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How Digicape Was Built From A Love Of Apple Computers And Just R5 000

Robin Olivier launched his first business with two partners and R5 000 between them. He had a wife, a bond and a baby on the way. He also knew that he and his partners had more guts than sense, but they were determined to build their own destinies. They weren’t going to let the fact that they didn’t have a degree between them hold them back. Within ten years they’d built a R140-million

Nadine Todd

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Vital stats

  • Player: Robin Olivier
  • Company: Digicape
  • Position: Co-founder and MD.
  • Launched: 1999
  • Turnover: R240 million
  • What they do: Apple Premium Reseller and customised business solutions provider
  • Visit: digicape.co.za

From a young age Robin Olivier knew he was going to be an entrepreneur. He’d grown up in a single-parent household, and although there was always food on the table, there wasn’t money for luxuries. Robin’s mother had managed to get him into a local semi-private school, and although she wasn’t always able to cover his school fees, he received a good education and a clear view of life on the other side of the fence. Then and there, he promised himself he would make something of his life. And that would be through business ownership.

The problem was that he knew nothing about business. His mother couldn’t share business advice with him, and he didn’t have a father to mentor him. He also didn’t have a business idea. Surfing was his passion and he competed for Western Province.

“I instinctively knew that I didn’t have enough life experience. Passion is critical, but without an idea and some understanding of business, I knew I needed to go out and learn from other people who were running their businesses,” he says.

This is exactly what he did, putting his hand up for any job that needed doing, or skill that needed to be figured out. Robin had one goal: To prepare himself for business ownership. Along the way he not only picked up those skills, but also a passion for Apple computers. By the time he was 29, he was ready to take the plunge with two partners he’d managed in their work servicing Apple products. He had the idea, he knew what he was passionate about and he’d acquired skills. What the three partners didn’t have was money, but they more than made up for that with bravado.

Robin’s only obstacle was convincing his wife, who was six-months pregnant, that it wasn’t a harebrained scheme, and that they would still be able to pay for their bond each month. “I promised her that we were investing in our future. It wasn’t completely honest; I had no idea what would happen. But I worked tirelessly until I made it true.”

And so, with R5 000 between them after their bills had been paid, Robin and his two partners, Ashley Legg and Roberto Ferreira,  launched Coza Digital in 1999. They bought a hard drive, which they needed to back up and service client machines, and a toolkit each. They needed to make enough to each pay their bills by month end. And so, they got to work.

For the love of Apple

apple-products

Today Robin Olivier is the MD of one of two Apple-certified resellers and repair centres in South Africa. Robin’s high school had a computer lab, which meant he was one of a small percentage of South Africans in the late 80s who had some computer skills — but he hated computers.

“Computers didn’t make sense to me. I found them brutal,” he recalls. His first exposure to Apple Macs would be a completely different experience. Coming out of 18 months of mandatory service in the Navy, Robin couldn’t afford university. A friend was studying graphic design; it was 1991, and the course was based on Apple Macs. “I was nervous, because my experience with computers wasn’t great, but I needed to do something, and I didn’t have any better options. Plus, this sounded like fun.”

Robin soon discovered that he loved Apple. “They were easy and intuitive. A whole new world opened up to me.” And even though his first job was in Port Elizabeth as a designer, it was the Apple Mac he worked on that got his attention.

“There were only two Apple Macs in PE at the time. If something went wrong, you were forced to figure things out, and so that’s what I did. I started understanding how the system worked — and it made sense to me.”

Soon, Robin became known as the ‘mac’ guy, an in-house guru who others called for advice. “I ended up being head-hunted by a company that sold and serviced macs. There was a serious shortage of Apple Mac technicians in South Africa, so they picked up anyone who understood the product.”

Robin hadn’t forgotten his earlier ambition to run his own business. He prepared himself for that goal by learning as much as he could about all facets of business. “I recognised that no-one was going to hand me my dream, or the skills I needed. I had to make it happen for myself, and so I put my hand up for everything. I was fearless in that way — I still am. I jump into everything with both feet and then figure it out — that’s how you learn. I spent a few years at the same company, and learnt about tech, sales processes, and how to sell products as solutions. It was never about moving boxes, but walking a path with our customers. The lessons and insights I gained are integral to our business model and sales strategy today.”

By 29 Robin thought he had learnt enough to blaze his own trail, and he found two partners with similar ambitions. “We were cocky, arrogant and ambitious — all we saw were dollar signs,” he says. “We would have taken on the world. We had no idea how tough it would actually be.”

And it was tough. Robin learnt first-hand what he’d always suspected — that without passion it’s difficult to push through the tough times. “We were earning enough to pay our bills and hire a receptionist and book-keeper, but there were months where things were touch and go, and we had to make trade-offs about which bills to pay.

“We had secured a good relationship with an Apple distributor while we were employed, and they were looking for more resellers and partners. If we were prepared to go for it, they would back us to a point. No one asked us for a business plan — thank goodness, because we didn’t have one — and they agreed to give us kit on consignment, which we could pay for when our clients paid us. Without this relationship, we wouldn’t have survived the first six months. We were servicing clients, but we couldn’t afford to provide products that required upfront payment.

“We worked hard to make enough money to pay the bills. We knew our customers would support us because we were skilled. It also helped that in those days everyone was a digital immigrant.”

Curveballs and growth curves

Curveballs and growth curves

Coza Digital’s first big growth curve happened in 2000. The business had been operational for over year, and an opportunity arose to merge with another firm.

“It was a very similar business to ours, focused on Apple support. The owner wanted to exit without abandoning his team. By merging with us, he ensured their job security. The merger doubled our turnover, but it also increased our costs. We now had 15 employees, and their livelihoods were linked to our own. It was a lot more responsibility.”

In 2001, Apple approached Coza Digital and suggested the business merge again. “Apple had launched the iPod — a complete game changer. They wanted the brand to be more mainstream, not only an underground brand for creatives. They launched their first retail store in San Francisco and were focusing on more exposure and presence in international markets.

“In South Africa, businesses that offered Apple support were small and fragmented. There were no big players, and Apple saw this as an issue. They wanted our businesses to grow and be more impactful, and one way to achieve this was through consolidation.

“We started a conversation with Syntech. We were mirrors of each other: Same service and product offerings, similar annual turnovers and staff complements.”

Both companies saw the benefits of merging, and in December 2001 Digicape was launched. “We saw the merger as like for like. Neither of our brands was strong enough to justify keeping the name, so we created a new brand.”

Within weeks they were questioning the move. “While our combined turnover was R8 million, in our first month together we made only R350 000. December is a quiet month, but this was a disaster. What had we done?” On paper, the deal looked good. Both Coza Digital and Syntech had separate and secure client bases.

“We needed to look forward. We had a bad month; it happens. It’s not the best foot to begin a merger on, but it doesn’t mean you throw in the towel.”

Coza had come into the merger with three shareholders, and Syntech had four. But you cannot have seven decision-makers — not if you want an agile, successful business. “We made the decision that there would be two managing partners, one from each business, myself and Graham Greathead Graham, a CA with an MBA — and the only shareholder with a business degree — was MD and I headed up marketing and sales.

“We agreed that being a shareholder didn’t guarantee employment, or a managerial role. Every decision would be for the good of the business, not based on previous positions or current shareholding. Graham and I managed the business and this allowed us to be nimble and swift in our decision-making.”

With these foundations in place, rapid growth started three months into the merger. “We had recognised that we couldn’t bring our old cultures into this new business and expect success. We needed a new culture, and although it took longer than three months to develop and entrench across the organisation, the foundations we were laying stimulated that early growth.

“By the close of 2002 our combined turnover had almost doubled to R14 million.” The growth and change of culture was not without consequences. One of Coza’s founding partners exited. “We had entered a period of hockey-stick growth, and he didn’t want to be in that type of growth-focused environment. We now had six shareholders instead of two blocks of shareholders from the businesses that had merged.”

Wins and losses with the move into retail

digicape-logo

One year into the merger, Digicape entered the retail space. Apple had recently launched its first retail store in San Francisco, and the model was untested in South Africa. “We had a lot of bravado,” admits Robin. “But we understood it was a risk we needed to take if we wanted to continue on our growth curve.”

Robin and his partners recognised that they were selling time. Their value was based on expertise and customer service, but ultimately they were limited by the hours in a day. This is one reason why service-based businesses struggle to increase their margins when they scale — more work equals more hours equals a higher salary bill.

The solution is to also sell products. “We could make the same revenue as six or seven hours of tech service time in minutes with the right sale,” says Robin. In its first month of opening the store, Digicape’s turnover doubled. But, product sales can quickly become commoditised, and Apple product margins are low. This means you need high volumes, and superior support service as a foundation. Time might be limited, but the margins are better, and the barrier to entry is much higher. “Our foundations remain in consulting,” says Robin.

“We understand the importance of our relationships with our customers and the service we provide them. The investment in computers is high, particularly if you run Apples. Downtime is also expensive. As a one stop shop, with a skilled team and support service, we offer exceptional value.

“We also made the decision to invest in Apple accreditations. This is costly and the courses are tough. We send people overseas for training, and pay for them to write their accreditation exams. Apple has deliberately set the bar high. Sometimes it takes two or three attempts to pass an accreditation, and you pay for each attempt.”

The result is that Digicape is one of only two organisations in South Africa that can do warranty repairs on Apple products.

The move into retail also had its downside. In 2008, Digicape opened its first retail store in Johannesburg. The bottom had dropped out of the market, the store’s location was wrong, and it cost the business millions.

The result wasn’t just the loss of millions, but an organisation that was becoming rudderless. At the time, a decision was made to keep all employees on, despite the losses.

“We made the decision rather to work through the challenge. It was an emotional decision and not the best for the people in the business, even though at the time we thought it was.”

The cumulative result was an unhappy, toxic business. Employees were leaving, Graham retired and Robin was voted MD by his fellow directors. He realised Digicape urgently needed to address company culture.

“I wanted to feel energised and happy at work. If we could create a company we wanted to work for, our employees would want to be there too, making magic happen.”

Changing a company’s culture does not happen overnight, particularly when you are a R140-million organisation with 110 employees, and no HR manager.

Building a business to last

robin-digicape

“The old school way of thinking is that you get a salary in exchange for work,” says Robin. “That doesn’t work today. Talented people expect more.

“Customers benefit most when your employees are empowered and engaged. And happy customers are loyal customers, willing to pay more for the value they receive. That benefits the business.”

How do you get employees more engaged and empowered? That’s the question so many business owners struggle with.

“We had to make promises we could deliver. Our people are our biggest assets — it’s a cliché, but for a reason. We needed to make it a promise: You are the most important thing in this business, and we value you. We will show you how much by providing a culture that is healthy and allows you to make mistakes and learn from them.

“It was a big change for us. We needed to be transparent right down to financial performance. It took two years to see a real shift, as trust is built over time and has to be top down. We had to give first, so that our people saw us delivering what we promised.”

For Robin, the aha moment came when he read Liz Wiseman’s book, Multipliers. “The biggest lesson was that leadership is not about having the best answers. It’s about having the best questions and letting people answer those questions themselves.

“As MD, I had taken on the responsibility of being the person with all the answers. But once I understood the principles behind multipliers, I found that you can empower people to be better versions of themselves, and lessen your burden as well. When leadership coaches and mentors, people respond well and manage themselves. This realisation shifted our business.”

By 2015, Digicape experienced its most profitable year. This was tripled in 2016. The bottom line speaks for itself.

The Success Formula

Robin has a simple formula for success. He calls it the Temple of Success. The foundation is organisational culture. This is the organisational DNA, values and core purpose. Resting on this foundation are three pillars: Finance, strategy and data.

Finance is critical. “We’ve been through cash flow situations. We operate on thin margins. 90% of our product is Apple, and there’s very little room for error. We need to be extremely good at forecasting and targets because cashflow is the lifeblood of our organisation and requires attention and investment in resources.”

Strategy is essential. “Understand the difference between your strategy and your goals. One is the roadmap, the other is how you’re going to get there.” Data pulls it all together.

“One of the things that put us back on the growth path in 2010 was transparency — but in order to achieve this we needed measurement tools to check performance. We were managing accounts after the month ended — you need to do this first. You need to focus on lead indicators, instead of lag indicators. Look forward — not only backwards and where you went wrong or right. What is measured improves, and so you need to ensure that you monitor your business and key metrics. We do this hourly, across the organisation. This means we can react fast and deal with things as they arise — not three months down the line.”


Key insights

In business, learn by looking backwards, but grow by looking forwards

Not everything will work out as planned. After their first merger, Robin, his partners and their new co-owners found themselves with a much lower turnover and higher costs than anticipated. If they’d allowed this to derail them, the business wouldn’t have survived. Instead, they looked forward, focused on integrating the businesses and managed to achieve hockey-stick growth three months later.

Sometimes, bravado beats experience

Throughout Digicape’s launch and growth, Robin and his partners have made bold decisions to move into new spaces without necessarily having the right back-up or experience. They’ve taken the chance, and worked hard to achieve their goals.

Leadership is about letting others be the best versions of themselves

Leadership is not about having the best answers. It’s about having the best questions and letting people answer those questions themselves.


Lessons learnt

  • The Navy taught me to be attentive to detail. I wasn’t a neat freak when I went in, but I was when I came out. That attention to detail has been invaluable in everything I’ve done, particularly with Apple and retail.
  • The Navy also forced us to recognise our faults, which helped me to internalise my strengths and weaknesses. You don’t need to go to the Navy to learn this, but it is a valuable skill. As a business leader or manager you will never be good at everything. If you recognise that, you can focus on your strengths, and delegate the things you aren’t good at to others.
  • If you’re serious about personal growth, put your hand up for anything and everything. I’ve always been fearless in that way. I jump into everything with both feet and then figure it out — that’s how you learn.
  • You have to be passionate about what you do. Passion gets you through the dark times, and there will be dark times. Why are you doing this? Without passion you can’t answer that question when you need it most. Profit is the ideal outcome, but should never be the goal.
  • Make decisions for the majority, not the minority, and don’t allow pride to cloud your judgement. We’ve needed to make difficult calls, but not making them has hurt the business more. We needed to consolidate. It took us too long to realise that, but once we had, the business and our employees were far better off. Putting off the tough choice just made things tougher for everyone.

Listen to the podcast

matt-brown-podcast

Matt Brown interviews Robin Olivier and discusses how DigiCape was launched, the challenges they’ve faced along the way, how entrepreneurs can become better leaders and the steps to building a large-scale organisation. To listen to the podcast, go to mattbrownmedia.co.za/matt-brown-show or find the Matt Brown Show on iTunes or Stitcher.

Entrepreneur Profiles

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.

Nadine Todd

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Vital Stats

  • 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.

Related: What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

“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.

Related: How Matthew Piper And Karidas Tshintsholo Launched Their First Business From Their UCT Dorm Rooms

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.”

brand-cartel-south-african-agency

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.

Related: The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

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.

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Entrepreneur Profiles

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?

Monique Verduyn

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“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.”

Vital Stats

  • 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.

Related: 5 Key Areas Pratley Are Using For Current And Future Growth

“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.

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

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.”

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Entrepreneur Profiles

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.

Nadine Todd

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tim-hogins

Vital Stats

  • 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.

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

The in-built art of tenacity

green-outdoor-gyms

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

gog-water-park

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.

Related: The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

Seizing opportunities

gog-exercise

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-exercise-park

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.”

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

Next level

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.

Healthy Living

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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