How a South African digital company is tapping into the potential on the continent
Bluegrass Digital was a university startup that was founded by two South African brothers, James and Nicholas Durrant, during the dotcom era in 1996. In those days it was a software development house, and the type of work they were looking for was not really available in South Africa yet, so the company focused their attention on the UK market where they set up offices.
Since then Bluegrass has evolved to become a digital production agency where they specialise in designing, developing and delivering applications across web, mobile and online social platforms.
“Strategically the business is very much focused on aligning ourselves with supporting ad and creative agencies,” Nicholas Durrant, managing director of Bluegrass, told How we made it in Africa.
In 2010 Bluegrass started to focus its attention more towards the South African and African markets. They have been working for companies in Nigeria for two years now, and are actively looking to increase their partnerships in the region.
“How we work in Africa is the same way that we work in Europe and [South Africa],” explained Durrant. “We work strategically with partners because as a business we don’t want to end up having to deal with having to hire resources and set up offices locally, and all the infrastructure related investment that needs to happen.”
Durrant added that these African partners often don’t have the skills to deliver on the brief they were given by their client, and therefore make use of Bluegrass’s skills and experience.
“And it’s all done remotely and obviously the internet allows us to do that a lot more easily than other businesses, but all the work is done out of our Cape Town hub, which is our main production hub office.”
Mobile technology development driving business
A lot of the work that Bluegrass does in Africa is geared towards mobile technology. Durrant said that this is due to the fact that the fixed line infrastructure in countries like Nigeria are unreliable for connecting with the internet and added that for most Africans the cheapest route to access the internet is through mobile devices.
“You will find that mobile technology is certainly evolving in Africa faster than it is in Europe for example… obviously in Europe the amount of users on smartphones far outweighs Africa, but the fact is the development of platforms and technology in the mobile space is happening faster in Africa out of need. So things like M-Pesa in [Kenya], you know the payment platforms, they are very popular. They are used a lot because there is no other way to do payments in an online way.”
“So when we are actually doing work in Africa, or in Nigeria as an example, their biggest concern is actually the mobi version of whatever we are doing,” continued Durrant. “They are not actually interested in the website because actually the majority of users accessing a campaign or accessing the web will be [doing it] through mobile. So it’s certainly a bigger factor in Nigeria and also to talk about development skills, that is also an area that is lacking in a sort of young market that is evolving.”
For this reason, Durrant is visiting Lagos for the first time this week to try and grow new partnerships. Similarly, he is visiting Ghana in August.
“It is a business trip. You know, everyone talks about Africa as a whole but actually within Africa each of these territories have unique ways of doing business. So Nigeria has its own challenges and ways that business is conducted and so has Ghana, so has South Africa.”
Durrant said that they have looked at smaller countries like Mauritius but have decided to focus their attention on markets with high growth potential for their business, such as Ghana, Nigeria and Kenya.
“Nigeria is a tougher business place because it is a slightly more cowboyish type country. It’s slightly more aggressive and less trusted, whereas Ghana and Kenya are kind of a softer touch, in terms of doing business… but Nigeria is obviously growing at such a rate [that] it might be a bit more aggressive and you might need a bit more patience, but it’s a market we wouldn’t say ‘no’ to. I think we have just identified Ghana and Kenya and Nigeria simply from experiences from other businesses there and what their experience has been. So for now, that’s our focus. As time goes on and other countries emerge and join the [African economic growth] revolution, then we will start to look at those as well.”
Advice for building partnerships with African companies online
Durrant said that when it comes to big business, foreign companies should go and visit the African market they want to increase their business in, and meet their business partners in Africa personally. However, he added that for smaller companies, like Bluegrass, it is possible to find trusted business partners in African markets without even visiting the county, using online platforms like LinkedIn.
“And the interesting thing is they are also excited to build partnerships with a reliable company outside of Nigeria because they are also needing those partnerships to deliver the reputable type of work that they want for their clients. So they are much more open to talking. It’s more difficult in a developed market in the UK if you went in cold to someone and tried to connect. You know 99% of the time you will probably be rejected. But with countries like Nigeria they are obviously very open and wanting to connect with a company like ourselves.”
His advice for foreign businesses looking to partner with an African company they have only connected with over the internet is to get testimonials on them. Furthermore, while there is a level of distrust surrounding the Nigerian market, due to a reputation of fraud, Durrant said that South African companies are often less deterred by this than Western firms tend to be.
“As South Africans we are slightly more aligned to dealing with more of these types of countries because South Africa itself has had a tough time in terms of reputation management over the years.”