You can’t go very far in the local blogosphere without stumbling across a conversation on the lack of funds for web entrepreneurs, lack of online innovation, lack of skills etc.

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I have been trying to come to grips with this problem for some time, but to not much avail. The simple fact is that South Africa lacks angel investors to seed an entrepreneur’s idea, and there is little incentive for a strong angel network to establish itself.

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Part of the problem is that few people, especially the “youngsters”, have both the technical and the business skills to take an online project forward, successfully. They can develop a “killer app”, but have no idea how to take it to market. Sometimes, they’re not even sure if there is a market.

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I was discussing these issues with Dr. Jill Sawers who is the Manager of Entrepreneurship at the Innovation Hub, and she has now spearheaded an exciting initiative to bridge some of these gaps.

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The Maxum Incubator, together with University of Pretoria and IdeaBank (my company) are organising the fist pre-incubation offering for young online entrepreneurs.

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All successful applicants will receive:
•    Free plug and play shared office space for a 3 months (a R500 deposit, telephone costs and  consumables will be for your own account)
•    Attending Izazi entrepreneur forums (opportunity to network with like-minded entrepreneurs)
•    Exposure to experienced business mentors and Maxum management team who will guide you in the process of deciding what is necessary to convert your proposed business concept/prototype into a real, viable business opportunity
•    An opportunity at the end of your pre-incubation period to decide whether your business idea has the potential for making money and become part of the Maxum Business Incubator programme
•    If your business opportunity is good enough, you will be introduced to venture capitalists who may be interested in investing in your business

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Basically, it is a foot in the door of a very connected Hub. You will work on your idea while utilising Maxxum’s office space and bandwith, and you will work together with MBA graduates to fine tune your business plan and prototype.

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Once you have a the foundations in place, you wil be introduced to the venture capitalists who have been identified specifically for their interest in funding online start up businesses.

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It is an ideal opportunity for someone in the Pretoria vicinity to become ingrained in both the tech and business spheres at the same time. Plus, the Innovation Hub is a great place to work (my office is across the road, so I am there often) and the energy and vibe are invigorating!

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If you are working on an online venture, if you need some guidance, help or will be needing funding to take your product to market, I strongly suggest you review this opportunity.

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Five simple application steps:
1.    Prepare a 5 slide PowerPoint concept, or a five point document, that outlines your proposition and illustrates commitment to the business enterprise (see accompanying example) and forward this, together with “Assessment of potential ICT Entrepreneurs” form,  to gsetumo@theinnovationhub.com. The business idea must demonstrate technological innovation in at least one of The Innovation Hub’s focus areas: ICT, biosciences, electronics, advanced manufacturing and materials, or energy and the sustainable environment.
2.     As an IT start-up or “Techie with an idea” you will present to a group of MBA students who, if they see an opportunity of building a business around your idea, will engage in a discussion with you over a glass of wine/beer/cool drink after your presentation.
3.    If you agree that this is a business opportunity, you will put together a business proposal and submit this to Maxum for entry into the pre-incubation programme.
4.    If the plan looks viable, you will present to the Selection Advisory Panel who will discuss  the feasibility of your concept.
5.    Should your application be successful you will be invited to pre-incubate your business idea and locate your business in Maxum’s pre-incubation premises at The Innovation Hub in Pretoria. And….if your business proposal is good enough, you will be linked up with Venture Capitalist who may consider investing in your business.

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Important dates to remember:

• 1 September 2008:    Deadline for receipt of applications to be submitted to Maxum

• 8 October 2008:      Successful applicants invited to prepare presentation forBusiness Beat Function

• 21 October 2008:    Business Beat function at The Innovation Hub, Pretoria

• 17 November 2008:    Deadline for receipt of proposals for Maxum’s pre-incubation                programme

• 26 November 2008:    Presentation of selected proposals to Maxum’s Selection Panel

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For more information contact Patricia Dlamini, Manager: Maxum: (012) 844 0084, pdlamini@theinnovationhub.com or visit www.maxum.co.za

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Or you can give me a shout at eved@ideabank.co.za.

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Example of presentation

You’ve heard of Mark Shuttleworth, you’ve heard of incuBeta. Now hear this: Gareth Ochse and Craig Corte have finally released their new baby BuzzFuse* to the market.

Created in South Africa, BuzzFuse* is a very nifty, very clever and very needed application that

• allows content creators (think music, cartoons, blogs, photographs) to spread their wares
• allows content consumers (think you and me) to discover, review and share said content.

This is how it works in its simplest version:

1. You sign up for a BuzzFuse* account (the entry one is free, the premium is $10 pmonth)
2. You create your content, say a new Wordpress theme, and post it online on you blog, website, Myspace etc
3. You register the content on your BuzzFuse account, and get a simple widget to post with the content on your website (like the one above this post)
4. Anyone who views your content can click on the widget, and get taken to your BuzzFuse page where they can:

a. Comment on your content
b. Rate it
c. Discuss it
d. Share it with their friends

5. At the end of the day, all BuzzFuse members get a personal email, which suggests new content based on their friend recommendations, rankings etc
6. You can check the interactivity around your content, the ranking and general feedback with the Reporting tools.

Wow.
I can easily picture a time, in the not too distant future, where content providers are going to be adding the BuzzFuse* widget as readily as they are adding the Digg This feature.

What that means is that we have a locally developed application with global appeal. Now we must just spread the word. If you are a content provider, I suggest you sign up and give this a go.

Business Week feature an excellent chart that neatly sums up the state of the web wrt to the US audience.

They divide the web audience into six categories:

• Creators publish web pages, write blogs, upload videos
• Critics comment on blogs and post ratings and reviews
• Collectors use RSS to gather information
• Joiners use social networking sites
• Spectators read blogs, watch videos, listen podcasts
• Inactives are online but don’t participate in any social media

The audience is also divided into 7 age groups:

• 12 – 17 yrs
• 18 – 21
• 22 -26
• 27 -40
• 41-50
• 51-61
• 62 +

The chart then shows you what percentage of users fall into each category and each age group. For example:

34% of 12-17 yr olds in the US, who are online, are creators. 51% of them are Joiners and 34% are Inactives (obviously, these categories are not mutually exclusive, so you can belong to more than one)

On the other hand,

only 5% of the 62 yr+ age group are Creatives, and 70% of them are Inactives.

Gives you a good understanding of who is where doing what.

Yahoo has tried to buy Facebook for an initial price of $750 million, and supposedly took the offer all the way up to $1.6 billion before the end of the talks. According to Executive Summary, which uses a leaked slide of Yahoo’s evaluation techniques and projects them for current figures, Facebook is now worth about $3.5 billion.

Numbers, numbers, numbers. Anyone with a calculator can plug them in and come up with arguments as to why FB is worth $10m, $50m, $1 billion or whatever.

The truth is, number analyses don’t work. Here’s an example of why:

Number of FB users at time of Yahoo offering: 7 million
Amount Yahoo was willing to pay: $750 million - $1.6 billion
Cost per FB user: $100 - $235

At the time, FB was a college community tool. And, as anyone who was once a poor student knows, students respond to money. So if the value of FB can be found in numbers, build a better tool (ain’t rocket science) and offer each student $150 to join. Hell, I’ll join too! And you ! And you!

But, of course, there is more to it than that. What you are really buying, if you are buying FB, is a mind set. There are, today, 30 million people who like FaceBook. And it isn’t even perfect. But our mind is set on logging in everyday, because our friends are logging in too.
And we love our friends.
More than we love Google.

But where is the money?
Facebook is a great start for a money making making tool, but it is not the tool itself. What Facebook has done, is it has created an audience. Not, mind you, an ad-receptive audience. Just an audience, made up of millions of people, who like to communicate with each other in an environment that they can very much control. But don’t try to send them a message to buy anything. Right now, there is no advantage to the audience to receiving that message.

Unless, of course, the audience is also making money out of it.

This is pretty much how Google’s Adsense works. Google haven’t bought Joe Doe’s website, but they have convinced him that if he puts ads on it, he can make money. Joe gives a licence of sorts to Google, to display ads on his site. Slyly, but logically, Google explain to Joe that it is still his effort that is necessary to make the money - by maintaining the website, posting good content, and pushing it out to the community.

But wait! The community in Facebook is already built in. So all we need now is for someone to convince Joe Doe that he should put ads on his Facebook page by incentivising him with cash. Of course, it is a bit awkward to sell things to friends, so it will have to be a very subtle process. Maybe Joe will recommend a book to Jane, and make money if Jane buys it. Or he’ll suggest we all go to a concert together, and make a commission on the tickets. Or we’ll all subscribe to a service that adds benefits to our online experience. Maybe if Joe sends a Facebook message to Jane that they should see a movie this Friday, a one line note can be appended that suggests which movie is going to be the hot ticket this weekend.

The options of monitization are endless, but they would have to be dealt with a lot of sensitivity. This, after all, was our community first, and it was founded on some self-evident rights. The main of these is that nobody is making money off us, without our permission.

So how much is Facebook worth?
Spreadsheets won’t tell you, because Facebook is worth what anyone will pay for it. Or what Mark wants for it.

Perhaps an alternative method to valuing Facebook is to work out how much time is spent Facebooking relative to time spent being exposed to other online marketing methods, and how fixed that ratio is. And trust me, as soon as Facebook is sold, there will be plenty of “Where’s the next Facebook ?” questions posted out there - immediately.

By licensing out Facebook, the buyer and seller get a win-win situation. The “seller” continues to develop a product that gets as much online attention span as is possible form the audience. The “buyer” takes advantage of this attention span in a sensitive, incentivised, and brilliant way. Either one messes up, and it’s back to the market.

But if they both succeed, they will perfect the ideal marketing model of the most powerful marketing machine in the world- the online community.

And we know who “they” are. Don’t we?