In this story:
* Raising venture capital
* Advice for internet start ups
* How to serve US and UK markets
* The challenge of running a global company
Vinny Lingham has yet to hit 30 and already he's achieved what most geeks and Web natives dream of. The winner of the Top ICT Young Entrepreneur in Africa Award is taking on the world with a couple of hot new media properties already on his portfolio. He has set up shop in Silicon Valley with Synthasite following a $5 million investment from Compagnie Financi`ere Richemont's subsidiary, Swiss-based Columbus Venture Capital. A free Web publishing platform that enables users to construct websites with little or no HTML knowledge (quick and easy drop/drag functionality), Synthasite has attracted well over 100 000 users so far and plans to open its platform to third party developers soon. The start up is one of a slew of successes Lingham has under his belt.
The idea for Synthasite came when Lingham has involved with incuBeta, an investment holdings group for online companies, including highly successful paid search marketers, Clicks2Customers. Founded with his wife Charlene Troskie, Eric Edelstein and Llewellyn Claasen, incuBeta subsidiary Clicks2Customers now generates well over $100 million in client revenue annually. Lingham caused some controversy by settling off shore with nay sayers admonishing him for moving out of the country. I've never understood this mentality which I believe is based on scarcity thinking. Much like the remaining rats on a sinking ship berating one of their own for fleeing, rather than celebrating a South African son and national brand champion who's headed out into the global village. Besides, Lingham has retained direct interests in South Africa through incuBeta, and with his direct holdings in Quirk.biz; Revenews.com and SkyRove.com. His successful local interests are contributing toward job creation and the growth of the new media economy.
Face to face with Vinny Lingham
Mandy de Waal caught up with Lingham to get his views on investment, deal making, raising capital, love, thinking, tough challenges and cricket.
When did you first get involved with the Internet? How did you get involved? What was your impression of the medium then, and how has it changed?
I first got online in about 1995, when it first was commercially available. Back then it was just a natural progression from BBS (bulletin boards) and was painstakingly slow, but basic Web pages loaded fine and you could get information online. I was still in high school and I only had access at home. In fact, I think I was the only kid at high school with Internet access. It was great to connect with people around the world - I even experimented with VOIP way before Skype.
Lingham caused some controversy by settling off shore with nay sayers admonishing him for moving out of the country.
Mandy de Waal
You've achieved significant growth professionally. Explain some of the challenges you have overcome and the lessons learnt along the way.
The toughest challenge has been raising capital for businesses that are ahead of their time. Most people didn't understand what I was doing back in 2003 when I started Clicks2Customers. I had to use credit cards, sell my house and borrow from loan sharks in order to fund my first business. For Synthasite, I had meetings with over 20 VCs before I was able to secure funding. That is a lot of investors to meet with and get turned away from. I met with very prominent and intelligent fund managers and investors, and very few of them understood what I was trying to accomplish or were willing to back me, even though I already had a big success under my belt. So, in short, my biggest challenge has been raising capital. You really want smart money - people who can see how things will be, and are willing to back early stage businesses in the hopes that they will achieve it. Raising corporate finance is relatively easy, compared to start-up capital.
Who, and what, inspires you?
I am inspired by entrepreneurs who are visionary and follow their dreams to fruition. It's really great to read autobiographies about how people start their business from scratch and evolve them over time. It's relatively easy to take over and run a business that's been operational for a while - but to create something from nothing takes true talent. When I read of guys like Richard Branson, Larry Ellison, Sergei Brin, Larry Page and Bill Gates - it's really inspirational stuff how these guys were able to create great companies. I aspire to their levels of success.
What have you achieved that you've been most proud of, and why?
If nothing else, I have had the pleasure of working directly with and training about a hundred people in South Africa over the past five years, and giving them the skills to be successful online. This has spawned a number of spin-off businesses by employees I have had in the past, and now they are in a position to create more jobs in the economy. I think my proudest achievement is to have been in a position to inspire other entrepreneurs to start online businesses in SA and assist in job creation. If you're looking at accolades, then receiving the Horizon Award for Global Vision in 2006 in Santa Barbara, California, and Top Young IT Entrepreneur in Africa in 2006 were two great honours, among many others.
In your own business and as a personal investor you have had good experience negotiating with and dealing with entrepreneurs and venture capitalists. What advice do you have for local technology and Internet entrepreneurs wanting to attract venture capital?
Hang in there - it will get easier over time. My personal aim is to return to SA at some point and assist in creating a more vibrant venture capital market. I have tried in the past, and the mindset is not right, yet - but that will change. Keep your businesses lean and mean, cost wise, and focus on the lucrative international markets via the Internet and raise money from family and friends where possible. Look for businesses that can create scale - the ability to grow either users or revenue with no marginal cost. Businesses that can scale are very valuable.
What's the most important thing to understand regarding negotiating or deal making?
Focus on a win-win situation, and you can't go wrong. If you're making too much and the other party is making too little - no amount of paperwork would make the deal viable.
How is the experience of serving markets in the UK and US different to serving the local market? What have you learnt from this?
The UK and US business-to-business environment is cutthroat and very difficult to break into. You really need a key competitive edge and good guerilla marketing. I found that speaking at conferences was a great way to attract business. I have changed my focus to direct consumer-focused businesses now - much more competitive, but much more of a meritocracy - consumers are more predictable if you have the right data.
How is Internet marketing in SA (or for South African brands/companies) different to online marketing done by international brands/companies?
Internet marketing in SA is still in its infancy. This is because most companies still let their techies run their Web sites - which don't really convert very well, and therefore reduces the efficacy of their online marketing campaigns. Those who do market online currently do not have an understanding of "return on investment". Google in SA is a good thing, as they are beginning this educational process.
What is the challenge of running a business over three continents?
It is very challenging - especially the travel back and forth - it is particularly tiring. What I have learnt from my experience is that it's important to create a solid base where you expect to spend the majority of your time - and build a team out there. The costs of running a business in multiple countries adds up fast - so it's better maximise your current markets, before focusing elsewhere. Don't try to grow too fast.
If you had to describe the point where new media or the Web is at now, how would you describe it?
The Web and new media are both teenagers - great potential, extremely exciting, but very difficult to communicate with adults. The majority of Generation X are finding it very difficult to adapt to the Internet - Gen Y is taking over. Just look at Mark Zuckerberg (age 23) and Facebook.
What can South African netrepreneurs learn from their peers in the US and UK?
Build products for extremely large, niche markets globally. Locally focused solutions have too small a market to be financially viable - as fun and valuable as they may be. Don't try to be the XYZ of SA, where XYZ = a US product. That's just too small a market - think big, and look for the big opportunities in fast-growing markets.
If you could change one thing in your career to date, what would that be and why?
Nothing - I savour the lessons I have learnt as they prepare me for the next challenge. In life you need to learn and move on, and hope not to make the same mistake again.
What's the best advice anyone ever gave you?
I asked my wife this question. Her reply was: "You don't really listen to anyone's advice." She knows me well. I tend to be headstrong and I think I know better - and most of the time, I think I actually do. Advice is very relative to your experiences in life - I prefer to learn my own lessons.
What media do you read?
Mostly online, but a lot of books and magazines. My favourites are: Wired Magazine and Fast Company. Sometimes I just have to stop staring at a computer screen and read some paper-based media.
What are the first five tabs you open on your browser every day?
1. E-mail (I don't use desktop e-mail)
2. TechMeme.com
3. News24.com
4. Facebook
5. TechCrunch.com
How would you define being successful?
Success is achieving your own personal goals - and not anyone else's. That's true success, as it leads to satisfaction.
What's your mantra?
Do unto others as you would have them do unto you... (That's one of them anyway)
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