One of the finalists in this year’s Sanlam/Business Partners Entrepreneur of the Year awards, Michael Eilertsen was bitten by the entrepreneurial bug early in life. His first venture during his university days was selling R10 breakfast packs to morning commuters heading to Sandton. The breakfasts soon came with a daily pamphlet.
A born salesman as well as entrepreneur, Eilertsen introduced himself through the pamphlet and gave the week’s update of business lessons he had learnt. He soon had business people offering him advice and getting involved, and some of those early clients, like Grant Anderson from Investment Cars, would go on to be clients of Eilertsen’s bigger ventures.
The mark of any true entrepreneur is the ability to recognise a gap in the market and then fill that need. For example, his breakfasts needed coffee, but how could you keep coffee hot and fresh on the side of the road? “I found out about these packs that Nestlé had bought for about R10 000 each, but they were complicated to use so Nestlé sold all 10 packs to me for R500.”
It took some time and adjustments, but before long Eilertsen was selling steaming hot coffee to commuters, along with nine fellow students/employees – and he wasn’t yet 20. Once again, he looked at what he had and determined what else he could do with it.
“This has always been my way of doing things. You can’t be too fixated on what you’re doing right now. There are always opportunities everywhere.”
He travelled to the US and secured the rights to the Rocketman packs, and Major Tom packs for beer. Nestlé, SAB and Coca-Cola became key clients, and soon Eilertsen’s crew was dispensing coffee, beer and soft drinks at sports stadiums, promo events and concerts across South Africa.
“It was hard work with low margins, and when SAB and Nestlé offered to buy the rights and existing packs in 2006, I said yes.”
Never idle, Eilertsen soon had another venture, Boiling Point, on the go. It harkened to his days of selling coffee to commuters.
“I loved marketing and I developed an idea that would provide commuters with coffee, and my clients with an opt-in database.”
His first client was Investment Cars, which sponsored a Ciro booth outside the gated community of Dainfern. Commuters received a free cup of coffee for their business cards, and Investment Cars got first hand access to wealthy Joburgers, sending an SMS and email within the hour stating “the only thing hotter than our coffee is our cars.”
“The return on investment was excellent and Investment Cars sold between 15 and 30 additional cars a month based on those leads,” says Eilertsen, who soon had a database of 300 000 names. “I was sitting on a gold mine. I realised that the real value of what we had was not the early morning coffee, but this database.”
Evolving the model
This is where his current company, Live Out Loud, came into being. “I wanted to offer an exclusive luxury product – what better than an invite-only magazine that provided a direct channel to the elite for our advertisers? The readership was small, but we could guarantee the magazine was going to the right people.”
Knowing next to nothing about publishing, Eilertsen sold Boiling Point and managed to scrape R980 000 together. “I thought I had decent start-up capital. No one told me you couldn’t start a magazine with only R980 000. We were broke within the first six weeks.”
By rebonding his house, he managed to keep the business going (only just), but Eilertsen knew he needed to adjust the model. “Again, we went back to where our real value lay – our database. We developed the idea of events that would give our advertisers direct access to those same execs and CEOs.
“The exclusivity of the events would get our readers there, and we partnered with our advertisers to supply their products in exchange for an advert and the opportunity to be involved. The events cost us a fraction of what they would have without this arrangement, and our clients networked with the people they were targeting.”
While Eilertsen’s team was initially concerned about their lack of experience in events, the business today is a luxury eventing company with a flagship magazine. Eilertsen has even added travel to the portfolio, since many guests live outside Joburg.
Clients include Bentley, Nedbank and Absa, and Live Out Loud’s two signature events, Supercars and Jets and Jewels, remain top of each year’s social calendar.
“You don’t need to start off wanting a huge empire. You just need to be the best at what you do at that time.” The rest, it seems, will follow as long as you’re always willing and able to take the next step.
Player: Michael Eilertsen
Company: Live Out Loud