to sell Gyft, an online gift card service, to First Data, a big player in the payment technology space, for a rumoured US$54m-plus. Gyft pioneered the concept of a mobile wallet for gift cards.
Lingham founded Gyft in January 2012. The company raised $6m in total funding prior to the acquisition from several investors including Google Ventures, Canyon Creek Capital, The Social+Capital Partnership, Karlin Ventures, David Sacks and Hass Portman.
TechCentral: You relocated from South Africa to San Francisco to take Yola, your previous business, big. What did the decision to leave South Africa for Silicon Valley have on your ability to grow Yola and later Gyft?
Vinny Lingham: I decided to leave South Africa in 2008 to pursue my goal of competing in the global technology market with millions of Internet users. It’s very hard to do from South Africa and at the time broadband penetration or mobile were not even options to build a business on top of. Things have changed somewhat in seven years, but we still have a way to go before the country is fully connected. Internet access in South Africa is expensive, but I think that’s changing.
TC: Where did the idea for Gyft come from and how did you go about launching and growing the business?
VL: The idea came to me when I paid for my coffee one day at Starbucks in San Francisco using their new app on my iPhone. I actually paid using a digital gift card and, after digging into the market stats, I realised what a big market gift cards was in the US ($150bn/year, mostly plastic).
TC: How did the First Data deal come about? What’s the background to it? I see David Frankel, former co-CEO of Internet Solutions, was partly involved. What was his and others’ roles in doing this deal?
VL: I am proud to count David as one of my early investors in Gyft — he has been very supportive and it was great to have him involved. We had been working with the First Data team for some time and they had been looking at the digital and mobile gift card space very keenly. We got to the point that we decided to join forces and tackle the move from plastic to mobile together.
TC: There are plenty of South African technology entrepreneurs and start-ups who are going to want to study what you’ve achieved here and how you’ve done it. What advice would you give to them?
VL: The only way to study it, is to do it. You achieve a lot more by focusing on building businesses than spending too much time planning it. Find a market opportunity, make sure it’s a big one and execute on that — and stay focused. If you’re going to fail, do that quickly and move on. Talk to your potential customers and make sure you’re building what they want. Use the lean start-up methodologies to help kick-start you.
TC: Specifically, would you advise South African entrepreneurs who want to make the big time to relocate to the US, or can they do it from South Africa?
VL: I’m investing heavily in South Africa. I think that Africa has really become the final frontier and there are many opportunities to build and grow businesses. Moving to and getting connected in the US is very difficult and time consuming — and expensive! There are so many great business opportunities in South Africa — and I got a taste of them on Dragons’ Den — that I highly recommend that South African entrepreneurs focus their energies on building the next big thing for South Africa and the African continent.
TC: What’s next for you personally?
VL: I’m focusing on building Gyft up to the next level, plus I’ll be involved in a bit of angel investing and participating in Dragons’ Den. That’s about it. — (c) 2014 NewsCentral Media
