Eight South African entrepreneurs share their secrets to success
A selection of South African entrepreneurs reveal how they managed to overcome the challenges of building a successful business.
As part of its Do Great Things initiative, financial services firm Old Mutual asked South African entrepreneurs about how they managed to build successful businesses. Here are the highlights. Question: How have you positioned your business to stand out from the crowd? By Rob Stokes, founder of Quirk
I think the key thing with positioning is that you cannot be everything to all people and it’s really difficult for an entrepreneur to accept that. After 12 years I still have not accepted it, gratefully, I think. I have a non-exec chairman who’s far older and wiser than I am. And every time I come up with an idea that’s completely out of focus he slaps me back into shape and he’s absolutely right even though it frustrates me immensely.
In terms of how to determine your positioning in the market, I think it has to be relative to your competitors. It must fit into a market need and I think most importantly it has to be born internally. What we did with Quirk when deciding what position we wanted to hold in the market was to go through a set of workshops with our staff where we asked them to articulate through a set of standard processes: what makes Quirk different, what makes us better, what makes them get up and want to come to work in the morning with a smile on their face and excitement in their brains. One must bear in mind that it is something a business needs to re-evaluate every couple of years because things change. We took that and we aggregated it. Very interestingly, I think, it was a very easy aggregation process, that the different groups of people were saying the same things. And from this we drew out a set of core values that essentially said “this is what makes us different”. These core values were then matched against the needs of the market and fortunately for us, it was a great match. That which makes us different doesn’t really exist in the market and therefore we’ve got a good market position.
If what makes you different already exists blatantly in the market or your business hasn’t got the most competitive starting point, you will need to adjust your positioning. The key thing is however to own a niche, and own it thoroughly and don’t try and be everything to everyone.
Question: What recruitment process do you follow? By Yossi Hasson, MD of Synaq
At Synaq, it is important that we hire the right personality type for the job and for the company. To pick up on a person’s personality in an one-hour interview is a difficult task, so we ask open-ended questions and try to get the interviewees to tell us a story about themselves. Some of the questions are:
Who were you as a kid?
Who was your favourite parent?
Who was your best boss and why?
Who was your most irritating colleague and why?
We ask the interviewee what gets them ticking and how they structure their day. All these questions have no right or wrong answer but they give us a very clear picture of the type of personality of that individual and the type of environment where they are going to succeed. If these two things are aligned with the job, then we know we have a candidate. We would then test for aptitude and skills and give them the relevant aptitude tests and a technical test they would need to pass. If it’s a sales position, they will have to do a sales pitch or we’ll test whatever the functions of the job are. We need to make sure the candidate has the right personality for the job function and that they will thrive within the environment of the company. This person could be a genius and be brilliant but if they are not the right fit for the job and the environment, then he/she won’t be happy and won’t shine within the organisation.
Question: How did you set up your business while still being employed by a corporate? By Matthew Buckland, founder of Creative Spark
I don’t fit into the mould of a risky, throw caution to the wind type of entrepreneur. I’m actually a cautious business owner. So what might seem like an outwardly risky move is carefully thought out. And it’s managed risk effectively.
I’ve been plotting and planning for the past seven years. I started the company seven years ago and ran it in a very low level state for a while, while I was still employed at a corporate company. On that front, my advice is to be very transparent and open with your employer. If they know you’re an entrepreneurial person within the organisation, they’ll grant you that freedom as long as you’re transparent and open with them. They should be absolutely fine with you if you decide to start another company. And of course you have to be a good performer within that organisation to get that leeway and concession. You obviously have to manage and watch conflicts of interests as well as be transparent about that.
The business grew too big for me to run it on the side and to be employed at the same time. Eventually I had to take the leap. When I say leap, it wasn’t a very high leap because I was leaping into something that was generating revenue and was showing success. I think that’s how my startup story may differ from others. I didn’t throw caution to the wind. It was a managed process.
Question: How do you develop business relationships? By Shana Kay, founder of Infointeg
I think most people have a very negative perception about networking or they think that you go to an event, you swap a business card and that’s how you form relationships. I have a very different take on that. I don’t believe in talking about your business when you meet someone, because at the end of the day people only do business with people they like and trust. It really all starts with the social aspect. You get to know someone at a networking event and then you meet them again and then you start a little courtship. You do one project, you do another one and if you see that it is working out, eventually you can look at the contracts that you have put in place. At the end of the day you need to test the waters before you jump in and sign a contract. It’s like a marriage.
Question: How did you manage the uncertainty that comes with starting a new business? By Rapelang Rabana, CEO and co-founder of Yeigo Communications
One of the most popular questions is, "How could you take the risk of starting a business?" Well, I got over the illusion that there was certainty and that there are no risks in the first place. I didn’t believe that going to a corporate and getting a job was going to guarantee me the life I wanted. None of those things are guaranteed any more and it was about dropping the illusion that someone else or a company is going to look after you. You are in a better position to control your life when you start a business for yourself and you are able run it. You know everything that’s going on with it, instead of being in a corporate company where you will have less information. So, I think people assume there is certainty and uncertainty by creating the illusion of certainty, when there really isn’t any of that.
Question: How can you collaborate with competitors? By KK Diaz, founder of Rekopane Payroll Services
We don’t have big loans to be able to employ all the skills necessary to run a particular business, so partnering with other businesses has always been key to us. And we’ve been lucky that we haven’t felt threatened or intimidated by our competition. And what we’ve actually done is we’ve adopted what we call co-opetition, and that’s cooperating with our competition to be able to service bigger clients and do bigger jobs, recognising that we’re not specialists in every field in our industry.
So, when clients require us to service partly what we do as well as things that we don’t do, we’re always happy to call on other accounting firms or other accounting and payroll software consultants so that we handle the jobs better and make sure everyone benefits.
Question: How can you stay happy and healthy? By Justin Stanford, founder of 4Di Capital
I think it’s important to retain some level of balance, no matter how hard you’re working. Relentless pursuit of success is one thing, and it’s important, but health and happiness are probably the two most important things in life. And it can be hard at times to keep that balance and to retain your perspective. So while I definitely think you need to be able to persevere and drive hard on your business, you need to also just keep sight of balance in your life and look after your health and to look after your happiness. Ask yourself, “Is what I’m doing something that I like? Am I happy chasing this objective? Is this truly going to satisfy me, or am I just chasing the money?” Because often in my experience, chasing the money isn’t the best choice whatsoever, and I’ve had lots of opportunities where I could have taken a decision which would chase the more obvious short-term money, but in the long term would be less fulfilling or possibly even less successful, so I think it’s quite important to retain that objectivity and to be conscious of the decisions you’re making.
I think the most practical example that goes right back to the beginning for me is that, when I wanted to start a business, when I was 17 or 18, I was pretty much told that I would need to move to Johannesburg because that’s where all business took place, it was the centre of commerce, that’s where all the money was. I thought hard about it and decided that I would rather stay in Cape Town, against the odds and against conventional wisdom. And so I did, and I still managed to make a success of it in Cape Town. And I’m glad that’s the decision that I took, because on the whole I feel that I’m much happier and healthier for it. So one needs to be careful of what motivates you when you make decisions and how you balance your time and your life. Be ruthless and be judicious with your energy and your time. Make sure that what you focus on is working towards happiness and that you’re not sacrificing health and that you don’t get caught in the trap of just chasing the money.
Question: How do you allocate your limited marketing budget in a startup? By Jason Xenopoulos, CEO of Native
I am talking to a large extent from personal experience, and I think that one of the most important things for any new startup venture is to really hold onto to the cash, particularly when it comes to marketing. I think that we are too often concerned, particularly when starting an online startup or a mobile startup, about the fact that you need to be first. You need to have that first-mover advantage in order to gain a critical mass of users in order to win the war, and so you spend a lot of money at building the brand, staking your claim and getting there first. But, in fact, the bigger danger is that you are too soon and if you spend too much money on marketing in the early days the likelihood is that you are going to run out of steam before your product or service comes of age.
I have seen a number of businesses that were great ideas but they spent all their money in eighteen months and went bankrupt before the market caught up with the idea. Smaller competitors of theirs who spent much less money and manage to just kind of crawl along for the full duration of those three years actually ended up winning the war because they were still there when the floodgates opened.
So I think that as a startup you need to be very, very careful about the way you use your cash, particularly in terms of marketing your brand. You need to try and give yourself as long a time frame as possible for your product or service to mature for the market to really grasp what it is you are offering them, particularly if it is a new product or service that they have never been exposed to, where you are answering a need that the consumer doesn’t even know they have. And I think if you can do that, if you can trust in the fact that you aren’t suddenly going to have your lunch stolen away from you by a big competitor who gets there first, then you have a much better chance of surviving.
I think that this notion of the first-mover advantage is very misleading. I think the truth of it is that we are talking about first right-mover advantage. Yahoo had first-mover advantage, they seemed indomitable, but Google had something better. The same with Myspace and Facebook, so I think that when it comes to building your brand or product or service in a new startup, you really need to give yourself as much time as possible to build that brand.