Johannesburg / Cape Town / Soweto
First, a bit of background that I think is helpful
A Zimbabwean explained to me that the US has a strategic interest in South Africa. I gather that it’s easier for the US Navy to sail aircraft carriers around Cape Town if there are not enemy missiles pointed from Cape Town out to sea. Given this strategic interest, I’m surprised to see that the entrepreneurs in South Africa are Indian and Chinese rather than American. Why don’t we do more business investment in South Africa? Maybe we are waiting for the government to get a bit more trustworthy, since President Zuma had been stealing all the money for many years now. If the government gets more trustworthy there, maybe this will change.
South African culture is vastly different from the US. It’s tribal. It’s still really, really racist, as black-white tensions have not disappeared since Apartheid was abolished over 25 years ago. The government is super corrupt at all levels, which has been really damaging for the people. It’s complicated, and too much (and too off-topic) to get into here. Just keep in mind: Johannesburg or Cape Town may look a bit like an American City, but it’s really quite different there.
I interviewed people as we traveled across South Africa. Here are a few things I have learned from them:
The iPhone is too expensive for most people here
Largely people are Android users.
Most villagers can’t afford cell data
They use SIM cards (call / text) only.
In Johannesburg many people own more than one phone
Why? Mistresses. One phone for each mistress — it is easier to keep affairs separated that way.
There are traditional affairs, and then there are the new ones enabled by the internet
Blesserfinder is an online “dating” site where middle-aged men pick up poor girls from the slums to be their “girlfriend” for a year or two or three until the girls are pregnant or their “blessers” are otherwise done with them. A young woman might just really want that iPhone, and that fancy bag, of that fancy dress. With unemployment for youth hovering over 50% it’s easy to imagine that people may see few ways to get out of poverty.
I heard a lot of stories about how hard it is for young women in South Africa, the country with the highest incidence of rape in the world and world’s 4th highest incidence of AIDS. Blessers are a uniquely sad example of how social media enables old-fashioned trades like prostitution to flourish online, and how widespread economic and education gaps here lead to the web supporting different (and more desperate) priorities and choices than we are used to at home.
There are very, very few black entrepreneurs in South Africa
Thabo, a middle-class black South African from a Johannesburg township explained it to me like this: black people don’t want to see other black people succeed in business. If there are two businesses, and one is run by a white person, all the black people will go to the white business. Why? They don’t like seeing a neighbor succeeding because it makes it obvious that they are failing; they would rather see them fail. The lack of black entrepreneurs has left a leadership vacuum that is being filled by Indian and Chinese immigrants. While these businesses are mostly involved in manufacturing, real estate, and trade right now, in the future we may see internet entrepreneurship in South Africa coming from Indian and Chinese business people.
Phone calls and mobile payments are key applications for mobile phone users
EcoCash is the most popular way to send money – it uses SMS dial codes for authentication and works without a data plan. Small business owners can become currency exchangers and take a small commission for converting EcoCash payments into hard currency. Ecocash was described to me as a rare success story of a black African entrepreneur (in this case, from Zimbabwe) making a positive difference in the community, and creating a successful business. Everyone uses it.
