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Bakos Brothers: Ryan Bakos

When Ryan Bakos suggested to his uncles that it was time for the family business to start making green furniture, they pointed out that it really was not a popular colour.

Monique Verduyn

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Ryan Bakos of Bakos Brothers

The Bakos Brothers decorating Centre – an eye-catching corner property in Dunkeld, Johannesburg, is a well known landmark. It offers decorating, design, planning and furnishing services, and also serves as the headquarters for the family-owned furniture business which has showrooms in Sandton City, Design Quarter Fourways, Pretoria and Nelspruit. Several more are in the pipeline following a total refurbishment of the company by Ryan Bakos, the young and super-energetic new face of the iconic luxury furniture brand.

The first Bakos Brothers retail store opened its doors in 1971, in Rissik Street, Johannesburg. Of Lebanese descent, the brothers – Norman, Tyrone, Dennis, Bernard and Donald – came from a family with a strong entrepreneurial background and a couple of them had already owned their own furniture shops when they decided to pool their skills and resources to create a store that sold elegant pieces to an upmarket clientele and focused strongly on customer service finesse. The brothers’ hard work and commitment to the company saw them launching a second store two years later, also in the CBD. When television was introduced to the country in 1976, they spotted the gap in the market and Bakos Brothers became South Africa’s number one television retailer.

They sourced fine furniture from around the world, giving discerning consumers access to international designs and trends. That immediately differentiated the experience of shopping at the plush store, setting the business apart long before brand awareness became the marketing catchphrase that it is today. Bakos Brothers was synonymous with opulent living and gave South Africans a taste of what has since become known as lifestyle furniture and design.

The company also diversified into property development. In 1977, the brothers built a modern shopping centre in Nelspruit. A first for the town, the project was spearheaded by Dennis Bakos, the eldest of the five, and father to Ryan, who was destined to take over the reins from childhood.

A family tradition

By 2008, the brothers were confident that Ryan was old enough and experienced enough in the workings of the business to assume the role of leader. They realised it was time to inject new energy into the business, and Ryan was ready. It’s a job he says he was groomed for from the time he learnt to walk and talk.

“My uncles are conservative and traditionalist. The company consisted of three stores, a small staff, ancient systems and a real mom and pop attitude. Information flow was non-existent. It was hard to determine stock levels and find price lists. The things they excelled at were an eye for quality and superb salesmanship, but we needed to reinvent the Bakos Brothers brand to enable the business to grow in what has become an intensely competitive market. Luckily, I have always been more interested in back-end systems than the front-end. My experience with etailer eDreams had given me a huge insight into information systems, and I started to apply those learnings from the day I walked in.”

Never a good student, Ryan completed school in 1998. He had failed standard eight and was only too keen to matriculate and get his formal education over and done with. Interestingly, not one of the brothers who started Bakos matriculated, and Ryan’s own brother Sheldon is the only man in the family to have a degree. After school, Ryan went straight on to join the commercial and retail property side of the family business, working alongside his father. In 2000, he moved into furniture retail where he spent two years as a salesman, also delivering furniture and doing lots of manual labour in the warehouse.  “Working anywhere else was never an option for me,” he says. “The business is as much a part of our family as we are of it.”

Profiting from outside experience

It’s well known in the business world that family-owned companies often suffer when the reins are handed over by the founder to the next generation. The founders work hard and build a business, the children take it over and are poorly prepared to manage and make it grow but they enjoy the wealth, and the grandchildren inherit a dead business and an empty bank account. Ryan and his family were determined that would not be the case.

At 21, he was encouraged to take a gap year and went to London where he waited tables and then backpacked around Europe. On his return to South Africa, he went back into the retail side in sales for two years and then moved into property for another five years. He became a property manager and – with responsibilities to both the landlord and the tenants – he got the opportunity to grow his real estate knowledge and combine this with management skills.

As a sideline, in 2003 he and a friend started a mail order company that imported consumer products from overseas. That became eDreams, a hugely successful and popular online shopping site in which Ryan continues to have an interest. It’s a business venture that gave him profound insight into what it takes to systematise operations.

“eDreams taught me a great amount about the importance of sophisticated functionality and the availability of information,” he says. “We spent nearly two years developing the website and today it is able to handle thousands of orders at any given time with just six staff. It was an excellent training ground for what happened next.”

But when he took over, it was not an easy period for the company. The recession was in full swing, margins were tight, and cheaper competitors had popped up all over the country. However, Ryan believes that what kept the business alive over four decades and through so many changes in fashion and style is family. “The difference between us and everybody else is that we remain a family business. My uncles come to work every morning and they open up the stores. They really are the greatest salesmen. Nothing can compete with that. It’s a great company to work for as that family ethos is pervasive. The environment is warm and friendly, and not at all corporate. Even though we now have commercial systems and processes in place, the atmosphere remains the same, and customers feel it too. If there is ever a problem, the customer can get hold of a Bakos to sort it out for them – they will not be sent from manager to manager. That’s because the brothers started the business from scratch. They drove around delivering couches – that service culture remains. It’s an essential part of our training programme; all our salespeople learn how to treat the customer the Bakos way.” Under Ryan’s leadership, the Bakos Brothers brand has undergone considerable changes, and it’s behind the scenes that some of the most innovative modifications have taken place, with Ryan revitalising the business and preparing the company for major growth into the second decade of the millennium.

“When I was appointed CEO, my goals were to revitalise the business, leveraging all the good, solid, family values that were in place, while at the same time overhauling all the systems and processes that would hamper growth. My uncles had not been interested in expansion, but I made them realise that it would be the best way forward for the business as we needed greater visibility if we wanted to remain competitive.

On the question of trust, Ryan points out that the brothers took no convincing when it came to making him CEO. That was how he in turn encouraged them to let him implement the changes to the business, the results of which are clearly evident in the figures, with turnover in the nine digits.

“Trust and support make all the difference in a family business,” he says. “The five brothers have worked together for so long and I grew up as their son. They have always had conviction in my desire to do the best for the business. In any family concern, the older generation must be prepared to let go and to have faith in the youngsters. Change is fundamental to growth. Less than five years ago the company was still run on carbon paper copies. Today we are geared up for national expansion.”

Reinvention in the midst of the downturn

Ryan’s decision to open a 4 500m2 factory in Wynberg at a time when the market was in severe downturn – employment in the furniture manufacturing industry had dropped by 11% to less than 40 000 by 2009 – was a brave move. It has helped the company to take on larger competitors, adjust its pricing and cut out the middlemen.

Up until then, Bakos Brothers had been a focused retail company that bought from local manufacturers and imported most of its sofas. They were buying expensive fabrics and couches from suppliers, all of whom had their own margins. The only way to bring costs down was to start making their own furniture.

Ryan notes that he was astonished by how many furniture companies were wiped out by the recession. “I know of seven major factories and retailers that have disappeared. The closure of these businesses worked to our advantage, with the company sourcing both skilled employees and relatively new equipment from the defunct factories.”

The factory now provides work for 160 people and the company buys fabrics and leather in bulk, direct from the wholesalers. This has made it possible to bring down the tag of a couch from about R40 000 to R 9 000. The showrooms have been redesigned to feature both ranges – top-end and more affordable.

The company also brought on board Gerald Yosh, a legend in the local furniture business who is now in his 70s, to head the manufacturing division and assist with design. “You can feel the presence of genius when you are around him,” says Ryan. “He has so much experience and knowledge and he’s also helping us to bring in even more business. We meet every day and speak constantly.”

Expanding market share

The establishment of the factory is enabling the company to grow its national footprint. From appealing to just 2% of the market previously, it’s expanding rapidly. In 2009, a new store was opened in Nelspruit. This was a first for the business which had operated solely in Gauteng up to then. “The store was a tester to see how efficiently we could control a business remotely. We got our managers involved in the project and it has really taken off. I’m pleased about that. I grew up in Nelspruit and my family has had a long history there so it was important for me to get it right.”

But Ryan notes that the store did have a few teething problems at first. Ironically, these difficulties helped to pave the way for the business’s ongoing transformation. “The store struggled when it first opened because of the cost of the high-end items. That’s when I realised that to really boost turnover across the entire company, we needed vertical integration.”

Manufacturing locally also means the company is able to fulfil orders far more quickly, as customers do not have to wait for items to be imported.

“With the opening of our own factory and our control of the manufacturing process, we have brought down the cost of our sofas dramatically. We still provide exceptional quality. Our frames and raw materials are of the highest specs, and we buy only the best fabrics and leathers. But because we’ve brought everything in-house, we are able to offer the same quality at a far more affordable price. The strength of the rand has also worked in our favour as this has lowered the cost of the fabrics we do import.”

At the same time, Ryan saw the need to introduce more budget lines of furniture items. He says this will not impact the perception of the store as a high-end retailer. Although he considered launching a separate label for the more affordable range, he decided against it as he felt there was no need to dilute the brand.

“The exclusive, top-end lines are still at the core of the business, it’s just that we now offer a large range of more affordable items too. This has grown our customer base radically along with the marketing drive as people want to own a Bakos Brothers item. Whether you want a four-metre mahogany dining table or a less ostentatious item, we can provide both. It wasn’t necessary to introduce a second brand, because both price points appeal to the same market. The brand is aspirational. It’s this mix of products that has enabled the new Nelspruit store to flourish, and that’s the strategy we have adopted for the rollout of our other stores through 2011.”

Next, Ryan took another unprecedented step for Bakos Brothers and radically increased the advertising budget – by 400%. “I was determined that we would advertise aggressively in the glossy magazines and in newspapers. Because of the slump, most companies were slashing their advertising budgets so we managed to get massive discounts. We got so much bang for our buck, it was amazing. Alongside the budget increase, the ads changed too. They had been the same for many years, and it was time to simplify the concepts and introduce clean lines and fresh designs, all more in line with the demands of the contemporary consumer and with what is happening in the furniture market.”

Ryan believes this spurt in visibility while other retailers were playing it safe played a major role in Bakos Brothers’ subsequent successes. The company’s exposure in the media increased by around 2 000% and turnover skyrocketed. Growth has since been posted at 17% year-on-year. “A downturn can provide great opportunities if you keep an eye out for them,” he says. “This massive advertising drive has positioned us upfront to take advantage of the slow but steady upturn.”

A fresh look at tired systems

Critical to the growth of the business was Ryan’s move to revitalise business systems across the company. “We implemented a totally new, cutting edge information systems infrastructure. The need for this type of system is glaringly obvious in any big company, but in an old-school family business it can be overlooked because ‘things have always been done in a certain way’ and the founders are familiar with that. Initially, my uncles took some convincing. This type of change is expensive and it can be invasive, but we started to see the benefits fairly quickly.”

“I started at ground level, ensuring that things like stock levels were right, the stock balanced, lead times were brought down, and price lists were all accurate. That gave everybody a window into the company, a 100% accurate picture of what was available, what we could and couldn’t sell, and what processes to follow in each case – all of which had previously been unavailable or hard to find.”

To make sure the systems were as perfect as possible, he walked around with booklets and asked employees to comment on what was working and what was not. He also held one-on-one interviews with staff, asking them what were the ten things they hated about their job. That was a smart move as they are on the ground every day. Incorporating their suggestions into the operational side of the business has helped to significantly boost turnover in the past two years, Ryan says.

“We found out what the problems were and fixed them. I have always believed that the best way to glean information from people is to speak to them directly – that is my style of doing things. We overhauled departments that had been undermanaged and spent a fortune on bringing in new management. We also asked our people what they loved about their work and made sure those aspects of the business remained intact.  This gave us real insight. With all that information, we were able to take the weakest components of the business and make them strong. When the business started picking up, demand grew and so did stress levels. That gave us the opportunity to push out the bad eggs.”

Family businesses often have poor human resources systems in place, and Bakos Brothers was no exception. When Ryan took over, the HR department was weak and had to be completely revamped. On the topic of recruitment, he is adamant that he will not consider employing people who job hop, and will only look at CVs of those who have been in their current employment for five to ten years. “One thing I have learnt over the years is that loyal, stable and conservative employees are the ones who will be with you for a long time.”

Ryan also brought in experts to monitor the company’s carbon footprint. The company emits 100 tons of carbon every month, most of it from electricity consumption. It now offsets that by planting hundreds of trees in Johannesburg’s poorer suburbs. A lighting conversion programme to reduce consumption is also underway.

“I believe it is every person’s responsibility to adopt low-carbon practices, and businesses are made of people. Raising public awareness and encouraging choices that support ethical companies will result in pressure being felt by other suppliers to follow suit,” he says.

A new approach to leadership

Ryan’s not a great reader, but he takes his inspiration from others. He continues to be mentored by his father and uncles, all of whom are able to provide him with the advice and cautionary words that come with years of experience in the business.

He admits that it’s challenging to retain the feel of a family business, yet still function at a corporate level. One of the advantages is that he’s introduced some team activities for his people, such as ten pin bowling, beach volleyball and inspirational talks. There has to be a balance however, he says, between having a good time at work and doing the work properly. “My message to the staff is simply, ‘Love your job and obey the rules’. I believe we have managed to retain a very positive energy in the business because of that.”

He believes in leading by example, which is not difficult for someone who has taken on just about every role in the business over the years. On a typical day, he gets to the factory at seven, checks on production and quality control, and also sees that the floors and the bathrooms are clean. From there he visits the warehouse, and then goes to his office to monitor the finances and payments. He’s putting in the hours, but he says that if you love what you do you never have to work.

“I’ve been in it for so long that I can do anything and everything. That is essential if you want to build a strong company. You have to know how things are done. My staff have photos of me working on the factory floor. It’s fun to build a couch.”

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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1 Comment

1 Comment

  1. Khanyisa Matyaba

    Nov 5, 2011 at 11:33

    young entreupreuneur feel motivated about this living testomon but in putting them to act its another story

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Entrepreneur Profiles

8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

It’s taken 12 years, but not only is Priven Reddy a self-made millionaire at the age of 36, he sits at the helm of five companies and 380 employees, and his companies have R4 billion in assets. Here’s how a kid from Chatsworth in Durban stopped blaming his fate on everyone else and took control of his destiny.

Nadine Todd

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priven-reddy

Vital Stats

  • Player: Priven Reddy
  • Company: Kagiso Interactive Media
  • Launched: 2006
  • Start-ups: Krypteum (launched 2017). Krypteum allows traders to buy a cryptocurrency coin and have their investment managed by artificial intelligence and machine learning capabilities.
    • Dryvar (launched end-July 2017)
    • Shypar (launched January 2018)
  • Net worth including crypto assets holdings: Over R4 billion
  • Visit: www.kagisointeractive.com

As a kid growing up in the 90s, Priven Reddy had a rough childhood after the passing of his dad. “After my father unexpectedly died, my mom settled down with a man who later became an alcoholic. There were times when we wouldn’t have food to eat,” he candidly recalls. It’s a stark reality, but one that laid the foundations for the man Priven would become, and he doesn’t shy away from unpleasant memories.

Instead, young Priven soon figured out that he needed a paradigm of how he viewed the world or he would be consumed by it. Over the years he has built up a framework of eight codes that he not only lives by, but believes has shaped his success and more importantly, the mindset that has been instrumental in achieving that success. By adopting them he has turned his life around and then used them to rapidly climb the success ladder of the corporate world once his foundations were in place. 

Code 1: Find your inner drive and keep feeding it

For Priven, the pivotal moment that forced him to shift his attitude in life is still a fresh memory, despite the intervening years. “I was 20 and waiting tables at a restaurant at the Gateway Theatre of Shopping. One of my customers had finished eating and gestured over his plate containing some left over, half eaten pizza. ‘Here, this is for you,’ he told me with mistaken generosity. ‘Put it in a doggy-bag and take it home.’ His words were like a sucker punch to my dignity. I couldn’t believe it. Was this how our society treated its poor?”

It was the last straw in a series of blows that Priven had endured that day. He’d been rejected by a girl whom he’d asked out, on the basis that she wouldn’t date anyone who didn’t own a car. That morning his family had also once again shared their disapproval over the way he was living his life.

“They called me an embarrassment. It stung — and it stuck in my mind. To top it off, I arrived at work that day and the owner of the restaurant took me aside and told me that I had too much potential to be working as a waiter my whole life. He was thinking of firing me so that I would get out of my comfort zone and do something else.”

After his run-in with the customer later that day, Priven went outside the mall, reflecting on what had happened that day and his life in general. “It was like someone snapped their fingers and woke me from a bad dream. I would never let anyone belittle me or impinge on my dignity again. Then and there I made a decision: I would no longer be the victim of my own fate. I was going to be the master of my own destiny.”

Hungry to prove himself, the promise was more than just words for Priven. He knew that he needed to take matters into his own hands and start making some real changes. “Once I stopped blaming the world for everything that went against me, I started to grow. I began to see challenges as opportunities and I was able to channel that energy into a positive inner drive. I began to understand that things don’t happen to you, they happen for you. That shift changed everything for me.”

Related: 30 Top Influential SA Business Leaders

Code 2: The biggest opportunities are found where things are the most difficult

“The first principal I learnt is that in adversity lies opportunity. In a business sense this means being able to identify the challenges people have and create a solution that takes away these difficulties.”

It was a lesson Priven was already learning in primary school. The school had a small tuckshop catering for over 1 000 kids. Long, frustrated lines meant many kids ended up missing their entire lunch break waiting to be served. The young entrepreneur immediately spotted a gap. “I borrowed some money and bought bags of chips and chocolates and sweets from a local wholesaler. I started at the back of the queue and sold to the kids one by one all the way down the line. I sold out quickly and made more profit than the tuck shop vendors because I didn’t have any overheads.”

The small business only lasted a few weeks before the school shut it down, but Priven took something away from the experience more valuable than some extra cash in his pocket — he’d found validation that his approach to business worked.

“How do you make things easier for people? Answer that and you’re making money. Difficulties can be found everywhere, regardless of class or creed. It doesn’t matter what the circumstances are. It could be a blue-collar factory worker at the end of the day not being able to go to the supermarket to purchase groceries because they’ll miss their taxi home. Or it could be wealthy early-adopters interested in investing in blockchain technology, but not having the time or know-how to manage their cryptocurrency portfolio effectively.”

Priven doesn’t let insurmountable tasks discourage him. “If it’s difficult, there are fewer competitors who will enter that field. It’s that simple. Most people are daunted by the challenge and find something else to do. However, that’s where the real opportunity lies. I believe the impossible is not unachievable — it’s just a niche market.”

This same philosophy has driven Priven to explore highly technical sectors, including augmented reality (which he began exploring over six years ago), and how to incorporate artificial intelligence into crytocurrencies.

“I love doing difficult things. That’s the space where a lot of money can be made,” he says.

Code 3: There’s no substitute for hard work

According to his close friends and family, Priven’s capacity for burning both ends of the candle is legendary. He’s proud that entrepreneurship runs in his DNA, a trait fostered by his late father, Christie Reddy, from an early age. The founder of a national logistics company, Christie owned a fleet of more than 100 trucks and boasted a client base of multi-national accounts when he was killed in a fatal road accident. A series of hijackings, theft and mismanagement quickly saw the company crashing into bankruptcy. Priven was just 11 years old and his world was ripped apart.

“My dad taught us the value of working hard from a young age,” he says. “My four siblings and I were always competing in entrepreneurial games. He even sub-divided the back garden into five small vegetable plots and gave us each a packet of seeds. The challenge was to see who could grow their own veggies and herbs and then sell them door-to-door. ‘After paying your mum and me for the cost of the seeds and fertilizer, the one who makes the biggest profit is the winner,’ he told us.”

For Priven the challenge wasn’t work though — it was fun. And that sense of fun has always persisted. To this day he says it’s not hard work if you’re having fun.

“I think my dad knew that by giving us these business principals, skills and tools at a young age, he was laying the foundations for our future independence. He knew this was more valuable than any trust fund he could set up.”

Today, all of Priven’s siblings are successful entrepreneurs operating their own businesses in diverse industry sectors, ranging from one of the leading app development companies in Africa and the Middle East to a large independent events management company, to South Africa’s only business consultancy for tech start-ups, to a niche organic farm in the Western Cape.

Code 4: Perseverance always pays off

Priven launched Kagiso Interactive as a web design agency 12 years ago in what he calls ‘the wild west days’ of the IT industry in South Africa. “I had learnt graphic design at my brother-in-law’s design studio and was making a little money doing a few below-the-line advertising projects for clients. I had a chance meeting with a guy in a coffee shop who said ‘You need to meet my brother — he does web design. Maybe you can work together.’

“Web design was still pretty new. We met, and ended up launching a small start-up from his garage, combining my graphic design and business skills with his web-building skills. We began attracting some clients and even employed a few people. But it was tough. The garage flooded every time it rained. We moved into an office block but we weren’t stable yet. After eight months my business partner left, along with most of our employees.”

For Priven, it felt like he was in a downward spiral. He was 24 years old and finally feeling like he was building something worthwhile. At this point, after everything he’d been through, quitting wasn’t an option.

“With only one employee left, I advised him to find a job at a larger company as well. It was a steep learning curve, but I hung in there. I wanted him to find security, but I was determined to make a go of it for myself.”

One of Priven’s customers, the owner of Tudor Hotel in Durban, offered him some space, furniture and equipment so that he could continue working, and told him he could start paying rent once he brought in revenue. It gave Priven the start he needed.

Related: Inspiring Entrepreneur Siyanda Dlamini Believes You Need To Back Yourself To Build Your Dreams

Code 5: Don’t be afraid to leave your comfort zone

priven-reddy-expert-advice

With his fledgling business downsized, Priven looked online for new markets. He registered his company’s services on eLance to broaden his market-base and tap into an international client-base.

“I met an IT entrepreneur who was based in India through an online platform. We became friends and spent a lot of time discussing our companies, our clients and troubleshooting any business problems we experienced. He planted the seeds of app development in my head. I remember telling him it was a ridiculous idea, but he wouldn’t let it go.”

It was 2009 and the Indian Government was largely investing in IT and mobile applications, two things that were virtually unheard of in South Africa. The Google Play Store was only launched in 2012. Priven wasn’t sold on the idea, but he eventually allowed himself to be convinced, largely because he just needed to sell it.

“I didn’t need to build up a team because I could outsource any development to India, so the risk was really low,” he says. “We’d basically do a web search and contact any companies we found who made money from their websites and we’d offer them an app. It wasn’t the easiest sell. We were trying to convince people that you could make money from a smartphone — a device that had just been launched in South Africa. We were telling them it was a computer in their pocket, which was true, except there was no iStore, Internet speeds were slow and mobile data was expensive.”

Once he starts something though, Priven sees it through, and so he stuck at it. “I was feeling a bit like a fish out of water, and kept asking myself what I was doing. But the more I did it, the more I learnt, until the idea of app development started to feel familiar.”

Because of that friend’s persistence, Priven ended up on the ground floor of mobile applications development. “By the time other companies recognised the value of apps, we had learnt a lot of lessons and really understood the space. Plus, our clientele was largely international.

Code 6: Believe in your product, always

Kagiso Interactive spent years outsourcing its work to India, which worked well because it allowed Priven to keep his overheads low while he built up the business. “I reached a point where I didn’t want to be a factory though,” he says. “I wanted to offer a lifetime warranty on the applications we built. Most apps only really start to show problems once you’ve scaled your users, and that takes 18 to 24 months, long after most warranties have run out.

“With this in mind, I started building my own team, upskilling and moulding them with a service-first culture. We don’t charge maintenance either. If you’re confident in your product, it shouldn’t need maintenance. We back ourselves.”

By 2014, when the Saudi Royal family contacted Kagiso, the company had built over 1 000 applications and had developed a strong reputation in the market. “Working with the Saudi Royal family has been a game-changer for us — a lot of our clients are based in Dubai — but none of that could happen overnight.

“We got into a space early, focused on becoming the best in our field, built a solid word-of-mouth and referral reputation, and ten years later started reaping the rewards.”

Priven is also fanatical about giving clients what they need, instead of what they ask for. “We’re here to build real solutions and we understand this space. It’s not always the popular move to tell a client that they actually need a different product to the one they’re requesting, but it’s the right move, and it will cement an excellent relationship.

“Over the years I’ve turned work down that wasn’t right for us, or if I knew the company couldn’t afford what they were asking for, or wouldn’t be able to take it to market. We also never tender for business. Our work should be on our merits alone.

“I also oversee everything — nothing is sent out without my final approval. This means I need to always be available, and respond to things quickly. As far as I’m concerned, that’s my job.

“It also fosters a culture of putting the client first. We need to respond to every single client within 15 minutes of receiving a call, email or message through our website. It’s an ethos that has shaped everything we do, and is the reason why it took ten years to build the foundations for a business that has accelerated in growth in the past four years. We live for this.”

Related: 6 Habits Long-Time Millionaires Rely On To Stay Rich

Code 7: Mindpower is real

“When you grow up in adversity you have two choices: You can either allow the negativity around you to consume you or you can focus on the positive and see the challenges as opportunities. Wallowing in self-pity will only make you bitter. You end up with a victim mentality — and that cripples you. I don’t like focusing on the negative, so I search for the rainbows in the storm instead.”

In 2010, Priven’s sister gave him The Secret by Rhonda Byrne. “It changed everything for me. I realised the power of thought and what it’s done for my life. Mindpower is real — picture it, really want it, and then focus on how to get it. You can attract people and things to your life. You just need to be able to visualise it and then go out and get it.

“That doesn’t mean it’s easy — you will still bang into walls and face challenges. But when you have a determined mindset, you can push through them to the other side. You can overcome anything. A positive mindset is a powerful weapon that you can use to transform your reality.”

Code 8: Never stop learning

Priven is an avid learner. It’s a secret he believes too few people take advantage of: There’s so much out there, so many free online courses, and so many ways to upskill yourself. So why aren’t you taking advantage of all of those resources?

“I’ve never let the fact that I didn’t get a degree hold me back. We all have the potential to be great — you just need to be willing to put in the work. I taught myself design, then web development, then app development, and then AI and VR and how blockchain and cryptocurrencies work. The information is out there. You will also be amazed at how forthcoming people are and willing to share their knowledge.

“I hire experts, but I need to understand everything that we do within our business, and I need to know enough to see what’s coming and where technology will take us.

“I use the same philosophy when I hire. We do need senior engineers, but I also hire kids straight out of university. I learnt this from Google — you need a degree, but top companies don’t hire based only on that degree. We hire based on potential and attitude. What can you teach someone, and how much are they willing to learn?

“An individual who believes they should be promoted purely on their degrees isn’t the right fit for us. We want people who will seize any opportunity to learn and really better themselves. Those are the people who do well in our organisation.

“We live by what we believe in. The head of our Shypar team used to be our cleaning lady. I saw the potential in her right from the beginning. She was hungry to learn. Even as a cleaner she found time during her lunch breaks to learn on the computers in the office. She was given the opportunity because she never stopped learning.”

Priven’s philosophy is clear: Expose the right people to skills and they will grab that opportunity — and you will have helped them change their lives. “We don’t always get this right. We hire slow and fire fast. But I prefer to give everyone the best opportunity I can and to do that you have to start by taking a chance on them.

“I try to hire people who are better than me. I believe it’s important to surround yourself with people who are progressive and positive. They up your game. Negative people are energy vampires.

“In 2010 I had one employee. By 2014 we employed 188 people, and four years later we have 386 staff members. I’m incredibly proud of the skills we have built over that time.”

Related: 7 Pieces Of Wise Advice For Start-Up Entrepreneurs From Successful Business Owners


Lessons learnt

priven-reddy-of-kagiso-interactive-media

Put the right foundations in place

That’s the real secret to growth. In the last three years I’ve really started focusing on other passion projects because Kagiso Interactive has grown to a point where it can bootstrap other start-ups and take some mitigated risks.

We’ve also been learning all this incredible tech that we can now put into action. Focusing on AI in 2012 gave us the know-how and technology we needed to build Krypteum, an AI platform that is going to change the face of AI and what it can do for business. It reads hundreds of thousands of lines of code and information in seconds. Krypteum is also the world’s first AI-powered investment cryptocurrency. If you put the right foundations in place, the sky is the limit.

Collaborate with key stakeholders

When we launched Dryver, a local ride-sharing app, we immediately started engaging with the taxi associations. We want to create a business that supports drivers and small business owners, and is branded and safe for everyone — drivers and customers alike. We knew it would be important to get the taxi associations on board — the right partnerships always enable growth.

Always put your users first

When we built Shyper, our delivery app, we focused on the drivers: What did they need? What helped them to deliver a good service? This was all important, but we ended up with a really complicated app that consumers found too difficult to use. We’ve now made the decision to rebuild the architecture from scratch. We’ve learnt a lot, and we can simplify the platform to make it a lot more user-friendly. Yes, it means losing money short-term, but long-term we will have a much more successful business.

In any sales discussion, make sure you have a solution for your client

Sit back, spot the problem and determine the solution. That way you’re having a discussion that focuses on a solution for a problem that you know needs solving.

Always treat people in the way that you would want to be treated

I’ve been on the other side of this, and it can be emotionally damaging. Be kind with your actions as they will ultimately define you.

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Entrepreneur Profiles

Who Is Lyle Malander? – Winner Of The SAICA Top-35-Under-35 CA(SA) Competition

The daring and driven entrepreneur Lyle Malander launched Malander Advisory, a chartered accounting and financial advisory firm, in 2015. He has since also launched Malander Placements, a recruitment firm, and Malander Digital, an IT firm. And they just recently opened a branch in London.

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Vital Stats:

  • Lyle Malander
  • Age: 30
  • Designation: Director
  • Company: Malander Advisory, Malander Placements, Malander Digital, Malander UK
  • Visit: www.malander.co.za

At just 30 years, Lyle Malander is not merely a trendy businessman but a trailblazer whose ambitions are fuelled by making a difference and creating a legacy. The co-founder and director of the Malander Group of companies’ core focus is providing professional advisory and resource solutions to various large and listed entities. Lyle is proud to say that in 2,5 years the Malander businesses have derived revenue in excess of R40 million. His hard work and arduous hours have turned his dreams into reality.

Through the Malander Advisory business, Lyle oversees the team that provides managed chartered accountant and finance resource solutions to an array of clients in various sectors and industries and has created employment opportunities for over 70 chartered accountants and finance professionals.

Malander Placements is a team of trained professionals that provide recruitment solutions, particularly in the fields of finance, law and IT, to various clients. And pursuant to his keen interest in the technological environment and the ways in which it can enhance business operations, Lyle established Malander Digital, which provides temporary IT resourcing, IT outsourcing, and digital marketing solutions.

‘Lyle’s story of persistence, growth and vision is an inspiration to anyone who is daring enough to start their own business,’ says Dineshrie Pillay, one of the Top 35 judges.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

‘I think as entrepreneurs, we are always looking forward and striving to achieve more and as soon as we reach a goal, we change the goal posts to want to achieve more,’ says Lyle Malander. ‘That being said, I wasn’t always fortunate enough to have enjoyed the luxuries life has to offer. I remember the struggles we faced as a family when I was growing up. I think what sets me apart is that I have always seen these struggles and challenges as a learning opportunity which fuels my desire to want to make a difference and create a legacy.’

Lyle humbly attributes the success of his businesses to his strong team with an aligned vision: ‘My co-director and team have all been pivotal to the growth of the business and their motivation and dream is what keeps us going on a daily basis,’ he says.

Lyle admits that growing up, he didn’t always have the most fortunate of circumstances. As a young coloured kid from Cape Town, he was exposed to his fair share of financial and social challenges. But he held on to his dreams to make a difference. Today he says that his perseverance and dedication has been a key factor in overcoming his challenges in life.

‘I remember a time when I was younger and wanted to become a doctor because at the time I considered it to be the only really “prestigious” profession I knew of. Later on, I realised that I couldn’t spend time in hospitals and fainted at the sight of blood. My mom then came across the CA(SA) profession in conversation with a colleague at work and proceeded to tell me about it. I then started doing some research,’ he says.

He liked what he found and avidly began pursuing his studies to be a CA(SA) at the University of Stellenbosch. But at the end of his honours year when he received his end of year results, he learnt to his shock and dismay that he had received the bare minimum mark of 40% required to get access to the final exam. He distinctly remembers his lecturer saying, ‘To those of you who have a 45% year mark, don’t worry, there have been people in the past who have ended up passing the year.’ Being in the unfortunate position of having a year mark lower than that, Lyle immediately had that sinking feeling that he might have to re-do honours.

However, when he chatted with some of the graduate recruiters at Deloitte, they encouraged him that it was still possible to make it through the year. He decided he wouldn’t be giving up as yet!

‘I managed to pass honours that year and since then, I have realised that giving up isn’t the answer. We should always continue to follow our dreams no matter what odds are stacked up against us,’ he says proudly.

Lyle relocated to Johannesburg to complete his articles at Deloitte in 2012. He then went on secondment to Deloitte LLP in Chicago for three months before returning to join an accounting and advisory division at Deloitte South Africa. He worked on various clients including the Aveng Group, where he assisted in raising a R2 billion convertible bond.

‘I believe the training we get as CAs(SA) requires us to get an in-depth understanding of not only the finance environment but the business environment in general. Gaining this understanding of the mechanics of business and the importance of controls within business has equipped me for the entrepreneurial journey in the sense that I have had exposure to various operating environments and have garnered an understanding of what it takes to run any operation,’ he says.

‘I think great entrepreneurs are the ones who not only learn from their failures but also learn from those they are surrounded by,’ says Lyle. ‘As entrepreneurs, it is so easy to get consumed by our own ideas and vision that we forget to listen to the needs of those around us, and more specifically the needs of our clients, teams or employees. Great entrepreneurs not only identify these needs but also develop solutions to address them.’

Lyle has been instrumental in the companies’ recent expansion into the United Kingdom through the opening of a London office. This is pursuant to the companies’ expansion strategy to gain international exposure and the ability to service their clients with both their local and offshore financial advisory and resourcing requirements, as well as provide their finance and recruitment professionals with international exposure.

They have also recently started a programme called ‘Malander for Change’, which is aimed at providing technological resources such as laptops and Internet access as well as development training to institutions and organisations that need it most.

‘Our Malander for Change programme is aimed at providing training and guidance on not only how to find a job but also how to get access to resources to further education and training, as well as foster entrepreneurship, in the hope of contributing to a decline in the high rate of unemployment we face in our country,’ Lyle says.

Related: Funding And Resources For Young SA Entrepreneurs

Family life

Although Lyle admits much time is spent planning business, his free hours are spent with his girlfriend, family and friends. And when he has time, he also enjoys a good game of sport.

Lyle says his mom has always been the glue that held the family together and was a significant role model for him. ‘She was always the one that drove me to become somewhat of an academic, and I will always be grateful for that.’

His father, a serial entrepreneur, and his brother, also an entrepreneur, have taught Lyle many valuable lessons and he has drawn a large amount of inspiration from them.

Lyle’s describes his gran, to whom he is very close, as one of his number one supporters. ‘I think for any individual it is always important to have someone who believes in you and in everything you do. My gran has always been that person.’

‘Coming from a background where I was exposed to poverty and growing up in areas of poverty where I witnessed the imbalances in society, I believe that we as professionals have the ability, and potentially even a responsibility, to contribute to social change,’ he says.

‘The single greatest lesson that I have learnt so far is that nothing is impossible!’

What mantra do you live by?

Dream it. Believe it. Achieve it.

Where do you see yourself in five years’ time?

I hope to lead the Malander Group to greater heights and growing it into a reputable brand within the South African and even international business environment.

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Entrepreneur Profiles

6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up

Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.

Nadine Todd

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Vital Stats

Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”

Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.

“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.

Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.

1. You don’t just need a product – you need clients as well

Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.

“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”

So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.

“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”

2. Price and solution go hand-in-hand

As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.

In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.

“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”

The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”

It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.

“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”

Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.

“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”

It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.

“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”

3. Get as much on-the-ground experience as you can

appanna-ganapathy-art-technologies

The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”


Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

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