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Google doing its bit for the continentIt is highly unlikely that when Sergey Brin and Larry Page started Google in 1996 as a research project, they envisioned how it would revolutionise the way in which people used the Internet. Granted, they were not the first people to conceive of a search engine to help one find one’s way around the vastness that is cyberspace, but there is no denying that Google has become the most popular method of doing so.
Their ‘research project’ has blossomed into a multinational empire that excels in fast and relevant Internet searches to this day. Google now manages a robust and growing library of tools that can be accessed via the Internet, including e-mail, GPS navigation, word processing and calendar software, to name but a few. And all for free.
In 2007, it officially opened a local office and initiated numerous improvements to its local service offerings, but nothing that warranted major media attention – until earlier in the year, when Google launched Umbono.
Unlike so much of what Google does, Umbono is not an Internet-based product or service. It is Google proactively taking an interest in South Africa, by encouraging entrepreneurship in the county’s information technology (IT) industry by laying down cold, hard cash.
It is a major departure for a firm that has traditionally kept its business on the Internet.
Google’s point woman for Umbono, Johanna Kollar, has the task of making it a success. An honorary African for over a decade, she has lived and worked in this country for most of her formal career.
With a background in venture capital and private equity, Kollar has been an outspoken advocate for Africa’s place in the global economy. Leadership spoke with her about Umbono and Google’s interest in Africa in general.
How did the Google opportunity come about?
I was finishing my MBA and I noticed that Google was recruiting for a South African office, so I sent in my application material, thinking: Google has quite a vigorous recruiting process, and emerging markets are quite unpredictable – you never know how many people they’ll bring into the office.
I met with the country manager, we spoke, but nothing came of it; and then, a year later, I got the phone call, which I was very happy to receive.
I was a part of the original team that set up that office, and it’s simply fantastic to see the uptake in the market and the growth and interest in terms of Google products.
When you first start, you think: “Okay, I’m spending a lot of time just educating people about what we do and what kind of services we provide.” But then, as the ball picks up, you can see that you don’t need to evangelise anymore – people want to come to you and hear more.
What was the thinking behind establishing a South African office in the first place?
I think Google recognises that Africa is poised for success, especially if you look at all the fibre-optic cables being laid here. You realise that the Internet will eventually become affordable and accessible for everyone on this continent.
It’s not happened yet, but there’s at least 15% of the population with access to broadband right now – that’s a lot of people.
There is recognition of the fact that the gross domestic product (in some demographics) is quite high here, so in terms of advertising revenue – which is how Google makes its money – it’s an important market for us: more people coming online, more advertisers using Google.
And thanks to South Africa’s infrastructure, this is a good place to enter the emerging market that is Africa.
Yes. There is a bit of a dichotomy right now, with some of parts of the population unable to access the Internet at all and others having excellent access. But our view is that this will change rapidly, especially with more affordable Android devices coming into the market.
So where does the Umbono concept come from?
At the end of March last year, we started having conversations in the market here to get a feel for the different components and their status.
We originally had an idea for a more ‘informal’ competition, is the word, I suppose. People would apply with an idea and then get some grant money. It was much less structured.
So I took the original idea and formalised it as Umbono. It’s modelled after other incubators like Y Combinator in the United States, so it’s not wholly original, just tweaked here and there.
Our hypothesis is that all the elements exist in South Africa to make a flourishing IT industry; it’s just that no one’s bringing the right people together. So we had a lot of conversations with people here last year, just to understand how the market works here: How do entrepreneurs and potential investors normally come together here? And what we found was that there isn’t really a system for that.
In September last year, I put together a formal presentation to the senior execs at Google and they said yes; and I got the green light. I started working on this in January and we launched in March – pretty fast.
That is an incredibly fast turnaround time.
Really fast. This is one of the things I love about working at Google: People will make decisions like that and then will let you run everything.
I’m not an entrepreneur myself, but there’s a very intrapreneurial work ethic at Google, if you know what I mean. It’s why there is so much innovation at Google because people have that freedom and support from the organisation.
I believe this is a unique aspect of Google’s corporate culture: being allowed to use company time and resources to develop new ideas.
Yes, it’s called a 20% project, where we get to use one day a week to work on something. And sometimes those projects blossom.
Gmail was a 20% project. Umbono started as a 20% project for me.
What’s incredible is that it’s easy to set up a meeting with a senior executive within the corporate, to talk about these things and then they just need to say yes – and then it happens.
And if Umbono works here, you can do it in India, in Brazil, or wherever?
We’ll see. I’ve spoken with Googlers in the Middle East who are passionate about taking it there. And Googlers in China, in Senegal, in Israel.
Everybody is really curious to know how it’s going to evolve. And we’re designing it so that it can be easily replicated.
What is Umbono actually?
Google puts in some money, but we also have a team of angel investors. Google matches whatever the investors put up, to a combined maximum of $50 000.
So it is a collaboration between an angel investor and Google?
Correct. For example, if an angel investor puts in $25 000, Google will match that money.
But the nice thing is that Google doesn’t take an equity stake in the venture, only the angel investors. So the start-up teams that are chosen will actually get more money, but give up a lesser equity stake in their business than they may have normally..
Google’s involvement in these projects creates a confidence for potential investors, and lowers their financial risk?
That’s exactly it. Also, we’re acting as a magnet for the pieces coming together right. The angel investors benefit because the Google brand attracts and inspires confidence.
Google’s product managers review the applications, and that’s a great value-add for an angel investor.
The angel investors we’ve invited for this round are very savvy guys. They don’t really need our help, but we certainly don’t hurt the process, either.
And you help to find people they might have overlooked?
Exactly. Our hope is that because we are involved, many more and varied people apply than the angel investors could reach themselves.
Umbono began in late March; what has been the response thus far?
Fantastic, but we’re victims of our own success: we’ve received so many applications (laughs).
There are many great teams and business ideas that have come through that won’t make it because we can’t accommodate them right now.
My next project is to figure out how the broader South Africa ecosystem can, in fact, support those teams because many of the ideas are fantastic. We just can’t support them all.
How many teams have actually been selected?
We received double the number of applications we were expecting; I won’t give you the exact number. It’s not thousands, but hundreds... let’s just say ‘a lot’.
We’ve now completed an initial screening, so there’s a short list. We’ve gone back to those teams that have been short-listed and collected more detailed information – they’re in committee review right now with the Google project managers and the angel investors. From that short list, the angel investors will choose who they want to interview.
We still have over 50 teams on the short list. If the angels really want to interview all those people, they will, but it’s a serious time commitment on their part. I think they’ll probably end up interviewing 20 to 25 teams, and we’re looking to bring five teams into Umbono. But if an angel investor wants to take on more than one team, that’s fine as well.
But your intention was to take on only five teams?
Yes. I think the reason there’s been a bit confusing – the applications are open year round.
People have good ideas all the time; it’s not just in April that good ideas come around.
So we encourage folks to continue to apply; we may take on three teams now, for example, and two teams later on in the year.
Google is acting as a facilitator, protecting the process and providing capital?
I think most of what we’re contributing is the set-up and process, sourcing the applications from beginning to end.
However, I think the secret sauce in all this is the Google product managers because the Umbono guys are going to be teamed up with a ‘power mentor’. These are typically Google product managers who are just brilliant. Their job within Google is to build a product (with their engineering team) and take it to market.
The Umbono guys will get one to two hours a week with them, people with the business savvy to see a product through.
That’s another aspect the angel investors particularly like – that we are both staying involved for the long haul to support these teams.
What are the ideas that captured your attention?
I can’t talk specifics, but what I think is exciting is that a lot of the ideas coming through are solving really important problems – very innovative solutions for emerging market problems, which can be rolled out across all emerging markets. I think people sometimes forget how successful one can be simply in an emerging market.
I think the ideas that can succeed will reach an enormous consumer base, but it doesn’t necessarily have to be a developed market consumer. ▲
Zaid Kriel
I need a way of contacting google please help.