As part of Global Entrepreneurship Week, our team at NVCA connected with leaders in innovation ecosystems around the world. In the first of our series of interviews, we spoke with Nkululeko Mthembu, the founder of the Durban Innovation Hub in Durban, South Africa. Durban, a city of over three million people and home to the country’s largest port, has a diverse economy driven by trade, industry and the presence of multinational corporations.
Mthembu founded the organization with the vision to foster entrepreneurship throughout Durban through collaboration, connection, education and mentorship. Whether they are connecting first-time entrepreneurs with experienced industry players, convening events like the monthly Hook Up Dinners to give entrepreneurs the opportunity to break bread and pitch each other, or hosting seminars on Lean Startup methodology, Mthembu, aptly known as “The Head Honcho,” is creating space for entrepreneurs to learn and create. Why the focus on connection? As Mthembu told us, “The entrepreneurial journey is long and very lonely, so we put together spaces and clusters and little hives where entrepreneurs can meet.”
The collective work of the Durban Innovation Hub, many other incubators, corporations and government entities, like the National Youth Development Agency seems to be having an impact. Every year, in partnership with Deloitte, NVCA surveys 300 venture capital investors to measure their confidence in investing in startups around the world as part of our Global Venture Capital Confidence Survey. In 2014, confidence in growth prospects of South African startups increased among investors in the U.S., Brazil, China and Japan.
Mthembu and his team know firsthand the reasons to be confident in South African startups. He pointed to the huge opportunities that exist. In addition to having the largest port, Durban has the most land mass in the country, advanced agricultural and industrial ecosystems, and multinational corporations right in their backyard. Many universities have dedicated research and development initiatives focused on innovation across the value chain of agribusiness, including improving crop development and developing alternative energies. In addition, compared to other economies, there is very little red tape coming from the government, so it can be easy to get things done.
However, the challenge remains to educate more people about the concept of entrepreneurship and creating an ecosystem that will attract international talent at a time when many workers leave for Johannesburg, Capetown and the UK. Amid a fertile environment for potential corporate partnerships, job opportunities to build technical skills, Durban can be very silo-ed. Durban Innovation Hub wants to break down the barriers hindering innovation.
In Durban, Mthembu believes the pathway to success will come from tapping into the structures that already exist, and in order to do so, collaboration is needed. Durban Innovation Hub has formed partnerships that benefit the rising generation – working with student entrepreneurs in their teens, on up. The Hub has partnered with a local college to offer free coding classes, developed relationships with successful entrepreneurs to provide mentorship, and is working to leverage corporate resources.
As the Durban Innovation Hub team pointed out, everyone in Durban brings a competitive spirit to the ecosystem. When companies seek to raise outside capital, the team strongly encourages bootstrapping. They believe bootstrapping builds out the character of the entrepreneur, their ability to think and enhances their natural inclination toward competition. Once an enterprise has developed its business model, entrepreneurs in Durban may turn to crowdfunding through South African crowdfunding platform Thundafund or other similar services.
Often, the best motivation can come from the heroes of innovation. When we asked aspiring entrepreneurs in Durban who they admire most, they immediately named Steve Jobs, Bill Gates and South Africa’s own Elon Musk as their most iconic figures. Mark Shuttleworth, one of South Africa’s most revered entrepreneurs and the first citizen to travel to space, looms large as well. All the role models play a huge role in shaping South Africa, and their perceptions of what is possible.
Looking ahead 10 years, we asked what the Durban Innovation Hub hopes to have accomplished. Mthembu and his team listed off several milestones they are working toward. By 2024, the Hub hopes to have contributed 10% growth of the local economy, convened over one million minds, built R&D facilities, attracted foreign direct investment from international players, created an enabling environment for entrepreneurs, and increased interconnectedness with the global communities by 5 percent. With their track record in Durban and a clear roadmap, they are well on their way.