Not everything is going the wrong way on our planet. There are things that are changing for the better! And one of them is South Africa. Just back from a three-day MySQL related trip to Johannesburg and Pretoria, I saw a lot of well-founded hope around me. The hope is related to less crime, less racial tension, and more economic growth. I share the positive vibes and think they’re founded in reality.

I was in South Africa for the yearly Sun partner event in “Sub-Saharan Africa” or SSA for short. SSA is one of the fastest-growing regions within what is known as “Emerging Markets”, which in itself grows faster than Europe, North America or Asia Pacific. And partners are extremely important, as Sun uses solely indirect sales in the region.

I was so impressed by what I saw that I wrote nine blog entries. As I didn’t want to spam PlanetMySQL nor blogs.mysql.com/kaj with nine separate blog entries, some of which were hardly related to MySQL, I wrote them on my newly-started private blog blogs.arno.fi/isit/. The name “/isit/” comes from an observation on how English is spoken in South Africa, but I made it up as an acronym for “It’s some interesting topic!“. On that site, I’ll be blogging on anything that interests me, in the humble hope that it also interests someone else.

My first nine blogs are all about South Africa:

1. Why I think South Africa is on track
2. South Africa: There’s hope!
3. The Government Wants You To Use A Condom
4. Jacaranda, the South African national weed
5. South Africa: Select your preferred language
6. Comune di Monte Casino
7. Four practical ways to learn a language: On the road, from a girlfriend, for the police, getting lost
8. South African breakfast: Worthy of an experiment!
9. “South Africa has many robots.” — “Is it?” — “Ja!”

Here are a few excerpts from some of them (but if you’re interested, do go to blogs.arno.fi/isit/):

Why I think South Africa is on track

1. Races happily mix! And respect each other!
2. Sub-Saharan Africa experiences explosive growth!
3. People have learned to live with crime
4. Foreigners get a needlessly negative picture of South Africa
5. White émigré South Africans are being encouraged to move back, by all South Africans
6. Even white South Africans are well seen in the rest of Africa
7. Afrikaans is alive and well
8. Re-naming of places and streets is limited

South Africa: There’s hope!

Encouraged by the openness of everyone I talked to (”oh yes, please go ahead, I’d love to read your non-MySQL related blog on South Africa!“), I wrote a short summary of what I see as the top reasons

The Top Ten Reasons Why South Africa isn’t the next Zimbabwe

1. There was a long tradition of democracy prior to the end of apartheid. [..]
2. The racial situation is not black and white. [..]
3. An allegedly “phenomenal” constitution. [..]
4. Nobody even attempting at changing the constitution. [..]
5. Politics becoming less aligned with race and tribes. [..]
6. Silly politicians being fired. AIDS is now, even according to the new South African minister of health, caused by HIV and not cured by garlic but prevented by proactively using condoms.
7. Security improving. On a customer visit today, we walked through central Johannesburg. That was in an area where my local host wouldn’t have walked 3-4 years ago.
8. The 2010 FIFA World Cup. The eyes of the world will be on South Africa from 11 June to 11 July 2010, and not just those of football enthusiasts. There was a huge positive impact in Germany 2006, both on the national identity and on the external perception of it. I think we’ll see something similar in 2010.
9. The large economic footprint of South Africa. It’s huge. MySQL downloads in South Africa outnumber those of downloads elsewhere in Sub-Saharan Africa by a factor of three.
10. Innovative public policy, at least in Open Source. Read Aslam Raffee’s blog. Open Source is being mandated by the government. That means South Africa is at the forefront in innovating public policy.

Personally, I could sense a mere fraction of the racial tension of my previous visit in 1993. On the dance floor at the Sun partner venue of Kievits Kroon, everyone mixed with everyone. I could see mutual respect.

Hey, why not invest in Africa? It’ll be the next boom market (and likely, one of the only ones in the current climate).

Four practical ways to learn a language: On the road, from a girlfriend, for the police, getting lost

George Swahi Moleko’s Tips for How To Learn Eight Languages

1. On the road. Meaning: On the street, in the township. For example in Soweto, people speak so many different languages that you pick it up from friends, when you grow up. That’s how George learned most of the languages.

2. From a girlfriend. Some of the South African languages are difficult to learn for a Sotho speaker. Then, George asserts, you need more motivation, and more intense exposure to the language: You need a girlfriend. George mentioned having used the girlfriend method for learning at least Venda, Tsonga and Nguni.

3. For the police. While having to do with the police might not directly teach you so much, it indirectly motivates you. George means that Venda speakers are hugely overrepresented in the South African police, and they’re likely to just reply “It’s the law! The fine is 500 Rand. Everyone has to follow the law.” if you complain in Sotho. But if you swap to Venda and say “My brother! It’s not my own car. I’m so sorry. I was in a hurry. Anyone can do a mistake, my brother!“, the policeman will be more understanding.

4. Getting lost. Not finding your way out, and having to rely on your environment, is a high motivator just like the previous item.

I hope you’ll enjoy these blog entries, as well as upcoming ones on blogs.arno.fi/isit/! And, if you’re a South African of any race, I hope you don’t see my commentary as offensive. It isn’t meant to be. I very much enjoyed your country, and respect what you’ve accomplished!

Today at the Venture Capital Forum in Hilton Arc de Triomphe, Paris, I received the EVCA “Hall of Fame” Award on behalf of MySQL AB. What a timing, to meet with investment bankers and venture capitalists now!

In these times of a deep finance crisis, of no credit handed out by banks and of general doom and gloom, it felt great to be somewhat of an “everybody’s darling”. In the VC community, MySQL is seen as a great success — and in particular, we’re seen by European VCs as a European success story (despite over 50 % of our personnel and most of our Management Team being US-based, at the point of time when the VCs exited).

Side note: I don’t mind MySQL being seen as a European success story. We’re used to portraying ourselves as belonging to whatever geography is relevant for the moment. That can be “Swedish”, “Scandinavian”, “European”, “Bulgarian”, “American”, “Silicon Valley”, or whatever you’d like. And at the same time, I never stop pointing out that MySQL was originally written in Finland, and that a disproportionate amount of the corporate DNA originates from TF, the Swedish speaking, Helan går-singing student association of Helsinki University of Technology.

Before the panel began, Paul Deninger, Vice-Chairman of Jefferies & Company gave what I learned is his traditional opening speech. I can see why he’s appreciated. With a good sense of the audience’s mixed atmosphere of horror (at the current financial crisis) and hope (for opportunities presented due to lower valuations), he introduced Jefferies as “an investment bank that unlike the now-socialised ones never became an investment firm“. Paul is also known for his yearly “PD’s list of the top 10 events of the year”, with observations on raw material prices, the advent of CleanTech, the pricing of financial instruments, Russia remaining in South Ossetia and other equivalent global events. Interestingly, Sun’s acquisition of MySQL AB made it onto his list. We’ve always joked that we’re “world famous for being humble”, but PD does give us a hard time.

Together with Robert Dighero of Tradus (a UK based eBay-of-Eastern-Europe online auction company), I was on the “Entrepreneurship Hall of Fame” panel lead by Mike Chalfen, General Partner at Advent Venture Partners and a good friend of MySQL investor and former MySQL board member Danny Rimer.

I got a number of questions, both publicly on the panel and privately in the networking thereafter. In gratitude of having been given the award, I’d like to share my answers.

Q: What was the impact of VC investors on MySQL’s business?

A: Above all, VC investments enabled faster growth (through enabling recruitment of key talent). Each of the earlier-round investors also opened the doors for the next level of investors. Our VCs certainly granted us credibility towards big customers. Sure, they also gave us valuable feedback on our business model and tightened corporate governance procedures, easing our growth pains.

Q: What could the impact have been of having more or less cash?

A: Mainly, it would have influenced the speed of recruitment. Now, we grew as fast as we could with the ambition of having the VC money mostly as a safety net, and financing growth mainly through increased sales. Cash on the balance sheet increases operational focus and creates stability!

Q: How would MySQL fare in today’s tougher climate?

A: As for sales, it’s important to understand that MySQL has a “low TCO” proposition (”destruction factor”), where the tough climate is good for us. As for IPOs and trade sales, it’s hard to identify a company that isn’t negatively impacted by today’s climate.

Q: What were the 1-2 most critical turning points in the development of the business?

A1: Entering a deal with SAP in 2003, which influenced the product technically, but most of all gave us enterprise credibility (but was dangerous technically, as it impacted our roadmap).

A2: The next-round VC evaluation meeting in Scope Capital’s Stockholm offices after our CEO Mårten Mickos came back with term sheets from the two dream Silicon Valley candidates in a round where the finalists were Kleiner, Sequoia, Warburgs, Advent and Benchmark. Our co-founder Michael “Monty” Widenius concluded with asking “Do we want to become partners with our father (referring to Kleiner) or our brother (referring to Benchmark)?“. Ending up choosing our brothers wass a key to the culture in the company, which is what really built MySQL.

A3: Moving management to Silicon Valley, easing recruitment of key people.

Q: What lessons can you pass on for VCs and entrepreneurs that are most relevant in the coming recession?

A: Four lessons. First, be smart. Choose smart people, pick the right strategy, make the right decisions. Second, work hard. If opportunity knocks, you have to seize the moment, or being smart won’t help. I don’t consider myself lazy, but my work hours pale in comparison with the co-founder’s when he grew the community around the turn of the century, and with those of our CEO ever since he took over. Third, be resistant to uncertainty. When bad things happen, never give up. Hadn’t our CEO been a replica of Admiral Stockdale, living out the Stockdale Paradox [1], we would have lost the company several times over. Fourth, be lucky. Yes, you can be smart about timing, but to succeed, you also need a big portion of luck.

[1] “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

Q: What advice do you have for VCs?

A: Most VCs are smart people, and they know that they have to pick the right entrepreneurs (who are smart, work hard, and resistant to uncertainty). They know that to be lucky, they have to buy several lottery tickets. Then, let the right entrepreneurs do their thing! Support them when they need support. On a different note, I think VCs should be happy that they belong to a caste respected by Nassim Nicholas Taleb of Black Swan fame. VC investments are potential positive Black Swans, and I think MySQL turned out to be one of them.

Q: What does it take for a buyer to want to pay up a lot of cash for a VC business?

A: A huge customer base that has money to spend. A documented, strong and sustainable growth rate. Brand recognition doesn’t hurt. Finally, and obviously, a lot of cash in the bank.

Q: Did MySQL experience a conflict between the mentalities of the “geeky” MySQL users and the “greedy” Venture Capitalists?

A: In general, it hasn’t been that challenging to keep a balance. Sure, it’s true that the geeks and the VCs form two entirely different audiences. But we target our messages. “Tala med bönder på bönders vis och med de lärde på latin”, we say in Swedish — roughly “Talk to peasants as peasants do, and to the learned in Latin” (let’s not go into which audience matches which category in the Swedish saying). And in reality, at least when it comes to MySQL, geeks and VCs have benefitted from each other. We did of course joke in front of geeks that “we fooled these VCs to give us money to be able to write more Open Source software faster”, and conversely said in front of VCs that “we exploit Open Source Software to give a larger ROI for VCs”. But neutrally speaking, it was a mutual benefit, a virtuous circle, where we’ve done our best to align commercial and community interests.

Q: You’re a serial entrepreneur, and made some money out of the Sun acquisition. Would you do it again?

A: Obviously, there is a hunger for more. Or perhaps appetite is a better word, as I am clearly more picky about the nature of the opportunity than before. During my two first entrepreneurships (founding Polycon Ab, and buying back Polycon shares from a German investor three years after the trade sale where we had sold half of Polycon), I jumped at opportunities without evaluating them in detail. By contrast, in 2001 I sold the MySQL related part of Polycon to MySQL AB based on long contemplations, but still, with MySQL I’ve been willing to relocate my family from Grankulla, Finland to Munich, Germany. I’m not so sure I’d relocate as easily again. Besides, for the time being, I’m quite happy with working for Sun — it’s an exciting job with a great learning curve and an opportunity to have an impact.

Q: What are you investing in yourself?

A: I’ve got a day job at Sun, and that consumes nearly all of my business focus. That said, I made a certain investment, together with a former angel investor in MySQL, in an IT solution provider on Åland, the islands between Finland and Sweden that are independent enough to have their own Top-Level Domain .ax. It’s called PBS Ab, for Productive Business Systems, and provide a great opportunity to apply learnings from my earlier life as a serial entrepreneur (with both Polycon and MySQL).

That’s it. Finally, I would like to extend a special thank you note to a few of the members of the MySQL AB Board of Directors that I’ve had the honour and pleasure to work with over the years. Our first Chairman John Wattin once described me as a “fireman”, as I’ve been given various tasks (”wherever there’s a fire”) since joining MySQL. Fredrik Oweson of Scope Capital, Danny Rimer of Index Ventures, Kevin Harvey of Benchmark Capital, Bernard Liautaud (founder of Business Objects) and Tim O’Reilly (founder of O’Reilly Media) have each provided all of MySQL but also myself in person with invaluable inspiration and insight over the years. Thank you, former MySQL BoD members!

Links:

• Benchmark Capital: http://benchmark.com/
• Index Ventures: http://indexventures.com/
• Scope Capital: http://www.scope.se/