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Governance = Value Creation + Massive Business Growth

South African biotechnology company Deltamune, launched by Hannes Swart and three partners after a management buyout of the in-house laboratory of Golden Lay Farms in 1995, more than doubled in size over 36 months – from R40 million to R90 million.

Monique Verduyn

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An animal health business focusing on veterinary and public health solutions for the production animal sectors, the challenge for Deltamune was one faced by many companies that are started by scientists and engineers: How to turn a business founded on the owners’ expertise into a sustainable enterprise with a structure that will enable it to grow and evolve separately from the founders.

It was a challenge that founder Hannes Swart began to address in 2007, when he brought in HL Hall & Sons Investments.

The well known Mpumalanga-based company became the majority shareholder in the business under the guidance of Richard Franklin, who is responsible for the group’s pharmaceutical portfolio.

“As professional investors, we look at businesses from different angles, and with a long-term perspective in mind, unlike a business’s management team and original shareholders,” says Franklin.

“With Deltamune, we identified a company run by founders who were passionate about science and laboratory technology. What we needed to do as a team was to introduce business processes and practices that would enable the company to really flourish.”

The path to transformation

It’s worth noting that the business was achieving turnover of around R40 million up until 2010, which is not bad in anyone’s terms, but it was clear to everyone  that a shift in thinking could enable a much more exciting level of expansion.

Swart agreed and the transformation of the business was set in motion.

“As scientists, we struggled to find the right business language to enable communication between the investors and the existing management team. We needed to learn investment speak to be able to make more informed decisions.”

It was in 2010 that the business had reached a new level of complexity, thanks to its steady growth. That was when Franklin and Swart attended a business summit run by Sirdar South Africa, which helps businesses identify and address the management challenges of growing businesses.

“Our focus is on growing the bottom line through the practical application of effective governance and management,” says Carl Bates, chief executive of Sirdar.

“We help businesses like Deltamune to set up sound procedures, backed by regular governance and management meetings. The goal is to achieve immediate, increased and sustained profitability and value in the business.”

Related: Ubertech Meets Ubergeek: Stafford Masie isn’t Just Changing the Rules… He’s Changing the Game

From craft to enterprise

Bates’ fundamental premise is this: Success requires people to recognise that a business is about more than the personalities within it. It’s about the purpose it promises. He draws an important distinction between a ‘craft’ and an ‘enterprise’.

The existence of a craft depends on the active involvement of the owner because they represent the expertise required to keep the business going. An enterprise is a business with a promise and a structure that makes it sustainable beyond the people who founded or operate it.

“When you hold on to being the craftsman and making it all about yourself, you lose the game,” he says. “To achieve success, you must move your passion from practising your craft to creating an enterprise, and understand that the enterprise is separate and distinct from you. It’s about keeping your ego in check.”

Following the Sirdar Business Summit, the whole Deltamune management team went through a training exercise to equip them all with a common language to enable them to translate scientific ideas into financial reward. Much of what was discussed was stuff that everyone in the business knew, but suddenly it was coming from an independent source.

How governance enables business growth

Deltamune’s journey to its almost R100 million turnover has been built on governance, which Bates defines as “the accountability and responsibility for the performance, conformance and corporate social responsibility of a business at the highest level.

“Governance is often perceived as a dirty word in business, but if understood and applied properly, it’s a mechanism for success.”

Governance is essentially the practice by which companies are managed, controlled and driven to perform. It encompasses:

  • Putting a focus on the measurable performance improvement in the company’s results  by ensuring management is held accountable for the strategic and business objectives
  • Providing a broader reference point for debating and agreeing strategic objectives and issues to ensure independent perspectives are considered in guiding the company’s long-term performance
  • The creation and ongoing monitoring of a system of checks and balances to ensure a balanced exercise of power within a company
  • The implementation of a system to ensure compliance by the company with its legal and regulatory obligations
  • The implementation of a process whereby risks to the sustainability of a company’s business are identified and managed within agreed parameters
  • The development of practices which make and keep the company accountable to the broader society in which it operates.

It‘s essentially about the responsible leadership of companies. This is leadership that is transparent, answerable and accountable towards the company’s stakeholders.

Bates stresses that without effective governance there is no way a business owner can measure and manage their business effectively, or achieve outstanding success.

Related: Funding Growth

The reasons are simple. No governance results in:

  • Lack of accountability for their actions to each other and the business
  • A limited view of the vision and purpose of their business, often due to the myopic focus on day-to-day operational issues
  • Operational needs limiting the time spent reflecting objectively and developing the business accordingly
  • Not setting standards and sticking to them or setting standards too low
  • Lack of awareness of their legal and corporate social responsibilities as directors
  • Having skills and abilities incongruent with the life stage of the business
  • Avoiding the difficult decisions that sometimes need to be made for business success
  • Effectively operating in a silo as a ‘craftsman’ rather than effectively being an enterprise.

To implement effective governance at Deltamune, the leadership team, along with Bates who came in as independent, non-executive chairman, and one other independent director, were provided with monthly board meeting papers and clear minutes of meetings.

All actions and resolutions of the board are now recorded and the team is held accountable by the board to effectively implement those at a management level.

“We don’t get the CEO’s PA to do the minutes,” Bates adds. ”The minutes are independently recorded and they are detailed and professional, ensuring that everyone is held to account. That is a critical part of the governance process.”

Wearing different hats

Deltamune_Entrepreneur-Profiles_Success-Stories

Looking at the growth of the business over the past 36 months, Swart recalls one of the most valuable lessons: Learning how to keep the three hats of business separate and distinct.

“SME owners generally do not treat their businesses as they would if they were big corporates,” he says. “Most SME owners get stuck working in their businesses and forget their strategic responsibilities as a director and their investment goals as a shareholder.

“What has enabled us to grow at such an amazing rate is defining roles for shareholders, directors and managers. A shareholder focuses on their investment return, a director focuses on setting strategy and ensuring performance, and a manager ensures the job gets done. You can be all three, but if there are no other independent non-executive directors in the business, there is no physical way to separate roles.”

Bates explains: “When one person owns all of the company’s shares, is the sole director and the manager responsible for the day-today running of the business, the company can never become sustainable. For Deltamune, introducing governance to the business and – as part of the process – distinguishing the roles of shareholder, director and manager has resulted in the development of a business that is now able to work without the founder. This not only means it‘s sustainable, but it also makes it more saleable in the future.”

Personal growth

Swart says that the biggest benefit for him has been his own personal growth and the access he has gained to other people’s expertise in various management disciplines.

“This has led to an overall increase in the intellectual capital of the business, and it has also enabled the management team to maximise all our resources and assets.”

Franklin adds that this level of growth is only possible if the founder of the business is willing to relinquish some control. He applauds Swart for being ready to do so. “It really is about recognising that if you want to grow the business beyond your own capacity as a founder, you have to bring in external controls. If you are not willing to stop being the sole decision-maker in the business, this process is not for you.”

Bates offers a pertinent example: “In 15 years of heading up the business, Hannes had never had a performance review. He’s now gone through that process as an employee of the business he started. It’s a critical development in the life of any business founder.” Remuneration structures and performance bonuses have been introduced for all employees, including the CEO.

Swart agrees. “As an entrepreneur, you start a business because you really love what you do. By bringing in the right external shareholders, you can still live your passion, but you can also work towards getting the most out of your investment and ensuring the other parties do the same.”

He points out that the journey was not always an easy one. “It took commitment from everyone to develop a way of understanding each other better, and it was tough at times,” he says. “Now, things take much longer than they did when I was the sole decision-maker, which is something you should bear in mind as an entrepreneur. If you want to bring shareholders on board, you have to be prepared to let go.”

Bates is more candid.“The first six months of this process can be awful. But if you are able to get through that, the benefits are amazing. It changes your perspective as a business owner when the board disagrees with you. Yes, it’s tough, and every entrepreneur has an ego to some degree, but handing over some of your original authority can have major benefits, as the Deltamune experience has shown.”

Swart says he and the team spend much more time dissecting ideas and analysing decisions, but the result is that they make more considered, better decisions.“We now also speak in a common language. On the financial side, we are very clear about the responsibility to investors, and monitoring financial performance every day is now par for the course.

“Added to that, we have really tackled the skills side of the business, and we provide coaching and mentoring for employees to help them grow with the business. It has equipped us to deal with expansion and helps to ensure we are better able to manage the size of the company now.”

“As the non-executive chairman, among other key activities, my goal is to see profitability and shareholder returns increase,” says Bates.

“When we started working together, we analysed the natural abilities of the directors. It was clear that the team’s strengths were strongly scientific, but there were several areas of business that were lacking, including sales and marketing, which are disciplines that I am particularly interested in, so I put a strong emphasis on that. One of the other independent directors has a particular interest in stakeholder relationships and employee wellbeing. These elements did not come naturally to the original team and the benefits of integrating these aspects into the business have been
enormous.”

A promising outlook

Looking ahead, Swart says the company is focusing on formalising its acquisition strategy and is actively looking to acquire complementary businesses.

Having opened offices in Oudtshoorn, Western Cape, expansion into the rest of the continent – where there is a big market for its products – is also on the cards for Deltamune.

“We are realistically bullish about the market for veterinary health products in South Africa and beyond,” he says. “Several South African companies are expanding up north to take advantage of the growth potential on the continent.”

“Businesses have processes for a reason,” Bates concludes. “I’ve heard people say, ‘My business is not all about money,’ but if you want to be a master baker, you actually have to be a master business person too. The fact is that whether big or small, businesses are not all that different from each other. Governance and processes pave the way for growth in any size company. Most importantly, directors are there to add value, not to whip people into shape. In Deltamune’s case, they have enabled the company to double in size.”

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+.

Entrepreneur Profiles

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

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

Nadine Todd

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Vital Stats

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

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

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

Code 1: Find your inner drive and keep feeding it

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

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

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

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

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

Related: 30 Top Influential SA Business Leaders

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

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

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

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

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

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

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

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

Code 3: There’s no substitute for hard work

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

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

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

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

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

Code 4: Perseverance always pays off

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

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

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

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

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

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

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

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

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

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

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

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

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

Code 6: Believe in your product, always

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

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

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

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

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

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

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

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

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

Code 7: Mindpower is real

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

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

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

Code 8: Never stop learning

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

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

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

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

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

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

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

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

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

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


Lessons learnt

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Put the right foundations in place

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

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

Collaborate with key stakeholders

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

Always put your users first

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

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

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

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

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

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Entrepreneur Profiles

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

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

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Vital Stats:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related: Funding And Resources For Young SA Entrepreneurs

Family life

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

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

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

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

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

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

What mantra do you live by?

Dream it. Believe it. Achieve it.

Where do you see yourself in five years’ time?

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

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Entrepreneur Profiles

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

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

Nadine Todd

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Vital Stats

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

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

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

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

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

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

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

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

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

2. Price and solution go hand-in-hand

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

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

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

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

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

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

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

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

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

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

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

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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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