How wiGroup Keeps Doubling their Turnover

How wiGroup Keeps Doubling their Turnover

SHARE

 Vital stats

The growth stats

  • 2008: wiGroup makes no money. It’s living off investment finance while developing and tweaking the platform.
  • 2011: Breakeven
  • 2012: R7 million
  • 2013: R20 million
  • 2014: Projecting R40 million
  • 2015: Goal is R65 million
  • 2016: Goal is R100 million

 

What strategic decisions did you make in your start-up phase that are still paying dividends today?

The first and biggest has been taking great care to get the right people onboard from day one. Businesses are essentially their people. If you get the people part right you set the foundation and the environment for success.

The second was to find the right funding partner. I was 24 years old and I’d left my job to start something on my own. I’d been working for another start-up and realised that I wanted to be in that environment – I wanted to be an entrepreneur, taking risks and creating new things.

The problem was that I had only a few months of rent in hand, and I needed a few million rands to get my idea, which centred on point-of-sale transactions from a mobile device, off the ground. I needed an investor, but I also didn’t want to just take money from anyone.

I wanted an investor who would add strategic value to my business, specifically a company with retail and point of sale (POS) relationships in place. When I met Capital Eye Investments (which was UCS Group at the time) I knew it was a good match.

They were looking for innovative software companies to invest in, and I was looking for a company to add strategic value to my business. That relationship still holds today, and it’s been a strong contributing factor in our growth.

Did your start-up strategy align with today’s growth figures?

Absolutely… not. The initial incarnation of the business was wiWallet, a solution that enabled you to load your credit card details onto your mobile phone and pay in participating stores using your mobile phone.

Initially, we had partnered with some small innovative coffee shops, and launched on 8 August 2008: I remember walking into Café Neo and buying coffee using my phone linked to my credit card. It was an incredible feeling.

 

Entrepreneur-Newsletters
Entrepreneur’s daily tips & insights delivered direct to your inbox.

However, wiWallet was a consumer play and one that was probably seven years ahead of its time. We learnt a lot of very quick lessons in launching the business, the key one being that big retailers were not going to integrate a point solution to their POS for every new application that launched.

It was too risky for them; they were wary of backing the wrong horse knowing that there would, in the near future, be a slew of mobile applications all wanting to integrate to them. Equally, the banks were very hesitant about the idea.

We realised that what the market really needed was a platform that would sit between the retailers’ POS and the growing number of applications that would begin entering the space, so we pivoted our business from a consumer play to a business to business play.

This is when we changed the name to wiGroup, and built our new platform, an open and interoperable solution that enabled retailers to integrate once to their POS to then be able to accept any mobile transaction application, including vouchers, coupons, payments, loyalty and money transfer applications.

From the outset we knew that we needed to attract the big retail players for our business to be successful. Once you’ve got two or three major clients on board, the rest will follow. But it’s a chicken and egg situation. We’re a platform for mobile applications aimed at the retail market. We needed apps on our platform to attract retailers and we needed retailers to attract applications.

How did you get your foot in the door?

Step one was proving we had the technology. Step two was making sure that we were able to articulate the value proposition delivered by the wiPlatform clearly and at the right level within the big retailers.

In any software business, real growth comes when you can scale the product. Your development costs are high upfront, but at a certain point your sales exceed your investment, and because you aren’t manufacturing a product, this results in great margins. But it’s dependent on uptake.

It’s also a slow process – you can spend up to a year going through the motions with a retail group before an agreement is reached.

Our value proposition resonated with the retailers. They don’t want to spend months vetting and negotiating with each app developer that presents them with an idea. Similarly, for app developers, getting an integration to a large retail chain is extremely difficult.

Our platform solved both those problems. It works on a similar principle to Apple’s iOS or Google’s Android in that it enables app developers to build on to it and get reach and scale. In our case this reach and scale is through the retailers that have integrated to our platform.

Read Next: How to Get Clients to Buy More Stuff

How did you sign your first big deal?

Bevan-Ducasse_WiGroup

With a lot of hard work, patience, persistence and timing. We’d proven the technology through our pilot with Vida e Caffé, which is a brand people want to associate with, so we had something innovative to show Shoprite and Pick n Pay, the retail groups we were targeting. We also understood that landing such big clients takes time, but they were vital to our growth plans. You need to be prepared for a lot of meetings, and reiterations of the concept. That’s how big corporates work, and you have to play by their rules. You won’t sign the deal if you can’t put in the time.

We also had a number of things going for us. First, we were speaking to them at a time when they were beginning to be approached by app developers on a weekly basis. The need for our platform was clear. Second, both retailers knew that enabling mobile transactions at their POS was strategically important.

What is interesting is that Pick n Pay and Shoprite went live on our platform within a matter of weeks of each other, but they each launched with very different use cases. Shoprite launched with their mobile coupon offering, Eezicoupons, and Pick n Pay launched with MTN Mobile Money.

Through the Pick n Pay integration to wiPlatform, MTN Mobile Money users are able to deposit, withdraw and pay from their mobile bank account at any Pick n Pay till point across South Africa. The success of the MTN Mobile Money integration opened doors for discussions with other tier one networks such as Vodacom.

Having the two biggest FMCG retailers and two biggest networks on our platform was the cornerstone of our growth strategy, and once we had them, the momentum really shifted.

What was your most strategic decision when it came to laying the foundations for your growth?

Our integrations are essential. Who we’ve targeted was, and is, crucial to our goals. So important, in fact, that having them as clients is almost priceless. Getting them on board was therefore essential, and we were willing to lower our revenue to ensure the integration and strategic positioning we needed happened.

We didn’t want to set our price point too low though – once you do that, it’s very difficult to raise your prices – so we offered them a good discount instead. They know they’re getting a discounted rate, but we won’t need to change our price point later.

Always work out what your most important strategic goal is. Ours wasn’t getting as much money in the bank as quickly as possible. I’d rather invest heavily in the business this year to see our goal of R100 million realised in 2016, and to do that, the platform needs to grow quickly and sustainably.

Our whole growth model has followed this same path. From 2008 to 2010 we were living off investment capital as we had projected. In 2011 we broke even. By 2012 our turnover was R7 million, which grew to R20 million in 2013. We’re projecting turnover of R40 million this year, and R100 million by 2016.

Our investors have seen a good return on their investment, and all growth for the last two and a half years has been organically funded through our own cash flow.

At this stage in the business, I’d rather invest a few million into new product ideas that add value to our platform and our clients than keep that money on our bottom line. We spend a lot on developing new opportunities and solutions to support and stimulate the market and on enhancing our platform.

How is your current growth stimulated?

Bevan-Ducasse

MTN Mobile Money alone has over one million users in South Africa, generating huge transaction volume through our platform. Our business model supports exponential growth as we leverage the marketing and expanse of the applications that integrate into us.

Being POS integrated, our mobile coupon capability enables our clients to close the marketing loop with any campaigns they run.  We’ve found that mobile money transfer, digital coupons, vouchers and loyalty have driven the growth, and our belief is that payments will follow once mobile transacting has become more widely accepted.

Start-up app developers are increasingly finding wiGroup when they carry out their research ahead of launching their businesses. The capability our platform offers them is clear. They’re approaching us to get onto our platform, and some of them are developing amazing, leading edge apps. It means we’re not doing it alone – we’re all growing together, and benefiting from joint exposure to the market.

Similarly, when app developers approach our clients, the retailers are sending them our way. So for example, if a developer approaches KFC with a loyalty programme, they direct them towards us, since KFC tills are already integrated with our system. We currently have R1,9 billion in transactions that have gone through our system, and it’s growing each day.

Read Next: 4 Ways to Find More Work

What additional value do you offer your clients?

Over and above the fact that they just need to integrate with one platform, we give our clients unprecedented access to track and engage with their customers.

We have built tools and products that can link to basket information and deliver deep analytics and reporting. The reporting is real time and invaluable to retailers and restaurants.

We also work hard at finding applications that will suit our retailer partners and assist in both pairing the application with the retailer and allowing them to leverage from the benefits.

How much focus is placed on development at this point?

It’s still our major focus. Of the 50 employees we have, 20 work on development, while the remaining 30 are in admin, sales, business analysis, account management and project management.

All new product sign off and direction resides with myself, but everyone in the company provides input and ideas, ensuring the product and value is always prioritised.

We also have a team that deals exclusively with agencies. So for example if Unilever and Quirk develop a campaign that rewards customers for buying Nivea products, we’ll build the app that supports the campaign.

In addition, mainstream apps will be hitting soon and we look forward to seeing the innovative and exciting ways that these applications make use of our platform. At this point the market is in its infancy in South Africa.

This is an easy and convenient platform, and we’re ready for even greater growth, particularly because we pay a lot of attention to what consumers want, and to what our clients need.

Global expansion

  • wiGroup is currently in discussions with one of the biggest switching companies in Nigeria. With an agreement already in place to integrate the company’s tech into one of Africa’s fastest growing economies, wiGroup’s reach into Africa is poised for explosive growth.
  • wiGroup is currently launching with partners through the SADC region.
  • Talks with large retail groups in the UK have already begun. 

Dealing with competition

wiGroup-competition

wiGroup might be a first mover, but success breeds competition. Ducasse’s strategy to deal with competition is threefold.

Continue to expand wiGroup’s platform as fast as possible.

By definition the strongest competitive advantage a platform can have is reach — Facebook, Google and Apple have all proven this model.

Add Value

Continue to add valuable products to the platform,always striving to be innovative and leading with creative ideas. Every new product wiGroup bolts onto its platform puts it another step ahead of anyone else wanting to enter the space.

Ensuring excellent service and relationships.

“We strive to be the most reliable partner to our clients, always providing them with excellent service,” says Ducasse. It’s easy to pay lip service to the importance of focusing on the customer, but in wiGroup’s case, there is a strong understanding that through these relationships the company ensures clients trust them, and more importantly, like working with them.

“We believe this is critical to keeping their business and assisting us in gaining further market share through their positive word of mouth.”

Taking advice

“I read a lot of business books and biographies of top entrepreneurs. I’m inspired by the drive for perfection, out-the-box thinking and passion of people like Steve Jobs, the genius of Larry Page and Sergey Brin, and the energy and passion of Richard Branson.

“There are also so many excellent business lessons in top business books. We’ve built the entire company around Jim Collins’ advice in Good to Great on finding the right people and getting them on the bus. One person doesn’t run a business, especially as we grow. A business is only as good as the team you have, so make sure that you’re hiring well — and giving your employees a great environment within which they may excel.”

 

Nadine Todd
Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.