'The future is already here – it is only unevenly distributed'

BUSINESS INTELLECTUALS: Michael Jordaan discusses what he learned from Shackleton, cheap smartphones, Stellenbosch's challenges and, of course, the future...

This is the eighth interview on Our Long Walk, my blog about the past, present, and future of South Africa. I'll be talking with South African business leaders to gain their perspectives on the lessons from history. Previous interviews were with André de Ruyter, Herman Mashaba, Jannie Durand, Paul Clüver, Magda Wierzycka, Anton Rupert’s biographer Ebbe Dommisse and Phuthi Mahanyele-Dabengwa. Please consider a paid subscription to access the full interview and all of my twice-weekly content, including columns, guest essays, and summaries of the latest relevant research.

A former CEO of First National Bank, Michael Jordaan heads up private investment company Montegray Capital and has a strategic role in his start-up investments which range from the data-driven mobile network Rain to the digital-only Bank Zero.

1. In a presentation several years ago, you contrasted the leadership styles of people like Shackleton and Amundsen. Could you share with us a historical leader you admire and who has significantly influenced your approach and vision of the future? Whose leadership from history do you draw inspiration from?

I love reading biographies. They’re the root of history and one can learn so much from so many people and the challenges they faced. It’s also sobering that many of them also had significant flaws. Churchill drank a lot. Under Napoleon 3 million soldiers died (and up to a further 3 million civilians). Genghis Khan had 44 wives and 400 concubines. Steve Jobs was a bad father. So it’s much better not just to have one role model but rather many, then distil the good things.

2. Shackleton is well known for his crisis leadership, but in the years after his first polar exploration, he suffered several business failures. What lessons can we learn from this? Why didn’t Shackleton’s leadership expertise extend to business success?

Shackleton was a great leader. He was not afraid of making hard decisions and led by example. I contrast his more conventional style with that of Amundsen who was the first to reach the South Pole by learning from the Inuit about survival in the ice. Not only that but he was also the first to fly to the North Pole in an airship. A lot of innovation involves copying things that worked elsewhere.

Shackleton’s failures in business may have been an example of the Dunning-Kruger effect where an expert in one field mistakenly believes he/she is also an expert in another unrelated field. This is something we all need to watch out for. Stay humble and keep learning.

3. In 1903, Horace Rackham, Henry Ford’s lawyer, famously quipped: ‘The horse is here to stay, but the automobile is only a novelty.’ The history of inventions is marked by people underestimating the value of new technology. As a venture capitalist, how do you manage the hype that comes with many new technologies while ensuring we understand the implications of exponential growth?

The future is already here – it is only unevenly distributed. Many people only slowly change their behaviour even though there are better alternatives available already. For example, it is possible to bank on your smartphone for free using Bank Zero, but many still use branches and pay for legacy banking technology. Or pay more for Eskom than it would cost to use solar power in the daytime. My advice to entrepreneurs is to come up with something that is not 10% better than the existing way of doing things, but factors better. That’s the way to gain rapid adoption.

4. The South African banking industry has been lauded for consistently being on the cutting edge. Bank Zero, as you put it, is based on an old idea that’s come back into fashion. Besides banking, do you see other areas where history can serve as a guide or toolkit for innovation?

It’s much easier to be open to new ideas than it is to let go of past ones. But history clearly shows us that few things last forever: empires come and go, businesses rise and fail, while technology and the science that informs it keep progressing. I try to be acutely aware of macro trends in the world. It is much easier to start a new business based on such a trend that is strong and irreversible. Examples are the ubiquity of smartphones, the ever-increasing need for data, the rise of Artificial intelligence, the reduction in the cost of solar panels and batteries, etc.

5. In an article about the importance of embracing tech, you referred to Estonia’s remarkable digitalisation journey following the fall of communism. Of the many approaches Estonia took toward digitalisation, which do you think could have the most impact on South Africa’s digital transformation?

If every South African had a smartphone with affordable data, we could make so many government services available on Apps. No more standing in queues for social grants, home affairs or drivers’ licences. Property transfers could take one day. Payments could all be free.