While Michael Jordaan may have left the corporate world to live on a wine farm in Stellenbosch, he remains an active participant in the tech industry, providing venture capital to innovative start-ups.
The former First National Bank boss, who now heads up start-up investment vehicle Montegray Capital, was the guest speaker at a Stellenbosch Digital event at the Launchlab last week.
Jordaan admitted to learning a lot working in a big corporate, but says start-ups are beginning to challenge these well-established industry players. "Most big corporates are doomed. Yes, start-ups have a huge amount of disadvantages but they have no qualms about new ideas. They also have agility and lower cost cultures on their sides. Nothing changes the world as much as start-ups do. Nowadays it is so easy to launch a new venture and it is also becoming easier for small teams to execute big ideas."
It is this that made Jordaan want to back these new businesses and teams of people who have proven that they can execute an idea. "I love ideas and innovative thinking. To run a successful start-up you need to have a bit of a rebellious streak in you. You need to challenge ways of doing things and ways of thinking." But he is adamant that ideas are nothing without proper execution. "A bad idea that you execute really well can actually be worth a lot."
Discussing how new ideas have the potential to disrupt industries, he suggested how crowdfunding could truly threaten big banks. Acknowledging that banks are often encumbered by regulation, he noted they are also aided by regulation. "There is a certain amount of safety in traditional funding that you don't get in crowdfunding." He went on to describe crypto-currencies like Bitcoin as having the potential to destroy the financial industry. "But in its current incarnation, it is not yet developed enough to do so."
Speaking about the possibility of Stellenbosch as a hub for tech innovation, Jordaan believes it depends on the type of business and where you want your concept to go. "As a development centre and a conceptual centre where you can get the business going, I think Stellenbosch has a lot going for it. But I do think that you may be doing yourself a disservice if you have a global opportunity and you think you can do it all from here."
Stellenbosch must frame itself within the broader Cape tech ecosystem, stated Jordaan, continuing that SA as a country is a nice place to experiment because we have many of the opportunities of the first world but can cater to third world problems that no one is addressing.
In line with this, he mentioned how MXit, the messaging platform Jordaan backed several years ago, which on Friday announced that it would be shutting its doors, as an example of a local concept that didn't have the legs to make a global mark. Even though it was doing what WhatsApp does today before WhatsApp even existed. "What I learnt from my MXit experience is that if you fall behind - even by six months - the nature of the tech industry is such that a competitor will come along and take your opportunity."
Ultimately, it comes down to conceptualising something and then bringing that idea to life. "What do we want the Springboks to do at the World Cup? We want them to win. As a venture capitalist, I want the same thing. I want to make investments that are going to be truly successful."
Stellenbosch Digital is a community-driven organisation that aims to link corporate, entrepreneurial and social initiatives in the digital sphere by promoting mutual recognition and starting conversations both online and at regular meetups.
Find out more at www.stellenboschdigital.co.za or follow @StelliesDigital to get all the latest updates from the Stellenbosch Digital scene.
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