My Grade 7 English teacher told me I would achieve great things. Thanks to him, although I did not really set out to be an entrepreneur, I always believed that I would have a career that was out of the ordinary.
My brother and I grew up in Chatsworth. Our mother, a single parent, was a clothing factory machinist. She was also a very industrious woman: because we were so poor, she would supplement her income on the weekends by selling products like clothing, jewellery and cookware.
I was a good student and I got a bursary to study teaching at what was then the University of Westville when I finished high school. But it was 1985, at the height of the political struggle. Student protests were rife, and I did not manage to complete my first year. I had to find a job to support myself so I became a data capture clerk for a Durban-based land surveying company.
Learning the ropes
The IBM XT (with its 10MB hard drive) had been around for just three years. There weren’t many programmes available, so people like me who were using these machines tended to make up the software we needed as we went along. Because data capturing is such a tedious process, I wanted to learn how to develop software that would make it easier. To do that, I had to teach myself programming. I took the computer manuals and other technology books home with me and did that over the course of a year. It sounds simple, but it was a huge amount of work that had to be done every day after-hours. I also signed up for a computer science degree with a distance learning university. But because the industry was developing so quickly, I found the course material to be grossly outdated compared with what we were doing on the job, so I deregistered.
Once I had studied enough on my own, I formalised the learning process by completing a few short courses in IT, all of which I paid for myself. As a data capturer I did not earn a lot of money so I supplemented my income by selling clothes at the flea market on Saturdays.
After two years I was promoted to head of the data capturing team, and I soon became formally involved in programming.
In 1991, I was headhunted by the Aircraft Operating Company (AOC), an aerial photography and map drawing business that was very technologically advanced. AOC created a specialist position for me at the Durban office and over a period of three years I learnt an enormous amount about geographic information systems (GIS).
By then it was 1994 and the future seemed uncertain. It was a different environment back then and affirmative action had not yet come into play. But I had ambition; I felt I was being stifled at work and I wanted to do a lot more with my life.
During this time, I had also developed a software package for the medical profession. It was a simple accounting solution that enabled medical people to manage their practices. I came up with the idea because I played tennis with an optometrist who bemoaned the lack of software available for his type of business.
After I sold him the package, he told others about it and within 18 months I had 40 clients, purely as a result of word of mouth. Because I was working for AOC, I did all the software installations and user training over the weekends.
Taking the leap
I had developed a passion for GIS technology so I partnered with another developer and together we launched Data World. The company was registered at the end of 1994 and by the beginning of 1995 we had moved into our premises in Stamford Hill.
We had no access to finance so my partner and I – who I bought out a few years later – put whatever savings we had into the business to pay the rent and get it off the ground. We kept our costs to a minimum. I remember buying office furniture at an auction.
We didn’t have a business plan either, and we had no specific agenda. But both of us wanted to build the leading GIS business in the country. Remember, the technology was still in its infancy and very much a niche product. When we started the business, we were also one of the first black IT companies in South Africa at the time, so we definitely had first mover advantage on both counts.
The first job we tendered for was some work for the Pietermaritzburg municipality. As a business we had no track record, but as individuals, we had built a vast network over the years as well as a solid reputation; it helped enormously to be well known in what was still a fledgling industry. We won the tender and never looked back.
Managing the money
At holding level, I am a 100% shareholder in the business. Shareholders in the subsidiaries comprise different empowerment groups, but they don’t just have equity in the business, they actually work in these companies.
For the first three to four years, we took no cash out of the business. My wife Vanessa and I lived on her teacher’s salary. Every now and then I would pay myself a small bonus when we had completed a major project. This is one of the most important things to remember when you are building a company. Most people get so taken in by that first cheque. The point is to take the money out of profits, not revenue. That’s the way you build cash flow, which is fundamental to the survival of any business.
Today we have cash flow that would see us through six months even if we did not earn a cent over that period. The holding company, Spatial Data Holdings, has reserves of more than R50 million, net income of the same amount, and liabilities of only about R10 million.
In the first six years Data World grew 100% annually, doubling turnover and staff every year. Even though we stayed in Stamford Road, we had to keep moving offices to accommodate that growth. In 1999 Data World opened a branch in Johannesburg. In 2001 we moved the head office to Umhlanga, and then in 2003 we decided to locate our head office in the Durban city centre.
It took 13 years for the business to reach R200 million in revenue. Bearing in mind that we sell no products, only services, I am very proud of this achievement. Today our annual turnover is R250 million. The company employs more than 500 people, with salaries accounting for 70% of our expenditure.
Data World initially started off as a company offering GIS services, but we evolved the business quite early into a developer of IT solutions built on a GIS platform. Again, that gave us a very definite edge in a sector that has grown steadily over the years. I made that decision in 1999, after looking at what was happening internationally. It was clear that government departments stood to gain huge benefits from the evolution of GIS. The province’s municipalities, as well as Umgeni Water and Statistics South Africa were among the first of our clients to really benefit from our innovative approach to the development of solutions built with this technology.
Growing through diversification
With all the international competitors that have come into South Africa, it was important for us to diversify and to move into different business sectors. That’s why I founded several start-ups over the years. It also helps to do that because it can get a bit boring to focus only on one business.
A word of caution – don’t even think about branching out into other areas of business until you have built an unshakeable base. Timing is everything. If you diversify before the primary business is ready, you could end up draining your cash reserves badly and killing off the company you worked so hard to build.
By 2003 Data World was pretty much running itself, so we partnered with Indian company Ramco Systems to launch City Works, which provides solutions for municipal and government organisations. Ramco had been looking for a local partner and there was a perfect fit between our organisations.
In 2004, we partnered with ImvoTech to launch Bizworks, a company that offers contact centre and business process outsourcing solutions. We have some big UK-based clients like British Telecom and Marks & Spencer. It was not easy to break into the UK market, but we did it by taking advantage of trade missions organised by the Department of Trade and Industry.
It worked well because we were selling South Africa as a collective, and the customers we targeted wanted to move their contact centres out of India. A year later we launched e-Valuations, a property valuation, consulting and development company. It’s now the largest valuation company in South Africa and we are in the process of expanding the business into India and China.
Vista Imaging was launched in 2007. It delivers digital imagery content using immersive spherical video technology. It basically gives you 360° views of surroundings that are seamlessly stitched together. Two years ago we launched Xcallibre, which provides business process systems to clients in the financial services, healthcare, manufacturing, public service, communication, transport and research and development sectors. This is the business that will enable us to expand outside of the public sector.
I want to decrease the dependency of the group on the public sector over time, but it’s extremely hard for a South African IT company to target corporates. Winning the Ernst & Young Emerging Entrepreneur Award last year will go a long way in helping to raise the profile of the group.
It’s been quite an experience to do business overseas. I have found that people from India and China are extremely loyal to the companies they represent, and they will do their utmost to maximise the deal for their employer. That means we have to work doubly hard to ensure a win-win situation for both sides.
In the US, people are driven by margins. We are currently in negotiations with an American company, but it’s a tough market to break into. Mostly, that is achieved by acquisitions.UK companies are the easiest to do business with – they are really fair and they tend to be happy if the deal benefits both parties equally.
I aim to learn something new every day. When I turned 35, I realised that I was never going to get a university degree, and that I actually did not need one. I set aside time to read business books, but I have no space in my life for formal courses.
Because 90% of our work is in the public sector, most of our contracts are won as a result of tendering. I spend a great deal of time networking and the company exhibits regularly at conferences to ensure that we maintain the strength of our brand in the public sector. It goes without saying that I have learnt a lot about how to tender. It’s so easy to be disqualified, which is why you have to make sure that all the statutory requirements are in order. It’s vital to have all your tax payments up to date and to ensure that your VAT and PAYE are paid. As an entrepreneur, you should never fear a tax audit. I sleep well at night by making sure that we are fully compliant.
Another point that’s key is to write your marketing proposal in layman’s terms when you respond to a bid. You may have a technical background, but you need to articulate that you have a good understanding of what the customer wants in language they can grasp. And always be concise and precise. Possibly the most important part of a tender is to get the costing done as efficiently as possible. I also ask as many questions as I can when I’m preparing a bid – not only does the nuisance factor help to build relationships with customers, but it also gives you keen insight into the business problem. I like to be curious. If you lose a bid to another company, find out how they are able to provide the service at a cheaper rate.
Confronting the challenges
Probably the biggest challenge we have faced is finding the right skills. And once you have done that, it’s often a struggle for a small business to retain those skills – they simply get snapped up. As a result, the company has placed a big emphasis on staff retention and we have a fairly low attrition rate. That said, we recently lost five people in quick succession to another company.
I have worked hard to build a very strong management team. I retain the title of CEO in each business, but every business in the group has its own MD. I maintain a firm hold on the companies and all the corporate offices are situated in one place. Because we are in the services game, I look for people’s people – it’s all about relationships in this business. I also like to employ people who have good project management skills as that is a key element of what we do. As far as possible, I try to grow people from within the group.
Succession planning was once a concern, but I have taken care of that. In the beginning, my biggest challenge was that there weren’t enough of me around. It’s an age-old concern for entrepreneurs – the limits of what you can achieve on your own. I have learnt to delegate even though it was a struggle initially. In the business’s first decade, I had no confidence in anyone else; now, if I drop dead tomorrow the business will continue to run smoothly.
Looking to the future
Last year was a difficult one for us – and for everyone. We saw a dip in revenue in some of the businesses, though not all, but we still remained profitable. Our main objective was to reconsolidate at the end of 2009, which we have done. We did not retrench any staff. What we did instead, was shift our focus to several internal projects. We got our employees to develop new software products which we will be turning into additional revenue in the course of this year. It’s great to be able to use your existing resources to do that.
They say that cash is king, and it’s absolutely true. I’m going to be looking at growing ours in the future by going into property development and investing in the construction sector.
My next big goal is to get to R1 billion turnover in the next five years. But that is not the sole driver of the business. We want to maintain profitability levels even in declining revenue situations, which is something we have succeeded in doing. We grew our profits last year even though revenues dropped. We will probably realise the bigger part of that objective with acquisitions and we will use some of our cash reserves to accomplish those.
There’s no easy path to success. It requires absolute hard work. There are no comfort zones. I had no life outside work for ten years; now I have weekends. Technology has played a big role in helping me to work smarter and free up some hours. Nonetheless, because I play an oversight role in each business in the group, I am connected all the time. Our customers are global and I respond to their emails within 24 hours maximum. That is my promise to them.
What is GIS?
A geographic information system (GIS) captures, stores, analyses, manages and presents data linked to location. It includes mapping software and its application to cartography, remote sensing, land surveying, mathematics, photogrammetry, geography, and tools that can be implemented with GIS software. In the simplest terms, GIS is the merging of cartography and database technology.
GIS technology provides municipalities with a common platform for data collection, storage, authorised and secure access to spatial and non-spatial data, harmonising the work flow of departments and disseminating information for the benefit of the public at large.
Charting the growth of a R250 million business
Data World Awards and Achievements
1995: Data World is established
2001: Data World nominated as one of the Top 20 Unlisted Companies in South Africa by Business Day.
2002: Data World rated one of the Top 5 Black ICT Companies at the African ICT Achievers Awards.
Special Achievement Award given to Data World for its client the Municipal Demarcation Board at the ESRI User Conference (ESRI is a world leader in GIS spatial modelling tools and mapping software).
2003: Data World rated one of the Top 300 Empowerment Companies in South Africa.
Data World partners with Indian company Ramco Systems to launch City Works, which provides solutions for municipal and government organisations.
2004: Data World partners with ImvoTech to launch Bizworks, which offers contact centre and business process outsourcing solutions.
2005: Property valuation, consulting and development company e-Valuations is launched.
2006: Data World named CSSA ICT company of the year.
Data World starts overseas operations in New Delhi, India.
2007: Vista Imaging is launched. It specialises in the delivery of digital imagery content using immersive spherical video technology, providing 360˚ views of surroundings that are seamlessly stitched together.
2008: Xcallibre is launched. It provides business process systems to clients in the financial services, healthcare, manufacturing, public service, communication, transport and research and development sectors.
2009: Willy Govender wins the Emerging Entrepreneur category at the Ernst & Young World Entrepreneur Awards.
7 Foundational Values Of Brand Cartel And How They Grew an Iconic Business From The Ground Up
Marco Ferreira, Renate Albrecht and Dillon Warren built Brand Cartel, a through-the-line agency, that delivers exactly what they wanted — and has grown exponentially as a result.
- Players: Marco Ferreira, Renate Albrecht and Dillon Warren
- Company: Brand Cartel
- Launched: 2013
- Visit: brandcartel.co.za
“We’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do.”
When Dillon Warren, Renate Albrecht and Marco Ferreira launched Brand Cartel in 2013 they were in their early 20s with zero agency experience between them. The idea had started when Marco recognised that social media was taking off, but no agencies were playing in that space yet. It was a clear opportunity.
Printing flyers that said ‘Your social media is so last season’, Marco and Renate went from store to store in Sandton City, pitching their services. When Dillon joined them a few months later because they needed someone to handle the company’s finances, they had two laptops between them, R6 000, which Dillon had earned from a Ricoffy advert, and sheer will and tenacity.
“We shared a house to save on rent and split everything three ways,” says Renate. “At one point we hadn’t eaten in two days. My mom lent me R500 so I could buy Futurelife and a bag of apples for the three of us.”
The trio hired their first employee soon after launching Brand Cartel, and after prioritising salaries and bills, there wasn’t much leftover. “Dillon actually paid us R67 each one month,” laughs Marco. “That’s what was left — although I still can’t believe he actually sent it to us.” It was at this point that the young business owners realised they needed credit cards if they were going to make it through their start-up phase — not an easy feat when your bank balance is under R100.
“Looking back, those days really taught us the value of money,” says Dillon
“We spent a lot of time with very little, and we’re still careful with money today.” Through it all though, the partners kept their focus on building their business. “It almost didn’t work for a long time. We were young and naïve, but in a way, that was our strength. We didn’t have any responsibilities, and we’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do. All of our business has been referral business. It takes time, but we focused on being the best we could be and giving everything we had to our clients. Our differentiator was that we really cared, and were willing to offer any solutions as long as they aligned with our values.”
This is how Brand Cartel has grown from a social media agency into PR and Media Buying, SEO and PPC Strategy, Digital and Print Design, Web Development, Campaign Strategy and now an Influencer division. “It’s an incredibly competitive space with low barriers to entry, which meant it was easy to launch, but tougher to build a client base,” says Renate. “I’d sometimes cry in my car between sales pitches, and then walk in smiling. We had no idea if we’d make it.”
The perseverance has paid off though. Strong foundations have laid the groundwork for exponential growth over the past year, with turnover growing almost ten-fold in 2017 thanks to relationship-building, strong referrals and fostering an internal culture and set of values that has driven the business to new heights as a team.
Like many start-ups, Renate, Dillon and Marco have made their fair share of hiring mistakes, but as the business grew and matured, the young entrepreneurs began to realise that the success of their business lay in the quality of their team and the values they stood for.
This meant two things: Those values needed to be formalised so that they could permeate everything Brand Cartel does, and they needed a team that lived, breathed and believed in them.
“We’ve had some nasty experiences,” admits Dillon. “You should always hire slowly and fire fast, and for five years we did the opposite. We’ve hired incredible people, but we’ve also ended up with individuals who didn’t align with our values at all, and that can destroy your culture.
Dillon, Marco and Renate realised they needed to put their values on paper. “We did an exercise and actually plotted people based on a score grading them against our values, so we knew where our issues were. We knew what we wanted to stand for, and who was aligned with those values. We were right; within a few weeks resignations came in and we mutually parted ways.”
The team that stayed was different. They embraced Brand Cartel’s values, and more importantly, it gave the partners a hiring blueprint going forward.
“Values are intangibles that you somehow need to make real, so it’s important to think about the language you use, and how they can be used in a real-world work context,” says Marco.
The team has done this in a number of ways. First, they chose ‘value phrases’ that can be used in conversation, for example, ‘check it, don’t wreck it’, and ‘are you wagging your tail?’ Team members can gently remind each other of the value system and focus everyone on a task at hand simply by referring to the company’s values. “In addition, when someone is not behaving according to those values, you can call them out on the value, which is an external thing, rather than calling them out personally,” explains Dillon.
Second, all performance reviews are based on the values first. This means everyone in the organisation begins any interaction from a place of trust, knowing they are operating according to the same value system.
“When you’re in a production environment with jobs moving through a pipeline, there can be problems and delays,” explains Marco. “Instead of pointing fingers when something is over deadline or a mistake is made, our team can give each other the benefit of the doubt and work together. They trust each other, which creates cohesion. We all work as a team, which impacts the quality of our work and the service we offer our clients.”
The system is simple. Coaches will step in first if there is an issue before it escalates to the Head of Team Experience, Nicole Lambrou. If Nicole is called in, she will address the problem head on. “Inevitably it’s something fixable,” says Marco. “By addressing it immediately and in the context of our values it can be sorted out quickly. Ultimately, the overall quality of our team improves, and we are a more cohesive unit.”
The founders have seen this in action. “I recently arrived at a client event and three different people came up to me and complimented my team on the same things — all of which aligned with our values. Everyone at Brand Cartel lives them, internally and externally,” says Renate.
The value system has also shaped how the team hires new employees. “We used to meet people and hire for the position if they could do the job,” says Renate. “But then we started realising that anyone can hold up for an hour or two in an interview. You only learn who they really are three months and one day later.
“We need people who walk the talk, and we really only had a proper measurement of that once we articulated our values. Our interview style has changed, but so has what we look for.”
Here are the seven values that Dillon, Marco and Renate developed based on what they want their business to look like, how they want it to operate, and what they want to achieve, both internally, and in the market place.
1. Play with your work
Our goal is for everyone on our team to become so good at what they do that it’s no longer work. Once that happens you love your job because you’re killing it. It’s why sportsmen are called players, not workers, and it starts with the right mindset.
2. Wag your tail
The idea behind this value stems from Dale Carnegie, who said ‘have you ever met a Labrador you don’t like?’ In other words, we all respond well to people who are friendly. It needs to be genuine though, so again, it’s a mindset that you need to embrace.
We live these values whether we’re at the office or meeting clients. If you go into each and every situation with joy and excitement, from meeting someone new to a new brief coming in, you’ll be motivated and excited — and so will everyone around you.
3. Check it, don’t wreck it
The little things can make big differences. Previously it was too easy to pass the buck, which meant mistakes could — and did — happen. Once you instil a sense of ownership and create a space where people are comfortable admitting to a mistake however, two things happen. First, things get checked and caught before there’s a problem. Second, people will own up if something goes wrong. This can help avoid disasters, but it also leads to learnings, and the same thing not happening again.
4. What’s Plan B (aka make it happen)
We don’t want to hear about the problem; come to us with solutions, or better yet, already have solved the problem and made it happen. We reached a point where we had too many people coming to us with every small problem they encountered, or telling us that something wasn’t working so they just didn’t do it.
That wasn’t the way we operated, and it definitely wasn’t the way we wanted our company to operate. We also didn’t want to be spoon feeding our team. It’s normal for things to go wrong and problems to creep in — success lies in how those problems are handled.
Ignoring problems doesn’t make them go away, so we embrace them instead, encouraging everyone on our team to continuously look for solutions. For example, the PR department holds a ‘keep the paw-paw at Fruit & Veg City’ meeting every morning, where we deliberately look for where problems might arise so that we can handle them before they do. We start with what’s going wrong and then move to what’s going right. You need to give your team a safe and transparent space to air problems though. We don’t escalate. We need to know issues so that we can collectively fix them, not to find fault.
5. Put your name to it
It’s about pride in work and making it your own. When someone has pride in what they’re doing, they’ll not only put in extra time and effort, but they’ll pull out all the stops to make their creative pop, or go the extra mile for a client.
We need to find the balance between great quality work and fast output though. One way we’ve achieved this is by everyone reviewing the client brief and then committing to how long their portion will take.
When someone gives an upfront commitment, they immediately take ownership of the job. It took time for us to find our groove with this, but today we can really see the difference. Our creative coaches also keep a close eye on time sheets and where everyone is in relation to the job as a whole to keep the entire brief on track. If someone is heading towards overtime we can immediately ask if something is wrong and if they need assistance.
We also celebrate everything that leaves our studio. Every morning we have a mandatory 15-minute catch up session where we check in on four core things: How am I feeling (which allows us to pick up on the mood in the room and the pressure levels of our teams); What’s the most important thing I did yesterday; What’s the most important thing I’m going to do today (both of which give intention and accountability); and ‘stucks’, issues that team members need help with. We then end off with our achievements so that we can celebrate them together.
6. Keep it real (aka check your ego at the door)
We believe in transparency. At the end of the day we’re all people trying to achieve the same thing, but it’s easy for ego to creep in — especially when things go wrong. You can’t be ego-driven and solutions-orientated. If clients or team members are having a bad day, you need to be able to focus on the solution. Take ego away and you can do just that. It’s how we deal with stucks as well. We can call each other out and say, ‘I’m waiting for you and can’t do my job until I receive what you owe me,’ and instead of getting a negative, ego-driven reaction, a colleague will say, ‘sorry, I’m on it.’
7. Walk the talk
For us, ‘walk the talk’ really pulls all our other values together. It’s about being realistic and communicating with each other. If you’ve made a mistake or run into a problem, tell your client. Don’t go silent while you try and fix it. Let them know what’s happening and fill them in on your plan of action.
Walk the talk also deals with the industry you’re in. For example, if you’re a publicist, you need to dress like a publicist, talk like a publicist, and live your craft. In everything we do, we keep this top of mind.
John Holdsworth Founder Of Tautona AI Shares 4 Disruptive Strategies That Are Changing The Insurance Industry
What can we do now that we couldn’t do before, thanks to changes in technology?
“Disruption isn’t just doing things in a different way which doesn’t resonate or go any further — it’s about changing the game. Being disruptive means taking a look at an industry and finding a way to do it differently, giving you an advantage over the incumbents.”
- Player: John Holdsworth
- Company: Tautona AI
- Est: 2016
- Visit: www.tautona.ai
Disruptive innovation is the catchphrase that defines the last 20 years. New technologies, business models and media have disrupted the way we do just about everything. Conventional wisdom has it that the new kids on the block are the ones who are going to own the market at the expense of industry stalwarts, but this innovative South African disruptor is showing them how it’s done.
1. It’s the experience economy, stupid
Regardless of how the world changes, organisations that consider their customers’ emotions and experience first, win. That’s exactly what Tautona did. They put themselves in the customers’ shoes and asked one key question: ‘What’s wrong?’ Few industries are as ripe for disruption as insurance. When John Holdsworth co-founded cognitive automation business Tautona AI in 2016, he knew that there had to be a better way for insurers to handle client claims.
Tautona AI emerged out of a consulting engagement John had with a large insurance company. With a background in IT, he is a highly experienced technology executive and entrepreneur who has started a number of successful companies. He says he loves the energy and adrenalin associated with start-ups. He pioneered the use of digital signatures in South Africa, founded mobile payments company PAYM8, and converged voice and data provider ECN, which he sold to Reunert for R172 million in 2011. The experience acquired over this time meant he was ready to take on a massive challenge.
“When a policyholder submits an insurance claim, that action should trigger an instant decision, with the outcome immediately communicated back to the policyholder,” John says.
“Customers want swift claims handling, communication, and compensation. They want the same instant gratification that they get from online banking. So that’s what we set out do — to revolutionise the entire claims process. We have made traditional claims processing a thing of the past by pioneering a cognitive solution that is making the claims process faster, smarter and more efficient.”
2. Automating judgment tasks once reserved for humans
Tautona’s claims automation solution uses artificial intelligence to instantly approve or refer claims for further investigation. By using machine learning algorithms to identify patterns in the data, Tautona’s solution identifies fraudulent claims, enabling insurers to halve fraudulent claim losses.
Tautona also uses Robotic Process Automation to integrate to legacy systems, removing the need for traditional programming techniques. This means that Tautona’s claims automation solution can be implemented with minimal disruption to a business. By automating decision-making, communication, and compensation, Tautona enables insurance companies to take a major step towards becoming true digital insurers.
3. Ditch the legacy systems, start from scratch
Disruptive innovators invest in digital strategies so that they can find new ways of responding to their customers’ evolving needs. The founders of Tautona AI agree on several principles, but one that stands out specifically because it goes entirely against traditional thinking, is the importance of starting from scratch.
“You cannot take a non-digital business model and expect it to work online,” says John. “Instead of using old methods, you need to start from the beginning. Ditch the legacy systems, take a leader mentality and imagine the art of the possible.”
This iterative, modular approach typically begins with defining the strategy and programme plan upfront, delivering a core capability fast so it can provide benefits immediately, and then continuously improving with regular, incremental capability improvements to achieve the objectives of the strategy. It’s an approach that fosters closer collaboration between stakeholders, improved transparency, earlier delivery, greater allowance for change and more focus on the business outcomes.
4. Shaking up an industry
How do you launch new solutions and educate customers who are used to doing things the way they have always been done? John says resistance to change is inevitable. That’s why you need more than good technology.
“When you introduce something ground-breaking to the market, you encounter many different types of personalities asking diverse questions. That demands an approach that is client-centric and entirely customer focused. It also means you have to spend time developing a sound business case to present to decision makers.”
A solid business case documents the justification for the undertaking of a project. It’s the way you prove to your client and other stakeholders that the product you’re pitching is a sound investment. You need to justify the project expenditure by identifying the business benefits the innovation will deliver and that your stakeholders will be most interested in reaping from the technology.
“Essentially, it’s about proving you can deliver,” says John. “When you have an entirely new proposition, the only way you can hope to get your foot in the door is with a value proposition so profound that clients are forced to take a look at it.”
Tautona has convinced a number of South Africa’s top insurers to implement their AI-powered claims automation solution. The results to date have been ground-breaking, with insurers dramatically reducing turnaround times and processing fees. As a result, Tautona’s sales pipeline is full to the end of the first quarter of 2019.
“But there’s no rest for disruptors. Nokia and BlackBerry crumbled because they were slow to react to market changes, and they underestimated the challenge from Apple and Samsung. The only way to retain leadership is with relentless innovation, that is, a constant flow of new versions and features. That applies in any industry today.”
Tim Hogins Started Out As A Security Guard, Today His Has A Turnover Of R150 Million And Has Self-Funded Three Huge Lifestyle Parks
As a poor township kid, Tim Hogins watched kids pile into buses heading to Sun City every weekend, knowing he couldn’t afford to join them. He was a youngster, but he made a promise to himself. One day he would build parks that anyone could visit — especially underprivileged kids like himself.
- Player: Tim Hogins
- Company: GOG, formerly Green Outdoor Gyms
- Est: 2012
- Turnover: R110 million
- Projected Turnover: R150 million (2018)
- Visit: gog.co.za
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that – I want to employ people, develop them, push boundaries and see where we can take this.”
“Poverty can be a good thing, because growing up poor makes you creative, and that’s an incredible power if you know how to use it.”
Seven years ago, Tim Hogins drove out of an office park and pulled onto the side of the road because he was having a panic attack. His car was closing in on him, he couldn’t see and he couldn’t breathe. After months of hard work, it was all over. His dreams were shattered.
Tim isn’t the first entrepreneur to find himself here, and he won’t be the last. What separates him from countless other aspiring business owners is that despite a massive setback, he didn’t back down. He sat in his car, phoned his wife, and told her what had happened. Instead of telling him it was time to move on and find a job, she asked him how they were going to cobble together the money he needed to start again.
And that was the beginning of Green Outdoor Gyms, a vision Tim had been nurturing for almost two years. A business idea that had led to his retrenchment and was almost ripped away from him by his business partners and investors.
But he didn’t quit. He pushed on. And today his business has a projected turnover of R150 million and has self-funded three huge lifestyle parks that Tim hopes will impact the lives of thousands of underprivileged children while providing jobs for hundreds more.
The in-built art of tenacity
To understand Tim, you need to understand where he came from. As a township kid growing up in Randfontein on the West Rand of Johannesburg, Tim always helped his parents to sell stuff. They were traders. His dad had a small café selling burgers and chips, and his mom baked. While other kids in the area piled into buses for Sun City on the weekends, or visited a local bird park, Tim had to work or the family didn’t eat.
“I matriculated in 1996, and even though I had an exemption, tertiary education wasn’t on the cards for me,” he says. “We just couldn’t afford it.” But Tim had a plan. His cousin told him about a free four-week course to become a security guard, and Tim aced it, securing a position at one of the firm’s top industrial sites.
Here’s the first secret to Tim’s success. Instead of seeing a dead-end job, Tim saw an opportunity. If he did his job well, he would progress to a driver, and then a cash-in-transit guard. From there the plan was management. Becoming a security guard wasn’t his fate because he couldn’t get a degree — it was step one to the rest of his life.
“I was raised to be the best version of myself. Everything is what you make of it. In primary school I was head boy, and in high school the head of the SRC. There’s always a way to grow and improve yourself.”
Two years into his career as a security guard, Tim heard about another opportunity — a free programming course teaching COBOL, a back-end system used by the financial services industry.
“I grew up 500 metres from Stafford Masie, who would go on to become the first head of Google South Africa and is one of our country’s greatest tech entrepreneurs,” says Tim. “I had zero programming experience — I’d never touched a computer — but I knew how valuable these skills were, and here was an opportunity being handed to me.”
It wasn’t quite as easy as Tim imagined. He failed the aptitude test and had to take it again. Once he was on the course, he failed that too — it was a programming course after all, and Tim needed a far more basic introduction to IT. He didn’t give up though. He’d quit his job and needed to make this work while he was still living with his father and didn’t have financial responsibilities, so he begged the course administrator to let him retake the programme. This time he passed, and found a job at a small IT firm.
Once there, Tim built up his IT acumen. Over the course of his IT career Tim worked for Dimension Data, EOH and SITA. In his final three years he applied for an account management position and moved into sales. His goal was to become a business owner, and so he diversified and learnt what he could about business.
He also paid attention to the world around him, looking for a business opportunity or problem he could solve. He dabbled with some ideas, but the one he kept coming back to was outdoor gyms.
“I saw kids in parks doing sit-ups, push-ups, pull-ups on trees, and kept thinking there must be a better way than this for them. I knew that a proper solution would be good for the whole community — giving kids and parents a safe and free environment to play in and focus on their health. I focused on poorer communities, where gym fees weren’t an option, and kids needed safe places to play and keep out of trouble.”
The more Tim unpacked the idea, the more he began to believe in it. And then his employers found out, and made it clear that they did not like Tim’s attention divided between his job and his business idea. Despite this, Tim continued to focus on his entrepreneurial play, and within a few months he’d been retrenched, ostensibly due to a restructuring of the business, yet Tim was the only person let go.
It was October 2010 and Tim had no job, two-months’ salary and he was about to get married. But it was the best thing that could have happened to him. “That retrenchment catapulted me into business. From then on, my full focus became outdoor gyms.”
Winning and losing
Tim had approached Joburg City Parks who where interested in the idea. He had also met with an engineer and they had begun to design the equipment. There was just one small problem: Money.
“I knocked on doors, approaching anyone who would listen. One investor laughed at me. He said I’d gone from IT to playing with steel — what was wrong with me? A contact at SITA said flat out that she wouldn’t help me. Looking for funding can be incredibly demoralising. I had an idea and a letter of intent from Joburg City Parks, and it still wasn’t enough.”
And then Tim was introduced to a group of investors who wanted to instal kids play areas in municipal parks. Tim had the City Parks connection; they had the funding. They entered into a business partnership and built a prototype together. This was when Tim’s wheels fell off.
“I was invited to a meeting by my three business partners, and when I arrived there were five people in the room — my partners and their two lawyers. We’d entered into the agreement as 50/50 partners, and they wanted us to all be 25% shareholders. I couldn’t agree to that. This was my idea, my connection, my baby.”
By the time Tim left the meeting, he had no funding, no partners and no prototype and he knew City Parks was getting impatient. All he’d done was create competitors — and they had a demo model.
Tim had spent most of 2011 looking for funding and then building the prototype once he found his partners. He wasn’t just back to square one, he was behind where he’d started months ago. Hence the panic attack.
It was a pivotal moment. Give up or push on? Tim chose to push on. That night, Tim and his wife, Rona Hogins, sat down and came up with a plan. They would sell one car and Rona would apply for a bank loan. Together, they managed to come up with R200 000. Tim approached a friend who was interested in a side business and they launched LXI, an importer of screens for media companies. LXI brought in enough to pay the bills while Tim concentrated on getting Green Outdoor Gyms off the ground.
Then luck stepped in. “I drove past a warehouse and saw some play equipment. Instead of driving on, I pulled in and pitched my business idea to the owner.” The owner, Neta Indig, agreed to build Tim’s prototype at cost, in exchange for a long-term partnership. Tim agreed. His R200 000 would be enough to get the business back off the ground. Green Outdoor Gyms was officially launched in February 2012.
Here’s the thing about luck though. Unless you’re open to opportunities, paying attention and willing to step out of your comfort zone, luck alone will get you nowhere. By the time Tim drove into Neta’s parking lot, he’d spoken to countless investors, had doors shut in his face, lost a partnership and his prototype, and was still willing to look for any opportunity that might present itself. Through sheer will and tenacity, he found it.
After the first outdoor gym was installed, two things happened. The competition Tim had feared from his old partners didn’t materialise. It was Tim’s first real lesson in the power of passion. He’d doggedly pursued his idea for over two years. His partners, who didn’t share that passion, did nothing with the prototype they’d acquired. Tim was still — at that stage — in blue ocean territory.
The second was how quickly an idea can take off once the foundations are in place. GOG’s turnover was R3 million in its first year, and orders were flooding in from municipalities throughout South Africa.
Tim was invited to present his solution in parliament, and it was included in the National Development Plan. “Everything escalated faster than I could have imagined,” he says.
“The reality is that we’re an obese nation. It’s a real problem. On top of that, 90% of the country can’t afford commercial gym fees. Under the National Development Plan, every community was earmarked for an outdoor gym. Government saw my vision and they bought into it.”
Tim had to tender for each new site, but he had a first-mover advantage. By the time other players entered his space he’d already built up a track record. His team’s turnover times are impressive and the business doesn’t only design and instal the equipment, but can also overhaul a derelict park. The quality of his products ensures that equipment lasts at least eight years with no maintenance, although once an outdoor park is installed, the community takes ownership of it, cleaning it regularly and maintaining the area.
In six short years, GOG has installed over 1 000 outdoor gyms for local municipalities around the country, and there’s still room for growth. There are currently between 5 000 and 10 000 sites available, and while Tim doesn’t believe they will get all of them, the business will continue to expand. “I believe we still have a ten-year run with government-funded outdoor gyms, but this is no longer our core business.”
In fact, GOG has grown and changed considerably since that first outdoor gym was installed in February 2012.
“I’m an opportunist. I pay attention to developments around me and am always on the lookout for where we can add value,” says Tim. As a result, GOG is now developing its own sites and supplying equipment to the industry — across private and public sectors.
“You need to know that competitors are coming,” says Tim. “When we started out we had a niche with outdoor gyms and government, but someone will always want to eat your lunch. If you know that someone’s paying attention to what you’re doing and that everyone needs to diversify, you can stay ahead of your competitors.
“Our business is centred around health, fitness and family, and this understanding has allowed us to grow into lifestyle spaces that support our core focus.”
As a result, GOG has expanded to the installation of play areas and outdoor gyms for hotels, private and public schools, beach parks and lifestyle estates, including Steyn City.
“We also have a registered landscape company,” says Tim. “We can take vacant land and transform it into a park with grass, trees, water and pathways. We have a Geotech division that does soil testing and environmental studies.”
None of this happened overnight. It takes time to build a reputation, but if you’re focused on four key things, you can build a sustainable business. “You need to diversify your product range, diversify your customer base, nurture relationships and push outbound sales,” says Tim.
Tim has geared the business for scale, which is critical in a production and manufacturing context. “We have always outsourced our manufacturing, first with Neta, and later to a Chinese manufacturer who has become integral to our success.”
Tim’s relationship with Neta was critical in the start-up phase, but after two years the manufacturer decided to focus on his core. “We were too big — it wasn’t a side project anymore, and Neta wanted to remain in construction,” says Tim. “I needed to either find another manufacturing partner, or move into that space myself.”
Tim visited manufacturing facilities in China and sourced samples until he found a plant that could handle GOG’s volumes and quality. “Chinese manufacturers value loyalty and they’ll do whatever you want at the price point you ask. If you want a cheap product, you’ll get it — and the quality to match. Good quality costs more. I have an excellent relationship with our supplier — so good that he flew out to South Africa to see our operations, because he was impressed with the volumes he produces for us.”
It’s this relationship and the capacity available to Tim that has allowed him to take the next step towards his ultimate vision for GOG: Lifestyle parks.
Living the dream
GOG’s first lifestyle park stemmed from Tim’s need for a showroom and his life-long dream to give underprivileged children access to entertainment parks that he couldn’t afford when he was a child.
“We were manufacturing outdoor parks and I started thinking about other ideas in this space that aligned with our vision and niche. I needed a showroom that could showcase everything we can do, from ziplines to climbing walls, swimming pools to spray pools and outdoor gyms. A lifestyle park was the natural answer to everything I wanted to achieve.”
GOG Lifestyle was opened in November 2016 and is situated off the N14 near Lanseria Airport. It’s close to a number of townships, including Diepsloot and Cosmo City. “The revenue model is corporate team building events, family days and launches, which allows us to run specials for kids, the elderly, and CSI projects for schools and churches.”
The next lifestyle park, GOG Gardens, was opened in Soweto in December 2017. Bigger than the first lifestyle park, GOG Gardens caters for picnics, outdoor events and concerts. It’s a multi-purpose venue with seven venues in one, and also focuses on corporates, the general public and events, with CSI projects that support children.
“We have launched some smaller projects, such as GOG Kids at Chameleon Village in Hartbeespoort and a play area in Vilakazi Street, but our next big project is Happy Island, a 36 hectare water park off Beyers Naude Drive in Muldersdrift.”
Happy Island is GOG’s first joint venture with an investment partner, Tim’s Chinese supplier. Unlike the other lifestyle parks, which GOG self-funded from cash reserves, Happy Island is a multi-hundred million rand project with large capex needs. “The idea came to life when the chairman of our manufacturing supplier visited our operations in South Africa. There are no water parks in South Africa similar to those I visited in China. We are doing something completely new and exciting, and we broke ground in April 2017.”
All of GOG’s lifestyle parks have required high capex investments and have not yet reached break-even, unlike the smaller projects that will reach break-even within a few months. “Our projection for the lifestyle parks is three years, and five years for Happy Island,” says Tim.
“My long-term goal is to have ten lifestyle parks across South Africa, one in each region, and that’s what I’m investing in. We want to make a difference, give kids access to these parks and employ people.
“I’m here today because of my childhood experiences, but before I could invest in this dream, I needed to start small and build up my reputation and cash reserves. To achieve my ultimate dream will take a lot of investment, so that’s the focus.
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that — I want to employ people, develop them, push boundaries and see where we can take this. When someone says something is impossible, I want to know why, and then try anyway. That’s how you achieve great things. That’s how you realise your dreams.”
In 2016, GOG launched its first lifestyle park, GOG Lifestyle. Since then, two more lifestyle parks have been added, GOG Gardens in Soweto, and GOG Kids in Chameleon Village in Hartbeespoort. The company’s biggest venture, Happy Island will soon be open to the public as well.
GOG’s genesis was outdoor gyms, and the company continues to grow from these original roots: Catering to a growing focus on healthier lifestyles, from public parks to beaches, corporates and residential estates.
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