Striata set the bar for secure digital document delivery and e-billing in SA, and over the last 15 years has evolved from a small e-mail-focused local business into a global digital empire.
CEO Michael Wright spent an hour on Skype with ITWeb news journalist Paula Gilbert, to share some of his insights on the IT industry in SA and abroad.
PG: So how did you first find your place in the market?
MW: When we started out and I was talking about digital document delivery and electronic billing, I literally thought I had a two-year window before it was just de facto, the way it was going to go. And we had to land-grab and get as big as we could as quickly as we could because after two years everyone was going to do this. Why would someone not deliver documents digitally? But even today there are so many customers still receiving paper, which is half the battle.
PG: How difficult was it to make a success of your business globally? Because Striata has managed to do what a lot of other South African businesses have struggled to do.
MW: The war is not over. It's a constant struggle to stay relevant, to stay in the market and grow what you are doing. It requires good people, long hours, solid strategies and dedication. Someone said to me that for the South African market, roughly one out of a thousand start-ups survives. And if you take a thousand start-ups that have survived, only one out of those thousand makes it overseas.
So that makes it one out of a million start-ups in SA that will actually make it overseas. The interesting thing is that there are a lot of those examples out there. If you look at Gyft or Clickatell, there are a lot of examples of good South African technology companies starting in the garage, and growing and becoming international brands. This shows a lot of the resilience of the South African psyche and how we decide to just make a plan.
I think one of the big things is that South Africans have been dealt situations they had to handle and it gives them the ability to just make a plan. Whereas you may find that in a different environment, another person may not have had as many opportunities, or as many setbacks, to have to grow and learn and figure it out so when they do try to go overseas they find it's quite hard.
PG: What do you say to people who think e-mail is dying or going out of fashion?
MW: I say to them, go try open a new Facebook account without e-mail. Open Twitter, Instagram or any new type of app account without having an e-mail address, or forget your password and try figure out what to do without e-mail. E-mail is evolving as much as any other tool. The best thing that happened for e-mail was Twitter, because now all of the crap is gone. WhatsApp is also fantastic for e-mail; it took all of the clutter, chatter and banal, stupid everyday stuff that you don't want to have in an e-mail vault forever out of the process, especially from a business perspective.
And new technologies like Slack are doing this to another degree. E-mail is really good for communications between two parties that aren't on the same network; internally there are other processes that are better than e-mail. We see the value of e-mail going up because the stuff that detracted from it is being removed by social media.
PG: What are the new trends you aren't buying into?
MW: I think the rise of the instant gratification app economy is going to peak and then die. I think we are almost in the top of that curve. The Uber for X idea. I'm not saying Uber is going to die, but the Uber of dry-cleaning or whatever is not going to make it. People have now taken this instant gratification to a degree where it just becomes too expensive to live.
So in New York where those things are expensive anyway and there are not a lot of people who drive and the dry-cleaner can just cover five or 10 blocks and walk to fetch or drop off dry-cleaning that may work. But in a Joburg context where you have to drive 10km to drop off someone's clothes, this is not going to work.
Everyone has jumped on the bandwagon because they have seen how phenomenally successful Uber has been, but I think there are only certain industries where this is going to be applicable and I think what we have seen is the amount of VC money pouring into that space has gotten a bit ahead of itself.
PG: How important is the South African market for Striata?
MW: Every market is important but the South African market is the engine room and the innovation room. It's also the most mature market and hence we get the next set of ideas out of that market because they are using all of the features, whereas the UK and US markets are just using the base features - they are just so happy that we can change paper and make it digital. So the South African market is really an innovation hub for us in many respects and some of our oldest customers are in SA. We have been dealing with some of our large banks for 15 years.
PG: What is your view on the IT industry in SA at the moment?
MW: You have a massive skills crisis. I've seen that because I can't employ the right level skills at any price. I'm not even talking about people's complaint that it's getting expensive; it's that I cannot find someone with the right set of skills. They are either tied up, or they have left or they are not available. So we have made the decision to start hiring people outside of SA to work on our core product because we can't find that high-level skill in the South African market. I wish we could, but we just can't.
If you take a thousand start-ups that have survived, only one out of those thousand makes it overseas.
Low-level skills you can find, lots of guys coming out of varsity and technikon but they need five years of experience before they become really useful. I don't want to be the playground for that. I can grab one or two really good guys and put them through our academy but I can't do 50. And of the 50, there are only five that I want because they are the best and I want to have people that will add value continuously and those guys are getting snatched up and moving overseas. It's hard to get skills.
PG: So what should be done to fix this problem?
MW: It's a reality, there is just not enough people coming through. Maybe this is a harsh thing but there weren't enough people coming through 10 years ago, so now we are sitting with a problem. We could now throw a whole lot more people at it. You could put better courses together, you could give more people the opportunity to go and learn that stuff. But then they still have to go out and find a job, get some experience, and they are only really going to be at the level that society needs them to be at in another 10 years' time.
So we made the mistakes 10 years ago and we are now suffering a little bit from the brain drain because we have lost the teachers.
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