This is no fly-by-the-seat-of-your-pants, winners-know-how-to-wing-it, make-it-up-as-you-go-along rebel dissenter.
Rather, Adrian Gore is an actuary who built a business empire based on sound economic principles and a clear vision of finding a sustainable solution to a market-wide challenge. The disruption is what happened along the way.
“I’m not even sure I really think of myself as an entrepreneur,” he says — a startling statement from a man who’s held up as one of South Africa’s proudest examples of entrepreneurial success, and who speaks widely on the topic of entrepreneurship (Gore is chairman of the South African chapter of the global entrepreneurship organisation, Endeavor).
What he means, however, is that he’s not a serial start-up entrepreneur.
“What I really like is the institutional scale of large organisations and what they can do for society. Those are the two things that got me going when we started Discovery. I saw a clear challenge in society that needed addressing and I wanted to start a large organisation that could do it,” he says.
The need was to bring about a fundamental change in the medical schemes industry, which Gore, as a young actuary working at Liberty, could see was unsustainable.
“Medical schemes were running into real trouble, and as we tried to figure out how to change things to make them sustainable we hit on the profound underlying reason that things weren’t working,” he explains, before launching into an analogy that is at once so simple and so brilliant it leaves you wondering why no one thought of it before.
“Imagine you bought groceries in the same way that you consumed medical services under the traditional medical scheme model. You’d pay a monthly premium and then walk into a supermarket whenever you felt like it, take whatever you wanted off the shelf and go home. Food inflation would be stratospheric. That’s exactly what was happening in healthcare. People were paying a monthly premium, and then consuming every benefit available to them because it was in their interest to do so. If they didn’t use it, they’d lose it.”
This paved the way for the establishment of the medical savings product for day-to-day healthcare. It incentivised people to be more prudent with their benefits so they could retain what was their money, and in so doing revoluntionised the entire medical insurance industry.
It was the start of great things, but selling an entirely new concept to the market is hard work, as Gore discovered.
“I learnt that the ability to excite people about your product is critical. And I don’t mean in a counterfeit, marketing-hype kind of way. I mean in a real, academic way,” he says.
Gore was able to demonstrate the brilliance and elegance of the medical savings product concept in such a way that clients could make a clear link between what the product offered and how it could solve a problem they were experiencing.
“We were selling health economics, there was real academic rigour behind it. So we could explain to the CFO of a company why his medical scheme was experiencing health inflation and what our remedy was. When the penny dropped for people, they wondered how the old system could ever have worked — which of course it hadn’t been doing for a long time,” he says.
The pioneering nature of the medical savings account cannot be over-emphasised, but its true genius lay in its approach to incentivising behaviour, something that lies at the core of Discovery’s approach to solving problems even now. It underpins the slew of groundbreaking incentive-based innovations that were to come, including Vitality and the recently-launched Discovery Insure, with its Vitalitydrive offering. Not everyone was a fan, though.
Read Next: Meet the Dealmaker
“We were slated by competitors when we launched Vitality rewards. They said we were wasting healthcare rands on gym memberships and flights and that this money should be channelled to healthcare,” Gore explains.
It was not the last time Discovery’s detractors would be proved wrong. It was precisely the introduction of the Health & Racquet Club (now Virgin Active) membership incentive that truly launched Vitality into the stratosphere.
And since then, the power of incentivising healthy behaviour has become globally recognised. In a world where, as Gore explains, 50% of morbidity can be attributed to four lifestyle diseases that originate from three poor lifestyle choices (smoking, unhealthy eating and poor physical activity), healthcare has become intensely focused on how to get people to make healthier lifestyle choices.
“And if anything, this kind of incentivisation works even better with driving behaviour than it does with health,” says Gore, citing the success of the Discovery Insure insurance product which incentivises and rewards customers for good driving habits.
Gore’s vision is to scale the Vitality model and insurance model across the world, but while the company already has a foothold in China, the UK, the US and Singapore, he’s quick to point out that it’s in its infancy on the global stage.
Whenever the issue of Discovery’s offshore ventures arises, so too does the question of its initial ‘failure’ in launching Discovery in the States. A venture undertaken just after the company had gone public, Gore is adamant that the concept was well-received but that the size of the big-hitters and the discounts they could command meant Discovery was out-priced.
“We found we were paying 20% more per hospital event than the big guys were paying and we couldn’t compete,” he says. The company took a decision to call it a day and pulled out.
On the topic of failure, Gore has some interesting views. “I don’t buy into the idea that you need to fail first in order to be successful. I think the less you fail the better. But if you do fail, which sometimes happens, I think you should be able to start over again without a stigma. Failure is not desirable but it should be acceptable,” he says.
Americans seem to have got this right, he believes, but South Africa still punishes those who try and fail. Which leads us back to the topic of entrepreneurship, about which Gore has two deep-seated beliefs:
- Entrepreneurship is the only solution to the country’s unemployment problem; and
- Mentorship is the most powerful force for good among entrepreneurs.
On the second point he speaks from direct experience. Ex-RMB Laurie Dippenaar was chairman of Discovery for 15 years, after having originally agreed to invest R10 million in 27-year-old Gore’s idea for the company.
“When you start a business there are things that not only have you never experienced but you’ve never even considered. Many entrepreneurs think they don’t need a Board — that it’s a waste of time — but having a bunch of smart, experienced people giving you input is a gift from heaven. If I had not had a Laurie Dippenaar when I started, Discovery would be a very different company today,” he says.
He still draws on the collective input of a strong team. Discovery’s Exco meets on average for seven hours a week every Monday.
“We go through everything. Sometimes it’s a bun fight. We don’t stick to the agenda. Some things we’ll spend three hours on, other things we won’t get to. There’s rigorous debate and arguments, but it means that every week 20 really smart people are all thinking and providing input. No one is making buy/sell decisions. Everything is debated until consensus is reached,” he explains.
Reaching consensus is the path Gore prefers, which is surprising when one considers how he describes himself:“I’m actually an impatient and frustrated person. I’ve got a thin skin. I don’t take criticism well. Because of that, I don’t like to command because I don’t like the push-back that I get. So I far prefer consensus.”
One of the marks of a good leader, he believes, is the ability to instil hope, inspiration and a sense of possibility among people — and to do so authentically.
“Some of the most amazing people I work with give me a sense that ‘it is possible.’ In my best times I hope I do that but in my worst times I know I don’t. I slip into ‘Command and Control’ mode and I’m hard. But I always walk away from those sessions knowing they weren’t optimal,” he says.
But, he adds, leadership skills can be learnt. “No one leadership style is necessarily right, and it’s important to be authentic to who you are. But I do think you can identify your weaknesses and work on them. I’ve learnt how to motivate people when they are at each other’s throats by continually deferring to the common purpose at hand,” he explains.
Where he leads the company to next is clear. “We’re trying to build the best insurance organisation globally. Not the biggest, but the best. And I believe we can do it. It’s about changing financial services based on the idea of helping people to make the right choices — whether that’s to do with health, saving or driving,” he outlines.
But while he’ll accept that Discovery has come a long way, he adds, “We’re still a speck globally. There is a great deal still to build.”
This is perhaps why he finds it difficult to answer questions about what he’s most proud of when looking back on what’s been achieved: “I suppose I don’t really feel I’m in the position of having finished the race where one looks back and takes stock of it all. I’m only halfway through the marathon.”
Rich List: 2019 Richest People In The World
They’re worth billions, and their wealth continues to grow each year. Here’s the top 10 richest people globally in 2019.
10. Jeff Bezos
Net Worth: USD 139,5 billion
Jeff Bezos founded e-commerce giant Amazon in a garage in Seattle, USA in 1994. He also purchased The Washington Post for $250 million in 2013.
Bezos believes in always taking a long-term view and living in the present moment.
“I think this is something about which there’s a lot of controversy. A lot of people — and I’m just not one of them — believe that you should live for the now.
I think what you do is think about the great expanse of time ahead of you and try to make sure that you’re planning for that in a way that’s going to leave you ultimately satisfied. This is the way it works for me. There are a lot of paths to satisfaction and you need to find one that works for you.”
7 Self-Made Teenager Millionaire Entrepreneurs
These teenager entrepreneurs have already made their first million and more. How did they do it and what’s their secret to success?
1. Evan of YouTube
Evan and his father Jarod started a youtube channel ‘Evantube’ to review kids’ toys. The channel was a resounding success with other kids – so much so that today it boasts just over 6 million subscribers.
Evantube brings in more than USD1.4 million a year from ad revenue generated on the channel.
How did it start? With a father-son fun project making Angry Birds Stop Animation videos, and morphed into doing reviews on toys and video games. But Jarod’s dad is aware of the responsibility of Evan’s sudden fame and hopes to teach Evan about the importance of being a good role model for others.
“Most recently, we had the opportunity to work with the Make-a-Wish Foundation, and were able to fulfill the wish of a young boy whose dream was to meet Evan and make a video with him at Legoland,” explains Jared. “It was a really incredible experience. YouTube has definitely opened many doors, and the kids have gotten to do some pretty amazing things.”
Expert Advice From Property Point On Taking Your Start-Up To The Next Level
Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.
- Players: Shawn Theunissen and Desigan Chetty
- Company: Property Point
- What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
- Launched: 2008
- Visit: propertypoint.org.za
Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.
While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.
Risk, reputation and relationships
“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.
So, how do the 3Rs work, and what should business owners be doing based on them?
Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.
“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”
Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”
A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.
“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”
Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”
This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.
“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”
In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”
Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.
“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”
Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.
Building a sustainable start-up
While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.
Shawn and Desigan share the top five areas you should focus on.
1. Align and partner with the right people
This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.
2. Make sure you get the basics right
Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?
3. Understand your value proposition
Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?
4. Unpack your value chain
If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?
8. Don’t ignore technology
Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.
Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.
“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”
Networking, collaborating and mentoring
Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.
“We believe in the power of collaboration and networking,” says Desigan.
“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”
The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.
To find out more, visit www.ettp.co.za
Snapshots1 week ago
How Pepe Marais Went From Bankruptcy To Founding Joe Public And Becoming An Entrepreneurial Success
Company Posts8 hours ago
Changing The Shape Of What’s Possible
Snapshots1 week ago
Ian Fuhr Explains Why He Likes To Launch Businesses In Unfamiliar Industries And How He Made Sorbet A Success
Company Posts4 days ago
Designing Her Destiny
Entrepreneur Today1 week ago
Digital Transformation Should Be A Priority For Small Businesses In South Africa
Entrepreneur Today3 days ago
Why Just Having A Great Idea Won’t Make You The Next Richard Maponya
Marketing Tactics4 days ago
Useful Marketing Tactics For Growing Businesses
Cash Flow1 week ago
Financial Literacy Key To Business Success – Especially In A Tough Economy