Having lived in Cape Town for 2.5 years, and then moved back in Gauteng, I’ve done a fair amount of thinking about why people regard the city as an ideal start-up hub. Yesterday’s Silicon Cape event seems to have spurred some local but non-Captonian bloggers into asking the same question, and concluding that there is nothing special about Cape Town (or the technology and start-ups there), other than dislikable Capetonians.
Invention and innovation is a mindset –not a fucking geographical location.
Perhaps. But it happens in specific geographical locations.
If the idea of start-up hubs has been invalidated by the ubiquity of the Internet (as Colin Alston suggests), then why are tech start-ups still not evenly distributed among every large city in Europe and North America? Why do they founders and investors still choose San Francisco and not Chicago?
Then in the same post he says:
I have nothing against the Cape. Sounds like a marvelous lifestyle, and I certainly wouldn’t mind to live in Cape Town.
Ah, now that’s interesting…
Paul Graham makes a convincing arguments (here and here) why good universities, pleasant climate and beautiful nature, (among other factors) make a city attractive for founders, and investors.
Adopting Paul Graham’s idea that cities send messages, to me, Johannesburg says: “Earn a bigger salary, so that you can buy more toys, because there is nothing else to do for fun in this ugly mining town”.
In another post, Roelf says:
The reality is that Joburg is a very “un-exciting” place to live. I can count on my hands the few fun things to do (granted I’m not easily entertained), but there is a distinct lack of natural beauty and fun things to do.
To me, Cape Town says: “Compress the rest of your working life into 3 years, create wealth and retire young, because you need more time to enjoy this lifestyle”.
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Hi Simeon,
I agree. As a developer I’ve had various offers over the years to move to Joburg and earn a bigger salary… It’s never been an option for obvious reasons.
I did spend a few weeks working in joburg and it really sucked. (Although I’m sure a lot of that has to do with not knowing anyone. I have a few friends who live in Joburg and swear that joburg people are nicer than Cape Town people.)
There are two things I find really interesting.
1. Why do these people want to knock an initiative that could have a positive impact on the country as a whole? Like you pointed out, most of them openly admit to wanting to live in Cape Town. The Silicon Cape initiative is pro-actively working to make it easier for them to move (back to) Cape Town and earn the high salaries they are accustomed to.
2. I’ve been told by a few recruiters that the difference in Cape Town and Joburg tech salaries is decreasing as the demand for highly qualified tech staff is increasing in Cape Town. I think this has a lot to do with big (rich) tech operations choosing to base themselves in Cape Town rather than Joburg. Obviously, if you’re the boss and get to pick, why wouldn’t you pick Cape Town?
ps. Please tell that Roelf tonsil that Geocities didn’t get the business model right (and the market wasn’t ready), just like Altavista et al didn’t get the Search business model right. If everyone gave up whenever something was tried for the first time and failed we wouldn’t have much…. like the aeroplane that you coathangers use to fly down to the Cape every December.
No disputes there, and I stick by those words. Joburg is definately not a great place to live in — it’s dirty, busy, crime-ridden. But Joburg is where I live… And realistically Joburg is where 99% of my business gets done.
To me, Joburg says: “Compress your life into 18 months, move to Cape Town and sponsor some start-ups”. Of course the reality is that these fairy tales rarely happen, not due to people’s lack of innovation or will to succeed, but simply because South Africa in general is such a start-up unfriendly country.
There are serious issues to be addressed by our government and the industry. It just appears that as usual, everyone is quite happy to talk about it, and DO very little about it.
Having a discussion on the state of Venture Capital in the Western Cape is like having a panel discussion on the state of poverty in Orange Farm. It’s pointless because poverty is everywhere, and talking about it simply regurgitates some very known facts.
The reality is that action is required.
The reality is that all start-ups need to become bigger and grow up at some point.
Business doesn’t care whether you live in Cape Town, or Kuruman.
It cares about whether it can pay it’s salaries and show results to it’s investors.
It cares about how much tax it pays.
It cares about how easy it is to do business.
If it’s easy for a business (start-up or not) to exist, then we will progress in this country. Maybe even in Cape Town :)
Oh hai, it’s me!
Why Cape Town? Yes, they have good universities, certainly better than the ones in KZN. It’s a pretty crummy climate IMHO, and I find the place pretty boring. The most interesting thing I’ve done there is race my car up Chapman’s Peak.
I’ve been everywhere in SA and most places in our timezone, and after spending 24 years in Durban I decided Sandton was my favorite place in the world (Yes, the world, it even beats Germany, Paris, the UK and Amsterdam for me). It’s pretty, it’s interesting, there is always something to do, and the people who aren’t completely insane are usually nice. Go to a club anywhere in Joburg and people actually talk to you and mingle instead of acting like anyone they don’t know is infected with Swine Flu.
The point is not “My city is better than your city!” though, the point is that the entire argument is irrelevant. I don’t care where my coworkers live, I care about their work.
Modern business is not about a big tower block in some city, that is inefficient. It’s about small ones, in lots of cities – assuming you even need one in the first place.
The crux of the matter is put as simply as the dialog I had with one of these people
X> It’s so hard to raise capital for my venture
Me> Good thing programming tools are free, what’s the issue?
X> I need to hire programmers
Hi Guys
Thank you for the comments :-)
I find it interesting that as non-Capetonians, Colin and Roelf’s views on living in Cape Town are totally opposite, yet they seem to agree that Actually Getting Things Done, instead of Talking About It (like the Silicon Cape Initiative? You decide…) is what our country needs. I can’t agree more.
Regards,
Simeon.
As a resident of the Silicon Valley area (actually, just outside it), I’ve often wondered what makes it so special. The closest thing I’ve seen to a plausible reason is Paul Krugman’s work, for which he won the Nobel Prize in economics. Google around for his work on “New Trade Theory” and the follow-up paper on the new economic geography:
http://aede.osu.edu/class/AEDE840/Kraybill/readings/krugman_increasing%20returns.pdf
The papers are hard to follow unless you’re patient, but there is plenty of secondary literature covering it. The most accessible is probably Krugman’s Nobel lecture, which is aimed at the general audience :
http://nobelprize.org/nobel_prizes/economics/laureates/2008/krugman-lecture.html
The upshot is that no, there need not be anything special whatsoever about an industrial hub, other than the fact that it is a hub. Industry, and the factors which enable it, have to congregate somewhere. The geographic location can be arbitrary, but once nucleation begins it is self-reinforcing and powerful. If Cape Town is already an identifiable nucleation point, then it is probably pointless to fight it — whatever your opinion.
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