Access to opportunities key for IT SMMEs

The ICT charter is unlikely to succeed in growing new black-owned ICT companies unless it emphasises creating opportunities for SMMEs, says Liquid Thought co-founder and MD Zulfiq Isaacs.

"Future growth is going to come from today's start-ups and small businesses," he says. "The single best thing anyone can do for them is to create opportunities to enter the government and large corporate supply chain by disaggregating tenders and simplifying tender processes. If the charter can achieve that one thing it could potentially have a huge impact."

Liquid Thought is a case in point: started in 2001 to exploit a gap in the market for supplying specialised IT consulting services and technology to small and medium enterprises, it has now established a big enough reputation to land major corporate clients such as Vodacom, Foschini and Absa. In the process it has grown from a two-person start-up to a R5 million company employing a permanent staff of 13. Isaacs credits the Shuttleworth Foundation, Liquid Thought's first relatively high-profile client, with helping the company to make its breakthrough.

Liquid Thought was introduced to the Shuttleworth Foundation via the Cape IT Initiative (CITI), whose Bandwidth Barn incubator provided Liquid Thought's first office space.

"At the Barn we were fortunate to have access to some very skilled and passionate mentors who understood SMMEs and how to empower them," he says. "We also benefited from being one of very few black-owned companies in the Barn when it was getting a great deal of media attention. It was a great boost at a time when the world IT economy was in the post-11 September doldrums."

Thanks to these early boosts and a consistent and disciplined focus on innovation and growth, Liquid Thought has experienced over 100% annual sales growth since its inception. It has set its sights on achieving turnover of R100 million per annum within the next five years.

"It's very important to be schooling new black IT entrepreneurs," says Isaacs. "We've graduated from being a start-up to a phase of long-term sustainable growth, but I can only think of a handful of similar black-owned companies in the Western Cape that have succeeded in this space. Too few black entrepreneurs have the necessary competence, skill and confidence to take on the market - all the BEE activity is in the large corporates."

This will begin to change, Isaacs believes, only when more attention is paid to developing entrepreneurial confidence and skill - and to creating real opportunities for small, growth-oriented young IT companies. "Simply surviving in the early days was very, very hard," he says, "having the right BEE credentials made very little difference." An emphasis in the ICT charter on creating procurement opportunities - including shortening payment cycles for SMMEs - could help make things easier for the next generation of start-ups.