THE “HOW-TO” HANDBOOK FOR BUILDING COMPANIES

WWW.ENTREPRENEURMAG.CO.ZA FEB 2018

Change your
BUMPER GROWTH ISSUE financial
destiny
from zero to in 2018

R780 million 50%

GROWTH
in 6 years
ARNOUX MARÉ STARTED HIS
lean start-up
in action
BUSINESS 6 YEARS AGO WITH R500
Learn from two
Here are his tactics from the trenches entrepreneurs
for smart planning & aggressive growth who have been
there and done it

STEP-BY-STEP PLANNING
GUIDE TO EXPLOSIVE

DOUBLE-DIGIT
GROWTH
FREE
WORKPLAN
INSIDE

FUNDING
THE SINGLE-MOST POWERFUL Be irresistible
to funders
SUCCESS FORMULA FEB 2018 — ISSUE 143

IN BUSINESS
What do Bob Skinstad & expert
author Richard Koch know that you don’t?
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 CONTENTS
FEBRUARY 2018

“20% of start-ups have 80% of

the disruptive solutions and will
receive 80% of the funding.” “8020 is an absolute
Keet van Zyl, VC investor, Knife Capital game changer if you
understand how to
apply the principles,

Are you and the success that

putting pressure on the
right levers can achieve
funding in your life.”
Bob Skinstad

ready?
What do investors look for in a start-up? What
should your pitch deck include? What are
the red flags that warn funders away from a

56
business? What jargon do you need to know?
Top South African VC investor Keet van Zyl,
and multi-funded Darlene Menzies answer all
your funding questions.

ADAPT AND ON THE COVER

THRIVE
From launching his business

16
46 10
from his lounge in 2011 with
R500, to building a R780 million
company that employs 7 500
people, Arnoux Maré has 22
faced his share of challenges.
He’s had to work 18-hour days, 38
completely rework his business
model, and faced a bad client
HOW AN 8020 MINDSET WILL
debt that wiped out 10% of his TURN YOU INTO A RESULTS-
annual turnover, but he hasn’t
16 56
DRIVEN SUPER-PERFORMER
let challenges slow him down. Ex-Springbok rugby captain, businessman and
These are his lessons in sheer venture capitalist Bob Skinstad has been using
grit and determination. 8020 principles since his early 20s. Today, the
first question he asks of every business he
deals with is, ‘How can we 8020 this?’ If you
“In the early days of a start-up you’re in can implement 8020 in everything you do, you
make-or-break territory, so I went big and put will see phenomenal results.
Here’s how an 8020 mindset works, and
everything on the line.” Arnoux Maré what you can do to implement it.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 1
CONTENTS

DRIVING DOUBLE-
DIGIT GROWTH

52
South Africa’s GDP is expected
to grow at 1% or less this year,
but you’re targeting 15% to
20% in your business.
Dr Greg Fisher unpacks the
five-pillar strategy you need to

BIG,
formulate and execute to hit
your growth targets.

AUDACIOUS PLUS: A

GOALS
Nicolas Bereng isn’t just trying
five-pillar
framework
worksheet
to get you
to build a business, he’s focusing
on creating an entire industry that started
doesn’t yet exist in South Africa.
To achieve the impossible, you
need to start with a huge, audacious
goal, and then break it down into
achievable steps. These are his
lessons in getting your mindset
right, getting started, and building

38
something game-changing.

SMARTS
8 What’s your moonshot?
10 10 tips to becoming a
millionaire this year
SWEAT THE DETAILS
Start-ups are all about the
14 Psychology of success
details: Understanding your
product, target market
TACTICS and business model. Get
the details right, and
22 How to pivot your business
the rest will follow.
Michelle Dateling and
BUILD Anastasia Dobson-
du Toit unpack the
42 Growth lessons
reasons why their start-
44 Franchising your business
up is thriving.

LAUNCH
54 Ask Al
IN EVERY ISSUE

62
4 Contact Us
BUSINESS UNUSUAL 6 First Word
64 The real innovator’s
dilemma and what’s 28 Business Showcase
holding you back 45 Digital Subs

2 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
PUBLISHING CREDITS
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SMARTS 10 Tips to Become a Millionaire This Year, By Murray Newlands,

Entrepreneur, 5 June 2017
FIRST WORD

suddenly say that you should be in the blank: The problem

looking for problems might seem that we are trying to solve is:
counterintuitive, but it’s not. : . Distil the
Clearly defining the problem problem to its simplest form
isn’t giving in to it — it’s possible.
simply the first crucial step in 3. Ask yourself. “Why is that
crafting the correct solution. In a problem?” If the answer
this month’s issue you’ll find is another problem, then
numerous ways of approaching congratulate yourself for moving
problems, defining them, and from the ‘presenting problem’
building the right strategy to to a deeper problem. Then ask
drive growth or even pivot your yourself again, “Why is that a
business if your business model problem?” Do that repeatedly
isn’t delivering the results you’re until you either land on what
looking for. is obviously the source of all of
Before you delve into the the problems you’ve identified
expert insights, worksheets and or you identify unexpected
case studies we’ve compiled consequences of not solving
for you though, consider the the problem. If you land on
following three steps to help you unexpected consequences, the

TURNING PROBLEMS get started.

Executive coach Michael
Cooper has developed a
problem you identified right
before that is likely your
‘source problem’.

INTO PROFITS technique he calls the Problem

Definition Filter to help his
clients define their problems
GET STARTED
So, do you know what problems
in their very first conversation you need to solve this year?
ALBERT EINSTEIN If this sounds familiar, then together. He believes that Don’t waste valuable time and
once said, “If I were perhaps you shouldn’t only be defining problems is simple resources on poorly defined
given one hour to save looking forward, but backwards and any difficulty that arises is problems. Not all problems are
the planet, I would spend 59 too. Perhaps you should review because it requires patience, worth solving either — choose
minutes defining the problem and what’s held you back in the past. repetition and thorough to spend your resources on
one minute resolving it.” After all, if we keep doing what examination. He’s also adamant changes that will radically
It’s an extreme view, but it we’ve always done, we will see that it’s the most important improve your business, turnover
clearly outlines a key principle the same results. element of critical thinking. and bottom line.
that if you can define the problem If you want more, you have
properly, the solution will present to do something different, and Here are Cooper’s three
itself. often that starts with reframing steps to correctly defining your Entrepreneur continues to be
January and February tend to why you haven’t achieved all problems: one of South Africa’s top-read
be the months where we design those great results yet — what is 1. Explore the current situation. business magazines because
our goals and start working on the problem? Paint a picture in words by of you, our loyal readers. Thank
our implementation plans. They’re including the ‘presenting you. We hope you enjoy reading
the months when we promise THE PROBLEM DEFINITION problem’, the impact it’s having, this issue as much as we have
ourselves and those around us FILTER the consequences of not solving enjoyed putting it together.
that this year is going to be our As a magazine, we are great the problem, and the emotions
best year yet. This year things supporters of entrepreneurs the problem is creating for those
will be different — targets will be who don’t see problems, but involved.
met, cash flow will improve, new instead look for solutions. 2. Explain. Once you have
business will be won and bottom We love individuals who can examined and clearly explained
line growth will be in the double find opportunities in even the the situation, draft a simple
digits. most daunting challenges. To problem statement by filling Nadine Todd, Managing Editor

6 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
IDEAS FOR MAKING WISER USE OF
YOUR TIME AND ATTENTION

DISRUPTION

WHAT’S
YOUR
MOONSHOT? John Sanei is a global speaker, coach.

Q&A facilitator, trend specialist and author.

Entrepreneur spoke to him about his
book, What’s Your Moonshot? Here’s
what you need to know to drive innovation in your
organisation this year. BY GG VAN ROOYEN

8 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
PLAYER:
John Sanei
CLAIM TO FAME:
Global speaker,
coach, facilitator,
trend specialist
and author.
ABOUT: In
What’s Your
Moonshot? John
Sanei decodes
the mega-
trends that
are reshaping
human
behaviour and
the way people
Q What is a moonshot?
In 1961, US president John
F. Kennedy said that the United
the biggest, most audacious goal
they can imagine and go for it.

Q
do business. He States would put a man on the You say that business
also explains moon by the end of the decade. seems harder now than
how to innovate The technology needed to do before. Why is this the case?
your business to this didn’t exist, but the goal Capitalism, at least in the
keep up with an was still accomplished. Today, a traditional sense, has come
ever-changing
‘moonshot’ is what companies to an end. For decades, the
environment,
like Google and Facebook call technologies underpinning things
and to make a
an absurdly ambitious goal like transport, communication
positive impact
that seems impossible, but can and information sharing stayed
on millions, if
change the world. virtually unchanged. Then, with
not billions, of
people. the creation of the Internet,
VISIT: www.
johnsanei.com Q Why is the book called
What’s Your Moonshot?
The world is changing quickly
everything changed. Suddenly,
everything is changing and
evolving at an incredibly rapid
and people need to innovate rate, and just about every
and keep up if they want their industry out there is being
businesses to survive. However, disrupted. That’s why business
I want to encourage people seems so much harder these
to embrace a victor mindset days — you need to keep up
— I want them to stop thinking with the pace of innovation, and
small. It shouldn’t just be about the difficulty comes when you
surviving, it should be about attempt to stick with business
thriving. The modern business methods of the past. Until a few
world is complex, but it also years ago, having a differentiator
offers a lot of opportunities. was enough to keep you
South African entrepreneurs profitable and set you apart
tend to think too small; they from the competition. This is no
believe that they don't have the longer the case. Things change
same opportunities and abilities so quickly these days, that a
as people in places like London differentiator is only relevant for
or Silicon Valley. That’s why I a relatively short amount of time.
want entrepreneurs to find their You need to constantly look to
‘moonshot’. I want them to find the future and anticipate change.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 9
SMARTS DISRUPTION | WEALTH | SUCCESS | 8020 MINDSET

Q Tell us about the

rise of the chief
future officer.
Q Can you explain
your ‘Forever
Profitable’ methodology? 10 tips to become a
millionaire this year
Because the ability to It’s a methodology that
anticipate the future is so I discuss in the book,
crucial to survival these and that I use to guide
days, many forward- organisations into the Becoming a millionaire requires
thinking companies are future. In order to be changing your mindset and
starting to employ chief ‘forever profitable’, a
implementing some changes.
future officers who are company needs to keep
responsible for tracking an eye on the future and
BY MURRAY NEWLANDS
trends and identifying be ready for change. Of
how these trends will course, the issue of trends
potentially impact a is popular at the moment,
business. Now, as a and there’s no shortage
start-up founder or owner of books and speakers
of a smaller business, discussing the topic, but
you might not be able simply looking at trends
to employ a chief future is not enough. Companies
officer, so it’s important to need something more
cultivate a future mindset concrete. As the business
yourself. ‘Business as owner, you need to
usual’ is no longer good understand how trends
enough. Even if your will impact the future of
company is doing very technology, your industry,
well, you need to realise your consumer and your
that disruption is a real employee. Once you
possibility these days. You understand this, you can
need to look at trends and prepare for the future
prepare for change. in a pragmatic way and
prevent disruption. EM

READ THIS

B
ECOMING A to put everything on paper.
Do you have the changing missions — MILLIONAIRE may By physically seeing where
right mindset to or moonshots — are seem out of your you stand, you can make
thrive in today’s defined by thinking reach, but it’s the appropriate changes to
rapidly changing big to drive change possible with the achieve your financial goals.
business world? and shape the future. right attitude and guidance. You need to be clear about the
Are you a victim or The fact of the matter is your amount you earn versus the
an architect of the What’s Your income can only grow as amount you spend and create
future? Moonshot by John quickly as you do, so you need a financial plan that will help
Sanei is available in to change your mindset to guide your next steps.
As the foundations of all good bookstores. achieve your goal of becoming If creating this plan has
modern economies a millionaire. made you realise you aren’t
— transportation, Once you have a millionaire satisfied with your income and
communication and mind, you can’t lose it, no your spending habits, don’t
energy — become matter what financial or get discouraged. This is a
free or virtually business mistakes you make step towards making positive
free, massive along the way. To get yourself changes. When creating your
transformative ideas there, you’re going to need future plan, you need to:
can now be driven by some structure. To help you, » Know your full income
individual ambition I’ve outlined the top ten tips » Establish how much you
and determination. you should follow to become a spend
No longer the millionaire this year. » Be clear about where you
sole domain of could save
nations and global
organisations, these
pioneering, game-
1 Evaluate your current
financial status
You can’t grow if you don’t
» Use an online invoicing tool
like sighted.com to track
your finances
know where you currently » Write down your financial
stand, so it’s time for you and lifestyle goals.

10 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 SMARTS

2 WORK ON INCREASING YOUR

CURRENT INCOME
Once you’ve created your plan and listed your
financial and lifestyle goals, it’s time to work out how
7 Become more frugal
Rich people don’t get their
fortune from giving it away and
buying fancy cars — at least not
in their beginnings. If you want
to become a millionaire, you
need to start living a more frugal
your mind
» Read a book
» Exercise
» Cook a nice meal at home.

10 Network
The phrase ‘It’s not
you’re going to achieve them. Realistically, you aren’t
lifestyle. You need to cut down what you know, but who you
going to become a millionaire by cutting back on your
on your spending by avoiding know’ couldn’t be truer. You’ll
daily coffee; you need to work out how you are going
branded products and lavish often find that successful
to grow your current income.
shopping days. people associate with equally

8
successful peers, whether or
not they are in the same field.
As a result, it is key that you
• Emergency savings plan start networking with people
(personal savings account,
AVOID who can catapult you
money market). DEBT to success.
The best way to organise The best way to Unfortunately, even if you
your finances is to automate become a millionaire are the best brain surgeon in
them. Once you’ve established is to avoid debt at the world, nobody will know it
how much you are going to be all costs. A bond unless you tell them. So find
saving, create direct debits from is an investment out where your industry icons
your current account to these into yourself and will be, and go and meet them.
two savings accounts. potentially your family. There are a number of ways you
Schedule your direct debits A credit card bill, on can meet successful people,
to leave your current account the other hand, is some of which include:
on the day you get paid to avoid an expenditure you » Sending a simple email
any temptation of spending. have made without » Using social media to contact
Depending on how much you considering whether them
earn, you want to aim to put or not you could pay it » Meeting them at events and
5% towards your emergency back in the first place. conferences
fund and 10% towards your Start by treating » Subscribing to their
retirement fund. your credit card newsletter
as a way out of an » Attending their webinars

3 Think about new revenue

streams
5 Start learning new skills
Learning is about more than
enabling you to do your current
emergency rather than
a luxury. To get into
the right habits, avoid
» Reading great finance blogs
like Maya Fisher-French’s
Maya on Money.
Millionaires rarely have only one job properly; it’s a way for you taking it shopping with
form of revenue. In fact, many of to become an expert in your you and take it off Finally...
them have more than two. Start chosen field. Additionally, it’s a any online shopping You can’t become a millionaire
small and find a side job that can way for you to discuss topics accounts you may by sitting in the same chair
generate more money for you on with other professionals more have. This method will every day until retirement. You
a monthly basis. Some options broadly. Further, it will allow also make you think need to change your mindset
could be: you to become a well-rounded twice about buying and implement some, if not all,
» Offering your expertise as a intellectual. things you simply the tips outlined above. Start
freelance consultant You don’t have to reapply to don’t need. your day with a new sense of
» Mentoring or teaching go to college to learn new skills. drive and discipline, and make
» Doing guest lectures or blog You could simply: the necessary sacrifices to
posts » Read more reach the milestones that will
» Opening an online store. » Listen to podcasts
» Attend events and conferences 9 Embrace nothingness
Being bored is fine. In fact,
propel you towards your goals.
EM

4 Get saving
Once you’ve got your
» Do an online course. being bored actually means that
you have spare time on your © Entrepreneur Media Inc. All rights
income on track, you need to
create a strategy to split your
income between your:
6 Seek opportunities
Opportunities aren’t just
going to land on your lap as
hands, which is a good thing.
Aside from stopping you from
filling every void with an activity
reserved.

» Living costs (bills, rent, bond, you sit at your desk during your that costs you money, it’s also a
Murray Newlands
grocery shopping etc.) usual nine to five routine. You great way to focus your efforts
is an entrepreneur,
» Personal expenses (cinema, have to go out there and get on more productive matters. investor, business
dinners out, holidays, etc.) them. You also have to make When you are bored with advisor & speaker.
» Savings. Your savings will be your name heard so that others nothing to do, you could: He is the founder of
ChattyPeople.com chatbot builder
split into two accounts: think of you as the perfect » Start meditating to enhance tool & Sighted.com. Read his blog
• Retirement savings plan person when jobs pop up. your concentration and clear MurrayNewlands.com.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 11
ADVERTORIAL

Aiki Tran. These three dynamic businessmen

have their own share of accolades to
speak of. Chef Paul, who is a born and bred
Joburger, has been a contestant on Cutthroat
Kitchen for multiple episodes on the Food
Network. He won the People’s Choice Award
and was placed third as a judge in the
Gumbo Smackdown 2014. He received the
2013 Chef of Chef Awards in the 9th Annual
Houston Wine and Food week, as well as
being the 2013 Cadillac Culinary Master. He
was also one of 60 Houston Chefs to be
listed in the book Best Chefs America.
Thomas Nguyen, who is Chief of Marketing
for Peli Peli, graduated from the University
of Texas School of Law and was a former
litigation attorney. He was the Houston
Business Journal’s 40 under 40 award

A world of recipient in 2015 and an EY Entrepreneur of

the Year Gulf Coast finalist in 2016 and 2017.

opportunity awaits He was Entrepreneur of the Year — Houston

Asian Chamber of Commerce and is also a

Business ownership has always been the freelance writer for the Houston Press.
Peli Peli’s CEO, Aiki Tran, has over 12 years
entrepreneur’s way of shaping their future. The Peli Peli trio
who own the
of experience in restaurant technology
If you’ve always wanted to experience life business are and won the 2007 Entrepreneur of the
Aiki Tran, Chef Year award — Houston Asian Chamber
in the US, this is your chance. Paul Friedman of Commerce. He was responsible for
and Thomas streamlining the technology infrastructure
Nguyen. for franchises such as Popeyes and Wings,
Pizza N Things. He also became the number

G
one reseller of Aldelo and Dineware POS
LOBAL MEDIA has been reporting park, which opened in 2009, generated systems in Texas, with installations in over
that the chances of non-American revenue of $5,3 million in 2016. 200 restaurants.
citizens being granted access to Peli Peli Galleria opened in 2015, and Joining their ranks is South African Ryan
move to the US are getting slimmer had $5,2 million revenue in 2016. Peli Peli Stewart. Having owned 16 restaurants
with the new administration. However, there Kitchen, their first fast casual concept, throughout the country, he is also the CEO
is still one channel of access that allows opened in October 2016 and reported and co-founder of the Mozambik restaurant
people the opportunity to relocate that revenue of $2 million in 2017. Peli Deli, a chain. Ryan has 17 years’ experience in the
hasn’t been amended by the presidency. downtown fast food casual lunch concept industry and is being brought on board by
The EB-5 Visa programme was created and Peli Peli Cinco Ranch, which opened in Peli Peli to assist in their revenue and store
by Congress in 1990 to stimulate the US February and July 2017, respectively, are both location growth.
economy through job creation and capital showing incredible growth to match their
investment by foreign investors. Under a predecessors. YOUR PATH TO THE US
programme initially enacted as a pilot in At least two more locations will be opening With the combined talent, brainpower and
1992, and regularly re-authorised since in 2018, and as all new Peli Peli locations experience of these four businessmen, it’s no
then, investors may also qualify for EB-5 have historically generated positive cash flow wonder Peli Peli is achieving success.
classification by investing through regional within the first year, the company expects to The investment required to qualify for an
centres designated by USCIS based on increase its revenue exponentially. EB-5 Visa through Peli Peli is an amount of
proposals for promoting economic growth. $500 000 and is structured as an equity
The question most commonly asked by THE POWER TEAM BEHIND THE BRAND investment at risk. It entitles the foreign
foreign investors is where to start selecting The restaurant chain has garnered investor to permanent residency, and within
a relatively low-risk company to invest popularity, and won a multitude of awards, two years of living in the United States,
their money into. One such entity that has including Best Service & Best Atmosphere — a green card for the investor and his/her
been granted designation under the EB-5 Readers’ Choice Award (Houston Press) and dependents.
programme is the restaurant group Peli Peli. 2013 Diners’ Choice Award winner for the Top
100 American Fare Restaurants in the United
BUILT-IN SUCCESS States (OpenTable). Peli Peli is also rated in
Peli Peli is a South African cuisine restaurant the top ten in Houston, Texas (which boasts For more information on how
you can be a part of the EB-5 Visa
that has gained incredible traction in the over 12 000 restaurants) on both Tripadvisor
programme through Peli Peli,
competitive American restaurant industry. and Yelp.
email [email protected]
They currently have six successful branches The Peli Peli trio who own the business
opened in the Texas area. Peli Peli Vintage are Chef Paul Friedman, Thomas Nguyen and

12 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
SMARTS DISRUPTION | WEALTH | SUCCESS | 8020 MINDSET

CAREER GROWTH

WINNING
BEGINS WITH
THE COMPANY
YOU KEEP

When SABMiller and Anything is possible. If you

put your mind to it and ask
start working. Since joining
this organisation, I’ve realised
AB InBev merged in 2016, PLAYER: for help when in doubt, you how collaborative it is to work
two organisations known Doreen Kosi can achieve any goal you set in an open plan environment.
for yourself. As a leader, you Instead of sending emails to
for exceptional systems, COMPANY:
SAB and don’t need to always have all discuss setting up meetings,
processes and a winning AB InBev the answers. That’s why we you can address an issue then
attitude became one. POSITION: build strong teams made up and there, in five minutes, and
Vice of specialists in their fields; find a solution. It encourages
Incredible growth and President: we all need to learn from each team members to reach out,
an enduring long-term Legal & other. I’ve found it’s important share thoughts and ideas, find
Corporate
vision are proof that the Affairs — SAB
to steer your team, but also solutions, make immediate
to be led when necessary. decisions and move on to the
right culture can go a and AB InBev, Ultimately, real success is next challenge or task.
Africa Zone
long way. Doreen Kosi VISIT: www.
achieved when we work
collaboratively. Partnerships drive
unpacks the personal ab-inbev.
success. Beyond your own
success mindset that com; www.
sab.co.za
Quick collaborations build organisation, when you
drew her to SAB, and solutions-orientated teams. work with the collective
PHOTO: MIKE TURNER

SAB/AB InBev has an open you stand a better chance

reveals what it means plan office culture. As an of succeeding. More minds
to be a part of a exco member, I don’t have are better than one because
an office, I have a desk. In my they bring about diversity
winning team. previous positions, I’d arrive at of ideas and ways of doing
AS TOLD TO NADINE TODD my office, close the door and things. Surround yourself

14 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 SMARTS
with positive people and support heights. If you don’t accept and develop a thick skin. Things out across the organisation. It
them as well. When you build mediocrity, if you’re driven won’t always go your way. means we are all constantly
partnerships between corporates by the exceptional, and you looking for ways to improve
and SMEs, you increase the build your teams with people Personal growth is key if you our systems and processes,
chances of leveraging off one who hold the same values, want to be successful. Never we focus on innovations, and
another, learning lessons, eventually, you’ll attract more of stop learning. If you can, learn we’re competitive. But most
sharing risks and driving shared the same individuals. something new every day. importantly, you can’t develop
success and growth. When Concern yourself with what is best practice solutions if you
you all grow together, your Understand your personal going on in your surroundings aren’t personally focused on
impact on job creation and philosophy and live by it. If and recognise the phenomenon growth. The two go hand-in-
improving lives increases. But, you want to build a team of of global citizenship. SAB/AB hand. We learn all the time.
it’s important to take ownership winners, or join one, you need InBev has such an incredible Knowledge evolves and we
and be accountable for your own to be disciplined in your goals. growth and innovation culture cannot stop the hands of
actions and results. When you You need to strive to manage that we drive within the time. Networking opens new
do this, you have a collective yourself well in all aspects of organistion, but ultimately it possibilities and ideas and builds
commitment to improve the your life, and to be emotionally starts with the individual. For contacts from which you could
lives of more people in more intelligent. I have a dual example, we have a global benefit. When your networks
communities, and also to build philosophy I live by. Make Best Practice Programme. expand, you have a bigger pool
communities by developing decisions, stick by them and Any team can submit a ‘best of resources and support. This
people and creating authentic live with the consequences; practice’ solution, and if it’s works for both individuals and
and sustainable jobs that can be and ‘lift others as you climb’. tested and is better than the entrepreneurs. EM
measured. This isn’t my original quote, but current solution, it will be rolled
I believe in it strongly.
Top players encourage best-
of-breed behaviour. When Hand-in-hand with self-
everyone is working side by discipline is resilience.
side, and you have an office full
of top performers, the bar is
One fundamental truth that
experience has taught me is that SIMPLE STEPS TO SUCCESSFUL
constantly being raised. You’re
exposed to best practice and
successful professionals and
entrepreneurs are resilient and
ENTREPRENEURSHIP
Doreen offers her top tips for building a successful career
you start shaping your own not shy to get up when they fall.
and business:
behaviour accordingly. Don’t They pull themselves together
hide your stars. Expose their and start over again, no matter
» Define your own success and become a champion of
way of thinking and doing things how many times they fail. Never
your own dreams.
to everyone around them. Pay give up. The less successful are
» Clarity breeds action. Identify what you want to do. Do
attention to what top performers those who give up when things
a proper due diligence of the market and identify gaps
are doing around you as well — get tough.
carefully before you start up. Have a clear idea of how
what can you learn from them,
you want to close those gaps and convert your idea into
and how can you adjust your Believe in yourself. There’s a
a bankable business idea.
own style to get more done? fine line between confidence and
» Keep your idea simple and do not shy away from
arrogance. The one pulls people
repeating the same actions until success is imminent.
Top performers are drawn to towards you, the other is a turn-
» Have the courage to get started. You might not
winners. Long ago SAB and off, so be careful how you build
get everything right but do start anyway because
AB InBev made the decision to and embrace your confidence,
unsuccessful aspirant entrepreneurs fail, along with
focus on cultivating a winning but whatever you do, believe in
their ideas, for fear of acting on their dreams.
culture, and it’s worked. This yourself. To the point above, it’s
» Have a game plan: Be realistic about your idea and craft
is a company of winners and how those who fail get back up
a solid strategy around it before execution.
owners. It’s a place where results and try again. Understand your
» Map out a measurable execution roadmap and keep it in
and personal goals are aligned. worth. Never sell yourself short.
constant check.
There’s an overriding culture that Self-motivation is key. I think it’s
» Focus: Do not become distracted at all costs.
if you’re focused on results and clear that I believe in the value
» Always go back to basics and ensure constant relevance
have personal accountability, of teams and partnerships, but
of your plan. Use the time to ensure that you are ready
you cannot fail. There’s a huge you can’t add value to a team
to adapt when the need arises.
amount of focused energy if you aren’t confident in your
» Recognise stumbling blocks and understand them for
when you walk through the worth and what you bring to the
what they really are.
doors of any SAB/AB InBev table. Confidence also opens
» Use your fear to your advantage: Embrace your fear
office around the world, and it’s up many possibilities. When
because it will take you out of your comfort zone.
because of this. When you create you’re confident, the possibility
» Find positives in negatives and work on them to reach
an organisation of winners, of people warming up to you
your success.
other winners want to join you. and being open to supporting
» Be ethical and fair in your dealings with others.
The result is a team of high you are very high. And don’t
performers drawn to each other, forget: Success is hard work.
all pushing each other to greater Work hard, be authentic, persist

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 15
SMARTS DISRUPTION | WEALTH | SUCCESS | 8020 MINDSET

What do Bob Skinstad and expert author

Richard Koch know that you don’t?

THE NO.1
PERFORMANCE
ENHANCING
SECRET
The 8020 principle is one of the most
powerful success secrets in the world —
provided you implement it. Most people
have heard of it, few put it into action.
Bob Skinstad is re-energising an age-
old principle by sharing a collection of
real-life examples from highly successful
people of 8020 in action. Here’s how you
can start embracing an 8020 mindset PLAYER:
today — and see phenomenal results in Bob Skinstad
return. BY NADINE TODD WHAT HE
DOES: Bob
is an ex-

W
Springbok
HEN GARY operate as a cohesive unit. rugby assist them, or simply to show
KIRSTEN arrived To really make an impact, he captain, he wasn’t going anywhere. He
in India in 2008 turned to the 8020 principle. businessman, also spent those 200 days really
as the new coach What small but significant area entrepreneur, studying his team members and
of the Indian cricket team, could he turn all of his attention a director listening to them.
he recognised he had a key towards, to achieve 80% of the at venture By leveraging this one key
problem. Many of the players on results he was looking for? capital firm area, Gary built the trust he
the team were not only more He realised that the one thing Knife Capital was looking for, and learnt
famous than he was, but more he had that most of the other and has an enormous amount of
skilled as well. How do you players on his team did not, recently information about his players. He
coach Sachin Tendulkar, one of was time. Cricket is extremely developed found the one place that would
the greatest batsmen of all time, popular in India, and the an online make the biggest impact. Three
on his stroke? You tell him to members of the national cricket course for years later, that team went on to
keep doing what he’s doing, and team had a lot of endorsement millennials, win the World Cup.
get out of his way. deals, which meant they were 8020
Mindset.
But Gary did need to find very busy. Whatever happened, GAME-CHANGING PRINCIPLES
VISIT: www.
a way to build trust between Gary knew he could outwork “What’s incredible about the
knifecapital.
himself and his new team. There them. For the first 200 days of 8020 principle is that it’s
co.za and
were many superstars in Indian his contract, he spent every day relevant in every single facet
8020Mindset.
cricket, and yet the national at the batting nets, from 6am to of life,” says Bob Skinstad, an
com
team’s results weren’t good, 6pm. Each time a player came to ex-Springbok rugby captain,
mainly because they didn’t the nets, he was there, ready to businessman and now venture

16 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 SMARTS
capitalist. “Gary is just one in their careers. Richard and I it into practice. Using the 8020 of your attention into those key
successful person in his industry collaborated on the course. I principle on itself, only 20% of areas. Imagine how you would
who has shared his 8020 wrote the content, recruited the people who are exposed to supercharge your own growth
experiences with me; there are a number of my contacts to 8020 will actually implement it, and success, opening hours
so many real-world examples. share their own success stories, but they will reap 80% of the each day to concentrate on high
I first discovered it while I was and Richard reviewed all the rewards as a result. priority tasks instead of getting
playing rugby in my early 20s, material before it went live. It’s The problem is that reading sucked into the quagmire of
and I read Richard Koch’s book, been a great experience, and about a theory is easy. Putting ‘busyness’ we all fall victim to
The 80/20 Principle: The Secret one I hope will spread the word it into practice is hard. It without even realising.
to Achieving More With Less, of how significant a shift to the takes discipline, and a real “A few years ago, I was
but I use it in my business 8020 mindset can be. Once you understanding of how the involved in a restaurant in Cape
development capacity at Knife understand the principles in principles work. Town. We realised that 80% of
Capital today, and have applied action, it becomes the lens If you’ve been exposed the food customers ordered
it in various ways throughout my you use to make all of your to 8020 (also known as the came from 20% of the menu.
life and career. It’s an absolute decisions, which has an Pareto Principle) before, you Through this simple insight, we
game changer if you understand exponential impact on your know that 20% of a sales were able to take a 36-page
how to apply the principles, life, business and career.” team is responsible for 80% menu down to two pages.
and the success that putting of a company’s revenue, 20% We saved costs on wastage,
pressure on the right levers can 8020 IN ACTION of clients bring in 80% of streamlined kitchen processes,
achieve in your life.” In all business and personal business, and 20% of your and increased our efficiencies
To say Bob is passionate development theories, there is a actions each day impact 80% and customer service levels
about fostering an 8020 mindset vast gap between understanding of your life. Imagine if you knew through this one simple change.
is an understatement. In fact, the theory and actually putting which 20%, and could put all “The hardest part is getting
he believes so strongly in the
principle that he approached
Richard Koch himself to discuss
how he could help millennials to
IN ACTION
embrace 8020 to lay the right
foundations for their own futures The team at King Digital Entertainment in much higher than average falls, and the
and careers. shares how the Swedish Government found corresponding hip replacement operations.
“Richard has a house in Cape a way to save billions each year: The solution? The Swedish Government
Town. I managed to get his The Swedish Government was evaluating now employs a full-time team that drives
contact details and sent him a medical expenses, and discovered that around in a van changing lightbulbs for little
long email explaining how we a massive amount of money was spent old ladies — and saves billions each year.
had used his principles in the each year on hip replacement operations.
Springbok rugby team. We were After six months of research, they realised Bryan Habana shares how 8020 brought
a young team, and we used that around 80% of the operations were him back to form:
8020 to figure out who needed for women over the age of 75, living in During his illustrious career, Bryan Habana
to get their hands on the ball concentrated areas that covered around went through a dip. He was working
at which times of the game to 20% of the country. What was different in incredibly hard, but he wasn’t playing well.
make the biggest impact. Our those areas, and how was it affecting elderly The effort he put in was not translating
game improved markedly once women? into top on-field performances. He realised
we started applying Richard’s They discovered that elderly women that working hard wasn’t the answer — he
principles, and that led me to tended to live on the second or third needed to figure out where his energy
implement it in everything I did. floors, and they were changing their own was best spent. He was strong, fast and
Richard loved the fact that we lightbulbs in their stairways. This resulted committed — but his timing was off, and it
had applied it in such different was affecting his entire
ways to how he’d laid the game. He therefore
principles out in his business needed to concentrate
management books. on training and mental
“I really wanted to share all preparations that
the lessons I’d learnt, and also would fix his timing
the experiences of so many issues — and it was
other sportsmen, business this shift that brought
leaders and entrepreneurs him back to top form.
whom I know have used 8020 Without that insight, he
to achieve success. I didn’t would have continued
want to write a book though working on all the
— I thought a course would be wrong areas that
more immediate and practical, weren’t translating into
particularly for millennials, who results.
I believe can really benefit from
fostering an 8020 mindset early

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 17
SMARTS DISRUPTION | WEALTH | SUCCESS | 8020 MINDSET

started. Once you see success in one target every time,” he says. “We’ve
area though, you naturally start looking recently invested in a Swedish-based
for the 8020 in other areas of your life, business called MOST, which develops
and before you know it that’s how you environmental monitoring solutions for
look at everything,” explains Bob. the transport and shipping industry. An
“I see examples of 8020 early investor in MOST is King Digital
everywhere, but I also see a lot of what Entertainment, the creator of Candy
I call ‘2080’ thinking. Take the ‘latte Crush. We love MOST. It’s tracking
factor’ as an example. A few years ago, really nice numbers, the management
the idea took hold in the US (and South team is excellent, the product is next
Africa) that if you just stopped drinking level, the business model allows for
a latte once a day, you’d save $250 in recurring revenues — but our aim as
100 days. I disagree completely. If you an investor is to grow the business.
really want to impact your savings, We needed to analyse which areas Local entrepreneur Keith Rose-Innes
renegotiate your bond with your bank to concentrate on that will have the shares how he increased Seychelles’ fly-
once a year. That will give you a far biggest impact on growth. Through fishing tourism industry by 600%:
greater saving than cutting out lattes, applying 8020 we realised that 12% Keith Rose-Innes built his profile and
and you haven’t deprived yourself of of MOST’s current customers are expertise to become the go-to-guy for
something that makes life pleasant. responsible for 82% of the business’s building fly-fishing trips around the world.
One key negotiation at the right time revenues. Based on this expertise, Seychelles
will have a much bigger impact on your “How much energy, time and tourism hired him to increase visitor
life — speak to your bank, negotiate a resources are put into the other 88% numbers to their islands.
raise — but look at the key area that of clients who are only responsible The Seychelles is isolated and
will have an 80% impact, instead of for 18% of the company’s revenue? expensive. Keith did his research, and
an almost insignificant impact. That’s And what can be done to bring more discovered that only 20% of fly-fishing
where you should be putting your customers on board who are like the agents were responsible for most of
willpower, energy and self-discipline. 12%, and not the 88% of MOST’s the fly-fishing trips booked around the
“Gym is another great example. customer base? Focus on the right world. Instead of spreading his efforts,
We’re told to spend 20 minutes a day areas, and you’ll exponentially grow he concentrated exclusively on those top
at gym. That’s great for your health, your revenues without increasing agents, pitching the reasons why they
and you should do it, but in terms of overheads or expending more energy should promote the Seychelles to their
weight loss and body shaping, it’s — in fact, you could actually do more clients. Within six months he’s increased
negligible if you compare it to changing in less time, with fewer people, if year-on-year sales on the islands by
your eating habits. Gym is 20% of your you know where to concentrate 100%. This grew to 600% over the course
body. Eating is 80%. Where should you your efforts.” of four years — simply because Keith
be putting your focus? Instead, we see Bob believes that at its core, 8020 focused his efforts where he would have
people gyming and then eating two is common sense — you just need the greatest impact.
packets of chips, and wondering why to apply your mind to the principles,
they aren’t losing weight. It’s all about and ask the right questions: What’s
what levers you pull, and where you your 8020? Who are your biggest
put your focus.” customers, where are you spending
most of your time, which actions have
TAKE THE COURSE
8020 Mindset is a five-hour online
SMALL CHANGES, BIG RESULTS the biggest impact, and where are your
course endorsed by Richard Koch and
In 2017, Bob brokered local VC firm waste areas? And in each case, can
presented by Bob Skinstad. It’s designed
Knife Capital’s expansion into the you 8020 the results you’re looking
to help participants think like results-
UK. Based in the UK, Bob’s role as a for? What’s the 20% that will generate
orientated super-performers.
director at Knife Capital is business 80% of your returns, or impact 80% of
Visit: 8020mindset.com or email info@
development — how can Knife Capital your success? What’s the 20% that will
mindset.com for more information on the
assist its investments to build high- affect the world and your customers’
course and corporate talks
impact businesses from a small base? lives and businesses?
“Once again, 8020 hits the

LISTEN TO THE PODCAST

The Matt Brown Show is a
Matt Brown interviews To listen to the podcast, podcast with a listenership
Bob Skinstad and unpacks go to mattbrownmedia. in over 100 countries and
8020 in action. co.za/matt-brown-show or is designed to empower
find the Matt Brown Show entrepreneurs around the world
on iTunes or Stitcher. through information sharing.

18 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
ADVERTORIAL

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20 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 ACTIONABLE “HOW-
TO” INSIGHTS
FOR COMPETITIVE
ADVANTAGE

PIVOTS

SHIFTING
GEARS
Here’s what Andrew Taylor and Kyle Torrington’s journey
can teach you about what lean start-up looks like on the
ground, and how implementing it can radically improve your
chances of business success.

22 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 Sometimes an innovative idea can get everyone excited, but it still fails to
monetise. When that happens, you can choose to keep plugging away at
your business, or you can pivot. When their first business model wasn’t
delivering, Kyle Torrington and Andrew Taylor chose to find a different
solution to achieve the same goal. Here’s how they did it, and why they’ve
seen 50% month-on-month growth ever since. BY NADINE TODD

A
NDREW TAYLOR “We’d even recognised and discovered that in the US
PLAYERS:
and Kyle friction points and underlying and UK, similar online reverse
Andrew Taylor
and Kyle Torrington are assumptions we had around our bidding sites existed that
Torrington the first to admit business and target market that connected SMEs in need of legal
COMPANY: that it took them were proving incorrect,” agrees services with law firms who bid
Legal Legends too long to pivot Andrew, “and it still took us a for the business. In theory, this
EST: 2016 their business. “We believe in the few months to act.” would create a more competitive
WHAT THEY lean start-up methodology,” says Why? What prevented two environment and more
DO: Offer a Andrew. “And if you believe in it, smart entrepreneurs who affordable prices for SMEs. It
range of fixed- you need to live it.” understood their business, would also take the uncertainty
price legal In fact, it took just six months target market and what they out of legal billings, which
services for for the co-founders to change needed to do, from acting traditionally charged by the hour,
start-ups and their business model and immediately? It’s a dilemma that and give a project a flat rate.
entrepreneurs rebrand the company from business owners will find all too “There was nothing like it in
through an LexNove to Legal Legends. In the familiar, and it starts with the South Africa, but the idea had
ecommerce world of lean start-ups though, original idea, and is compounded already been tested and proven
site. six months is too long. by industry experts falling in love in other markets,” says Andrew.
ACCOLADES: “When we first launched, with your innovative solutions The co-founders contracted
2016 winner,
we completed the Ignitor — even though you’re struggling outside developers, resigned in
Hague
Accelerator Programme,” says to monetise the business. Here’s late 2014, and launched LexNove
Institute for
Kyle. “It was an invaluable how they pivoted their business in June 2015.
Innovating
experience, and it introduced us and acheived 50% month on The business was innovative,
Justice
VISIT: www. to lean start-up methodology month growth as a result. on-point and addressed a real
legallegends. and how to implement lean market need. Experts and the
co.za start-up principles in your 1. RECOGNISE THE GAP media lauded it as the future of
business. It’s not just about the BETWEEN VISION AND REALITY legal services. But it was proving
launch, it’s about the years that “The idea behind LexNove was very difficult to monetise.
follow. It’s a set of principles that to make legal services more “Our beachhead market
keep your business relevant and accessible and affordable for was SMEs. We’d identified
sustainable, but it also requires SMEs,” explains Kyle. As lawyers, a disconnect between
you to fail fast and adjust your they were exposed to the entrepreneurs and traditional
model continuously in a ‘build- reasons why legal services were legal services, but what we’d
PHOTO: DEVIN LESTER

measure-learn’ feedback loop. daunting, and often unaffordable failed to really consider was
The problem was that even for start-ups and SMEs, and the fact that start-ups and
though we understood and they believed there was a way to SMEs are very careful with their
believed in the theory, executing address those gaps. cash. If the choice is between
pivots in a business is easier said They started by researching legal services and survival,
than done.” what was available globally, understandably they’ll choose

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 23
TACTICS PIVOTS

survival,” says Kyle.

“Ask almost any established
business owner what they wish 2. CHOOSE A NEW DIRECTION
they’d done differently in their It’s not always easy to let go of an idea that you’ve nurtured and worked on for so long, particularly
start-up days though, and they when you’re lauded for it. But if you can’t monetise your idea, then it’s not a viable business. Andrew
almost always say they wish and Kyle could have continued to plug away. Perhaps if they’d waited long enough, the local market
they’d had the right contracts, would have caught up to US and European standards, where the business model did work.
agreements and intellectual Instead, they took a step back, critically reviewed the business, and started implementing the
property protection in place. It’s methods they’d learnt around the principles of the lean start-up methodology.
far more expensive to fix later. First, they needed to understand why their target market wasn’t responding to the service they
But when you’re in that space, were offering. They were addressing a real need, so what was the problem?
other costs take precedence.” “The idea of online legal services in South Africa was new, but ecommerce isn’t,” says Kyle. “The
Nevertheless, Kyle and problem is that users were expecting instant gratification. Instead, it took 48 hours to process bids.
Andrew managed to build a SME owners arrived on the site, and there were no prices, so you were still unsure what you’d get
strong user base on the site quoted. We realised that uncertainty around prices is a problem for a target market that isn’t well
— they’d contacted firms via versed in legal services.”
LinkedIn and their networks to “Even if the uncertainty had been cleared up, there was a secondary problem,” adds Andrew. “What
get the law firms on their site, an SME owner is willing to pay for certain legal services versus what law firms charge is miles apart.
and used Facebook and online Services were just seen as too expensive.”
advertising to bring users to “Our key driver was still to make the law affordable for SMEs,” says Kyle. “We want to capture the
the site. They categorised and 90% of the SME market that can’t afford traditional legal services by revolutionising the way law
collated bids and chased the is done, while still offering quality legal services. LexNove wasn’t achieving this goal. We needed
legal firms to ensure they bid on a new solution.”
contracts. But, getting users to This understanding, coupled with the challenges they were facing, led to one key question: What
convert was difficult, and it was did they need from their target market? The answer was clear — they needed to capture and hold the
only at this stage that LexNove full value of each client using their service, and they needed to offer that service at a price point SMEs
received its percentage of the could afford.
business. Up until that point,
everything they did was free.
It was turning out to be a lot
of effort for very small rewards.
“Another problem was that deals
that did convert introduced a
3. SHIFT THE
BUSINESS MODEL “We can scale the business without
business to a legal firm, and
they did future business directly
The co-founders started by
addressing their name. “We’d
increasing overheads — we’ve
with each other — there was big
platform leakage as the SME
read somewhere that two
syllable names were easier to
increased our own capacity and
didn’t come back to the site.
The legal world is a high-touch,
remember, which was where
LexNove (based on LexNova,
decreased time taken per transaction.
high-trust environment — people which means new law), came That’s the definition of scale.”
want to know and trust their from. But we’d fallen into an old
lawyers, and so even though trap. We chose a Latin name for
we had provided a ‘matching’ a business that was supposed to Today, the tagline on the site “Our goal was to achieve
service, once the match was be democratising legal services,” reads, ‘Fixed priced legendary the creation of intelligent
made we were no longer the ‘go says Andrew. “We needed a legal services for entrepreneurs’, automated contracts, which are
to’ legal provider for the SME,” new name that was memorable, immediately followed by a ‘shop automatically curated based on
explains Kyle. “We thought made sense, and told our now’ button that takes you to a user preferences,” says Kyle. “Our
people would keep coming back customers exactly what we do.” fixed-price menu. biggest challenge was how to
to the site. The reality was quite Legal Legends was born So, how did Andrew and bring our prices down and find
different.” from a skunkworks project Kyle achieve their goal? True to an annuity income model.” The
Most importantly, the site was inside LexNove. Andrew and lean start-up principles, they answer was automation and
failing to do what Andrew and Kyle kept LexNove operational, did it with a lot of hard work, instalment payment plans.
Kyle had intended in the first and let existing customers testing, measuring, adjusting In its new format, Legal Legends
place — it wasn’t bringing down and partners know they were and implementing. Working is actually a far more unique
legal fees. Because the site trying out a new product on with outside developers meant offering than LexNove was, but
used outside legal practitioners the side. A skunkworks project long lead times, so Kyle learnt it’s also a familiar ecommerce
and couldn’t control or even is developed primarily for the to code. They also paid careful platform that South Africans are
influence their fee setting, the sake of radical innovation, so it attention to how their customers more familiar with, and therefore
price point remained aligned allowed the co-founders to test responded to their offerings. more comfortable using. “We
with more traditional firms their theories and the lessons Once the business had pivoted realised we were asking people
instead of reducing to levels they had learnt with LexNove as a result of lessons learnt from to spend R10 000 on a reverse
start-ups could afford. without immediately shifting LexNove, it began to experience bidding site, with no credibility or
their business model. 50% monthly growth. track record,” explains Andrew.

24 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
TACTICS PIVOTS

“The new site has a menu with of service and expertise we’ve
prices. There are no hidden costs become known for.”
THE LEAN START-UP MODEL
or surprises. We started with 50 of The result is far more repeat The Lean Start-up philosophy was developed by
our most common services, and business, and a much higher level Eric Ries, a Silicon Valley-based entrepreneur
listed them as products, the way of comfort for first-time users who also sat on venture capital advisory boards.
you would see books listed on arriving on the site. He published The Lean Startup in 2011, igniting a
Amazon, or products on Takealot. A ‘build-measure-learn’ movement around a new way of doing business.
We then advertised our products feedback loop has also meant
through online and other means. that Kyle and Andrew are The model follows key precepts that include:
A user can purchase a product in continuously looking for additional » Taking untested products to market. The fact that
under one minute, and then they ways to make it even easier too many start-ups begin with an idea for a product
fill out a digitised questionnaire. for SMEs to do business with that they think people want, spending months (or even
This information gives us the them. One such solution is the years) perfecting that product without ever testing it
details we need to customise the introduction of interest-free in the market with prospective customers. When they
agreement they have bought.” instalment debits. fail to reach broad uptake from customers, it’s often
Once Andrew and Kyle had “The first instalment because they never spoke to prospective customers
a clear understanding of their significantly de-risks our exposure and determined whether or not the product was
value proposition, the rest fell into and reduces our risk, but giving interesting. The earlier you can determine customer
place. In the legal world, costs are our clients the opportunity to pay feedback, the quicker you can adjust your model to suit
directly related to time. Lawyers for the service in regular debit market needs.
charge by the hour, so to reduce orders also helps them carry a
costs, you need to reduce the cost that they might otherwise » The ‘build-measure-learn’ feedback loop is a core
time you spend on a service or forgo. We are now capturing the component of lean start-up methodology. The first
contract. “We also understood market we wanted in the first step is figuring out the problem that needs to be solved
that we needed to communicate a place,” says Kyle. and then developing a minimum viable product (MVP)
price point and what you get for it “We remain accessible, but to begin the process of learning as quickly as possible.
upfront — this was essential,” says we’ve automated as much as Once the MVP is established, a start-up can work on
Andrew. possible without sacrificing on tuning the engine. This will involve measurement and
quality, and offer skype meetings learning and must include actionable metrics that can
4. FIND A MODEL THAT SCALES over meetings in person. We’re demonstrate cause and effect.
To then deliver a quality product, now the custodians of the
the co-founders used the 8020 relationships we build with users » Utilising an investigative development method
principle. “We determined 80% of of the site, but have found ways called the ‘Five Whys’. This involves asking simple
a contract or agreement can be to significantly reduce the amount questions to study and solve problems across the
automated, and only 20% needs of unnecessary time spent with business journey. When this process of measuring
to be customised,” says Kyle. “We each client, which has resulted in and learning is done correctly, it will be clear that a
then designed questionnaires that a completely new cost structure,” company is either moving the drivers of the business
would give us the information we says Andrew. model or not. If not, it is a sign that it is time to pivot
needed to create the contracts, “We wanted to be an Airbnb or or make a structural course correction to test a new
and developed customised Uber that connected the market fundamental hypothesis about the product, strategy
software to automate the with service providers. The high- and engine of growth.
process.” touch, high-trust nature of law
Legal Legends now uses in- was an issue, and our solution » Lean isn’t only about spending less money. It’s
house lawyers, contracting out didn’t reduce the price point of also not only about failing fast and as cheaply as
to other lawyers when necessary. these services, which was the possible. It’s about putting a process in place, and
Through the questionnaires and main focus of the business. To following a methodology around product development
automated process, the time do that we needed to capture that allows the business to course correct.
taken to deliver a fully customised the full value of each client, and
contract is made dramatically radically adjust how we do law. » Progress in manufacturing is measured by
more efficient, and pricing is An automated free legal health the production of high quality goods. The unit of
much lower. In many cases, check we’ve designed is a great progress for lean start-ups is validated learning. This
customers are paying less than a tool to convert clients, and if we is a rigorous method for demonstrating progress
third of traditional legal costs. do convert them, we start with when an entrepreneur is embedded in the soil of
“We keep iterating by adhering information in hand that reduces extreme uncertainty. Once entrepreneurs embrace
to the ‘build-measure-learn’ the time taken to develop the validated learning, the development process can shrink
feedback loop. Automation and contracts or agreements substantially. When you focus on figuring the right
the questionnaires take a lot of they need. thing to build — the thing customers want and will pay
time upfront, but once they’re up, “Plus, we can scale the for, rather than an idea you think is good — you need
90% of the work is done for each business without increasing not spend months waiting for a product beta launch to
client who follows. It allows us overheads — we’ve increased our change the company’s direction. Instead, entrepreneurs
to do the work in-house, charge own capacity and decreased time can adapt their plans incrementally, inch by inch,
less, and to earn annuity income, taken per transaction. That’s the minute by minute.
while maintaining the standard definition of scale.” EM SOURCE: theleanstartup.com

26 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
BUSINESS SHOWCASE

YOU REAP CHOOSE

THE RIGHT

WHAT YOU SEW

EMBROIDERY
MACHINE FOR YOU
All of these high-performance
If you’re looking to expand your business or start something new, embroidery machines can stitch
an embroidery business could be just what you’ve been waiting up to 1 000 stiches a minute,
have colour touch screens,
for. Brother offers three home and small business embroidery
automatic needle threaders and
machines to help you sew the thread of success. thread trimmers. They also have
built-in font and designs and

T
they offer custom designs
HESE DAYS, everyone can on screen.
use additional income. So
what better time to start an
embroidery business than
now? This is not a franchise
or get-rich-quick scheme, but your
chance to join those who have made
money from a home-based embroidery
business or by adding embroidery
services to an existing business.
These state-of-the-art professional
embroidery machines are designed
to give you the basic equipment to
become your own boss, with the
flexibility to fit into most work places,
from a spare bedroom to a workshop or
retail environment.

PR1050X 10-NEEDLE
EMBROIDERY MACHINE
The PR1050X 10-needle professional
embroidery machine, comes equipped
with some of the most powerful design
and editing capabilities ever built into a
multi-needle embroidery machine. The
360mm x 200mm embroidery area and
variety of included and optional frames
gives you the flexibility to create a
multitude of projects.

Features
• 360mm x 200mm embroidery area
• Design rotation
• Enhanced appliqué function
• Single colour sewing
• Advanced threading system
• Wide table included
• Built-in intelligent camera system
• Thread colour sorting
• Create with My Design Centre
• Colour shuffling function PR1050X 10-Needle
• Built-in video tutorials and learning Embroidery Machine
support

28 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUSINESS SHOWCASE

VR 1-NEEDLE
EMBROIDERY MACHINE
The VR single needle embroidery Features
machine combines commercial • 200mm x 200mm embroidery area
features and functionality with easy- • Design rotation
to-use technology and advanced • Appliqué function
levels of customisation, all in the • Single colour sewing
comfort of your own home. Take • Link capability
on large projects using the 200mm • Forward/reverse 500 stitches
x 200mm embroidery area. Plus, • Built-in learning support
thread colour sorting means that • Upper and lower thread sensors
fewer colour changes are needed, • Single colour pattern converter
which reduces the time taken to • Free-arm embroidery*
complete multi-colour embroidery • Independent bobbin winder
designs. The VR machine brings all • 4-Spool thread stand
the features of a small enterprise
machine into your craft room.

PR655C 6-NEEDLE EMBROIDERY

MACHINE
The 6-needle PR655c is an ideal starter for a
home embroidery business. The wide-angle HD
LCD display offers vivid, crystal-clear clarity,
rendering the brightest images imaginable. See
high resolution design previews almost instantly.
The brightness adjustment feature allows you
to change the screen brightness to suit your
environment. Most importantly, you’ll find the
PR655c incredibly easy to use.

Features
• 300mm x 200mm embroidery area
• USB ports
• Design rotation
• Appliqué function
• Single colour sewing without interruption
• Link capability (*need PE-Design 10 Software)
• Forward/reverse, approximately 500 stitches
• LED pointer for perfect needle positioning
• Camera function
*Additional purchase required

Depending on your specific business needs, sometimes

two PR655c embroidery machines might be better
than one PR1050X machine. Use Brother’s latest
generation design software, PE-Design 10, to link up to
four PR machines via PC to increase your embroidery
output. You can also set up a list of individual names
and send them to embroider using Brother’s user-
friendly software. Visit www.brother.co.za

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 29
BUSINESS SHOWCASE

Q What are the benefits of

Achieving
being associated with
ACCA?
Association with ACCA guarantees
availability of support and

business resources needed to maintain

a relevant professional skillset
for the accountant and his

success
organisation. Credibility of the
ACCA brand helps all affiliates
command their stakeholders’
trust as they are assured of the
diligence and professionalism

Q&A synonymous with the ACCA

brand globally. This is largely
attributed to ACCA’s active role
in promoting and enhancing the
In a fast-paced, ever- global accountancy profession
changing business whilst representing its members
landscape, ongoing and affiliates.
learning and local and
international support can
give you the edge you Q What role does ACCA
play in the business
environment?
need. Walter Muwandi

PHOTO: SUPPLIED
ACCA assists businesses
unpacks how ACCA is by developing curricula in
giving him and his business collaboration with businesses,
a competitive advantage. ensuring its professionals meet
BY NICOLE CRAMPTON the demands of daily business
challenges. It also organises
workshops for knowledge sharing
PLAYER:
and CPD, ensuring members and
Walter Muwandi FCCA
affiliates are kept abreast with
COMPANY: CCG

H
changes in the profession, while
Systems
AVING A CREDIBLE formulation, performance EST: 2001 networking with their peers. ACCA
accounting measurement, controlling WHAT THEY DO: CCG also helps businesses search and
leader, like ACCA spending, increasing revenue systems develops select skills appropriate to deliver
in your corner and mitigating risks. When systems and supplies value, and conducts research to
can help you applied professionally, and implements produce industry insights that are
to achieve a successful and accounting skills help safeguard enterprise resource valuable for sector performance
sustainable business. Walter credibility and protect public planning (ERP) appraisal and benchmarking.
Muwandi, CEO of CCG Systems interest for a business, a role systems, currently
has over 27 years’ experience
in financial systems and
project management. He is
whose importance can never be
over-emphasised.
for Sage, SAP and
CaseWare Africa.
VISIT: www.ccgs.co.za
Q What has been your
experience with ACCA?
The support from the South
a Fellow member of ACCA
(FCCA) and presents globally
on International Public Sector
Q Why is having a firm grasp
of numbers important
when running a business?
African Office as well as ACCA
Global is phenomenal. I truly
feel the benefits of being part
Accounting Standards and In our fast-paced world data has of a global organisation that
Systems. become a staple commodity. To the data used and the decision- updates itself with global trends
remain relevant and effective the maker’s competence. Incomplete in business and continues to use

Q What do you believe

accounting skills bring to
a business?
modern business strategist must
be abreast of all the numbers
affecting their operations. Much
or irrelevant underlying data
can easily render a decision
ineffective and negatively
the latest technology available
to enhance business integration
and thinking.
Accounting skills bring an of modern day accounting impact a business’ top line.
objective and pragmatic focuses on analysis of data to All these factors dictate that
approach to various business forecast strategy and appraise an accountant should have a
challenges. They provide results of operations. firm grasp on all the relevant
invaluable information to In modern day predictive numbers affecting their business
management for use in analysis, the quality of decisions if they are to deliver value and
critical areas such as strategy made is largely a function of stay competitive.

30 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUSINESS SHOWCASE

resulting in only one contact

point — us. We are reliable, with
PLAYER: Gerhardt Becker,
proven, fast turnaround times,”
Chairman and Founder
COMPANY: FICS he adds.
WHAT THEY DO: Provide forensic FICS launched the FICS Mobile
investigation-type services to App, a first for South Africa,
individuals, professional firms, which offers new benchmark
corporations, government opportunities by capturing all
and parastatals in the legal, relevant photographic and other
accounting and financial services factual information at the scene
sectors. of incidents.
VISIT: www.fics.co.za
SOLUTIONS FOR COMPLICATED
MATTERS
Gerhardt says that The Financial
parties and the Road Accident Services Board (FSB) is currently
Fund (RAF),” Gerhardt says. putting pressure on the trustees
Key factors include: of retirement funds to expedite
» SAPS docket/SAPS Accident the tracing and payment of
Report, hospital records and unclaimed benefits.
ambulance records “There is a vast quantity of
PHOTO: SUPPLIED

» Statements of the witnesses unclaimed benefits in South

and the drivers Africa and we realise that it is a
» Photographs of the scene of complicated matter. We believe
the accident and sketch plan that we have a solution to these
of the accident scene. difficulties because we are a
specialist investigative group
Quantum investigation of companies with a growing

SATISFYING A assistance:
“We can also assist with
quantum investigations, which
national footprint that can
successfully trace members or
beneficiaries,” Gerhardt explains.

KEY NICHE
entail the investigation of the FICS can physically trace,
amount of money payable locate and link fund members
to claimants and/or the or beneficiaries.
dependents of a deceased,” adds Gerhardt says that when
FICS managing director shares how his company Gerhardt. it comes to emotional
can help you deal with highly-specialised business Key factors include: matters, such as fatal or
(and personal) legal matters. BY PRITESH RUTHUN » Employment of the claimant suspicious claims in workmen’s
and/or deceased compensation matters, it is
» Earnings of the claimant and/ difficult to stay objective and
“AFTER 25 YEARS in the deep-level investigations for or the deceased not get overwhelmed with all
industry, we realised that there’s the South African Government, » Deceased’s dependants the emotions. This is when it’s
a genuine need for a reliable and parastatals and corporate sector. (wife(s)/husband, children). best to get an outsider to handle
ethical partner, with the know- The firm also offers investigation these claims.
how and expertise to undertake services to individuals. He YOUR ONE-STOP SERVICE “Not only do we handle all
specialised investigations into believes that FICS is filling a key PROVIDER these claims and investigations
serious matters,” FICS MD and niche in South Africa, by serving Incidents such as motor with the utmost respect, we
Founder, Gerhardt Becker says. as a one-stop shop for people vehicle accidents are not only have the ability not to get
Gerhardt argues that poor who need assistance with a frustration for the person/s emotionally involved and we
service delivery has become sensitive personal or business involved in the accident, but also complete these claims hands-
customary in South Africa and matters. for all the relevant stakeholders on,” he says. “We do a lot of field
that his business aims to deliver afterward. Motor vehicle work, ensuring that the issues
better service delivery in a cost- Merit investigation assistance: accident related claims can be are sorted out in a shorter period
effective way. But why is he so FICS can assist with merit unnecessarily stretched out. and with accuracy.”
focused on reliability, ethics and investigations, which entail Gerhardt says FICS can
service delivery? investigation of all aspects help by serving as a one-stop
concerning a motor vehicle service provider. “Instead of
PROFESSIONAL accident, often several months having to contract multiple
INVESTIGATORS after the accident occurred. service providers to resolve one
Gerhardt is the founder of FICS, “The FICS team has 25 years of matter, we can assist our clients
a company that specialises in experience, working with various with a wide variety of services,

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 31
BUSINESS SHOWCASE

PLAYER: Jurie Venter What Introstat can

COMPANY: umAfrika Gaming Technology do for you:
EST: 2014
» Years of ICT sector
ABOUT: umAfrika is the provider of
experience brought
Gaming Products and Services to
forward to help you
South Africa and all other countries
grow your business
in Sub-Sahara Africa and the Indian
Ocean Islands. » As an HP Platinum
Partner Introstat has
access to the full range
of HP products from
reliable and has the right tools to Hardware, Software,
help and enhance your business. Networking to HP
I want to know that whenever I Financing and leasing
pick up the phone to a supplier, options
there is always someone on the » Through its consulting
other side who can help me.” expertise, Introstat
What’s the secret to building determines the finest
PHOTO: SUPPLIED

such great partnerships? “Be solution for your

honest and open in your business business
and partner with companies » Introstat has a team
that are honest and open with of qualified engineers
you,” says Jurie. “For example, we that can service
have an excellent partnership and maintain your
with Introstat, which had been printer fleet and ICT
From ageing infrastructure to a
building momentum for a few environment nationwide
successful business in one partnership years — long before we created » Offers both onsite

The foundations of growth

How Jurie Venter has focused on working with the
our own independent business.
What’s been phenomenal is how
we’ve grown together. When
and remote technical
support
» Provides services within
they first came onto our radar IT Security, Managed
right partners and doing thorough market research they only supplied printers. Over Print, Networking,
to achieve business success. BY NICOLE CRAMPTON the years Introstat has grown Server/Storage, Cloud,
into the areas that we needed to Hosting, VOIP and IoT
grow and enhance our business. Connectivity
THREE YEARS AGO, umAfrika Jurie knew he could build a We’ve been able to walk this » Introstat is a Premium
Gaming Technology co- strong business because he path together.” supplier of PCs,
founder, Jurie Venter split from had done thorough research The Lesson: As a start-up or laptops, printers,
an international company to into the South African market. SME, you will often work with ink and toner with a
start a more locally focused The international market was service providers who are also national distribution
business. umAfrika bought a similar enough to South Africa to on a growth path. Work together infrastructure
going concern in the South prove the concept, and research — with the right relationship » A BBBEE level 1
African gaming market. It was revealed the local market was and support, you’ll actually grow company.
a great opportunity with one large enough to offer a great together. This can work in a
big catch: They had to launch opportunity. number of ways. Your support Let Introstat show you the
with an ageing international The Lesson: Make sure there allows your suppliers to grow and new HP A3 Multifunctional
infrastructure. is a need for your offering. By extend their product and service range, the most secure
international standards, South offerings, which then helps you to printing devices in the
LOOK FOR OPPORTUNITIES Africa is a relatively small expand, or in other cases, clients world.
Although leaving a large market. Jurie and his team expand overseas and can take
international brand and all needed to ensure there was a you with them. Partner with a Introstat focuses on
the support it offers can be large enough local market before business that you can develop a technology and services
daunting, Jurie understood his they invested in support, staff or close relationship with, someone so customers like
goals, and how he aimed to get infrastructure. who is reliable and has your best umAfrika can focus on
there. “Although there was a interest at heart. The best way to their business.
shift from an international focus PARTNER FOR SUCCESS do this is to ensure your values www.introstat.co.za
to a local one, the foundation of “It’s very important to work with are aligned. Relationships and
the business stayed the same, the right partners,” says Jurie. support are the foundations of
with the added benefit that we “Focus on developing long-term business. Build these with your
now had local shareholders and relationships wherever you suppliers and your clients — look
could service local businesses.” can. You want a partner that is at business holistically.

32 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUSINESS SHOWCASE

6 Don’t fall behind

SUCCESSFUL
with your studies
and make sure you
keep up to date. Take
time to check that your

ADULTING
notes are updated, in
order and make sense.
The best way to do this
is to use some time
after lessons each day
How to cope with studying
to go over that day’s
as an adult. BY WENDY work to be sure you
BAUMGARTNER have the work well
summarised and in a
form that you can use
for revision. Another
impactful way to check
your understanding of a
topic is to find a friend
in the class who needs
help, and help them. You
cannot explain the work
if you don't understand
it. If you are not brave
enough to do this,
then draw a face on an
orange or an apple and

1 Make a time and

a place that you
can dedicate to your
explain the work to the
fruit!

3
BALANCING the various studies. This should If you do not understand,
priorities that fill your day allow you to work you should ask questions.
is one of the greatest without interruption. Don’t be shy! As lecturers, PULLING IT ALL TOGETHER
differences between Having your family we appreciate questions and Starting and completing a degree
studying as an adult understand and respect enquiring minds. Understanding as an adult student is not as
and studying when you these boundaries is very something now may mean the overwhelming as it may appear at
have just finished school. important and critical difference between passing or first. The key is to break it down
Students who have just to you doing well. If you failing in future, so ask questions into small, manageable steps.
finished school often have defined time to sooner rather than later. By putting positive, constructive
only have their studies work, you can spend habits in place and surrounding

4
to focus on, whereas time freely with them Form a small study yourself with a support system, you
adults with full-time once you are done. group with others. There will not only obtain your degree,
work commitments and/ is nothing more motivating but enjoy the process of learning
or a family to take care than being on the same path and growing.
of have more on their as others. Everyone has
plates. While this is not to
say that all new students
having finished school do
2 Find balance between the
various aspects of your
life. The best way to do this is
different skill sets and abilities,
and members of your study
group will help you gain a new
If you’re ready to take the next
step and fast forward your career,
learn more about Monash South
not have these priorities — to not fill too many hours with perspective on your work. Africa’s MSA Executive education
more and more do these unnecessary work. Work or programme at www.msa.ac.za/
days — they also seem
to have more support
from the family unit. Adult
studying can easily expand to fill
any amount of time you allow,
and so you have to manage
5 Find a mentor that you can
learn good habits from and
whose input you value. It takes
msaexec/what-we-offer/

Wendy Baumgartner
students need to start this so that you have enough a lot of courage to find a good is a Mathematics A
coordinator in the
their degrees with clear time to work, study, relax, and mentor, but this relationship will Foundation Programme
strategies to succeed. do all the other things that are benefit you in years to come. at Monash South Africa.
Here are a few tips. important to you, all the while The key is to find someone
remembering that time on task who is in a place in life that you
is important to your successful admire, either from a personal or
future. professional perspective.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 33
BUSINESS SHOWCASE

why we needed to do away with and the commitment to quality of

some of our disparate systems workmanship that we are known
and processes,” Tony explains. for can be executed well into the
Twelve months ago, Tubular future,” Tony says.
Holdings was running three Tubular Holdings went from
separate business systems that using three separate business
covered its electronic resource systems for ordering, invoicing,
planning and accounting and managing staff and assets,
management needs. “The payments, collections and
systems were not talking to each administration to one solution
other, which made reporting with Sage X3. Tony says the
very difficult to manage and we streamlining of systems and
decided that we needed more processes is key to the company’s
clarity and visibility if we were future success because by nature

PHOTO: DEVIN LESTER

going to grow the business Tubular Holdings is a collaborative
further and extend our reach and inclusive company, and now
locally and across the continent.” they have the ERP system to
allow them to operate as a truly
THE RIGHT TOOLS FOR THE JOB collaborative class-leader.
“We’re extremely specialist.
We provide high-quality

Right place, right steelwork fabrication services,

cladding, mechanical equipment
erection, complete electrical
WHY CHOOSE SAGE X3
POWERED BY PARITY?

time, right sequence instrumentation for furnaces and

related areas of a site and the
dismantling and erecting of silos,
Thanks to Sage X3 and
Parity, Tubular Holdings
now enjoys greater
visibility and insight into
Tubular Holdings’ CEO Tony Trindade shares ducting and piping,” Tony says.
its business operations:
insights on why streamlining operations He adds that the company
drives growth. BY PRITESH RUTHUN decided first and foremost to
» Assets such as
find an electronic resource
plant equipment can
planning package (ERP) that
be easily monitored,
PLAYER: would do away with the three
while costs associated

S
Tony Trindade, CEO disparate systems they had
with maintaining any
INCE ITS FOUNDING COMPANY: been using for years.
Tubular Holdings equipment is easier to
in 1979, Tubular “Once we decided after
WHAT THEY track and trace via the
Holdings has grown many meetings with all our
DO: Suppliers of system.
to become one stakeholders that we were going
structural steelwork, » When it comes to
of South Africa’s to use Sage X3, we knew we
mechanical, electrical, accounting, Tubular uses
leading construction players. needed to find a partner that
instrumentation, the Sage X3 system to
But, after nearly four decades was going to help us implement
platework and piping handle its administrative
of turning over millions of rands, the systems we needed. We
services (SMEIPP) to needs; making it easier to
the company had outgrown did not want to be in a position
mining, manufacturing stay on top of accounts
its own capabilities. It runs and related sectors. where we implemented an ERP
payable and receivable to
specialist equipment that VISIT: www.tubular. system that offered no support
maintain sound cashflow.
was in need of maintenance co.za or did not meet our needs.”
» Overall, clearer
without causing downtime;
communication and
managing members of its MEETING NEEDS
collaboration between
highly-specialised workforce Tony says that any business
employees has been
was becoming challenging; and platforms, ‘real-time’ site that’s looking to grow must
achieved, helping Tubular
administrating accounts payable offices and equipment stores, regularly assess its ERP systems
to grow its operations
and receivable had become generators and delivery vehicles. and how it influences operations.
with confidence.
cumbersome. Some operational “If you consider our plant “Throughout the various
changes were urgently needed. equipment operations, our project phases and interactions
specialist staff management with the Parity team, the choice
DO AWAY WITH DISPARITY needs and our material we made in choosing Sage X3 as
Tubular Holdings is a massive and commodity sourcing our ERP Platform for the future
operation. Its assets alone requirements against the was reaffirmed. The software
include over 100 mobile cranes, backdrop of operating under and expert implementation
a fleet of specialist trucks and stringent health, safety and partner we have in Parity
trailers, high-tech hydraulic quality controls, you can see ensures that our business vision

34 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUSINESS SHOWCASE

Spartan typically grants finance there is something wrong with

within seven days, although the their internal processes. Either
fastest approval has been six the company is too shy to be
hours, with the longest 15 days. assertive with clients, or it lacks
“How quickly we can approve the capacity or capability to
finance is determined by how invoice clients and collect cash
prepared the business owner is,” efficiently. Either way, the result
explains Kumaran. is a shortage of cash.
“Do they have all their basic “Business owners in this
documentation ready? These situation apply for a loan in order
include financials, management to be able to pay the bills, when
accounts, debtors age analysis they should be reviewing their
and creditors age analysis. own business, pulling one or
From a working capital context, two levers, and improving their
this information makes it easy cash flows.
to assess the health of the “A customer project or
business. Every business owner contract is an example of an
and financial director should be expansionary and positive need
on top of these figures.” for finance. These cases are

FINANCING THAT BACKS FINDING A FUNDING FIT

ideally suited to bridging finance.
The problem is that there’s a

ENTREPRENEURS
Not every business needs lead time gap. You need to start
funding. Some can grow the project, spend cash to hire
organically and draw on their people or purchase equipment,
own cash reserves. Others build internal capacity, deliver
The SME landscape is fast and flexible. It requires
choose an equity route. on the project and then the
financing that understands how entrepreneurial Spartan is a debt funder. customer only pays you. Working
businesses operate. Through its unique processes However, even as a debt funder, capital and bridging finance
and assessments, Spartan’s finance solutions are the team’s aim is to back allows the entrepreneur to do
geared to do just that. BY NADINE TODD entrepreneurs and help them just that, and the company
grow their businesses. They grows as a result.”

I
evaluate what the finance will Bridging finance, in particular,
T TAKES an entrepreneur We hire for fit, looking for be used for, and if the return is is high risk and requires a large
to know entrepreneurs, empathy and alignment in every greater than the repayments. amount of flexibility, which is
which is why Kumaran position. All of our processes “There are numerous ways why more traditional funding
Padayachee and his team and assessments are done with that finance can be applied institutions shy away from it.
at Spartan are dedicated empathy and understanding incorrectly by SMEs,” says Spartan, on the other hand,
to financially backing an often- towards SMEs.” Kumaran. “One of the first flags offers revolving bridging loans
underserviced sector: SMEs. we look for is debtors age. If to customers the team has
“We’re fast, we’re flexible, BECOMING FUNDING READY the industry norm is payment worked with. “We understand
and we’re understanding,” says Thanks to these systems, in 30 days, but a business is this space, and our aim is to
Kumaran. “Every single person processes and the team’s typically paid by its clients in support the entrepreneurs within
who works here is SME-centric. unique way of assessing SMEs, 60 or 120 days, then we know it,” Kumaran concludes.

ALTERNATIVE FINANCE SOLUTIONS

Spartan is a 36-year-old Non-Bank Finance Bridging Finance
Company — that specialises in financing Bridging Finance is available for one to three
Small and Mid-sized businesses by providing: month terms and is ideal for contract or
Growth Finance [structured finance for project-based businesses. It is a solution
expansion]; Specialised Asset Finance that assists businesses with solving cash
[equipment/machinery/technology/software/ flow issues due to growth related challenges Kumaran Padayachee,
office fit-outs/energy/etc.] and Working in their business and is either for a once-off CEO, Spartan
Capital Finance [bridging finance & medium need or for revolving business use.
term loans].
Spartan is an Authorised Financial Services Provider
www.spartan.co.za 47631 and Registered Credit Provider NCRCP8669.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 35
BUSINESS SHOWCASE

DRIVING YOUR BUSINESS GROWTH

change lives. With the right
data — and access to that data
— you increase safety, simplify
Thanks to meaningful feedback and ideas from its customers, TomTom Telematics your business, drive efficiencies,
increase your output and
has just released its latest version of WEBFLEET. Designed to help its customers
customer service, and ensure you
get the most from their businesses through the right telematics solution, New are always productive and reliable
WEBFLEET can help you reach your customers quicker, get more done, improve — across the organisation. And
efficiencies, save costs and boost your revenues. BY NADINE TODD that impact can be measured, and
given a real ROI value.
“Imagine the impression
EUROPE’S highly regulated companies that operate at that
operating environment has level make on their industries.
made telematics ubiquitous They stand out from their
in business. On the one hand, competitors. There is so much
this means industries across room for growth in South Africa as
the spectrum have become we deploy these solutions.”
safer, more efficient and highly
productive across the EU. On GAME-CHANGING SOLUTIONS
the other, it’s much harder to As an organisation, TomTom
stand out from the crowd when Telematics is focused on
everyone follows the same best continuous growth and innovation
practice standards. as well, constantly learning from
“We don’t have those same market conditions, its customers
stringent regulations in place,” and industry needs to improve its
Thomas Schmidt, MD of Justin Manson, Sales Director,
says Justin Manson, Sales product offerings.
TomTom Telematics Africa at TomTom Telematics
Director, Africa at TomTom The result is the launch of
Telematics. “Our clients have New WEBFLEET in February
realised what a huge competitive 2018. “We’ve increased the value
advantage this actually offers save up to 10% on its bottom products that can change the we offer our customers,” says
them though. line, and redeploy that cash way companies operate, and Thomas. “We’ve collated data
“Locally, everyone into the company’s growth, most importantly help them from hundreds of thousands of
understands the role that thanks to drivers reaching save money and make money. customers around the world who
telematics plays in tracking customers quicker and getting The challenge for us is educating gave us their feedback through
what your drivers are doing right more done. The right data also our customers so that they surveys, and New WEBFLEET is a
and wrong, and use it as a tool increases productivity and understand what our solutions window into easy-to-use, smart
for encouraging good driving ensures better turnaround offer, and the incredible impact fleet management that is a game
practices, but there’s so much times.” they can have on a business. changer for companies.”
more to this solution, and we’re Thomas Schmidt, MD of We consistently improve these “TomTom Telematics is in the
making it our mission to help TomTom Telematics, loves solutions based on customer business of helping businesses,”
business owners really use it to visiting South Africa for this feedback as well, making them agrees Justin. “Our goal is help
their benefit. very reason. “Because so many very much from customers for our customers master their
“When deployed across business owners aren’t using customers. challenges. The right data at your
the organisation to its full telematics to their full extent, “Anyone can buy a map for fingertips will help you change
capabilities, a telematics there’s such a huge opportunity less than R100. Why invest the way you operate. That’s our
system can radically improve for us to assist businesses in in such expensive devices? goal. How much cash is being left
productivity and workflow. their growth here,” he says. “We The answer is because we’ve on the table in an organisation
Done correctly, a business can deliver a high-value stack of developed solutions that because of inefficiencies?”

Open your Usability Personalisation Plan a route

eyes to fleet Benefit now Many ways the way you
management from a more to customise want it
like you’ve simple and WEBFLEET to Use multiple
never seen it intuitive user experience suit individual requirements from variables (including
before — more effective use of personalised views to adding waypoints) to give fastest
time and easier access to information to make what you see or most efficient routes.
information. more informative on one page.

36 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUSINESS SHOWCASE

DASHBOARD
New WEBFLEET’s dashboard gives an overview of performance
at a glance. Up to 27 KPIs can be used to track the performance
of vehicles, individuals, benchmark teams or give a simple
overview. This helps you to track real-time performance against
your pre-defined KPIs.

REPORTING » Send planned routes directly to

New WEBFLEET gives you a TomTom PRO driver terminal
instant access to the information to keep your drivers on the
that matters, meaning you can right track.
INTRODUCING NEW WEBFLEET spot trends over time and use
real-time information to make PERSONALISED MAP VIEWS*
The smartest way to manage your smarter and more informed » Create your own saved map
vehicles and mobile workforce decisions. You can instantly view to reach information you
download or schedule reports need fast.
TomTom Telematics’ state of the art Software-as-a-Service (SaaS) to help you stay on top of » Switch between vehicle groups
fleet management solution, with best-in-class user interface, is everything — from fuel efficiency or areas, without needing to
inspired by two decades of working together with customers to and legal compliance to quality adjust the map filters and
achieve more for better fleet management. New WEBFLEET is of service. zoom levels.
everything you need to manage your vehicles in the cloud, in real
*Features will be available with the
time. It allows you to monitor reports and dashboards, manage MANAGE ON THE MOVE 3.1 version in April 2018
orders/workflow, and improve driving behaviour, safety and New WEBFLEET is optimised
service, helping you save fuel and reduce costs. so you can manage your fleet
on any device by entering
WEBFLEET through a web
BEST-IN-CLASS USER browser or by downloading the
INTERFACE
MAP VIEW
WEBFLEET Mobile app on your About TomTom
» A future-proof platform with a
Know where your vehicles
smartphone. Telematics
are and where they have TomTom Telematics
completely renewed interface,
been. Different map is a business unit of
based on the latest HTML5 SEND ROUTES DIRECT TO
options such as Google, TomTom dedicated to
technology and driven by DRIVERS
Google Street View or fleet management,
continuous innovation. » Plan accurate routes in New
satellite map are enriched vehicle telematics and
» Simple and clean interface, WEBFLEET by adjusting
with traffic information, connected car services.
with minimised clicks for multiple variables such as
giving you a more detailed WEBFLEET is a Software-
faster working. location, time of departure/
view on what’s happening as-a-Service solution,
» Intuitive functionality, means arrival, traffic and vehicle type.
on the roads. Toggle used by small to large
it is more accessible for » Get a choice of alternative
between different types businesses to improve
greater impact across your routes, as well as suggested
of information on the map vehicle performance,
business. fastest route with traffic.
such as traffic, addresses save fuel, support drivers
» User rights management and » Customise your route by
and areas and create and increase overall
state-of-the-art data handing simply adding new waypoints,
specific views, so you fleet efficiency. TomTom
ensures the highest level of or dragging and dropping
only see the information Telematics is one of the
data privacy and data security. existing waypoints on a route.
you need. world’s leading telematics
» Fast access to the right Then choose from guided or
information. forced route* options. solution providers with
more than 785 000
subscriptions worldwide,
servicing drivers in more
than 60 countries.

Access Simple, clean and easy Send

WEBFLEET to administer routes
Across Toggle between views to to driver
different get the right information terminals
device types, allowing to focus on the task in hand. Get the In real time, ensure
you to always stay on right information to the right people drivers follow or avoid
top of business. at the right time, keep data secure specific routes. Visit telematics.tomtom.com/tellmemore and
and in the right hands. follow us on Twitter @TomTomWEBFLEET

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 37
BUILD
ACTIONABLE INSIGHTS TO ACCELERATE HIGH GROWTH

STRATEGY

DRIVING
DOUBLE-
DIGIT
GROWTH
Exceptional strategy is based on five
key principles: A good plan, the choices
and trade-offs you’re willing to make, Your key
differentiation, your profit equation and implementation
activity integration. Here’s how you can plan framework to
strengthen your business to drive higher get you started
growth and profits. BY NADINE TODD

38 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 momentum of the economy. (or develop a theory) that relates
You need to do something more to your market.
to fill that gap. And therein lies Take Steve Jobs as an
the challenge, because there’s example. He hypothesised that
no silver bullet that can drive people would pay a premium
double digit growth. price for ease of use and an
“Ultimately, you need to be elegant design in computing.
able to critically think through This would form the foundation
and formulate multiple ways that other digital products could
PHOTO: MIKE TURNER

to fill that gap,” explained Greg be added to.

during his keynote strategy
workshop at the 2017 ThinkSales
Sales Leadership Convention.
“Success in anything — sports,
2 STRATEGY IS ABOUT
MAKING CHOICES AND
TRADE-OFFS
raising children, learning Strategists are constantly faced
and business — is driven by with choices and trade-offs that
Dr Greg Fisher is a professor in the fundamental principles that need to be made if you’re going
Management and Entrepreneurship need to be applied with balance to stick to the plan. Remember,
Department at the Kelley School of and moderation. true value is created when you
Business at Indiana University and “A conceptual understanding make a choice, and don’t try
a visiting lecturer at the Gordon of what to do isn’t enough. You to dabble in multiple things
Institute of Business Science (GIBS) in need to take action — your ability at once. You need a clear and
South Africa. to drive double digit growth lies manageable goal. Choices
in developing a strategy based require decisions, often relating
on five key principles, and then to where you will be channelling

O
executing it.” your resources. A trade-off is
VER THE PAST not doing something. What will
THREE YEARS, you do and not do? This must
GDP growth in Here are the five key align with what you’ve already
South Africa principles you must theorised. It doesn’t serve you or
has been small. unpack in order to the business to follow too many
Economists formulate and execute a paths and options.
expect 2018 to see GDP growth growth-driven strategy. Which markets will you pursue
at 1% or less. And yet the growth vigorously and which will you
strategies of businesses are leave alone? Which customers
aiming much, much higher.
How do you target 15% to
20% growth under such tight
1 YOU NEED A GOOD PLAN
Every successful business
shift begins with a good theory.
will you target, and which won’t
you? Which products will you
produce to enact your theory?
economic conditions? It doesn’t need to be sexy. It Which activities will you engage
According to Dr Greg Fisher, does need to be insightful, and in inside your organisation, what
a professor in the Management give you a map of what to do will you outsource and what
and Entrepreneurship next, what not to do next, and won’t you do at all? Who will you
Department at the Kelley what value needs to be created hire? Who won’t you hire? And
School of Business at Indiana through which channels going which assets will you choose
University and a visiting lecturer forward. to own?
at the Gordon Institute of Leverage foresight, insight Everything is a choice and
Business Science (GIBS) in South and hindsight to formulate a a trade-off. Take Ikea, a retail
Africa, you can’t just ride the mental model and hypothesise brand that’s enjoyed 70 years

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 39
BUILD STRATEGY | GROWTH | FRANCHISING

of successful growth. Why?

Because of fundamental and
particular choices relating to
4 PROFITS
The strategy conversation
tends to happen early, the
profit, and to achieve that, your
strategy must point to one or
more of these three elements.
On the other side:
» Customer willingness to pay
» The cost to produce and
product designs and style. Ikea profit conversation happens In other words, either you deliver your goods.
isn’t everything to everyone late. You need to bring them need to sell more products, or
— it has a very specific value together. When you’re having you need to increase the price Profit lies in the middle. Focusing
proposition and delivers on it a strategy conversation, you you can charge, or you need on two or even all three of the
relentlessly. need to understand how it will to decrease the expenses you levers is challenging, but it will
drive bottom line growth. The will incur to get that product to result in the greatest results if

3 DIFFERENTIATION
This is fundamental. Even
if you’re the low-cost provider
role of strategy is to bridge what
customers are willing to pay
for a product or service, and
market (or a combination of all
three).
The key question is therefore:
executed properly.
But remember: The
management of the profit
in your space, you still need to what it will cost you to deliver What can you influence to drive equation is ongoing. You need
be doing something different it. The strategies you adopt are the outcome you want? What to manipulate it in action and
to drive those costs down; you determined by theories, choices, strategy will drive profit? create a strategy that can be
still need to be differentiating differentiation and costs. The variants on the profit adjusted when and where
yourself and the way you The formula is the following: equation that you need to necessary, always tying it back to
operate. The world is more Profit = the number of products consider include: the bottom line.
competitive than it’s ever been, you sell x price of product — » Industry average competitors Ideally, you want to spend less
and buyers have more access expenses. » Uniquely differentiated while delivering more, resulting
to information and options How does your strategy competitors in higher profits. Before you can
than they’ve ever had. To be impact this equation? Which » Low-cost competitors do that though, you must identify
competitive, you need to really lever will your strategy pull? » Competitors with a digital your profit levers. Finally, does
interrogate your differentiators. You ultimately want to drive advantage. your profit equation tie back to

YOUR BUSINESS WORKPLAN

Your key business plan to 2 CHOICES & TRADE-OFFS

Identify the CHOICES & TRADE-OFFS that you have made, and

discover and implement need to make, to act on your theory.

the five core elements of A choice is a clear decision to do something specific and meaningful.
A trade-off is a clear choice not to do something that is somewhat

a business strategy tempting or attractive to pursue.

» We have chosen to
Identify 3 to 5 important strategic choices you have made

1 THEORY
Briefly describe the THEORY underpinning your organisation’s
strategy.
»

»
We still need to make choices with respect to
Identify 3 to 5 important strategic choices you still need to make
We have chosen NOT to
Identify 3 to 5 important trade-offs that you have made
A theory is a mental model about how your organisation does (or » We still need to decide NOT to
could) create value. It reveals hypotheses about how an organisation Identify 3 to 5 important trade-offs that you still need to make
can create significant value. It usually entails:
» Foresight about the evolution of the industry in which you operate Key questions to ask yourself
» Insight into how your organisation can create value in the industry » Do your choices and trade-offs clearly reflect your theory?
as it evolves » What’s preventing you from making the choices and trade-offs
» Hindsight about how you might build past competencies, that you still need to make? What would it take to definitively
relationships and assets. make these choices?

We theorise that

Key questions about yourself

3 DIFFERENTIATION
Identify the points of DIFFERENTIATION that are embedded in
what you do (i.e. in your theory, choices and trade-offs).
» What are the assumptions embedded in your theory? Are they
valid? Could they be tested? Differentiation is something that clearly distinguishes an organisation
» Would the other leaders in your organisation describe a similar from others in the industry. It is something that other organisations
theory underpinning your strategy? Do you have a consistent view targeting the same customers are not doing and which those
of opportunities and mechanisms for value creation across the customers ultimately find valuable.
organisation’s leaders?

40 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUILD
your points of differentiation, service of the four points above? them all very well. That’s activity Bringing it all together
trade-offs and choices and Your goal is to ultimately create integration. What’s your theory? Do you have
ultimately business theory? something that is beautiful and The problem is that it’s not a clear, consistent and concise
precise. Independently, these easy, which is why so many theory on how to succeed? How

5 ACTIVITY INTEGRATION
Your fifth, final and most
important point is activity
departments are meaningless.
Success lies in multiple activities,
all working together to drive your
organisations fail at this stage.
If you can get this right
though, the results will speak
does that theory translate into
your choices and trade-offs?
What definitive things are you
integration. You need to strategy. for themselves. 1x1x1… to 10 choosing to do and not to do?
make your strategy happen. To get started, consider which = 100%. 0.9x0.9x0.9… to 10 How do these choices drive
The previous four steps are activities are necessary to = 35%. That’s the power of differentiation? You need a core
meaningless unless you can do drive your strategy and ensure activity integration. It also differentiation that customers
something with them. integration. How these activities means that doing each activity can appreciate, value and buy
Activity implementation is the work together reinforces at 90% will bring the entire into.
result of the business performing everything you’re doing. organisation down to 35%. How does your differentiation
a certain set of discreet Activities amplify each other, Walt Disney conceptualised ultimately drive profits? Can you
activities. These include the until 1 + 1 = 3. the entire Disney business articulate it, and what levers are
sales force, managing customers The problem is that multiple according to activity integration. you pulling?
and managing returns. This activities working together is Each element worked into the What activities do you need
is your core and critical to difficult to replicate. There is no next, starting with movies at the to implement your strategy, and
business. Think of each business single activity (or silver bullet) centre. Get that right, and all the how do they ultimately integrate
unit as a part to a mechanical that will drive success. You need other activities — Disneyland, with each other?
watch. to optimise all of your activities merchandising and so on —
The challenge becomes: How — you need ten primary work. Negate the movie piece
do they all work together in the activities, and you need to do and the rest disintegrates.

We are different (or strive to be different) with respect to Key questions to ask yourself
» What more could you be doing to increase volumes, charge higher
prices and/or reduce expenses?
Key questions to ask yourself » Does your profit equation tie back to your theory, choices and
» Do your customers see and experience these points of trade-offs, and to your points of differentiation?
differentiation? Would they agree you are different in this regard? » Is the profit equation consistently understood across the
» Would the employees in your organisation describe similar organisation?
elements of differentiation? Do you have a consistent view of your
organisation’s differentiators across the organisation?
» How easy is it for your competitors to emulate your points
of differentiation? Could they easily copy your points of
5 ACTIVITY INTEGRATION
Identify the ACTIVITIES needed to deliver on your points of
differentiation, and assess whether these activities are adequately
differentiation? If not, why not? INTEGRATED with one another (i.e. reinforce one another).

4 PROFITS
Identify how your points of differentiation drive PROFITS.
STEP 1. Write up a brief description of each activity required to
deliver on your organisation’s elements of differentiation.
An activity is something that a organisation does repeatedly in the
A useful way to examine the connection between strategy and profits process of developing, marketing and delivering products and services
is to examine a simple version of the profit equation as follows: Profit to clients.
= (Number of products sold x Price of products) – Expenses. Identify
how the organisation’s differentiation elements drive profits as follows: STEP 2. Draw links between the activities that currently reinforce
» Identify those elements of the profit equation that apply for your each other.
strategy and complete the statement where applicable Reinforcement between activities comes about when two activities
support each other such that when they operate together, they are
» We are able to sell more products than rivals (YES/NO) because more effective than if they operated independently i.e. doing one
activity well enhances the other activity.
» We are able to charge higher prices for our products than rivals
(YES/NO) because Key questions to ask yourself
» We are able to reduce our expenses relative to rivals (YES/NO) » Do we consistently view our organisation as an integrated system
because of activities that reinforce one another, or do we tend to deal with
each activity independently?
Check those that are appropriate and complete the statement » Are our activities arranged in a way that consistently and
» We sell more products because effectively delivers on our key points of differentiation? If not, how
» We charge higher prices for products because could they be rearranged to more effectively deliver on key points
» We reduce expenses because of differentiation? EM

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 41
BUILD STRATEGY | GROWTH | FRANCHISING

STEADY AS
SHE GOES It’s not often that an

Q&A
individual manages to
bootstrap a business,
substantially grow
it over two decades,
and then successfully negotiate an
acquisition by an overseas company.
DRS CEO Robert Brown managed
exactly this — so successfully, in fact,
that he is now also the CEO of Nasdaq-
listed company, Cognosec. Entrepreneur
spoke to him about taking a business to
the next level, and ensuring long-term
success. BY GG VAN ROOYEN PLAYER:
Robert Brown
POSITION: CEO
and founder
COMPANY: DRS
Q When it comes to
bootstrapping a business
and growing it successfully,
bad at it, but it can’t be ignored.
You have to sweat the details.
You can bring on a bookkeeper
Q Looking back on the
growth of DRS over the
years, what would you identify
(Dynamic Recovery
Services)
EST: 1997
how important is cashflow? or accountant, but that doesn’t as one of the company’s key
ABOUT: DRS is
What role does it play? absolve you from all financial inflection points?
an ICT company
Cashflow is everything. If you responsibility. As the founder or Probably when the company
that specialises
want to be successful, you need CEO, you should have detailed passed that 50-employee in information
to know exactly what’s going knowledge of the company’s threshold. In my experience, security, IT risk
on in your business’s bank financial situation at all times. once a business grows beyond management and IT
account. How much is coming 50 people, things change governance services
in? How much is going out?
Who owes you money? Who do
you owe? When will they pay?
Q Where does budgeting
feature in this?
Budgeting is very important. You
fundamentally. Systems and
processes that worked well
until then, suddenly start
and solutions.
The company was
launched more than
When do you need to pay? These need to create a detailed budget. breaking down. So, once your two decades ago
questions are all crucial. Many However, the budget is useless business reaches that size, I with just R2 000, but
people see money coming into if it doesn’t reflect reality. Don’t think you need to be willing to today counts many
a bank account and assume exaggerate income and minimise reevaluate the basic structure listed companies
that the business is profitable. expenses. Entrepreneurs are of the organisation. Chances amongst its clients.
Of course, this is not the case. naturally optimistic people, but are, some big things will need It was acquired a few
Only when more is coming in this is one instance in which to change. When the business is years ago by Swedish
than is going out is the business a serious dose of reality is growing quickly, it’s easy to blow company Cognosec
AB. In January 2016,
PHOTO: MIKE TURNER

actually profitable. Unfortunately, very useful. In fact, don’t just past this point without giving it
Robert Brown was
if you want to know what is really be realistic — assume that a much thought, but you’ll end up
appointed as CEO of
going on in your business, you disaster will hit. Create a ‘worst paying for it down the line. Once
Cognosec.
need to pay attention to the case’ scenario. As the saying again, sweat the details. The
VISIT: www.drs.co.za
paperwork. Many entrepreneurs goes: Hope for the best, but earlier you start implementing
hate paperwork and are pretty prepare for the worst. the necessary systems and

42 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 BUILD

BRIAN TRACY’S
processes, the less painful to lots of clients. There as soon as you can. For TOP 5 TIPS TO
the experience will be. are plenty of examples
in history of companies
me, Cognosec AB made
a lot of sense. It was a MAKING THE
Q How did you
manage the growth
that built an empire on a
single piece of technology,
company that I believed
would increase the options MOST OF 2018
of DRS? How did you and when that technology available to DRS and its
know that the time was became obsolete, these people. By joining an Set your goals. Before you can
right to enter that next companies disappeared. international organisation, achieve them, you have to set
cycle of growth? Similarly, young we really went to the next them. They should be serious
In my opinion, you should companies sometimes level. commitments you follow through on
find the work, and then land a huge contract that for the duration of the year. Make
find the people needed
to do that work. In other
words, you don’t want to
becomes the engine for
massive growth. When
that contract suddenly
Q What is the key to
long-term success?
It’s the people. A lot of
them meaningful and follow through.

be over capacity. If you disappears, the company business leaders say Remember you are never
do this, you run the risk folds. If you want to create this, of course, but that stuck. You are the captain of
of spending more than a company that thrives in just proves how true it your life – where you are and
you’re making. Instead, the long term, don’t put all is. Without great people, who you have there with you
go out there, find work, your eggs in one basket. you cannot build a great is your choice. Take control
and then expand. Don’t business. You might enjoy and move towards whatever
moves you towards fulfilment.

“If you want your company to grow and Discipline yourself. The potential of
prosper beyond you, the founder, you need to self-disciplined people can never be
under-estimated. Goals, challenges
be willing to accept change. The last thing you and tasks can all be overcome with

want is to remain central to the success of the enough discipline. Adopt an attitude
of determination and self-discipline.
company decades after the launch.” The only thing standing between you
and your gaols is you.

expand and then hope

that you’ll be able to find
work to keep everyone
Q DRS became a
Cognosec AB
subsidiary a few years
some short-term success,
but the business won’t last
for decades. When your
Learn how to say no. Yes is not
always the right answer. We can
stretch ourselves too thin. You will
busy. Also, landing a ago. What made you business grows, especially only be effective if you can dedicate
couple of good long-term decide to sell? if it’s growing quickly, it’s your focus to the most valuable
contracts can give you the If you want your company all too easy to hire the tasks. Free up time and room for the
breathing room needed to grow and prosper wrong people or to lose opportunities that mean the most
to grow. If you know that beyond you, the founder, control of the culture. to you.
some steady money will you need to be willing When you do this, the
be coming in over the next to accept change. The business suffers. One of Delegate. Not every task requires
couple of years, you have last thing you want is our greatest achievements your personal attention. In fact, it’s
more freedom to grow. to remain central to the as a company, and what possible the people around you
success of the company I believe has been key to will have the strengths and skills

Q How do you
minimise risk when
growing a company? How
decades after the launch.
You need to think about
your exit, even if you
our success, has been our
ability to help individuals
grow and prosper. We
that make them the most capable
of tackling specific tasks. The best
leaders know how to spot these
do you set it up for long- don’t plan on leaving have many long-time skills in others.
term success? the company in the near employees who have Always ask: Does this need to be
Never have one product future. Even if you don’t worked themselves up done? Does this need to be done
and never have one intend to exit at all, you from incredibly junior now? Does this need to be done by
customer. Too many still don’t want to be positions into leadership me? EM
companies become over responsible for every roles. That’s given us a © Entrepreneur Media Inc. All rights reserved.
reliant on a single product decision. That’s not how depth of knowledge and a
or a single large client. you create a large and feeling of family that have
That’s incredibly risky. healthy organisation. been instrumental in our Brian Tracy is the author
Instead, you want multiple Start putting the people success. EM of over seventy best-selling
books that have been
revenue streams. You want and structures in place translated into dozens of
to sell multiple products that will allow you to exit languages.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 43
BUILD STRATEGY | GROWTH | FRANCHISING

“Businesses looking to franchise

need to ensure that their
business is teachable to others.
Overcomplicated products and
systems may deter franchisees from
investing in your brand.”

Growth
through
franchising For many businesses, franchising is an excellent

Q&A
route to growth, opening up new opportunities
and markets. Laurette Pienaar, National Franchise
Manager at Nedbank, unpacks why it’s worth
considering this route. BY NADINE TODD

Q Franchising is a great way

to grow a business. In
must be scalable and able to be
repeated in several locations.
VITAL STATS franchised store as opposed to
corporate-owned stores.
PLAYER:
your experience, what type of Secondly, there must be demand Laurette Pienaar Franchised stores are also
business is ideally suited to the for the products sold and, thirdly, POSITION: proven to be more successful
franchise model? the franchise model must be National than corporate-owned stores.
Franchising has been proven proven as profitable. Franchise This is mainly due to the fact
successful across all industries, Manager that the franchise owners have
including the automotive,
food, entertainment and retail Q Why is franchising a good
growth option?
COMPANY:
Nedbank Limited
VISIT: nedbank.
a vested interest in the store,
whereas corporate stores are
PHOTO: SUPPLIED

industries. However, several key Franchising is often used as a supervised by a manager.

qualities ultimately determine a cost-effective growth strategy co.za Franchising is therefore also a
concept’s ability to successfully for businesses. A key benefit of great way to build your brand.
become a franchise. this strategy is that no capital
Firstly, the business model layout is required for a new

44 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
Q What should
business owners
interested in this route
franchise need to ensure
that their business is
teachable to others.
focus on? Overcomplicated products
Franchisors should set and systems may deter
up good infrastructure to franchisees from investing
support their franchisees, in your brand.
including good upfront Franchisors have to
and ongoing training to do ongoing introspection
both the franchisees and regarding their company
their staff, the correct legal culture. For example,
advice and assistance, and does the culture promote
a strong operational team innovation and inspire
to assist franchisees daily. franchisees and consumers,
Many successful which ultimately is a culture
franchisors provide support worth investing in?
by expanding through New franchisors’
vertical integration, which selection criteria for
provides franchisees with franchisees are often
logistics, supply chain not sufficiently thorough
security and product and comprehensive. For
consistency. a new franchisor, it is
Several franchisors important to choose good
advocate a structure quality franchisees and
with both franchisee and to have strict selection
corporate-owned stores. criteria to ensure that your
This enables a franchisor to brand remains reputable
keep in touch with the daily and stable during fast-
challenges franchisees expanding cycles.
experience and new
products and solutions can
be tested at a corporate
store before being rolled
Q What lessons can
potential franchisors
learn from South
out to the franchise Africa’s most successful
network. franchises?
Businesses looking to

Q How can franchising

consultants
assist business owners
expand through franchising
should consider setting up
several corporate-owned
to franchise their stores first. This assures
businesses? potential investors that
Franchise consultants your business is based
provide daily operational on a proven model with a
support to franchisees. track record and supportive
They are responsible for infrastructure.
daily store visits to assist There is not always a
with quality checks, process one-size-fits-all model.
flows, supplier relationships Many franchisors have
and, often, financial created custom models to
assessments. They are a accommodate and adjust
helpful soundboard on any to the need of a specific
improvements to be made property or consumer
in the business model and market. A great example
can convey suggestions to of this would be the food
the franchisor. industry where many
franchisors offer shopping

Q What red flags and

challenges should
business owners who
centre concepts, drive
thrus and kiosk or express
concepts. Consider this
want to go this route be when developing your
aware of? model. EM
Businesses looking to
PROFILE

Arnoux Maré is a
quintessential entrepreneur.
Not only is he wildly
competitive (if his business
doesn’t triple its own annual
projections and targets he’ll
review the company top
to bottom), but he’s also
reengineered the art of ‘adapt
or die’ to, ‘adapt and thrive’.

BY NADINE TODD I PHOTOGRAPHY BY DEVIN LESTER

46 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 PROFILE

In 2011 Arnoux
launched a labour
consultancy
with R500 that
grew into a staff
outsourcing
company. By
2013, recognising
the inherent
issues in his
industry, he
completely
reworked his
business model to
create a solution
that employers,
employees and
trade unions alike
could benefit
from and support.

PLAYER:
Arnoux Maré
Not only did
COMPANY: this move allow
Innovative the business to
Solutions Group
LAUNCHED: survive — it’s
2011 thrived. Within
TURNOVER:
R780 million one year he grew
GROWTH: his turnover
From R32 million to
R780 million from R20 million
in four years to R32 million.
ACCOLADES:
Winner of Best Four years later
Outsourcing Service and Innovative
Provider in Africa,
Africa Leadership Solutions Group
Awards 2017. Arnoux has hit the
Maré: Winner of CEO
of the Year, Africa R780 million
Leadership Awards turnover mark.
2017
VISIT: innovative-
Here’s how he
group.co.za did it.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 47
PROFILE
substantively fair? If you can prove these
two things, you’ll win. If you can’t, you either

» The start-up haven’t followed procedures correctly, or

you’re in contravention of South Africa’s
Be brave, believe in your idea and labour legislation.”
It was 2011. Labour broking and
sell your vision outsourcing were big business in Europe
and the US, and Arnoux’s own experiences
showed him the benefits of the industry.
However, it was at this point that he realised
he needed to go back to the drawing board.
IMAGINE WAKING UP AT 6AM and spending that princely sum, Arnoux gave his client the In no way should he be considered a labour
the next 12 hours on the road between full benefit of a vast experience in labour broker or temporary employment service.
Pretoria, Johannesburg and Middelburg in relations that a full-time employee would In South Africa, labour brokers weren’t yet
Mpumalanga, knocking on doors and trying provide at a cost-to-company of R50 000 to persona non grata, but the writing was on
to sell your services. At 6pm you return home R60 000 per month. the wall.
(aka your office), spend time with your infant The owner of Yankees had a friend who Arnoux firmly believed in the concept that
daughter, and then sit down to study by 9pm. ran a butchery. His referral secured Arnoux companies should not employ their own
By 3am you’re able to crawl into bed, catch his second client. He was essentially the in- employees though. “It’s such a specialist
a quick three hours of sleep, and by 6am house HR manager for two businesses while field — managing a workforce involves
the alarm is going off and you’re up, out the he focused on selling and completing his recruitment, HR, processes, management
house and doing it all over again. labour law studies at night. and so on — these are all highly specialised,
This was Arnoux Maré’s life for nine “I was determined to become the and yet managers who are specialists in
months. In 2011 he started his business expert in this field. South African labour other fields are tasked with them.”
with R500, which was all he had left of his law is complex, but if you’re prepared and Arnoux had another problem as well.
salary after paying his bills. It was a big understand procedures and legislation, There was a loophole in labour legislation
move. He was leaving the safety of corporate you will always be on the right side of the that all consultants at the time exploited. The
employment, but he knew he wanted more, Commission for Conciliation, Mediation and law said that a company employee had to
and that the only way he would achieve his Arbitration (CCMA). This was the function I represent the company at a CCMA hearing,
goals was to do it for himself. performed for my clients”. so that outside consultants couldn’t. The
“I had a list of SMEs I wanted to target. Arnoux was soon consulting for clients and loophole? Accept temporary employment
Corporates have HR and payroll divisions dealing with human resources cases that had and handle the hearing anyway.
filled with human capital specialists. SMEs do been taken to the CCMA. After a year he was By 2012 this loophole was closing.
not. After five years in corporate I’d seen the providing consulting services to companies Arnoux’s entire business model was built on
common HR problems we faced. I particularly in the areas of fair labour practices, labour the fact that he would personally be at each
believed SMEs needed this solution. Human legislation and industrial relations. hearing, handling the full process. Add to this
capital is a specialist field, and yet any the fact that Namibia had outlawed labour
available manager tends to be assigned the “I knew that to build a name brokers, even going so far as to jail some
role. This is such an important part of an for myself in this industry I directors, and South Africa was heading in
SME’s business; I thought there was room for a similar direction, and he knew it was time
needed to take a big risk. In
an expert.” to radically change his model. The question
The reality was far more complicated.
the early days of a start-up was, to what?
“Having a list wasn’t enough. Business you’re in make-or-break Ultimately, this question and the sheer
doesn’t work like that. You need to prove territory, so I went big and volume of mediation and CCMA cases
yourself in the market before people will trust put everything on the line. I Arnoux was handling for clients would lead
you. I had to go from company to company. guaranteed clients that we to the start-up’s first subsidiary, Innovative
I’d been a sales rep earlier in my career, and would pay the settlements if Staffing Solutions, in 2013. Assuming the
I was back to doing what I’d done then: I was responsibility and accountability for each
we lost a case – provided we
knocking on doors, explaining what I did. I clients’ labour needs, ISS was not a labour
heard ‘no’ 15 times for every yes, but I didn’t
were involved in the process broker, however, it did grow from a labour
let that deter me. I stayed focused. The most from start to finish.” law consultancy into a full-scale outsourcing
important step is to get started. company, boosting turnover growth thanks
“You need to be brave. You have to find Arnoux admits that although he still takes to the pivot.
the courage to go out and sell yourself as the risks today, he doesn’t bet the business on
brand you’re planning to be, not what you are them — not with 7 500 full-time employees Start-up Lessons
at the moment. You can’t be dishonest, but relying on his company. But those start-up » Offer advice and share your expertise
you do need to sell your vision. I had a plan days were different. He needed to go all in, freely. The more your clients are educated,
and everything worked around that plan. It and the result was that he never lost a case. the more empowered they will feel, and
was painstakingly slow in the beginning, but He made sure he was prepared and up-to- the more they will view you as a trusted
I kept plugging away and knocking on doors date with all labour legislation. advisor. I gave my clients material to help
until slowly I built up a client base.” “There are two things you need to prove them develop the best labour policies
Arnoux signed his first client, Yankee in every labour dispute: Was the case and procedures. It didn’t make my service
Diners for a retainer of R780 per month. For procedurally correct and was the sanction redundant — it built trust between us.

48 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 PROFILE
» Don’t hold back when you’re a start-up. Where did these intersect, and how could and this was at the heart of the problem for
You’ll need to change this down the line, we develop solutions that addressed both trade unions.
but in the early days, you’re building a areas?” “I then reviewed what we did — we
brand and relationships. You need to give The exercise revealed a number of key focused on payroll outsourcing and admin,
as much of yourself as possible to achieve points that would ultimately help Arnoux labour law, and contractor pack outsourcing,
this. Later you can find ways to build what develop the business model Innovative which included recruitment. These are
you do into systems and processes others Solutions Group has today. Within a year his specialised, intense functions. I looked at
can follow. turnover went from R20 million to R32 million everything relevant to the function, including
» Don’t be emotional about your business. based on the new model, and four years later invoicing and a cost analysis for us and our
Entrepreneurs tend to be very emotional, this has grown exponentially to R780 million. clients. How could we get employees off the
and this leads to subjective decisions that books of employers without the labour broker
aren’t always best for the business. Treat The lesson? Never take function, in such a way that employees are
employees well, understand their side, but anything for granted. Arnoux protected, companies are protected and we
make a business decision and move on. offer a sustainable solution to both parties?”
was forced to evaluate his
Always ask the question, is this the best To answer these questions, Arnoux went
decision for what the business needs?
business and industry, which out into the field. “I approached one of our
Remember, it’s also your duty to support led to real solutions. Too engineering clients and played open cards.
the majority of your employees who rely often, businesses do what I knew I needed to understand the problem
on the business doing well. Sometimes they’ve always done — or an from all sides. I let him know this was an idea
that requires tough choices. industry has always done that was still in development phase, and
» Never stop learning. This is important — simply because that’s the then I asked him if he’d be willing to be our
throughout your business journey, but guinea pig. We called it ‘staff management’,
way it’s always been done. If
particularly as a start-up. The more you’re and developed a system that ensured we
able to build your expertise, the more
you want to grow, you need were the employer of a pool of employees
gravitas you will have with clients to start challenging those rather than our clients. This starts with who
and prospects. assumptions. an individual takes instruction from, and who
they believe they report to.
In Arnoux’s case, the exercise revealed the “In our test case, we took over the full
following key points, some were strengths, employment of 63 employees. I personally
and some were weaknesses: negotiated with their union, so that everyone
» The pivot » CCMA commissioners were becoming
stricter about consultants representing
was on board. We were not temporary
employers, but full-time employers —
Business is companies at the CCMA. The loophole his everyone had a permanent contract with all
company relied upon was closing. the benefits and legal protections that come
managing your » Arnoux was making large, sweeping with full-time employment.”

risk – even if promises to protect clients. As the business

grew, the risk associated with these promises
This signalled the birth of Innovative
Staffing Solutions, and within two months

that means was no longer acceptable.

» As an extremely competitive individual,
Arnoux’s client referred him to another
business. Although the owner was sceptical,
changing the Arnoux wanted to achieve higher growth
than the company was currently delivering
he agreed that Arnoux could take over the
employment of 103 of his 160 employees.
business — he knew he’d need a different model if he
wanted to exceed his current results.
The third company Innovative Staffing
Solutions secured was in Middleburg, and
» On the positive side, labour legislation had close to 300 employees in the hospitality
is an ever-growing field of inter-connected and agricultural sectors. Today, Innovative
laws. Only an expert dedicated to staying up- Solutions Group employs 7 500 people based
MANY LARGE SUCCESSFUL businesses have to-date can understand them all. on this model.
failed because they didn’t see the landscape Arnoux didn’t just analyse his own “Every site we manage has a contract
changing. Technology, legislation and business — key to the exercise was manager, and in-house IR and HR functions
community pressures have all played hugely understanding the difference between staff are their responsibility. They also have
disruptive roles across various industries outsourcing and labour broking as a whole. administrative support based on the size of
over the years, resulting in the now standard “I started by researching labour broking the site. The contract manager is completely
business phrase that businesses need to internationally. What were the roots of responsible for our employees on the site.
‘adapt or die’. the bad sentiments around labour broking The client goes to them. For example, if the
Unlike many other businesses, Arnoux did in South Africa, and why had Namibia client plans to plant 500Ha, they do the
just that. He took his business apart and re- criminalised an entire industry? ops planning, but the manager gets the
engineered it before he became a casualty of “I realised two main things: Locally, a employees inducted, ready and briefed on
the times. labour broker is actually recognised as a the ops planning.”
“I pulled a big white board into my office temporary employment agency. This brings Today, the holding company, Innovative
and started mapping two things. First, with it a host of problems. First, temporary Solutions Group, operates in transport,
how do we ensure that we are truly a staff employers can do what they want. Limited engineering, manufacturing, agriculture,
outsourcing company, and second, what duration contracts don’t need to give you hospitality, retail, admin and labour.
challenges were we facing as a business? notice. There’s no protection for employees,

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 49
PROFILE

“You need to be brave.

You have to find the
courage to go out and
sell yourself as the
brand you’re planning
to be, not what you are
at the moment. It was
painstakingly slow in
the beginning, but I
kept plugging away
and knocking on doors » Scale-up
until slowly I built up For growth
a client base.” What do our
clients need?
What do we
Lessons in Pivoting » Focus on cash reserves. We’ve always
need? What do
» Is it riskier to stay the same or to banked a percentage of income to save our employees
need?
change? All business is a risk, and we up for retrenchments. This is a legislative
tend to resist change as a result. Often requirement, and it’s essential for all
however, it’s even riskier to stay the same. businesses. You never know what’s
Only 40% of our initial clients moved over headed your way, and how cash reserves
to Innovative Staffing Solutions’ model, but will protect you.
the word-of-mouth referrals we received » Communication is key, but results are SHORTLY AFTER the birth of Innovative
from that 40% based on the new offering more important. I often hear business Staffing Solutions, Arnoux recognised that if
skyrocketed our growth. owners talking about how important it is he wanted to aggressively scale the business,
» Market your offering in a way that to be transparent with clients. I agree. But he would need to offer his clients solutions
customers understand what you do. I also think results are more important. across the labour spectrum. He didn’t want to
It’s easy to come up with fancy terms If you make a promise, stick to it. Make do this through Innovative Staffing Solutions
and names. If your customers don’t it a non-negotiable, instead of thinking alone, but rather through specialist divisions
understand exactly what you do though, that as long as you’re transparent it will that could work together and share client
it’s meaningless. We called our solution all be okay. Your promise influences the bases.
Staff Management because it let everyone operations of your client. Rather plot and “We needed strong foundations in place
know exactly what we did. We could have plan properly to ensure delivery, and then before we could aggressively start scaling the
used a sexier name, and no-one would you won’t need to be transparent about business, but by 2013 I was confident that
have understood what Innovative Staffing problems. we had the right systems in place and the
Solutions was. » Don’t sell services; sell a solution. When company was running smoothly. It was time to
» Business is all about managing risk. I you sell a solution, you’re talking about spread our wings.”
believe you need to take risks to grow, your client’s needs, instead of what your At that stage, Innovative Staffing Solutions
but you also need to mitigate them as business does. outsourced its accounting function to a
much as possible. You can’t foresee all » Operations are the bedrock of any small entrepreneurial accounting firm. “I
problems and plan for all eventualities, but business. We are operationally strong. already knew that I wanted to start a group
you can evaluate all the risk factors within 60% of what I do today is operationally of companies, of which Innovative Staffing
your operations. Based on this, develop focused. We plan extensively, which Solutions would be one division. The vision
a solution to nullify risk functions and means we are always prepared. I train was to offer all labour and human capital
implement methods to minimise risk as the contract managers, and I wrote the related solutions under a roof. However, I
much as possible. procedures and training manuals they use. recognised that it’s easy to be seen as a jack

50 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 PROFILE
of all trades and master of none, and wanted paying us the final month’s salary bill. dwell on the problems — and learn from
to avoid that perception.” We carried the entire R3,6 million payroll every challenge you face, it might just
The solution was to ensure subject matter ourselves.” provide an unexpected opportunity.
experts ran each division, and the best In the case of Innovative Staffing Solutions,
way to do that was to purchase existing This hit the company hard, this incident cemented trust between the
companies and bring them into the fold, but it also raised a very real company and the trade unions it works
rather than starting from scratch. “In this with. It also allowed Arnoux to approach
problem for Arnoux and his
case our accounting firm already had all the his clients, explain their situation, play open
necessary registrations in place as well as an
general manager, Liza Trollip. cards that he would be having cash flow
existing client base.” “We realised that 40% of our issues while the company recovered, but
The firm joined Innovative Staffing sales came from contracts also showed the lengths the business would
Solutions, and Arnoux created a holding and subcontracts of our go to protect its employees and retain good
company, Innovative Solutions Group, with biggest client who insisted relations with the trade unions. Word of
two divisions: Innovative Staffing Solutions everyone he worked with mouth referrals were boosted as a result.
and Innovative Accounting Solutions. Both “We started receiving calls from companies
used us. On the one hand this
operated as independent companies with we’d never heard of because of the efficiency
their own client bases, and as entities within
was great and had fuelled and professional way we dealt with this. We
a group. By bringing the accounting function our growth. On the other, it got smacked to the tune of
in-house, Innovative Solutions Group was was dangerous. We had a lot R4 million, and instead of liquidating, we kept
also saving on costs — a saving that would of eggs in one basket and employees on our books and labour relations
increase, thanks to economies of scale. needed to diversify our client good; everyone was happy.
The next company to join the fold was a base.” “The result was that business owners knew
small BEE consultancy, and the subsidiary we would protect them, and that we were
Innovative BEE Solutions was formed. fighters. We even had to say no to contracts
Today there are 17 subsidiaries in the There was a more immediate problem at because they were coming in faster than
group as a whole. Some offer services to hand though: Innovative Staffing Solutions we could open offices around the country
a Innovative Solutions Group client base, was faced with a cancelled contract, and to support them. Everything happens for a
others primarily service Innovative Solutions the employees who were, for all intents reason, provided you know how to capitalise
Group. For example, Innovative PPE Solutions and purposes, Innovative Staffing Solutions on the opportunity.”
was created because it made more financial employees.
sense for Innovative Solutions Group to “We immediately looped in the trade Scaling Lessons
source personal protective equipment for its union. Some staff members wanted to go » When you’re challenged, don’t mope.
7 500 employees itself than to outsource this back to the client. They saw their current Look to the future instead. It’s easy to get
essential function to another company. jobs as safe. We were happy to agree to that swept away by emotions and rush to solve
“Our focus has always been three-fold: without implementing restraints of trade. We problems. We took a completely different
What do our clients need? What do we need? promote job security, and you need to live by stance when we had to cover R3,6 million
What do our employees need? That’s how that, even if it means losing good employees in lost revenue. We focused on the
you grow; you need to keep asking these — the ethos comes first. business problem first, instead of rushing
questions.” “We then let the union know that we had to litigation with our ex-client. Focus
some positions we could redeploy people on the problem, and most importantly,
Growth does not come into at other sites, but we didn’t have find a solution. If you can do that, you’ll
without its challenges, and positions for everyone. The union was clear always continue to grow and open new
that they had agreed to our business model opportunities.
Arnoux’s acceptance of a
in the first place because we promised job » With big negatives come big lessons.
certain level of risk to scale security. We knew we had to make this work. When we get thrown in the deep end,
the company has led to That trust is the foundation of our business. we look for solutions. We always have,
some extremely challenging You don’t mess around with bargaining and it’s allowed us to expand beyond our
situations that Innovative councils, and for us, that relationship is operational depth.
Solutions Group has needed sacrosanct. We couldn’t break our word » Never give up. The uphill battle I faced
to weather. One of the first simply because we’d run into an obstacle, during my start-up years taught me to
even if it was a big one. never give up, which has been critical in
clients signed to ISS in
“We ended up with 10% of the workforce building this business. We suffered three
2012 ended up costing the whom we couldn’t immediately place, and months of hardship, wondering if we were
business R3,6 million one we carried their salaries until we could. going to make it. But we had worked so
year later. At the time, the That’s 32 employees who we had on our hard to build this business, and wouldn’t
loss was the equivalent of books without positions.” quit. That tenacity saw us through.
10% of the business’s annual As it turned out, having 32 staff members » What you put in is what you get out.
turnover. who could start immediately worked in As an employer, we’re strict, but we give
Innovative Staffing Solutions’ favour, and back as well. If you’re willing to work hard,
“Our process was simple: We paid our today the company always has a few extra you’ll be rewarded. For example, we run
payroll, invoiced clients, and they paid us. people on its books. a regional competition where the best
One year into the contract, and the client in The lesson? If you’re serious about drivers on our books win a Chevrolet Utility
question cancelled our service — without business growth, look for solutions, don’t vehicle. EM

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 51
EXPERT ADVICE, YOUNG
ENTREPRENEURS,
INSPIRATIONAL PROFILES
AND IDEAS CENTRE

Thanks to the
Internet, we
have access
to unimaginable amounts
of information, there is no
excuse for ignorance. We all
have the tools needed to gain
knowledge, we just need to
embrace them.”

52 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 MINDSET

EMBRACING
VITAL STATS
PLAYER:
Nicolas Bereng
KNOWLEDGE
Nicolas Bereng is a young entrepreneur with
dreams of creating not only a new company, but
COMPANY:
Brand LAIKI
ESTABLISHED:
a brand new industry as well. Here’s his advice on
2015 pursuing big, audacious (and scary) goals.
ABOUT: Brand
LAIKI aims
AS TOLD TO GG VAN ROOYEN
to combine
education and

N
entertainment in
order to create
an interest ICOLAS idea that I’m incapable of a business idea I’ll simply
in books and BERENG abandoning it. If you really abandon when things get
reading amongst is trying to care about something, it hard. I’m determined to make
South African create an carries you through the hard this work, and people can see
schoolchildren. industry times.” this, which increases their
One of the that doesn’t Here is Nicolas Bereng’s passion for it as well.
company’s really exist advice on cultivating a
chief aims is to in South Africa. winning mindset and pursuing Change your perspective.
organise events “We’re trying to establish audacious goals: My parents moved overseas
where reading the concept of edutainment in 2006, and after I finished
and learning can locally,” says Nicolas. Passion breeds passion. I’ve school in South Africa, I spent
be promoted. “It’s really not something managed to get buy-in from quite a bit of time with them
These events that exists or that people some large businesses and in Europe. Although I loved
will make use understand at present. Even partners, despite the fact that South Africa and knew that I
of modern
people who I would define as I’m young and the company wanted to return and build a
technologies
‘edutainers’ don’t necessarily is still new. I think the reason business here, the experience
like virtual and
call themselves that.” people have been willing was still immensely valuable.
augmented
PHOTO: MIKE TURNER

So how do you create a to meet with me is largely Travel changes your

reality.
new industry? because of my passion. They perspective — it makes you
VISIT: www.
brandlaiki.com “It isn’t easy,” he says. might not quite ‘get’ the look at things in a new way.
“It’s driven me to tears at concept of edutainment yet, It’s easy to get trapped in
times, but ultimately, I’m but my passion is infectious. your own environment and
so passionate about the They can sense that this isn’t to believe that there is only

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 53
LAUNCH MINDSET | ASK AL | FUNDING | FOCUS

one ‘correct’ way to do that I don’t have a ‘plan B’.

things. Changing your I’m completely committed
environment can spark to making this work.
creativity, and can even However, I still try to be
make you think on a big flexible in certain ways. I
scale. won’t abandon my dream,
but I’m open to change.
In the age of information, Business ideas change
ignorance is a choice. and evolve over time. You
Thanks to modern have to be willing to adapt.
technologies like the If you’re too married to
Internet, we have access your specific concept,
to unimaginable amounts you’ll struggle.
of information, so I always
tell kids that there is no Be willing to walk away
excuse for ignorance. We from opportunities. While
all have the tools needed it’s very important to be
to gain knowledge, we just flexible and to adapt your
need to embrace them. ideas as necessary, you

“As an entrepreneur, you

can’t afford not to read.
There are so many brilliant
books out there that can
help you along your journey.”
Reading is everything. should also be able to walk
To me, reading is one away from opportunities
of the most important when they become too
activities anyone can constricting. Don’t allow
engage in, which is why your ideas to be watered

THE SECRET TO
Brand LAIKI is focused down or changed entirely.
on inspiring kids to read This often means saying
more using urban music no to short-term success,
and new technologies. which can be hard, but it’s
Like travel, reading has
the ability to broaden your
horizons and to make you
look at things in a new
light. We might not all
important to focus on your
long-term goals.

If you understand people,

you understand business.
HAPPINESS
From starting the right business, to
have the ability to travel When you get right down managing business partners and
regularly, but we can all to it, business is ultimately
read. After school, I spent about people. When
finding your magic number, there is a
about a year just reading. you’re doing business, secret to happiness.
I went through dozens you’re dealing with

Q
and dozens of books. The people. Because of this,
knowledge I gained has it’s important to try to If I get rich will I negligible effect on your
proved invaluable. As an understand people. What be happy? happiness.
entrepreneur, you can’t are their aims? What are — JC Lately In other words: More
afford not to read. There their concerns? How can Does money equal money will make you
are so many brilliant books you help them? I think happiness? Mostly, yes. happy as long as you’re
out there that can help empathy is incredibly Research in the US poor. Once you break out
you along your journey. important. You can’t just shows that your happiness of poverty and enter a
use people. That’s not how is proportionate to your comfortable middle-class
Be committed but you create a successful earnings up until you existence, more money will
flexible. I’m very business in the long term. earn $80 000 per annum. not make you happier.
passionate about the EM Thereafter, incremental These are the top three
business, so I always say income gains have a for old folks:

54 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 LAUNCH
that leaves approximately their responses aren’t always
LAUNCH R2,7 million for reinvestment, as quick as I would like).
CO-ORDINATES which is enough to keep your — Mike READ THIS
capital amount in touch with If you have any perception of Alan Knott-Craig’s
inflation for 50 years. unfairness regarding effort/risk latest book, 13
The balance of R2,7 million vs reward, deal with it NOW! Rules for being an
(after tax) is for your living You can’t do so later. The best Entrepreneur is now
costs. In South Africa, R2,7 approach is honesty. Call your available.
million will afford you a lifestyle partners together. Explain your
that allows you to send your thinking. Perhaps argue for
kids to a great school and 25% ‘sweat equity’ for yourself.
BY ALAN
university, to travel overseas a Everyone dilutes accordingly.
KNOTT-CRAIG
couple of times a year, and to Ideally cut a deal whereby you
Successful businessman, live in a comfortable house. have an option to pay back all
bestselling author and Over time your living costs their loans, plus interest, within
social entrepreneur.
(and inflation) will eat into your six months, and you get 100%
Named a Young Global
Leader by the World capital amount. After 50 years of equity (unless they quit their
Economic Forum in 2009,
and now passionate about

“You need to be 100% sure

sharing what he wishes he
knew when he started his
own business.

@alanknottcraig that you have some ‘edge’ WHAT IT’S ABOUT

that makes you different from
www.bigalmanack.com
It’s easy to be an
entrepreneur. It’s
everyone that came before you also easy to fail.

(and failed). Otherwise you will

What’s hard is
being a successful

fail. What is your advantage that entrepreneur.

For an

is different to everyone who entrepreneur, there

is only one important

came before?” metric of success:

Money. But life is not
only about making
money. It’s about
» I wish I’d spent more time you should be down to nil, jobs and join full-time). being happy.
with family. assuming you earn zero other Equity dissent must be This book is a
» I wish I’d taken more risks. income in that time. resolved long before the collection of tips and
» I wish I’d travelled more. In 50 years, you will probably business makes money, wisdom that will help
Therein lies the secret to be dead. If you’re not dead, otherwise it will never be you make money
happiness. Spend time with your kids will be able to support resolved. without forgoing

Q
your family. Take risks. Travel. you (because they love you and happiness.
But first, make money. Don’t they have a great university What do you think of
do any of the above until you’re education). WiFi in taxis? GET IT NOW

Q
making enough money not be — Ntembeko To download the free
stressed about money. I am the sole director It’s a good idea, but not original. eBook or purchase

Q
of a company (the Before embarking on a start- a hard copy, go to
What is the magic others still have up, you should survey the www.13rules.co.za.
number? — Mushti full-time jobs and don’t want landscape for competitors. Just To browse Alan’s
The magic number is to be conflicted) and there is because there are none doesn’t other books, visit
the amount of money you need pro-rata shareholding based mean no one has tried your bigalmanack.com/
to not worry about money ever on our initial shareholder idea. books/
again. loans. However, I am putting It just means that everyone
If you don’t need toys like in most of the hard work, that tried has failed.
Ferraris, yachts and jets, the together with one of the You need to be 100% sure
magic number is R130 million. other actuaries. How best that you have some ‘edge’ ASK AL
Here’s the math: R130 million do I manage the director/ that makes you different from Do you have a
will earn R9,1 million in interest shareholder dynamic? I everyone who came before you burning start-up
annually (assuming 7% interest). obviously want to make as (and failed). Otherwise you will question?
After tax that is R5,46 million. much progress as possible but fail. What is your advantage that Email: alan@herotel.
Assuming you need 50% there are times when I need is different to everyone who com
to maintain a good lifestyle, the input from the others (and came before? EM

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 55
LAUNCH MINDSET | ASK AL | FUNDING | FOCUS

ARE YOU
FUNDING
READY?
Q&A
Keet van Zyl, one
of South Africa’s
top Venture Capital
investors unpacks
what he looks for
in a start-up, what
your pitch deck should include,
and the red flags that investors
walk away from. Would your start-
up make the cut? BY NADINE TODD

Darlene Menzies, founder of

Finfind.co.za and the successful
recipient of multiple rounds of
funding unpacks what she wished
she knew the first time she pitched
her business to investors.

56 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 LAUNCH

PLAYER: (friends, family and fools) to gain

Keet van Zyl some momentum in one or more
COMPANY: key traction verticals before
Knife Capital approaching the more formal
CLAIM TO FAME: early-stage investors.

Q
Keet is a Venture
Catalyst with As an investor, do
extensive high- profitable businesses
growth investment that solve real,
experience. In 2010 meaningful problems attract
he co-founded your interest? Why?
growth equity fund
Absolutely — profitable
manager Knife
businesses that solve real,
Capital.
meaningful problems attract our
WHAT THEY DO:
interest for investment as long
Knife Capital is
an independent as they are still in their growth
growth equity phase (as opposed to maturity/
investment firm harvesting phase). At the core
focusing on of any successful start-up lies a
innovation-driven good product/service and a large
ventures with addressable market for that
proven traction. product/service. This enables
By leveraging a start-up to grow or scale and
knowledge, become sustainable. Businesses
networks and that solve real, meaningful
funding, Knife problems have a better chance
Capital aims to of aggressively penetrating their
accelerate the identified target market and
international profitability is a great traction
expansion of milestone. Too many start-ups
entrepreneurial focus on building a solution
businesses

Q
looking for a problem to solve —
that achieved a
Why would you choose If I could know for sure that a instead of the other way around.
product/market

Q
to back Gazelles over start-up was going to turn into
fit in a beachhead
Unicorns, and what a Unicorn, I would obviously What separates a
market. They
does this investment strategy choose to back it over a Gazelle. have offices in good pitch from a
mean for start-ups looking for But that is just the thing: The Cape Town and great pitch?
investment in South Africa? risk/return ratio of chasing London and invest I’ve seen thousands of start-up
Unicorns are start-ups mythical African Unicorns with a via a consortium pitches through the years, and
(sometimes without an very low probability of actually of funding unfortunately most of them
established performance record), achieving Unicorn status is not partnerships, miss the mark by a long way.
valued at $1 billion or more, necessarily a viable investment including SARS The better ones contain all the
normally pre-public listing (IPO). strategy. There are enough section 12J Venture key components of a pitch, but
Gazelles are young post- entrepreneurs out there who are Capital Company: the really great ones tell a brief
commercialisation phase building sustainable high-growth KNF Ventures but engaging story that follows
businesses that are able to scale businesses requiring opportunity and Draper-Gain a ‘Hearts — Minds — Wallets’
and maintain a high revenue funding to accelerate growth Investments. narrative in a true authentic
growth rate off a decent base through access to knowledge VISIT: www. way. This includes first appealing
over a prolonged period. In the and market access networks. knifecap.com to the ‘hearts’ of potential
US, this is usually well in excess Many South African start-up investors by taking them through
of 20% year-on-year for a period investors require businesses to a journey to get them excited
of three to four years or more, have proven traction to de-risk about the opportunity. Then the
starting from a revenue base of investments to some extent (and entrepreneur has to augment
at least $1 million. My view is that many of those who don’t, do so the story with facts and a solid
in South Africa this range should after gaining a few battle-scars). business case to win their
be a sustainable year-on-year Start-ups looking for investment ‘minds’, concluding with a clear
growth rate of 30%+ for three should first bootstrap to some ‘ask’ of the funding requirements
years or more off a revenue base extent or get enough funding and how this investment could
of at least R5 million. from the so-called ‘three Fs’ positively affect their ‘wallets’.

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 57
LAUNCH MINDSET | ASK AL | FUNDING | FOCUS

Q How can an
entrepreneur
determine whether
their business is funding ready
The key components of a standard pitch deck include:

COVER SLIDE
Company logo and details. If relevant, add
anyway so what’s the point
of building a model?’… Build a
model! And make it granular.
We know there will be pivots,
the ‘one-line pitch’/tag-line.
or not? delays, underestimation of costs,
Venture capital should not be Define your company’s guiding principle. corporates who pay late, and so
the go-to funding choice for PURPOSE on. But we need to agree on the
“We are in the business of...”
everyone starting a business. basic set of metrics that reflect
It is an inspirational metaphor Describe the current problem in the market. the commercial DNA of the
PROBLEM
at the bleeding edge of What is the pain you are trying to alleviate? business at this point in time.

Q
entrepreneurship. There are
many other credible funding SOLUTION How do you alleviate this pain? Do you believe most
mechanisms out there across businesses can be
the debt/equity spectrum, and Outline your product/service. Add an bootstrapped?
PRODUCT
entrepreneurs should assess example/demo/screenshot. Yes and no — to some extent and
the criteria based on where they at certain stages of the business.
are in their business growth What are the driving forces in the market The one thing that start-ups
WHY NOW
cycle, and then gauge their that make this solution relevant now? who believe in themselves
funding readiness. A venture must jealously guard is the
MARKET Market size? Quantify the total addressable
backable business has a high management team’s equity
POTENTIAL market.
growth trajectory of at least ownership in the business. Risk
30% to 40% year-on-year for funding will generally result in the
Key competitor matrix. Who else does what
the foreseeable future with a start-up founders having to share
COMPETITION you do? Differentiation — What do you do
clear exit strategy for investors this equity with outside parties.
differently?
to realise returns of at least The more one can bootstrap
five to ten times the money while increasing value, the better
Key players in the organisation. Short
invested (in South Africa this TEAM in the long run for the founders
summary of credentials.
is most likely a trade sale to a — but not to the detriment of the
large strategic investor that can Demonstrate upward momentum and business.

Q
scale the product, intellectual TRACTION milestone achievement in some of your key
property or team by utilising its business metrics. What is the role
already established distribution of bootstrapping
channels). Entrepreneurs have BUSINESS Revenue drivers. How do you make money... versus funding in a
to ask themselves whether their MODEL Exactly? vibrant market?
growth goals can be achieved Bootstrapping is a viable option
without venture funding — in Financial projections — Summarised. for most lifestyle businesses
which case bootstrapping is the FINANCIALS Revenue, Costs, EBITDA. (Last year. This where growth is slower, but
way to go. And lastly whether year. Forecast years 1 to 5). a start-up is a high growth
the current founding team can potential company in search of a
embrace trading ownership (and What is “the ask?”. Outline what the funding repeatable and scalable business
REQUIREMENTS
would be used for. “Shopping list”.
thereby some element of control) model. If the business solves a
in the business for a financial SOURCE: Knife Capital real, meaningful problem and
partner. the business model is scalable,
In order to facilitate the it’s a question of time before
funding process, it is advisable in South Africa come through to watch one episode of Idols competitors establish themselves
for entrepreneurs to always warm referrals. It is simply to realise that many people in the market. This means that the
have the following elements not good enough to find the have an inflated sense of their window of opportunity for growth
at hand: A one-page teaser email address of a venture own abilities. There is a very and market penetration is closing,
document containing a summary capitalist and send through a fine line between a tenacious and while bootstrapping could
of the business and funding cold email expecting a positive entrepreneur who does not be ideal, by the time the start-up
requirements; and a business outcome. Study the investment take no for an answer where gets to ‘Point B’ — the goalposts
pitch deck, with a detailed mandates of potential funders, success is inevitable despite may have moved. Funding in a
financial model and a virtual build an investor universe of the setbacks, and a lost cause. vibrant market can accelerate
data room containing key preferred partners and do Start-up entrepreneurs need to growth and ensure that windows
business documentation for some homework to figure out a figure out on which end of this of opportunity are not missed.

Q
investor scrutiny. (See table) way to get referred. spectrum they are.

Q
And then: The 8020 principle Lastly: Like it or not, at What red flags
What do so many is as alive in entrepreneurship some level all roads lead to immediately warn
start-ups not today as it was in Pareto’s the assumptions behind your you off investment
understand about pea garden. 20% of start-ups financial model. We’ve heard it opportunities/start-ups?
funding? have 80% of the disruptive all from the ever-present ‘these My number one red flag is a
The largest deal origination solutions and will receive 80% projections are conservative’ culture clash. Either between
sources of start-up funding of the funding. One only has to ‘real life won’t mimic excel us as investors and the

58 E N T R E P R E N E U R M AG .CO. Z A F E B R UA RY 2 0 1 8
 LAUNCH
entrepreneurs, or subtle politics
within the entrepreneurial
team. We’ve learnt the hard
way that the one thing that you
can’t fix with money is a toxic
corporate culture. Most other
fundamental business gaps
can be closed with enough
investment. Knife Capital has
an internal [subjective] measure
for assessing corporate culture
in companies called the ‘Speed
of Climbing Stairs Index’. The
theory is that there is a direct
correlation between staff
morale/corporate culture, and
the speed at which employees
will climb a proverbial staircase
at the office. If it’s not fast
enough, we will not invest.
Other red flags include
questionable ethics, lack of
product/market fit, cash flow
management issues and
entrepreneurs betting on a
product as opposed to building
a multi-product sustainable
business.

Q
»
What specifically do
you look for in your
investments?
A Solid Investment Case:
This comprises a good
product/ service with a
competitive advantage; a
INSIDER INSIGHTS
large addressable market
for that product, a strong
management team, a scalable
business model, funding If you want funding, you
need to speak the language
to accelerate growth and
an achievable realisation
strategy.
» Awesome People: Start-up
investment is a long journey
Darlene Menzies has made it her business to understand the funding
to success and we feel that landscape in South Africa. But six years ago she was on the other side
we may as well embark on of the table, pitching her start-up to a room full of investors. Here’s what
that journey with amazing she knows now, that she wishes she’d known then.
people.
» Strong Culture: The company
culture needs to be solid I CLEARLY REMEMBER my first than 30 flights of stairs to I had prepared well and I
in order to celebrate the large pitching opportunity over get to it because as a chronic whole-heartedly believed in the
successes as well as survive six years ago. It was an evening claustrophobe I don’t do lifts. product I was pitching. But in
the setbacks. cocktail event organised by After reaching the right floor hindsight, I realise it was mostly
» Execution Capabilities: The one of the legendary pioneers and catching my breath I because I was wonderfully
value of an idea without of South Africa’s venture stepped into a room full of 30 naïve. There are some benefits
execution capabilities is zero. capital (VC) community, Brett or so high net worth individuals to being a greenhorn.
So we look for the ability to Commaille. It took place on — my introduction into the new The pitch itself went well,
execute. or near the top floor of the world of Angel and Venture I had been briefed to keep it
» Proven Traction: There Reserve Bank building in Cape Capital investors. simple and short. I described
needs to be some element Town. One of the reasons it’s Looking back, I wasn’t as the solution we had developed,
of momentum that can be so vividly etched in my memory nervous as you might expect, the problem it was addressing
demonstrated or quantified. is that I had to climb more partially, I thought, because and what the size of the

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 59
LAUNCH MINDSET | ASK AL | FUNDING | FOCUS

potential market was. I spoke resulted in some of the lingo a means of proof to the investor once a particular inflection point
briefly about the competitors becoming more commonplace that people want/need what is reached. Early stage investors
and what our differentiators — even so, raising venture you are selling. Traction is best like to invest before this point
were, what the business model capital still largely remains a measured by the number of is reached and then to sell their
was and shared our go-to- very foreign and intimidating paying customers acquired over shares once the hockey stick
market plan. I covered the size world for novice entrants. Back a defined period. growth is achieved.
and pedigree of our team, as well then I wished I’d had access to a Churn rate. If you are running Exit strategy. Venture capitalists
as my skills and experience as practical VC-made-easy glossary a business that sells products/ only plan to invest in your
the founder (aka the jockey) and and step-by-step manual as services via subscription, then business for a limited time period,
ended with details on how much a beginner’s guide. I’ve been potential investors will want to usually between five and seven
money we were looking for and threatening to write one ever know your churn rate. This refers years, before expecting to receive
what we would use it for. I was since. to the number of customers who their returns. An exit strategy is a
relieved when it was over and After surviving my harrowing bought your product and never planned approach to them leaving
in a way that will maximise their
benefit and minimise damage.
A typical exit strategy is a plan
HAVE A COFFEE OR TWO WITH A FEW SEASONED to sell the company once it has
FOUNDERS WHO HAVE ALREADY DONE DEALS IN achieved its anticipated growth
targets. In this case they may
ORDER TO GET FIRSTHAND INSIGHTS ABOUT WHAT want to know who you foresee
TO EXPECT WHEN YOU ENGAGE WITH VCs. would be prepared to buy your
company.
Term sheet. The term sheet is
felt confident about my delivery. Q&A baptism of fire, I starting continued using it i.e. those the document presented to the
A bunch of hands shot working my way through the you lost after acquiring them. start-up by the venture capital
up, which was positive. I felt world of term sheets and deal This figure impacts your growth investor once they have decided
encouraged; the hard part was negotiating and came across forecasts. Tip: make sure that they would like to invest. It
behind me. Or so I thought. many more acronyms and you have built the churn rate outlines the terms by which they
My nightmare began when I VC-specific terminology that into your forecasts so that your are prepared to make the financial
took the first question. “Great I had to learn to interpret and numbers are solid. investment in your company. You
pitch, I love what you guys are understand. Below are just a few Burn rate refers to the amount are entitled to negotiate the terms
doing. Please can you tell me of the terms I would love to have of money the business requires with the investor before reaching
a bit more about the traction known about and understood monthly to cover operating agreement. The signed term
you are getting, what your before my climb up those expenses. You can definitely sheet is not legally binding, unless
current burn rate is and how Reserve Bank building steps. expect to be asked what your stated, but rather it contains the
much runway you have.” My There are many others. current and anticipated burn final terms of the investment that
heart sank and I felt my cheeks rate looks like should you receive will be used to draw up the legal
start getting hot. I didn’t have Deck (or pitch deck) refers to the growth funding. documents for the deal. Always
the foggiest idea what he was short presentation you will give Runway refers to the number of seek legal advice before signing a
talking about. I could tell he to the investors. Guy Kawasaki, months that the business has term sheet.
wasn’t intentionally trying to a well-known American investor, sufficient cash to continue to
embarrass me, but nonetheless recommends his 10/20/30 operate before it runs out i.e. if DO YOUR RESEARCH
his VC jargon made his questions rule as an easy guide for your you have R200 000 in the bank My encouragement to
sound like enquiries about cars deck. He says make sure your and your burn rate is R95 000 entrepreneurs who are looking
and airplanes or something presentation consists of ten and you are not expecting any to raise venture capital is to
mechanical rather than anything slides, take no more than twenty immediate income from sales have a coffee or two with a few
I was working on. I put on a minutes to get through them then you have two months seasoned founders who have
brave face and asked him if he and use a font that is no smaller runway. What investors want to already done deals in order to get
would mind explaining to me than 30 points per slide. See know is how long the business firsthand insights about what to
what it was he wanted to know guykawasaki.com/the_102030_ can keep going until it has to expect when you engage with
so that I could try and answer rule/ close. Once again expect to be VCs — from the time you land the
him. That was the start of a MVP (minimal viable product). asked your current runway and pitching opportunity to when you
steep learning curve as I began This is a product developed with your future runway in terms of sign a deal and get the money
to navigate the world of early the minimum features to ensure the amount of money it will take and everything in between. EM
stage capital raising. it is sufficient to satisfy early to achieve the desired numbers.
Six years on, the South African adopters. The final, complete Hockey stick. This is a common
start-up and venture capital set of features is only designed term used to describe the kind
Darlene Menzies, CEO of Finfind,
community has matured and and developed after considering of growth curve in a start-up
SA’s leading access portal to finance
grown dramatically and there are feedback from these initial users. that an investor is keen to see. It solutions for SMEs. She is a tech
many more entrepreneur events, Traction. Traction refers to the refers to the exponential growth innovator and serial entrepreneur, the
training opportunities, start- number of people who have of things like users or page founder of three successful fintech
businesses and has raised venture
up competitions and pitching already started using your views, but mostly to revenue, capital from eight different VCs in the
coaching sessions, which has product or service and provides which is projected to occur last five years. www.finfindeasy.co.za

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LAUNCH MINDSET | ASK AL | FUNDING | FOCUS

SWEAT THE DETAILS

Launched in August 2016,
AnaStellar Brands has
seen strong growth
over a short period.
According to founders
Anastasia Dobson-du Toit
and Michelle Dateling,
success depends
on getting the
fundamentals right.
BY GG VAN ROOYEN

A
NASTASIA DOBSON- meanwhile, was working as needed to actually do something and Michelle was also keen to
DU TOIT, a qualified an optometrist and also has a with it, so we decided to start venture deeper into the realm of
pharmacist with stake in an optometry business. a business together,” says entrepreneurship.
a BCom degree A few years after successfully Michelle. The industry they settled
and Michelle Dateling, an completing their MBA degrees, As often happens, though, on was a challenging one,
optometrist, met while both both were looking to start a several members of the group but also one that Anastasia
PHOTO: MIKE TURNER

were pursuing an MBA at Wits business. withdrew for one reason or was intimately familiar with:
University in 2010. Anastasia “Initially, there were six of another, until eventually, only Pharmaceuticals. They launched
had spent years working in us — six ladies who had been in Anastasia and Michelle were AnaStellar Brands in 2016,
her family’s pharmaceutical the MBA programme together. left. Having exited the family a company that produces
company, which was eventually We all felt that there was no gain business in 2014, Anastasia consumer health products that
sold to a multinational. Michelle, in simply getting an MBA. We was ready for a new challenge target the body and its functions

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 LAUNCH
Of course, making inroads and a founder can end up marketing. We decided to recruit
into an industry that is incredibly regretting giving a big chunk a sales force to target the
competitive and heavily of the business away. Also, doctors who would prescribe
regulated isn’t easy, yet the you can quickly find yourself our products, instead of
company has enjoyed impressive in a situation where you are spending money on traditional
growth over the last 18 months. no longer your own boss. If at marketing campaigns. This was
How did the founders manage all possible, fund the business a strategy that really worked for
to establish and grow their start- yourself,” says Anastasia. us. You need to look at what the
up so quickly? Here are their most cost-effective marketing

PLAYERS:
tips for taking on entrenched
competitors. 3 Know your market and
customer
“Although we only launched late
solution is for your business. A
young business needs to see
a great ROI when it comes to
Michelle
Dateling and
Anastasia
1 Focus on what you do best
“We focus on the
development, marketing and
in 2016, we had spent a lot of
time researching and preparing
before this. We analysed the
marketing, otherwise it isn’t
worth it,” says Michelle.

Dobson-du Toit
COMPANY:
AnaStellar
sale of products.” says Anastasia.
“We don’t manufacture anything
ourselves and we don’t handle
market carefully and really
looked at our competitors. We
tried their products and took
6 Protect your IP
“A good lawyer can be
expensive, but it is absolutely
Brands
EST: 2016 things like warehousing and photos of shelves in stores. We worth the investment. You
ABOUT: distribution. When we launched knew exactly what the market need a lawyer to look at any
AnaStellar the company, we knew that we looked like, and we knew how contracts you sign, and you
Brands is a wanted it to be a South African we wanted to position ourselves need someone who can help
female-owned businesses — that the money by the time we officially started you to protect your IP. Too
South African should stay in the country and doing business,” says Michelle. many start-ups launch without
company, with stimulate the economy here. worrying about IP. By the time
a focus on the
development,
marketing
and sale of
“Equity is cheap when a start-up is young, and a founder can
innovative end up regretting giving a big chunk of the business away.
brands in
the FMCG,
Also, you can quickly find yourself in a situation where you
cosmetics and are no longer your own boss. If at all possible, fund the
pharmaceutical
sectors. All of business yourself.”
the company’s
brands are
manufactured
and packaged
However, we also realised that
we didn’t have to manufacture
ourselves in order to accomplish
4 Build intellectual property
At the end of the day, all
you really have is your brand
they come round to it, it’s often
too late. Get a good IP lawyer
and protect your brand from
within South
Africa. this. There are plenty of South and your IP, so you need to day one,” says Anastasia.
VISIT: www. African businesses with the focus on those when launching
anastellar.co.za necessary capacity, just hoping
for the business. So, we focus on
the development and branding,
your business. You need to
know exactly what you want
your brand to be. You need
7 Hire carefully
“As a start-up, we hire a
lot of young and inexperienced
which is where our strengths lie to sweat the details. Logos, sales people who we train and
and contract the rest out. Trying packaging and marketing help grow,” says Anastasia. “The
to manufacture on a large scale materials are important. You problem with this, however, is
when you are a small start-up is need to stand out and you that you can spend a lot of time
just too costly.” need to be able to compete and money training someone,
with large multinationals. We and then quickly lose them to

in a holistic way.
“We make use of a mixology
2 Don’t give your company
away
“Bootstrapping a business isn’t
spent time and money on good
packaging, for instance, even
creating boxes that are printed
a bigger company once they
have gained some experience.
Make sure that you aren’t
of targeted ingredients in a safe, easy, so saying no to funding on the inside. This adds to cost, simply training someone for the
cost-effective and convenient can be hard. However, you but helps build the brand,” says competition. Hire employees
way, ensuring continued have to be very careful when Michelle. who are committed for the long
compliance and thus effective it comes to taking outside term. It’s even worth including
results. Our products focus on
the nutritional requirements of
women throughout the various
funding. Although people were
offering us money for something
that didn’t truly exist yet, we
5 Have a clear marketing
strategy
“A start-up doesn’t have the
a clause in employee contracts
that state that employees need
to repay the cost of training if
stages of womanhood, including decided to rather fund the marketing budget of a large they leave the business within a
prenatal supplementation,” says business ourselves. Equity is business, so you need to be certain period.” EM
Anastasia. cheap when a start-up is young, strategic and targeted in your

F E B R UA RY 2 0 1 8 E N T R E P R E N E U R M AG .CO. Z A 63
BUSINESS UNUSUAL

technologies and can only be sold

in insignificant markets — is akin
to flapping one’s arms with wings
strapped to them in an attempt
to fly. Such expectations involve
fighting some fundamental
tendencies about the way
successful organisations work
and about how their performance
is evaluated.”

Consider Apple for a moment,

a company that has managed
to innovate consistently over
decades. Even its successes —

THE (REAL)
like the iPod, iPhone, iTunes and
iCloud — must have been hugely
disruptive to the basic operation
of the organisation. Every one

INNOVATOR’S of these products forced the

company to take a huge risk. And
not even a company like Apple

DILEMMA
Large companies have a problem with
can churn out consistent hits. Just
consider the Lisa, G4 Cube and
MotionMe. Consistent innovation
requires a willingness to fail.
In contrast to Apple, now look
innovation. It’s not that they can’t innovate, but
at Xerox and its Alto, which was
rather that they don’t know how to monetise the first computer to offer a
their innovations. BY GG VAN ROOYEN graphical user interface — the
basis for the operating systems
we use today. The company had
created a technology that both

T
Apple and Microsoft would refine
HE PROBLEM WITH Many believe that, according It takes a company with lots and sell incredibly successfully,
paradigm-shifting to Christensen’s argument, big of money and manpower to yet Xerox didn’t do much with it.
pieces of work is that and successful companies fail to produce a production-ready “You’re sitting on a gold mine. I
they become victims embrace and develop disruptive Apple iPhone or Tesla Model S. can’t believe Xerox is not taking
of their own success. technologies, instead banking on So, what’s the problem? Well, advantage of this,” Steve Jobs said
They are so often quoted and the innovation that made them large companies are reluctant when he was shown the Alto in
incorporated into other works, successful in the first place. to disrupt their own operations. 1979. Reflecting on the moment
that they lose their essence. A They may have been innovative They look at their existing later, he added: “It was like a veil
work’s crucial message becomes at one stage, but somewhere operations and customers, and being lifted from my eyes. I could
simplified, watered down and along the line they started fail to see the value of their see what the future of computing
even misinterpreted. caring mostly about sales. This innovations. was destined to be.”
This seems to be the is almost certainly an issue in “Successful companies
scenario outlined in Clayton M. some companies, but according want their resources to be So why did the folks at Xerox
Christensen’s 1997 book The to The Innovator’s Dilemma, it is focused on activities that not have this epiphany? Many
Innovator’s Dilemma. The book not the main issue, and in many address customers’ needs, that of them probably did, but as an
identifies a common problem cases the opposite is true. promise higher profits, that are organisation, Xerox didn’t feel
that has been around for technologically feasible, and that that the reward outweighed
decades, and makes us question According to Christensen’s help them play in substantial the potential risk. And that gets
why no one else had managed research, large companies markets,” writes Christensen. to the heart of the innovator’s
to spot it. The problem is that innovate quite effectively. After “Yet, to expect the processes dilemma — it’s not an inability to
its message is so intuitive all, they have the resources to that accomplish those things innovate, but instead a reluctance
that it leads people to jump to do it. Thanks to phenomenal also to do something like to gamble on innovation. When
conclusions. Once they have technological advancement nurturing disruptive technologies you innovate consistently, you’re
the gist of the argument, they over the last few decades, it’s — to focus resources on sure to have at least as many
simply fill in the blanks. In the become almost impossible proposals that customers failures as successes, and most
most extreme cases, the basic for a lone tinkerer to come up reject, that offer lower profit, modern companies aren’t set up
premise is usurped completely. with anything game-changing. that underperform existing to tolerate that sort of risk. EM

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