- Company: wiGroup
- Player: Bevan Ducasse
- Est: 2007
- Visit: wigroupinternational.com
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.
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.
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How did you sign your first big deal?
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?
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.
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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.
- 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 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.
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.”
“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.”
Growing Your Revenue In A Slow Economy
The dos and don’ts for your business.
The most dangerous counter to the unpredictability of any economic crisis is… doing nothing. The same everyday attitude can ruin any company. But what’s the next most dangerous behaviour? Clumsy or uncontrolled reactions.
What is needed, therefore, is finding and embracing the less common but noteworthy opportunities that unveil themselves during slow economic times.
You can do this in two stages.
- First: steady your company by sheltering it from associated dangers and make sure that it has the cash flow needed to stay afloat during the crisis.
- Only once you’re confident that you’ve adequately prepared for the worst, should you approach the second stage: looking for ways to grow your revenue over time.
An article by Gulati, Nohria & Wohlgezogen in Harvard Business Review (2010), indicates that, “…a subset that deploys a specific combination of defensive and offensive moves has the highest probability of breaking away from the pack. These companies reduce costs selectively by focusing more on operational efficiency than their rivals do, even as they invest comprehensively in the future by spending on marketing, R&D, and new assets. Their multipronged strategy…is the best antidote to a recession.”
Stage 1: Steady your company
In the first stage of stabilising your business in a recession (especially one that could continue to slide), take the time to methodically evaluate its weak points.
- Test out a few economic scenarios both at department level and across the broader business. Assess how each might impact your organisation, and cautiously calculate the financial effects. Then find ways to reduce your exposure. Make sure that you have sufficient cash flow and access to capital, to sustain your financial stability.
- Make a strong and targeted effort to lower expenses and boost efficiency. But, while it’s imperative to be fast, it’s also essential to have a rational, cautious, and well-thought-out plan. Don’t make radical cuts that will damage your business in the long term – by, for example, risking valuable future opportunities.
- Remember that cutting expenses boosts profits, but only if the sales price and the quantity of sales stay the same. If a reduction in expenses affects the quality of your products, you may need to consider lowering your price to maintain sales. This is critical as it can cancel out any potential returns and ultimately end in a loss.
- As your customers’ needs change, re-evaluate your pricing strategies and product mix. This may mean raising prices through effective branding, like Coca-Cola and Sony have done. These organisations have such strong brands that they can get away with charging higher prices than many of their competitors… all while growing their market share and preserving quality status, even during recessions.
- You can sell off non-core businesses and peripheral (or poorly performing) operations. Don’t hold out for ‘better times’ in the hope that you’ll secure the price you would’ve gotten when the economy was stronger. If the company isn’t essential to your goals and it increases your risks in the recession, sell it now.
Step 2: Prepare for the future
- A common challenge that many businesses encounter is inflexible or obsolete business models. Reconsider yours. Innovation in technology and media is constant, yielding a perpetually evolving business landscape. The traditional publishing industry is a perfect example of this.
- Do things differently and don’t be afraid to stand out by marketing your product in a novel way. Take Jordan’s Furniture: a US furniture outlet that sells more furniture per square foot than any of its competitors thanks to a strategy called “shoppertainment”.
- Consider pursuing transformative opportunities like mergers and acquisitions. If your business is relatively strong financially and strategically, a recession can be a rare opportunity to boost your competitive position. According to a Harvard Business Review article by Rigby and Harding (2009), “…companies that acquire in bad times as well as in good outperform boom-time buyers over the long run.”
Bottom line? Businesses that can find calculated and clever ways to balance lowering expenses to endure today and carefully planning and investing to grow tomorrow are most likely to survive and thrive after a period of economic recession.
How To Increase Profits By Focusing On The Needs Of Customers
How a water softener company boosted sales with moves as simple as changing its ecommerce platform and hiring an AdWords advisor.
“Growing a small business is hard. If it were easy, everyone would have a business,” says Tom Tarasiuk, who knows first-hand the difficulties that small businesses go through when they try to succeed at online marketing.
As president and owner of Discount Water Softeners, Tarasiuk has helped his company streamline its efforts to provide an outstanding user experience and increase sales. This undeviating focus on the customer and a willingness to take risks have enabled the business to grow.
Here are those all-important strategies he’s used:
Customer-centric product development
Tarasiuk says that a key tactic in his company’s growth has been the work by leadership to keep overhead costs low. One way that’s been done is by eliminating the usual middle men and purchasing water systems directly from the manufacturer.
But even more important has been the company’s customer-focused philosophy. The company keeps its overall inventory minimal and develops products and features that will meet the needs of its clients. It’s done this by avoiding stocking merchandise that won’t sell because people don’t need it.
As Tarasiuk told me: “Happy customers are a critical part of our growth. We base our additional or new products on what customers are requesting or what areas of the market need a void filled.”
Improving the user experience
The company’s emphasis on the customer plays out in its online marketing strategy. Case in point is when managers decided in 2013 to switch ecommerce platforms. They had been using Volusion and transitioned to Magento.
Tarasiuk says they wanted a framework that would allow them to customize various types of content (images, videos, etc.) on any of their pages. Their goal was to improve the user experience and increase conversions. They did have some concerns about the switch, he says. They feared Magento would be less user-friendly on the back end. But without taking risks, an organisation cannot grow. The result? After changing to Magento, the company’s sales nearly doubled.
And it saw its organic SEO increase noticeably with almost no additional effort. At that time, the company completely redesigned its website. Again, prioritising the customer was key. The location of optional items and upgrades on the site was improved, for instance.
This allowed customers, Tarasiuk says, to “customise their orders and learn what upgrades would benefit them the most for their needs.” The site redesign, he says, increased company sales by as much as 15 percent.
Saving time with email
Another major part of refining the user experience and cutting costs at Discount Water Softeners entailed enabling customers to resolve some of their issues through email instead of over the phone. At one point, customer service reps were taking 45 minutes to handle each call that came through. Tarasiuk says he didn’t have enough employees to handle the volume of the calls. And hiring more workers would mean increasing overhead costs.
Instead, he solved the problem by allowing people to ask their most common questions through email. Through Magento, the company added PHP forms for people to fill out and used Crazy Egg to determine the best places on the site to put the forms. The company also increased sales by driving traffic to the forms by using Google AdWords. This solution cut, by 30 minutes, the time that its reps spent on each call, Tarasiuk says. It allowed the reps to handle a higher volume of calls without adding more employees.
Google AdWords has been crucial to growth.
Google AdWords has been crucial to the growth of Discount Water Softeners. In fact, Tarasiuk goes so so far as to call AdWords “essential to efficient performance and high ROI for sales.” He says he believes every company should have someone who is skilled at leveraging AdWords to its full potential.
Tarasiuk’s business has been using Google AdWords for over 10 years, and he describes learning how to leverage this tool as “pivotal in our growth.”
When the company first started using AdWords, it wasn’t selling much and was spending only $20 per day on the tool. But then Tarasiuk found Gail Gardner, an AdWords advisor teaching pay per click strategies at the now-defunct SearchEngineForums, and the situation changed. The advisor told him that if he wanted his company to be “discovered,” he should be spending at least $70 to $80 on AdWords per day.
Following that advice, Tarsiuk says, has revolutionized his company’s online presence and has been a decision he’s never regretted. At one point, when Gardner changed her work and switched to managing PPC accounts, the company had to go without an advisor for a period and instead rely on Google support. That situation wasn’t ideal because it wasn’t clear whether Google was prioritising the company’s campaigns or focusing on its own interests, Tarasiuk says.
Google did help keep Discount Water Softeners going, but it also didn’t see a marked improvement in its campaigns at the time. The assistance of an advisor was what really made a difference in itsprofits. So Tarasiuk contacted Gardner and asked for a recommendation for a new AdWords manager.
“That original AdWords advisor was essential at not only jump-starting our internet presence, [but] she showed us how to use and manage AdWords,” he says.
While there is no formula for growing a business successfully, there are principles that can guide you along that way. Take smart risks, and make your decisions based on what will help your customers. Because of the time and money Discount Water Softeners saved on strategies it adopted, it has been able to use the extra resources it gained to launch a new line of high-efficiency water softeners.
The company has also been able to diversify its merchandise, improve its product and benefit the environment, Tarasiuk says.
“You miss 100 percent of the shots you do not take,” he says, quoting hockey star Wayne Gretzky.
This doesn’t mean you should be reckless. It means to get good advice, and then take a leap of faith based on that information. If you don’t, you’ll never know what you could be missing.
This article was originally posted here on Entrepreneur.com.
Why Mitigating Your Risk Can Drive Up Your Fleets Profits
Business naturally comes with risk. How you mitigate that risk could mean the difference between a sustainable, profitable enterprise and a business surviving on the edge. Here’s how fleet management companies handle their risk.
“Whether your fleet consists of ten vehicles or 1 000 plus, it always boils down to the cost of maintenance, fuel and cost-efficient routes,” said Dr David Molapo, head of fleet management, vehicle and asset finance at Standard Bank, at a round table event hosted by Standard Bank to determine key impacts on profitability and growth in the fleet management industry.
To keep costs down and profits up, focus on:
- Mitigating fuel costs for business growth
- Implementing tools and telematics to save on transport and fleet spend
- Training and monitoring drivers to ensure driver and load safety
- Mitigating risks such as hijacking, driver behaviour and delivery delays
- Bringing services in-house
- Complying with legislation.
Attracting and training quality drivers
Attracting quality drivers is one of the industry’s main challenges. Businesses often have to recruit drivers and upskill them to become quality, reliable drivers.
“SAB has a programme where a driver will be sourced and run on a SAB truck for a year to 18 months,” says Con Conradie, country commodity manager: Fleet for SABMiller.
“He is assessed over a long period and once he meets the grade he can buy his own truck and receive a ten year contract.”
“We place our drivers on advanced driving courses and all our drivers are allocated to a specific vehicle, which has reduced our insurance costs,” says Dorin Charalambous, MD of DSC Transport.
Preparing for the risks
“We have branded our reps’ vehicles with a full body wrap,” says CEO of Nature’s Choice, Greshan Mandy. “Since then we have not had a single case of theft. It’s advertising for your business as well as an immediate deterrent.”
“We contracted with Driver Check to monitor our fleet and their behaviour on the road,” says Mandy.
“We also have cameras in the vehicle to watch the vehicle and the driver,” he adds.
“These can deter the drivers from driving recklessly. If your driver has not done anything wrong the camera can prove his innocence,” says Reinard Basson, financial manager for Shoprite Group Transrite National.
Delays in delivery
“A truck is scheduled to do a certain route and that whole route has been timed, from the moment it leaves the depot, when it stops at an outlet and the time it takes to offload,” says Conradie. “Each vehicle has a slot at the outlets and the vehicles have mechanised forklifts. We levelled the pavements and widened the doors at our outlets so that there would be no delays,” says Conradie.
“Sometimes we deliver palletised goods and the next day it is a delivery of cement bags. Often there is no one to assist with the offload, which results in delays while you wait for assistance,” says Hennie Engelbrecht, director of Kopano Fuel.
The need for specialist services
Transporting for niche industries is in demand, with specialist transport services required for niche products.
“Cost is important to us but delivering the product the way we want it delivered is also key,” says Carel Ganger, financial director for Ceva Animal Health. “We’re transporting a high value product and there’s a need in the transport industry to do something specific for cold chain.”
Bringing services in-house
“We used to use sub-contractors to get our product to the market as quickly as possible. Courier costs were becoming exorbitant and we were being impacted by the labour strikes in the transport industry,” says Mandy.
“We made a decision to bring transport in-house and we are now saving around R300 000 per month.”
Complying with legislation
“Our legislation and regulations are changing and many municipalities across the country are taking pride in maintaining their road infrastructures and ensuring that vehicles carrying abnormal loads have the right permits in place. This is beneficial to the industry,” says CEO of Matalana Transport, Comfort Padi.
“Customers are also ensuring that suppliers become compliant with the current legislations, such as ensuring that transport suppliers are ISO 9001 accredited and compliant.”
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