- Founder: James Fisher
- Company: Nautic Africa
- Launched: 2008
- Previous experience: Invented the Snakeboard while still in college; launched Cape Advanced Vehicles (CAV) to build GT40 race cars
- Start-up capital: None
- Current turnover: An order book of R600 million
Serial entrepreneur. Maverick innovator. Mastermind behind the Snakeboard. GT40 and Shelby Cobra racing car manufacturer. Responsible for the first ships in their class to be designed and built in South Africa. Local boy made good.
James Fisher is all of these things.
But he’s also the man who has regrets about the way he listed his first company on the London Stock Exchange, the founder of another company that tanked badly and a businessman with many failures under his belt.
These days he’s a little bit more cynical, quite a bit older and a whole lot wiser. And he’s put past lessons to good use building Nautic Africa, a marine company started without a single cent, that has zero debt and an order book of over R600 million.
This is his story.
Inventing is in James Fisher’s DNA. As a youngster he’d consciously invest time in thinking about how to come up with a better version of an existing product, or better yet, an entirely novel product that would be ‘the next big thing’.
His efforts paid off when he invented the Snakeboard in 1989 along with school friend Oliver Macleod Smith. It was the biggest thing to happen to skateboarding since the skateboard and it made Fisher millions. The Snakeboard won the Popular Science Worldwide Product of the Year in 1992. Fisher and Macleod Smith listed the company on the London Stock Exchange, defying everyone who’d berated him for leaving university mid-degree to pursue what most saw as a harebrained pipe-dream.
He sold the snakeboard patents in 1995, the company in 1999 and moved on to his next venture – building GT40 racing cars locally in South Africa as part of Cape Advanced Vehicles (CAV), teaming up again with Macleod Smith and new partner Owen Ashley.
These days you’ll find him at the helm of Nautic Africa, a specialist maritime vessel design and construction company that supplies naval fleets and other vessels to customers around the world.
“I wouldn’t be so bold as to say I was born with business acumen. That’s not true. But if you are smart enough to learn the lessons early on, you will find yourself on the right track. It‘s a school of hard knocks but you do learn fast when you’re young and you’re prepared to go out there and try,” he says.
Fisher was nothing if not prepared to ‘go out there and give it a try’. He clearly remembers the family rumpus that erupted when he threw aside his university degree to follow his Snakeboard dream to the United States. “The move to the US at the time was not bought into by the whole family,” he jokes.
And being ready to get stuck in means he’s had his fair share of lessons. “Failure,” he says, “is – fortunately or unfortunately, depending on your take – a vital part of the learning curve.”
My most important lessons come from my two biggest failures
The first – surprisingly, given its meteoric success – relates to the Snakeboard.
Convinced by the market makers that they needed a prestigious board of directors when they listed in London, Fisher and Macleod handed over management control to a board that didn’t understand the product.
Fisher explains, “At the end of the day Oliver and I owned 51% of the company but we had no control over it. We handed everything over. Amongst other things we wanted to target the sports market and they felt it was more a cheap toy product to drive volume and revenue without consolidating the product, brand and integrity. The spirit we created wasn’t carried through and our stock price fell quite dramatically. Essentially, we lost our baby.”
The lesson was that you cannot hand over the reins of your company to people who don’t understand the intrinsic value and integrity of the product.
But he blames no one other than himself. “We managed it badly. We saw dollar signs and were happy to get some money out and float the company. It was enormously prestigious for youngsters in their mid 20s. We were on the front cover of the Financial Times in London. It was a great experience for us and I never regret it, but the failure for me was handing it over in such an inexperienced manner to people who didn’t understand the business,” he says.
Although he and Macleod retained majority equity, the experience raises questions many other entrepreneurs have about giving away ownership of a growing company. How much is too much?
“The question reminds me of something Raymond Ackerman said. He was in a position where he had to raise funding and his investors were very happy to put money into the business, but they wanted to take what would end up being majority equity. He convinced them that in fact they didn’t want that, because as his investors it was better for them if he was still in control of the business and driving it with passion that can only come from ownership. I think there is a lot of merit in that,” says Fisher.
The lesson about handing over ownership has stuck with him. He hasn’t given away a single share in Nautic Africa. Key staff incentives are imperative and Fisher does reward his team commensurate with good performance.
Equity deals may be on the horizon for Nautic in future, but these will be driven by purely strategic reasons – to open doors, unlock opportunities, take the business to the next level. But not necessarily to raise funding.
“At some point you are going to need to give away equity and that’s okay if it’s for the right reasons, but my advice would be to hold on to as much as you can for as long as you can. Investors – and I count myself among them – don’t need control. They should be investing in you as the entrepreneur, not trying to get you out of the way,” he adds.
That’s all very well but what do you do if you don’t have funding?
Well, here’s the thing. Nautic Africa was started without a single cent of Fisher’s – or anyone else’s money. It has been completely self-funded and to this day is 100% debt-free. And it’s not as if ship-building is a low capital requirement business. “It can take a year to build a ship and requires enormous amounts of money, so cash flow is always an issue,” says Fisher.
He got around the funding problem by leveraging off the back of an order and getting the customer to do a pre-payment.
“I kept a contract from the marine division of CAV when we sold the company and this got me into the maritime industry on the leisure side, supplying small boats to Mercury in the US. But when the leisure industry started dipping following the recession, I realised that the commercial industry was still strong. I had a client who was looking for a boat – I went and had it designed by a naval architect and outsourced the manufacture to a factory using the client’s deposit,” he explains.
Eventually an idea evolved in his mind to build more customised products for maritime customers. He got a couple of big orders and was able to set up his own facility, and has built the business from there to its point of success today.
But things weren’t always so rosy, and Fisher mentions ‘two’ big failures, so what was the second one? In answering that particular question, he’s unequivocal.
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The car business was a spectacular failure. I lost millions.
“You end up pouring money into it to keep it going. I will never do that again. When things aren’t working sometimes the best thing to do is to cut it, kill it, put it to bed and start again,” he says.
Disaster struck when the rand appreciated in value from R13/$ to R5/$ – a catastrophic turn of events for a business that was 100% export and 100% local manufacture. In a classic double whammy, revenue halved while costs soared.
“The lesson for me was that you need to aggressively hedge your business all the time and build up equity. You cannot be reliant on things always being the same going forward,” Fisher says.
Looking back he knows he should’ve done certain things differently but these are all the lessons you move forward with. “The two businesses are extremely similar – we manufacture locally and sell mostly into Africa but also globally. We are now hedged from a currency risk perspective because we import around 35% of components,” he explains.
Nautic has found its ‘sweet spot’ – Africa is growing, oil and gas are booming, the company has innovative products and the people to deliver a unique service that allows it to outstrip Chinese and Turkish competitors.
“Business is about getting the formula right. It’s not actually about the product but rather about the perfect business mix – the product, the people, the service, the timing, the environment, the cash flow,” Fisher says.
That said, people still want to know what the ‘key’ is to making a success out of a winning idea.
A lot of people ask me what the magic formula is for innovation.
“They ask me to be involved in their business or innovation because they seem to think that somehow that will make it work. But that’s missing the point. I don’t have some unique secret. The secret is simply this – you can have the best product in the world, something that will turn water into fuel, but if it‘s marketed by the wrong person and there’s not a driving, singular passion behind it, it will die.”
It’s an interesting take from an ‘ideas man’ whose success has been built on innovative and ground-breaking concepts. But it‘s something Fisher sees often in his work with young innovators and inventors. The ideas that are driven passionately by dedicated entrepreneurs who have an abiding belief in their product are the ones that work. The rest don’t see the light of day.
“Everyone says it‘s about the idea but that’s just not enough. There are so many great ideas out there. The person pushing it makes the difference; in a lot of cases naïve enthusiasm is better than cynical knowledge,” he adds.
Passion is something Fisher talks a great deal about. But he balances this now with a dollop of cynicism borne of the knocks he has suffered.
“You almost have to develop cynicism so that you remain aware that failure could be just around the corner,” he says.
It’s something that’s always at the back of his mind. “Business is a daily fight for survival – even when you are not on the verge of closing up shop, you need to think of it in that way.
“There is no room for complacency. The minute you stop checking that you are still buying at the right price, getting the best deal possible, that your customers are happy – you are lost,” he says.
He adds, “I find myself coming across far more cynically to young inventors because I know it‘s not a bed of roses out there. They need to understand that. It’s not to temper their enthusiasm, but rather to temper their expectations of what is going to hit them. They have to know they are going to need to push through many, many brick walls.”
But for all his talk of being more cynical, Fisher still admits to getting ‘enormously, stupidly excited’ about new ideas. So while much has changed, much has remained the same.
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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.
- Player: Appanna Ganapathy
- Company: ART Technologies and ART Call Management
- Launched: 2016
- Visit: art-technologies.co.za; art-callmanagement.co.za
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
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.”
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.”
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.
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:
30 Top Influential SA Business Leaders
Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.
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.
- Zareef Minty
- Roger Boniface
- Khanyi Dhlomo
- Zuko Tisani
- Phuti Mahanyele
- Nunu Ntshingila
- Dr. Judy Dlamini
- Tshego Sefolo and Londeka Shezi
- Nonkululeko Gobodo
- Dudu Msomi
- Sibongile Sambo
- Ian Fuhr
- Esna Colyn
- Ryan Bacher
- Nicky Newton-King
- Adrian Gore
- Terry Volkwyn
- Richard Maponya
- Sisa Ngebulana
- Wendy Luhabe
- Polo Leteka
- Vusi Thembekwayo
- Marnus Broodryk
- Thuli Madonsela
- Lebo Gunguluza
- Dawn Nathan-Jones
- Nicholas Bell
- Ran Neu-Ner and Gil Oved
- Vinny Lingham
- Patrice Motsepe
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