Eric Edelstein is the Co-founder of Springleap and Evly. His hats include tech entrepreneur, startup digest curator, social media public speaker and he has great expertise in the power of crowdsourcing. Eric also rubs shoulders with the likes of Drew Houston (Founder of Dropbox). He took the time to share some of his thoughts with us about startups, angel investors and the real reason why some startups succeed while others fall.
What specific factors do South African startups need to bear in mind when launching?
Lets start with the presumption that all factors depend on where we are comparing ourselves to. If we’re comparing to Silicon Valley or other tech hotspots around the world, then yes, we’re often at a disadvantage when attempting to build global companies. For example, our bandwidth is slower for a more expensive price. But we also face similar challenges to them. Although we don’t have as many software developers, we also don’t have as many companies fighting over them, so we share the same challenge of finding developers. And if we compare ourselves to less developed tech eco-systems, such as certain countries in the rest of Africa, we often have a more efficient tech eco-system; more networking events, greater bandwidth, and far more access to funding than they do.
How do startups go about looking for angel investors? What questions should they ask?
Network, network, network. The more people you meet and talk to, the more you’ll understand the eco-system. As an example, there are a number of organisations trying to match entrepreneurs with angel (and other early stage) investors, such as the Google Umbono program and Angel Hub. You can also meet angel investors through broker referrals. Meeting high net worth individuals directly is possible in South Africa, but unless you have an amazing contacts network, it’s probably going to feel like finding a needle in a haystack. The most important thing is to show the potential angel how you are going to limit their financial risk, while at the same time, giving them a fantastic investment opportunity with a great potential return.
What are the notable differences between startups in developed countries versus emerging markets?
In the developed countries, the entire eco-system for entrepreneurs is more developed. So there are far more resources available to help you build your business. More funders, more networking events, more bandwidth and so on. But there are also far more entrepreneurs trying to build their businesses and thus leveraging these resources.
Which South African startups have caught your attention? For the right or wrong reasons!
I’ll tell you after I invest in them! On a serious note, I’m currently not investing in new startups, as much as I’d love to be doing so, as I’m 100% focussed on building up my latest startup, evly.com, which allows organisations to better engage, grow, and gain business value from their fans and communities. Our differentiation? Previously building a Facebook app could take months of planning and development, but our software lets you build a facebook app to get your Facebook fans more involved with your brand in under an hour.
Wow, that sounds brilliant. So how does a startup build trust and brand loyalty before they have established a reputation?
Build a great product which adds value to your target market. The trust, brand loyalty and referrals will follow.
In a sentence, what is the determining factor as to why startups succeed?
A successful entrepreneur keeps moving forward until they succeed. Stumbling blocks along the way which knock them for six, just make them more determined to succeed.
Thanks for your time, Eric. We look forward to seeing more great things from Evly and also keeping an eye on your upcoming startup investments. Follow Eric on Twitter here.