by Mandy de Waal (@mandyldewaal)
Michael Jordaan is a long way from FNB, the bank he was appointed to lead at 36. After spending some 10 years helping FNB become the most-innovative, -savvy, and digitally adept financial brand in South Africa, he has opted for time, space and privacy. These days, he enjoys a quieter life at his venture capital firm. Montegray is situated in an eponymous building nestled in the gentrified part of Stellenbosch, right next to a chic wine bar called Bartinney Wine & Champagne Bar (Jordaan’s a keen wine enthusiast).
Mandy de Waal: Who are you?
Michael Jordaan: A very ordinary guy who has been lucky to have been surrounded by great people at crucial times. I’m a venture capitalist, wine enthusiast and generally have pleasure in learning about things.
MdW: You’ve moved from a very public life as CEO of FNB to a more-private life as a Stellenbosch-based investor. What has it been like to wrestle back your privacy?
MJ: Taleb said the three most-addictive substances are heroin, carbs and a salary. I’m in the fortunate position that I’ve never tried heroin and no longer need to put on a suit to impress directors for board meetings to earn my keep. I try to eat less carbs, too, but I figure two out of three ain’t bad.
When you stop being CEO of a large company it is common to experience ego-withdrawal symptoms. In my case, it was easy as I also no longer had to commute from Stellenbosch to Joburg every Sunday evening (as I had been doing for six years). Being with my family has completely compensated for the stuff I had to give up.
I’m trying hard to live a far more simple life and try and avoid the limelight (such as this interview). Admittedly, having a certain public profile does have its uses in attracting deal-flow and opening doors for entrepreneurs.
MdW: Any comments or learnings or insights about MXit and what happened to MXit?
MJ: I was initially resistant when asked to help as chairman, as I knew how strong the network effect of Whatsapp, Facebook Messenger and WeChat was. It was an opportunity to help my old bosses (Paul Harris and GT Ferreira) as well as a once-great South African startup. Sadly, the switch in strategy to move from feature phones to smartphones came way too late.
MdW: When did you start Montegray Capital and why?
MJ: We started a few months after my resignation [this was in 2013 — MdW] but at a deliberately slow pace. Everyone advised [and they were correct] not to make any big decisions quickly. Montegray Capital invests in startups that have already proven themselves in the market but need capital to grow exponentially. Small businesses with big ideas and great times are my passion. Nothing improves the world as much as a successful new business.
MdW: What have you learned about yourself since starting Montegray?
MJ: Patience and discipline. Venture capital is a tough game; one invests in an unlisted (and hence illiquid) company with no clear exit. Even though we do a proper due diligence and solid paperwork, the ultimate bet is on the entrepreneur or team. It’s important to stick to businesses you understand and people you trust.
MdW: What is your idea of the perfect investment?
MJ: We are inundated by people with great ideas daily. Unfortunately, ideas in themselves are worth very little. What is very valuable is a team of people who can turn an idea into reality and demonstrate that there is market demand. Our ideal is to invest at this stage into companies that have a lean cost base and need capital to grow. The perfect investment has a leader who has a track record of successful execution and a unique insight into the business model of an industry. It helps if the business can scale globally, but it is also attractive if it has a local moat and can compete against the avalanche of global companies.
MdW: Are you a good judge of human character? How important is the ‘human’ element of a business, and what do you look for in people when you invest?
MJ: I’m a humanist in the sense that I value human beings individually and collectively, as well as the critical thinking that comes with it. I look for very high competence but with an X-factor such as a problem-solving attitude and sense of humour. I’m pretty sure there are tests that can be very helpful and that big data will be hugely revealing, but I still go for the basics which involve time, discussion and debate, as well as observation when things get tough.
MdW: What companies have you invested in and why?
MJ: There is a whole range on the Montegray website. Each of them is unique but they all have the ability to grow very fast and are led by great people. The reality of venture investing is that some won’t make it and others will overcompensate. I believe that not taking risks is the greatest risk of all. That means I love taking calculated, diversified risks.
MdW: I often speak to business owners about their view of local VCs, and the most-pervasive view is that local VCs want too much for too little. What are your thoughts on this?
MJ: In global terms, the local VC industry is still underdeveloped and unsophisticated. The same can probably be said of the entire startup ecosystem. Both VCs and entrepreneurs need a lot of successful role models to attract more players. There’s probably too much talk over too many cups of coffee and too little real business being done.
MdW: Complete the sentence: Technology is…
MJ: …wonderful as it enables the human race to do more with less.
MdW: What’s your advice to startups looking for angel funding?
MJ: Keep costs low and variable. Launch a minimum viable product within a few months and use customer responses to incrementally improve it. Approach family and friends first.
MdW: Tell me about the difference between ideas and execution? What value should one put on ideas?
MJ: As a nerd, I love new concepts. But if you do not share an idea, it arguably does not exist. And if you cannot/do not implement an idea, it has very little business value, even if you have patented it. Ideas are freely available nowadays. The big human deficit is in our ability to implement them. For example, I can easily think of 10 ways to get SA to grow at 5% for the next 10 years. How much are these ideas really worth if they cannot be implemented?
MdW: I’ve often heard the expression “geeks will inherit the earth” or “coders will inherit the earth”. What do you think about this, and our future relationship with technology?
MJ: We all confuse the concepts of “technology” with “information technology”. Technology is any new and better way of doing things. Seen like that, the inventors of new and better ways of doing things will always surpass those who do things in conventional ways. It is up to us to use that technology in ways that are best for humanity. Things can go dramatically wrong easily (say nuclear or biological warfare) but can also be astoundingly positive (using solar energy instead of burning coal or oil).
MdW: You’ve tweeted about the material becoming immaterial. What are your thoughts about this given AI, virtual reality, the singularity? What are your thoughts about where technology is taking us and what that trip is going to be like?
MJ: Many things are dematerialising. The Yellow Pages used to be a book, now it is an online directory; we used to mail postcards but now it’s on Instagram; a voice recorder was a device but now it’s an app. In same vein, industry after industry is changing its physical shape from being something you can touch (say a bank branch) to something that is a mere number on a screen.
AI will soon be doing jobs that we consider highly skilled, such as accountants, translators, analysts, attorneys. It’s great for consumers as costs will drop dramatically, even become free. But it’s scary if you make your living from industries that will be disrupted. The only answer is lifelong learning.
MdW: You cycle a lot — how much each day? What do you think about when you cycle?
MJ: I just completed three days of Wines2Whales but fell more than I wanted because I was not fit enough and fatigue results in bad decisions. But I do love mountain biking [MTB]and the trails around Stellenbosch are world-class. I MTB once or twice a week and use the time to think about how I am going to survive the next hill or switchback. It is a form of escapism.
MdW: What virtue do you most admire in other humans?
MdW: What virtue do you most admire in yourself?
MJ: Tough one. I really do not admire myself.
MdW: Have you cracked the secret to a good life, or a happy life, or a contented life?
MJ: Not the whole thing, but simplification is part of it, and one’s relationship with family and friends another big part. Add health, laughter, travel, good food and wine, as well as the selfish joy from being a positive force, and you are getting there.
MdW: How do you measure your success or progress? What are your thoughts about this?
MJ: I don’t really measure myself like that. The big challenge is living in the moment and making the most of every day. Life is short.
MdW: What do you read or what content do you consume — what influences your thinking?
MJ: Always two or three books at the same time. If anyone recommends a book, I buy it immediately and therefore I always have a store of books to choose from. I read widely: from fiction to autobiography to history and philosophy.
MdW: How do you describe the way that you think?
MJ: Slowly. Analytically. Independently. I need to figure stuff out for myself.
MdW: Any life hacks or thoughts or ideas you’d like to share?
MJ: We take ourselves far too seriously. It is completely possible to take your job (or what you do) very seriously and still laugh at yourself.
MdW: How would you like to be remembered?
MJ: As a great father.
MdW: What legacy would you like to leave?
MJ: Someone who tried to improve the world, little by little, in every encounter, every day.
MdW: What don’t people know about you?
MJ: I’m an introvert and small talk drains me of energy.
MdW: Any stories or insights or anecdotes you can share?
MJ: My daughter says I think too much and zone out a lot. She’s probably right. I’m working on it.
Original article on Marklives.com