- Players: Craig Bright and Brian Little
- Company: Seed Experiences
- Turnover 2014: R70 million
- Visit: www.weareseed.co.za and www.rockingthedaisies.com
Some businesses and industries have an in-built ‘cool’ factor that mundane but often more important sectors do not.
Try as we might, it’s tough to make commercial transport, construction or farming sound sexy, but where would we be without these valuable industries?
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When choosing to launch a business, entrepreneurs are often drawn to the industries that modern society simply cannot do without — after all, there will always be a market.
Unfortunately, there is usually a multitude of competitors doing exactly what you’re doing, and it becomes difficult to differentiate your offering.
The Road Less Travelled
Craig Bright and Brian Little didn’t go this route. They chose an industry virtually unknown in South Africa.
One with notoriously low profit margins, a propensity to not break even, and with no local players to learn from — good or bad. But man, the cool factor was off the charts.
They wanted to host music festivals, the likes of which form part of the backbone of European and American culture, but were not common in South Africa a decade ago.
They knew it would fulfil multiple passions, from business ownership to creating events with international acts they wished they could attend in South Africa – but most of all, they wanted to find a way for their dreams to make money in an incredibly tough industry.
Ten years later, Rocking the Daisies is a mainstream event that thousands of people attend every year. Festivals like Sowing the Seeds and Vodacom In the City are well-known, mainstream brands. Bright and Little are responsible for bringing international acts like The Lumineers, The Kooks, UB40 and Bastille to South Africa, with many more surprises up their sleeves.
Their turnover has tripled year-on-year for the past three years, and they’ve figured out a way to make the business sustainable and profitable.
They’ve also continued to learn tough lessons, and are consolidating the business to maximise revenue streams and ensure they’re never solely reliant on ticket sales. Their festivals bring in a captive audience, and financial sustainability comes from other, integrated verticals.
Here’s how they took a cool but not-so-lucrative idea, and are creating a new model that’s breaking rules and shaping an industry.
From 700 to 22 500 Fans
When Brian Little and Craig Bright first decided to host a music festival, they knew they’d have a few challenges. They had no money, no venue and no acts, and while a few isolated events existed, there was no music festival culture in South Africa.
They decided to do it anyway. Step one was choosing a date. Spring in the Western Cape seemed like a good time, and they could align it with the Namaqualand flowers. Now they needed a venue.
“We started calling our old boarding school mates to see who had a farm we could use. One guy said yes. It would take us four years to pay him the rental fee we agreed on, but at least we had a venue,” says Bright.
Next, they needed cash. Bright sold his house and Little sold his car. They both borrowed cash from their parents. “We were so inexperienced we ended up spending money on all the wrong things,” says Little. “We put a full 2kms of fencing up,” recalls Bright.
“We were very, very ambitious about how many people would attend, and we didn’t want anyone sneaking in. That fence cost us R20 000 and a lot of time and hard work because we put it up ourselves. And then 700 people arrived,” he laughs.
Through contacts they secured new local acts the Parlotones and Goldfish, printed fliers and hoped for the best. All in all, the event cost R1,1 million to put on. They had R350 000 in cash.
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After selling everything else they could, and Little moving out of his house and onto a mate’s couch so that he could rent it out, they were still R400 000 short.
Turning Things Around
“We owed on the venue, the bands and the equipment,” says Little. “We worked with some very understanding people who basically waited a long time to be paid.”
Based on those numbers, the future of Rocking the Daisies seemed uncertain at best, but Bright and Little didn’t let it deter them.
“We knew we’d lose cash; we’d made the decision to view it as an investment and lose it well,” says Bright. “We had such great feedback and support, and that motivated us to keep going, despite our losses.”
The following year they had 4 500 people and partnered with Cloof Wine Estate for the first time. To this day, Rocking the Daisies continues to be held in this beautiful setting.
By year three, 10 000 people attended the event. Today the title sponsorship has grown from R40 000 in year one to over R3,5 million.
“We’ve learnt so much about perseverance, following your passions and organic growth. We’ve been patient, and we’ve grown this incredible brand as a result,” says Little.
Creating a Showcase
A showcase can be anything, from the ideal client to a situation where your product works seamlessly. You need to be able to show potential clients what you can do, and ideally have a space where you can keep testing and refining your offering.
When Little and Bright first went into business, they knew their ultimate goal was music events, but the reality was that bills needed to be paid.
Bright had been organising sporting events in Durban, and so initially they focused on hosting school rugby tournaments and beach volleyball events, supported by a strong relationship with Vodacom. Within a year they took the plunge and opened an office in Cape Town. The KZN events continued, but they wanted to build new relationships.
The reality was daunting. Despite a track record in Durban, no one was hiring them, and they experienced very little growth. “It became the only thing we thought about or talked about,” says Bright.
“It became a discussion over braais and beers with our mates — what could we do to showcase ourselves? How could we get noticed?” And then one night an idea began taking shape. “It was a weird situation,” says Little.
“We were building the business on client and sporting events to develop the capital and experience we needed to launch music events, but we realised that to win clients, we needed a branded music event that showcased what we could do.”
That night, the first pieces of Rocking the Daisies began to take shape, and although it was a financial disaster, it delivered strategically — Bright and Little had their showcase. They had also planted the seed for what was to become South Africa’s largest annual multiple-day music festival.
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Celebrating its tenth year in 2015, title sponsorship at Rocking the Daisies is now over R3,5 million, 22 500 people attend each year and the event has won multiple local and international greening awards.
Plot the Lessons
It might sound strange to plot a curriculum within your own business, but the more focused your approach to identifying and then filling in gaps, the greater your foundations and ultimate sustainability and market domination will be.
Great businesses rarely happen by accident, and part of a winning strategy is continuous growth.
Bright and Little knew this, and were willing to learn. They took hard knocks, including one memorable occasion in their first year of business, when they hosted a big screen IMAX event, showcasing the Springboks vs Australia. “It was my first event,” recalls Little.
“We were screening the game in Durban and Cape Town, and Craig was at one venue, which meant I was flying solo for the first time. Nick Mallett and Dave Campese agreed to unpack the game at half-and full-time, and eTV were covering the whole thing, which was a major coup.”
It was a disaster. The power at Little’s event went out, and no one, including the commentators, saw a single minute of the first half. “I was in a complete panic,” says Little.
“Not only did our guests and eTV see nothing, but Nick and Dave were actually writing sports columns for major news outlets based on the game and they saw nothing. It was one of the worst experiences of my professional life.”
However, it taught Little that not everything goes as planned, and sometimes you have to pick yourself up and move on. As a team, Bright and Little also learnt how important fail-safes and contingencies are.
“You’ll never be able to plan for every eventuality, but we’re a lot better now at predicting worst-case scenarios,” laughs Bright.
The School of Life
These are the on-the-fly lessons that all businesses learn and Bright and Little have taken their schooling very seriously.
“We had two key areas that we needed to work on,” says Little, “growing our business acumen — which for me was non-existent — and learning the ins and outs of music events. Our strategy was to build the business on corporate events to create a stable income, but we couldn’t lose sight of the ultimate goal.”
And so they started formulating a very specific product. Bright’s background was sports psychology.
He had contacts in the sporting world, and they’d built up a solid client relationship with Vodacom. Vodacom’s Durban July stand and Vodacom Beach Africa became the year’s staple events. Everything else was focused on the music scene.
“We crafted brand experiences around music,” explains Bright.
“That was our niche. It was our way of learning about musicians, booking acts, dealing with managers and agents and understanding how people respond to music in a branded, experiential marketing framework, while still paying the bills.”
Even more important, the business was steadily building relationships with a number of consumer brands, particularly alcohol brands like Smirnoff and Mainstay, and other consumer brands like Wrigley 5Gum, Converse and Durex.
“We crafted exclusive, branded music events,” says Little. Each event taught the partners something new, taking them closer to their ultimate goal.
“We weren’t tapping into traditional marketing spend, which meant we could work well with each brand’s agencies instead of competing with them,” says Bright.
“We created live experiences at each event and worked with advertising agency DDB who created buzz around pre-campaign tickets and the digital experience. They got the interest, held it and got people sharing it.”
Bright and Little believe they have succeeded with both their branded client events and their own festivals because they’ve always put the consumer first in their planning. The lesson is a simple one: Start with your customer and build from there.
As Little’s background is in advertising, he approached each event from a brand messaging perspective while also considering the complete eventing experience.
“We always approached each event with a single core question: If I was at this event, what would I want from the brand?”
“Or ultimate goal is to create an experience that’s inextricably linked to the brand, but that only works if the consumer is getting real value from the brand engagement. Once that happens, they do your marketing for you, because they want to share the experience,” says Bright.
Bright and Little used the dual platforms of client events and Rocking the Daisies to perfect their theories. “The festival was our testing ground,” Little explains.
“We were very careful about sponsor selection, because we were creating a specific brand with Daisies, and then we took those lessons and applied them to our client events.”
“Daisies was our showcase,” adds Bright. “It wasn’t a money spinner at that stage, but it was a great place to test ideas, show what we could do, get brands involved and prove the value of our ideas.”
Most great and sustainable businesses are built on solid foundations, and that takes time and patience. In 2009, Bright and Little were lucky enough to be invited to one of Europe’s largest outdoor music festivals, Paleo, held over six days each year in Switzerland.
With the 2010 FIFA World Cup fast approaching, the organisers wanted an African theme for their World Stage the following year, and so they reached out to the company doing the most in the South African festival space.
“The timing worked out really well,” says Bright. “We were guests of the organisers, which meant we got to see how a huge festival operated behind the scenes.”
Even more beneficial to the two budding festival entrepreneurs was hearing about Paleo’s history. “We faced similar challenges, trying to grow a festival culture from the ground up,” says Little. “What really struck home was when they told us that the first time they made a profit was in their sixth year.
“This giant of a festival, one of the largest in Europe, took six years to make a profit. We realised that there was hope for us, and that struggling was normal. If anything, we were in a better position, because we had our corporate clients paying the bills while we grew Daisies.”
With assurances from the Paleo team that they were on the right track, Bright and Little returned to South Africa and decided to let the growth of Rocking the Daisies plateau.
“Your instinct is to keep pushing to grow, grow, grow, and get as many people to your event as possible — after all, more people equals more money. The reality was that if we wanted to grow a festival brand that’s loved and trusted, we needed to take things slow and not over-extend ourselves,” says Little.
“We had to plateau,” agrees Bright. “The year before we’d grown to 10 000 people, a massive jump from the previous year’s 4 500. We weren’t equipped or experienced enough to handle those numbers. We let it grow organically instead of pushing it, giving ourselves time to learn before getting too big, too fast.”
The partners also recognised the need to start bringing more experienced people on board. “We identified our gaps and filled them,” explains Little.
“We were still green, and we needed to learn from people more experienced at production. This would also allow us to focus on the areas where we added value.”
But Bright and Little were effectively leading the charge when it came to the local festival space — there were no experienced people they could hire. “We needed to look beyond South Africa for the skills we needed,” says Bright.
“We found someone who specialised in festival production in the UK and Europe and could come to South Africa on a contract basis during our summer months when his season was over.”
Bright and Little were now free to concentrate on other areas of business growth, but they needed to start employing a team that could learn and bring those scarce skills in-house.
“These are all expenses, often before you can actually afford them, but they were necessary if we wanted to become leaders in this space. We were always looking long term,” they say.
Partnerships come in many forms. Bright and Little work well together because their areas of expertise align but aren’t the same. As the business started growing, they recognised the need to bring in a partner whose financial experience exceeded their own.
“When Craig’s brother, Marc Bright joined us, he started by sorting out our books, which were a disaster,” says Little.
As the business grew, so did Marc Bright’s role. “We now had someone who was thinking strategically about the numbers, which made a big impact on our decisions, and how we viewed our income versus expenses,” adds Bright.
Like the founders, Marc Bright is acutely aware of his strengths and weaknesses, and has recently appointed an FD to take his place.
“In many ways, we’ve been victims of our own success, learning where our gaps lie as we’ve grown,” says Little.
“It’s important to be aware of these areas if you want the business to scale, and so we’ve focused on finding them and implementing solutions. As our turnover has grown, cash flow has become even more important, which has made strong systems and processes vital. This has required a new skill set.
“An established business needs different decisions, and a more careful focus on the bottom line. Every decision we make focuses on bottom-line growth.”
There are other external decisions and partnerships that are vital to growth. “Our main draw card from the beginning has been international acts, and that takes a lot of relationship building, with agents, managers and even companies doing what we’re doing on different continents,” explains Bright.
“Paleo opened a lot of doors for us, connecting us to international agents and managers. We’ve fostered those relationships, because they’re so crucial to our business, not just to get acts to South Africa, but for when we have an emergency as well — if someone drops us at the last minute for whatever reason, we need ticket insurance, but we generally try to find a replacement act that the audience will also love — and that takes assistance from agents. We can’t do what we do in isolation.”
South Africa is off the beaten track as far as concert tour schedules are concerned. “We’ve been working with companies in Dubai and Australia to be able to offer a full tour leg to international acts,” says Little.
“First, we added additional shows locally, so when someone comes out they play at least two or three different venues. Together with our partners, we offer a comprehensive tour leg, which makes the trip to the southern hemisphere more worthwhile.”
Create a Brand
“When we started out, we would do anything for cash, even weddings,” says Bright. As the brand activations side of the business grew and full year campaigns were signed, the partners were able to specialise in the music space, carving a niche for themselves, but the ultimate goal remained the same.
“We were waiting to hit a turning point when the festivals started making enough for us to drop events completely and focus on where we wanted to be,” says Little.
“We didn’t rush it, and when the time came it was a big decision. We were walking away from money, secure long-term contracts and a solid track record for an industry that was still in its infancy in South Africa.”
Passion won out and the entrepreneurs took the plunge. “By 2010, we had the knowledge, the connections, and the brand sponsors to do activations at the festivals we created, but that were branded as our own. We focused exclusively on festivals.”
Part of this fresh start was a strong focus on the brand. “In this space, the brand is all important,” explains Little. “We focused on building Seed Experiences, our brand, as well as the festival brands.”
International acts didn’t perform under the artist’s brand, but a Seed Experiences brand.
“We built our IP, brand awareness and sponsorship relationships,” says Bright. It’s an important step towards creating a strong brand, and Bright and Little knew they needed to concentrate on creating a predictable consumer experience, particularly around what music they brought to South Africa, and the unique look and feel of the annual festivals they hosted.
It’s an established business principal: To deliver an amazing customer experience, the brand experience must be personal and meaningful, deliver consistency, be responsive to audience needs and reliable.
To achieve this, the team needed branded vehicles, each with their own distinct personality. Rocking the Daisies was already established.
Now two new festivals were added, Sowing the Seeds, which was Cape Town and Joburg based, and In the City, a unique platform for Joburg that runs concurrently with Rocking the Daisies.
“We’ve always done activations, but only at our events, under our brands,” says Little. “It’s a necessary revenue stream that’s integral to our strategy, but ultimately our first priority is to build our brands. Everything else is built on those.”
Leverage Your Brand
There are three key elements to the Seed Experiences business model. First, create a vehicle that you can use to upsell other products with much bigger margins.
Second, find amazing, passionate partners who want your product to succeed as much as you do. Third, create experiences that no one wants to miss. If you offer value, you’ll have clients.
“We knew from early on that we don’t own our festivals alone. Many passionate people make these brands possible — the artists, the suppliers, the sponsors and organisations like Greenpop, who assist the greening of Rocking the Daisies. It’s a collaborative effort. Without them, this business wouldn’t exist,” says Little.
“In a way, we’ve reached a point where we can have the best of both worlds,” says Bright.
“We’ve led the way in building a festival culture in South Africa, and we host music events. That’s what we’ve always wanted to do. But we’ve also found a way to take an industry with historically tight margins, and make money.”
“We’re building a big machine here; it needs the right foundations,” says Little.
“What are we good at? Where are our skills? What aligns? And what’s good versus sexy? It’s easy to get seduced by the sexy, but is it right for the business? Does it align with our strategy? A key learning for us has been when to say no. It’s often tempting to take on a project to prevent another promoter from doing it or to please a sponsor, but that doesn’t mean it’s right for the business.”
Keeping a Balance
A big part of that strategy is consolidation on the one hand, and then spin-off businesses on the other. It’s a fine balance, particularly as the founders don’t want to dilute their focus and offering, but enhance it.
“We’ve brought all marketing, digital and social media and PR in-house, and will be creating a new entity to service clients through digital campaigns and activations geared towards music lifestyle and youth culture — which are our niche and wheelhouse. We’re sticking to what we know,” says Little.
Another new business within the group is The Bandwagon. “For years we’ve booked international acts, created travel itineraries and experiences for them, and yet travel agents have benefited from the bookings. We’ve hired an industry expert with all the connections and package rates, and we’re now bringing this in-house,” says Bright, whose primary focus is this new enterprise.
“This also means we can sell festival packages to international travellers. Oversees, whole holidays are built around festivals. We bought The Vic Falls Carnival, and launched this new offering with 100 package deals for fans, where everything is planned and covered, including transport, accommodation, the festival and activities before and after the festival.
“Once again we’re doing what we do best — selling an experience. We sold out almost immediately, and now we’re rolling it out on a larger scale.”
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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