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Business Connexion: Benjamin and Isaac Mophatlane

When they were just 23, twin bothers Benjamin and Isaac Mophatlane launched an IT start-up in 1996 with a R4 million loan from a company that believed they had what it would take. The bet paid off. Today, Business Connexion is a multi-billion rand IT force in Africa. A systems integration specialist, the group’s history is rooted in a series of mergers and acquisitions, its 2004 merger with Comparex creating Africa’s first black-empowered technology giant. By 2009, the group had a turnover of R4,4 billion, with an operating profit of over R125 million. Benjamin Mophatlane tells Entrepreneur their story.

Monique Verduyn

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Benjamin Mophatlane of Business Connexion

Isaac and I were about 12 when we discovered computers at Christian Brothers College in Kimberley. The attraction was instantaneous and the fascination intense. We were two kids from Ga-Rankuwa. Our mother had been in healthcare all her life and she was a matron at the local hospital; our father started out as a teacher and became an education specialist. They were both always very clear about education opening the door to success. And both of them were strong on discipline. That’s why they sent us to a Catholic boarding school. We finished high school and did well enough to get bursaries from South African Breweries (SAB) to study accounting. We were lucky. Although our generation was the last to be really exposed to apartheid, there were some of us in the township who knew that the only way up was through education; of course, we were aware of the realities around us, but we held onto the idea that school and university would provide an escape from the circumstances we lived in.

During the holidays, we worked in sales at SAB and towards the end of our studies we both got part-time sales jobs at what was then Software Connection. That really gave us the opportunity to develop our passion for technology. Remember that the IT revolution was only just beginning. Java programming language started to catch the attention of the technology world as a platform-independent language. Windows 95 was considered to be a cool thing, so cool that one million copies were purchased by users in four days. Microsoft’s Office 97 was published in December 1996 on CD ROM and also on a set of 45 3,5-inch floppy disks. The Internet did not exist in many countries; neither did email nor mobile phones. Google launched that year, but hardly anyone outside Stanford had heard about it. These were very exciting times for people who had an interest in tech stuff.

Also, by the time we were ready to start our own venture, we had been exposed to many different role models – our parents, our teachers at school, and the highly qualified and talented people we worked with at SAB and Software Connection. I cannot stress enough how important it was to work while we were studying – it laid the foundation for so much that was to happen later by giving us experience and exposing us to the world of business while we were still students. Few entrepreneurs get access to funding for their ideas, but it was different for Isaac and me. By 1996, we had worked part-time for Software Connection’s Pretoria branch for 18 months. We got to develop a great relationship with the owners of the chain, a company called the Connection Group and headed by then CEO, Philip Cowles.

They knew us well; we came to work every day, we were always on time, and we were good salesmen. The customers liked us, and we were always ready to put in the hours. So when we came up with an idea for our own business, they loved it. I think they were so drawn to it because they were entrepreneurs themselves; they knew where we were coming from. We asked them for R4 million to finance a start-up – a computer reseller targeting government departments and parastatals. Procurement policies were changing, and it could not have been a more opportune time for two young black men to stake our claim in what was about to become a booming industry.

Launching the business

When we completed our accounting degrees and got the loan, we were both absolutely determined to make it work. We knew that this was our chance, and I think we made the decision early on that we would build a company that would become a force to be reckoned with. Our vision was to create a business that was more than just a small IT shop – we wanted it to have longevity and to provide employment for people. We wanted to leave a legacy.

You have to take advantage of the opportunities that life presents. The fact that we got capital meant our aspiration could become a reality. There was risk involved on both sides, but we were almost arrogantly confident in our abilities and, at 23, far too young to be afraid of risk; second, we had built a great relationship with a company that was itself created by entrepreneurs, so they understood. The money was a loan and we had every intention of paying it back, which we did later on. That was how we launched Business Connection.  But having the cash did not make it easy. One of the biggest headaches was leasing office space. Nobody believed we had the money to pay. Eventually, we managed to secure 165 m2 in Brooklyn, Pretoria. We hired a secretary and started trading in September 1996. The first clients were the National Parks Board and the Council for Scientific and Industrial Research (CSIR). Again, our part-time work paid off.

We had met a lot of our future customers when they popped into Software Connection. We had already built quite a large network and by tapping into that we secured our first customers. It sounds simple enough, but it was vital at that stage to prove that we could deliver. Had we failed to do that, the business would not be here today. The Connection Group provided accounting services for us, so we did not have to appoint a financial director in those early days. That level of administrative support from a company that had the know-how meant we really could do more with less. The help and the expertise we had access to made an enormous difference. We focused on gearing up the business for growth so that we could meet our contractual obligations.

The Microsoft differentiator

In that first year, Business Connection earned revenues of R100 000. But we had no intention of remaining small, which is why we realised we would have to move away from being a reseller and become a software integrator. To do that, we had to partner with a big player in the industry. By 1997 we had started to change direction to focus on becoming a specialist Microsoft Certified Solution Provider and one of a small number of local Microsoft Large Account Resellers. Microsoft then was what Apple is today.

Bill Gates was not yet a household name, but his company was young and it was changing the world. We too were young and we wanted to be part of that revolution. Microsoft in South Africa turned out to be an excellent ally and provided us with a lot of support, training and market research expertise, which in turn meant that we became specialists in the technology as the demand for it was escalating.

A big turning point came when Business Connection secured a three-year R100 million contract with Telkom towards the end of 1997. We had worked ourselves to the bone preparing pitches for business and compiling proposals. We worked 18-hour days and had no weekends. Winning this deal gave us our big break. We had to supply the entire Telkom user base with Microsoft licences. That deal literally changed the business overnight. Suddenly we were in another league. We had to employ additional experienced staff, which we did quickly. The deal was a success and we did the job well, because we knew we had to get it right. It was then that we realised how absolutely critical customer service is in the growth of a business. We got the chance to prove that in addition to making the sale, we could deliver on our promise to the client.

The first merger

In 1999, the Connection Group was having troubles and its stock collapsed to around 20 cents. Thankfully though, our local Microsoft proficiency paved the way for a global tie-up with Dutch-based multinational firm Getronix. The company acquired a 50% stake in Business Connection, enabling us to pay back the Connection Group loan and grow our staff to 50. We were now part of an international group which gave us access to new skills, new business and huge exposure to global best practices.

A year later, we were at a Microsoft conference in Seattle where we bumped into Matthew Blewett and Bruce Krebs, founders of Seattle Solutions, a Microsoft business like ours. We hit it off immediately. Meeting them proved to us how important it is to expose your business to the outside world and to attend conferences and expos. That networking element is key. Our presence effectively enabled the next phase of growth. Where Business Connection was largely Gauteng-based, Seattle Solutions had a strong footprint in the Western Cape and KwaZulu Natal. The value that a merger could bring to both businesses was a no-brainer. In 2001 we joined forces to form Business Connexion, an integrator of business solutions focused on Microsoft products. I was appointed MD. We rebranded the company with an ‘x’, but kept the name because it was already well known and respected.

Sustained growth

By 2003, seven years after we had launched our start-up, our revenue soared to R300 million, we were employing 350 people, and we had offices in Rivonia, Pretoria, Cape Town and Port Elizabeth. We also became the only company in South Africa with triple Microsoft Gold Partner status for enterprise systems, e-commerce and support. In addition to that, we were named Microsoft’s channel partner of the year for the Africa region for two years in a row.

The business lived and breathed Microsoft technology. It was this dedicated focus on one area of specialisation that really paved the way for our early successes. Do one thing and do it right, that’s my advice to young entrepreneurs. That way, you build a reputation for your business in the market that few can compete with. Reputation is extremely important because it makes finding and securing business so much easier. Anyone can start a venture, but it’s how you conduct business that makes an impact on your customers, and on the industry you work in.

Nonetheless, our systematic pursuit of growth soon meant that although our base of Microsoft clients was huge, we needed to develop a new set of skills and services to offer the market, preferably with a strong focus on outsourcing. We dominated the Microsoft market at that stage, and when you dominate you have to be aware that your position is not sustainable indefinitely, which is why it was time for us to diversify. We knew that we had to take a leap to move the business up to the next level. The move was enabled by our merger with a big systems integration company, Comparex Africa, in 2004. I became deputy CEO and Isaac was appointed group executive for public sector client engagement, a position he still holds today. Isaac also heads up the innovation arm of the group. The deal, valued at more than R220 million, created a black-empowered ICT giant with annual revenues in excess of R3 billion. Business Connexion listed in May that year.

Listing came with its own challenges. It was not a decision we took lightly. Entrepreneurship and the corporate world can make uncomfortable bedfellows. It’s widely known that one of the key challenges when a company decides to list is how to transform the independent, entrepreneurial management style of a private business to that of a listed entity responsible to external shareholders.

Sure, listing comes with benefits – such as access to capital for expansion – but it also raises the profile of the business and places reporting, compliance and corporate governance responsibilities on the executive team, all aimed at protecting new shareholder interests. It’s vital, therefore, to ensure that a company is at the correct stage in its business lifecycle to benefit from being public. In our case, we saw the Business Connexion listing as a definitive milestone in that lifecycle. It was the logical expression of the vision we had back in 1996. A number of acquisitions followed. Between 2004 and 2009 we bought four companies. Today we employ 4 600 people and we have offices in Namibia, Tanzania, Zambia, Mozambique and Nigeria. When we started the business, we knew that we wanted to develop it into something considerable. To grow, you have to learn to let go. Our growth has been achieved largely through mergers and acquisitions, all of which were hugely emotional decisions. I always had to be realistic about how my role would change.

The M&A challenge

Mergers and acquisitions put a huge amount of pressure on any organisation. Again, the Microsoft factor played a role. The technology was in great demand throughout, which meant that there were no cutbacks. When you don’t have to layoff staff, it’s a lot easier. The toughest decisions we always had to make were about who would lead the teams. You have to make peace with the fact that not everyone can continue to do the same job, but we always focused on choosing the best person and doing it swiftly.

Months and months of deliberation make everyone uncertain. The quicker you integrate two businesses, the easier the process is on everyone. Many companies that merge try to maintain the status quo; I don’t think it’s possible. It’s better to realise that change has happened and to move on.

Business Connexion’s depth and breadth of skills has played a core role in its service delivery levels. Through all the mergers and acquisitions, the value of our client relationships came to the fore as we never lost any customers along the way. Gut feel plays a hugely important role when you are making a decision about whether to buy a company. Once you know you have common ground, you have to make sure that the deal is in the best interests of your staff, your management team and your shareholders. Those factors are what determine the overall health and sustainability of any company. When you have alignment there, go for it. In the fast-paced world of IT, one of the few sustainable competitive advantages any business has is skilled staff. We have always recognised this. Ongoing investment in our people positively impacted our bottom line and growth. By focusing on the accelerated growth of our employees through intensive and ongoing training, we were able to deliver the best professional services to our customers. The successful transfer of knowledge has empowered our employees.

Surviving the Telkom bid

My biggest challenge so far was 2007. That was a hard year. I succeeded Peter Watt as CEO of Business Connexion, having worked alongside him since the 2004 merger. I had learnt a lot from him. But that was also the year that Telkom’s bid for the company was finally called off.

Telkom had made a play for Business Connexion in 2005, which it raised to R2,4 billion in 2006 to woo board members. The bid was eventually blocked by the competition authorities when regulators and rival operators argued that the former monopoly would be reinforcing its dominant position in the market. We were pursued for two years. Had the deal gone through, it would have been  excellent for our shareholders, but not for our staff and customers. It’s one instance in which staying true to who we are was critical. But the bid had a bad impact on the business. Operating profit plummeted by 25% and headline earnings came down by 13%, indicating the damage caused by the uncertainty around the offer. When it was all over, my team and I decided to take corrective action. It was a business imperative. I had just taken over as the head of the company and it was clear that because of the distraction of being targeted by a large organisation, we were worse off than our peers. Quite simply, management had taken its eye off the ball and the business had suffered as a result.

We initiated a revitalisation programme which lasted for two years. A wide range of projects and cost-cutting measures were rolled out, all focused on boosting margins, attracting more of the right people, ensuring accountability and clarifying responsibilities, eliminating duplication and consolidating support functions. Our financial results show that we did the right thing. The company has since succeeded in restoring its fortunes. Our operating profit margin went up by 6,1% for the six months ending February 2010, against 3,2% for the six months leading up to November 2008. This was a direct result of savings on operating expenses. In addition, investor confidence has been restored and we expect strong growth in profits in the months ahead.

Talented twins

There’s no doubt that having a twin brother who shares your vision is a huge advantage. Isaac and I have worked long and hard hours to build the business. But we’ve always had the comfort that comes with knowing you are working towards one common goal. We have also constantly had the confidence of believing that we can trust each other and rely on each other when times are hard.

We have played to our individual strengths. Isaac is a people’s person who has great sales ability, which is what he has focused on.
My strengths lie in strategy development. I believe my leadership style is balanced and engaging. I welcome participation and interaction from my team. But I always ask one question and demand a careful, considered response: is this in the best interests of the business? It’s this clear definition of roles and responsibilities – taking into account our different yet complementary abilities – which has made it possible for us to work together so successfully. It’s been difficult to establish balance in our lives. I’m a true Blue Bulls fan and I made sure I was at the Super 14 final in Soweto to witness my team’s triumph over the Stormers. Sport is a great interest of mine, and it’s one of the ways I maintain balance between work and my personal life.

Looking ahead

I believe that even today we have kept the entrepreneurial spirit of the company alive by empowering all the people who head up our business units and making them accountable and responsible. It’s inevitable that the bigger you become, the more corporate you become, but it is possible to keep that excitement about the business alive. Investec is a great example of a business that’s done just that.

The company has also weathered the global economic recession, emerging fairly unscathed. That’s because a large portion of the business is based on annuity revenue. Annuities have pulled us through the worst, but I must admit that we have seen far fewer technology refreshes in the last couple of years, so we have indeed felt the impact of the downturn even if we have not been damaged by it. Thankfully, we started rolling out the revitalisation programme before the recession really kicked in. Another thing to bear in mind is that we have never really had a problem with profitability. The business has always been successful from that point of view. But there’s a key factor that has worked in our favour – we have never had to cut back on staff so we have never had to deal with the emotional impact of layoffs, even when times were hard.

Looking ahead, we aim to consolidate our business in South Africa and to take advantage of the escalating demand for data centres and cloud computing. One of the main challenges for us now is to grow our African business. We have clients across the continent in financial services, telecommunications and other industries, but we always have to be realistic about doing business in Africa. There is a lack of skills in these countries, and getting the right people in place is not easy. Skilled South African employees are not really that keen to live in regions where there is little infrastructure. All of these factors add up to a huge cost of doing business. We have to be very cautious. I’m really excited about the future. Our industry is going through changes. Cellphones are becoming more important and widespread than PCs. As the telco sector is liberalised and the price of bandwidth comes down we are going to see more and more innovation, particularly in mobile. We’re ready for the next wave.

Our work ethic was established early on in our lives; coupled with the determination to succeed, our faith in each other, and a hard-earned reputation built over many successful projects, it has enabled us to grow the business and turn the dream we first envisioned all those years ago into an organisation that will continue to create value for all its people for many years to come. In the beginning, we capitalised on being in the right place at the right time. We were savvy enough to take advantage of the opportunities that came to us as a result of political change in the country, and to leverage the innovative new technology that was coming to the fore. It was a perfect combination of circumstances. But we were also smart enough to deliver. Now, as a multi-billion rand global enterprise, we are poised once again to make the most of the changes that are happening in the ICT industry and to build on the legacy we have created.

10 Fast Facts About Business Connexion

  1. More than 30% of South Africa’s employee pay slips are generated by Business Connexion’s payroll solutions
  2. Business Connexion runs the networks and IT infrastructure of the largest producers of paper and packing solutions in SA
  3. Business Connexion’s ERP solution is used to produce more than 4,5 million statements to South African ratepayers
  4. Business Connexion designed, developed, implemented and maintain Government’s payroll system, PERSAL
  5. Business Connexion’s Venus financial solution processes more than 4,5 million municipal consumer accounts
  6. Business Connexion provides the ICT solutions that underpin the operational excellence of some of South Africa’s largest retailers
  7. Business Connexion designed, implemented and maintains the network system that handles the bulk of South Africa’s airline reservations
  8. More than 30% of South Africa’s short-term insurance policies are created, under-written and processed using Business Connexion’s solutions
  9. Business Connexion provides the IT backbone for the delivery of over 40% of South Africa’s liquid fuel requirements
  10. Business Connexion manages and co-ordinates the ICT service delivery of four of the big six mining resource companies in South Africa. It also oversees and integrates various service and product suppliers for them

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. Frans Moeketsi Benedict Maphos

    Oct 6, 2011 at 08:02

    This is a very good story and as South Africans we can take this then change the world that we leave in.

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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.

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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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Entrepreneur Profiles

Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.

Diana Albertyn

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kid-entrepreneurs-who-have-already-built-successful-businesses-and-how-you-can-too

Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.

“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.

Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:

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Entrepreneur Profiles

30 Top Influential SA Business Leaders

Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.

Nicole Crampton

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Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:

  • “As we look ahead, leaders will be those who empower others.” – Bill Gates
  • “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
  • “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs

Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.

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