Eric EdelsteinEric Edelstein

The local tech start-up environment is exciting – but needs more funding.
Just over a year ago, the first phase of Evly’s Web site launched. A Cape Town-based company, Evly is a crowdsourcing social networking site.

The term crowdsourcing is about five years old, and refers to sourcing tasks to a group or crowd instead of one individual.

Evly provides a place for the crowdsourcing community to come together, share projects and effectively collaborate.

“We are at the very early stages of crowdsourcing in SA, and globally. SA is a few years behind countries like the US, and we’ve just started working with the power of the crowd,” says Eric Edelstein, founder of Evly.

Edelstein says the popularity of voting for Idols contestants shows how willing the crowd is to get involved, and how much they want to be part of the decision-making process. He says with the growth of the Internet, and mobile technology, crowdsourcing is becoming a better methodology for doing things.

The inspiration for Evly, Edelstein says, came from realising a gap in the market. He says after a decade in online marketing, he realised the potential of the crowd, and that social media and crowdsourcing is the future.

A few years ago, Edelstein launched Springleap, a company which crowdsources t-shirt designs. However, he says the design community and general public on Springleap reached a certain size to allow Springleap to open a new business channel. Originally, the company made its money off t-shirt sales, but increasingly, the platform has been approached by brands looking to run campaigns, and use Springleap to interact with customers.

Culture clash

Edelstein is heavily involved in the local start-up scene, and is curator of the Cape Town edition of StartupDigest, a newsletter that publishes weekly event guides for anyone interested in start-ups.

Edelstein recently spent some time in San Francisco, and says in many cases, there is a different attitude towards business there. Giant Internet companies, like Google, still operate with a start-up mindset. He says start-ups are more entrepreneurial, take more risks, and have less red tape and hierarchy, which leads to improved innovation.

“With a bigger company, especially in SA, a lot of the team aren’t used to start-ups. They’re used to corporate structure.”

While the process of implementing or trying new ideas in big corporates is slow, they provide stability.

“Start-ups can learn to slow down and make sure the decisions they make are the right decisions,” he says. Big corporates, on the other hand, need to learn to speed up innovation. “A compromise between the two will be the perfect situation,” says Edelstein, “but I think it will be different for every company.”

Starting up in SA

As for the start-up situation locally, Edelstein says it’s gaining ground. There’s great progress in that space, with the Silicon Cape initiative, and he says angel investors are getting involved. “It’s starting to become a really exciting space.” He says the industry is making fantastic progress, and more entrepreneurs are beginning to realise they’re working on a global platform. “We’re approaching the way things should be.”

When compiling the first issue of the Cape Town StartupDigest, he says he could only find a small number of events to showcase. After the fact, he realised there were many more events, but those were only known to small pockets of individuals.

“The start-up scene is becoming very vibrant, but we need to share information more,” he explains.

Not just in terms of news and events, but it is also important to share innovation, as well as sharing experiences. He says experienced entrepreneurs should communicate with new start-ups. “It’s important to give entrepreneurs an understanding of what they’ll go through.” Edelstein says it’s vital to let entrepreneurs know they have support.

While there are currently a few angel investors, Edelstein says there’s a need for more funding in the local space. “Nothing will happen unless more money becomes available in the ecosystem.”

He says the IT industry in SA is big. “You’ve got traditional companies doing unbelievable things. For IT companies in SA, it’s looking really good. When you look at start-ups, we need a lot more support to allow them to become bigger faster.”

He explains: “You can’t grow an Internet company by going slowly, but you can’t go quickly without funding.”

Corporates take years to achieve their growth, and Edelstein says start-ups have the ability to grow quickly, but need support to enable this.