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Nestlife: Vusi Sithole

In 1996 Vusi Sithole was the chairman of a subsidiary of Hollard. He had worked his way up the ranks of the insurance industry and was earning an executive’s salary, with further advancement on the horizon.

Nadine Todd

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Vusi Sithole

The story of Nestlife Assurance’s founder, Vusi Sithole, is one of perseverance, determination and the willingness of one man to create a legacy not only for himself, but also future generations of South Africans. Vusi Sithole is not shy about his opinion on the value of working hard. His company was not built on the back of BEE funding, it was not an opportunistic move and he first learnt his industry from the inside out. He firmly believes that nothing in life comes easily, and that learning to roll up your sleeves and get dirty is vital for the development of individuals and the nation as a whole.

“Affirmative action means that young black graduates are snapped up by large corporates at big salaries as they leave university. They start their working life already successful, without really walking the path to success. It’s creating a generation of South Africans who don’t have to work for their dreams, which I find worrying. I want to leave a legacy that shows what you can achieve if you want something badly enough, and you are willing to work for it, without a hand-up from the system. That will be Nestlife’s legacy,” says Sithole.

Having painstakingly built his company from the ground up, he knows what he’s talking about. Nestlife began as Life and Pension Insurance Corporation (LPC), an insolvent insurance company about to be liquidated. Not even its holding company wanted to take the risk of keeping it open.

But achieving dreams comes at a price, and for Sithole, that was giving up his cushy executive’s salary, with the second home, boat and overseas holidays just over the horizon, to build his vision.

Today he sits at his executive boardroom table, immaculate in a pressed suit, the head of a company that underwrites R150 million in premium incomes. It’s a long way off from a decade ago, when he filled the role of admin staff, salesman and GM all in one.

He had to, he had a staff of one: himself. “My journey to this point has been a rollercoaster of highs and lows. I have never been afraid to take a step backwards in the present if it meant future growth, but that has also meant sacrifices, for myself and my family.” It’s this commitment to a long-term goal that has really paid off.

Looking back to where Nestlife started takes us to 1996. Sithole had just used everything he owned as collateral to buy LPC, which was based in Mafikeng. His wife had already supported him through numerous changes in his life, and now he was asking her to support his decision to spend each week, Monday to Friday, in Mafikeng, away from his home in Johannesburg and his family. He didn’t give her all the details, particularly the fact that the house had been used as surety to buy the business, because he didn’t want her to shoulder the stress of the risk he was taking; and, he quips, he wanted to stay married.

Not only would her husband be away each week, but she had to accept that he’d given up his safe executive position, comfortable salary and future promotions to do so. His ultimate goal was to bring the business to Johannesburg, but he had no idea how long that would take. LPC was an insurance underwriting business with a limited licence to operate in the North West province. Before he could begin operating in Joburg he needed to raise R10 million to buy a national licence from the Financial Services Board (FSB). He had no idea how long that would take.

Why did he do all this you ask? Because he had a gut feeling that a business that no one wanted and was about to be liquidated was his ticket to achieving his ultimate dream of owning his own insurance business and building a legacy.

It takes a lot of faith in yourself to make that kind of commitment, but Sithole has self-belief in spades, and by 1996 he had also worked his way slowly and consistently through every position in the insurance industry, knowing that he would need to know the sector inside out before he launched his own company. He knew his market and he was determined to follow his instincts.

“I’ll take it”

Sithole’s introduction to LPC was almost accidental. By 1996 he had been in the insurance industry for over fifteen years. He had worked his way up the corporate ladder and he was the chairman of a subsidiary of Hollard. Life was good. And then he was approached by Capital Alliance, a local company that had its eye on him.

“It was the mid-1990s and Capital Alliance was rebuilding its reputation. Its short-term insurance business had suffered setbacks and although its life insurance side was still strong it was focusing on damage control. That meant restructuring and getting rid of dead weight, particularly subsidiaries that were not performing, or were not in line with the group’s new strategy.” LPC was both. While wooing Sithole, the group’s CEO, Ben Geldenhuis, invited him to visit the floundering subsidiary in Mafikeng. The group wanted to liquidate the company and if Sithole joined them it would be one of his first tasks.

“When we arrived in Mafikeng it took less than ten minutes to assess the company, including its five employees. There wasn’t much to see.” Which Geldenhuis of course knew. 1994 had seen a major change in South Africa’s political structure. The homeland governments were disbanded, replaced by new provincial governments. LPC had been formed to cater for the Bophuthatswana government’s insurance and pension policies. With the dismantling of that government, LPC lost the bulk of its client list. By 1996 it was underwriting an annual premium income of R5 million.

From this revenue, claims and other business expenses had to be paid, and in terms of the Insurance Act, insurance companies had to maintain a stipulated capital adequacy requirement, or they would be declared insolvent. LPC was dangerously close to this mark and the FSB wanted to revoke its limited licence, which meant it wouldn’t be able to trade at all, and Capital Alliance had no real interest in trying to secure new clients in the struggling North West province, which had taken the place of Bophuthatswana. Liquidating the company was a no-brainer.

But not for Sithole. “I can’t explain what happened. Here was this struggling company and instead of agreeing with Ben, I suddenly had this irrational but burning fire in me that this was it. Here was an opportunity for me to get into the industry on my own. I had been prepared to start a business from scratch — I was planning for it even — but this was a way in now, and I was ready.

I literally walked in and thought ‘I’ll take it’. Ben couldn’t believe it. In fact, he put a lot of effort into trying to convince me not to do it. He told me I was crazy, highlighting that I’d need to raise R10 million before I could move the business to Joburg, and Mafikeng did not offer that many potential clients. Maybe I was crazy.

I certainly didn’t know where I would get the money to buy the company, let alone how I would make the R10 million to buy a national licence, but I wanted to buy it anyway. One of the things that I believe is that at the core of all successful entrepreneurs is the ability to see the moment of truth when you are facing it. I knew what I was capable of, and I needed to trust in myself that I could get it done.”

Despite all the hurdles Sithole faced, he and Geldenhuis agreed on the terms of sale. Sithole raised just under the required money by putting his house and everything he owned up as collateral, for which he would own 74% of LPC. Capital Alliance would retain 26%. “I remember the day we signed the papers. Ben turned to me and said, Vusi, now you own an insurance company. Don’t f*** it up.”

Building foundations

Leaving his position as chairman of an insurance company to go it alone was not the first time Sithole had started from scratch. His entire career is marked by decisions to take the difficult road, rather than be satisfied with his current situation.

“I was a black varsity student at Fore Hare during the early 80s, when activism was rife in South Africa, and that influenced me. I wasn’t going to accept a life of mediocrity because of South Africa’s political system. I had big dreams for myself, and the will to achieve them.”

That activism got Sithole kicked out of Fort Hare early, and he arrived back in Johannesburg without a degree or a job. “It was the early 80s and work was not easy to find. Black people were carrying pass books, which the government used to keep track of employment status and work permits.

After months of looking for work, my father managed to get his boss at Anglo American Shipping to organise me a clerk’s position. My first day arrived, and as a young, idealistic young man, I looked at the office job I now had and rebelled against it. I arrived late, I took an extra long lunch hour and I left early.

I didn’t like the office space or the work. I didn’t appreciate the necessity of a job. The next day I was fired and while I wasn’t really sad to see the job go, I didn’t realise the problems the ‘unemployed’ stamp one day after the ‘employed’ stamp in my pass book would have on future job prospects. I was unemployed for months after that. Finally, I was put in contact through a family member with Sam Moseu, who sold insurance policies to the working class in Joburg. He needed someone to do admin for him, and so I was introduced to the insurance industry.”

It was the mid-80s and Sithole was back in an office, doing clerical work, which was exactly what he didn’t want to do, but months of looking for work had taught him the value of a job, any job. That didn’t mean he was giving up on his ambitions though. “I had my eye on hitting the streets with Sam. It took some convincing, but within a few months he let me join him in selling policies. Sam ended up being the man who taught me my first lessons in sales, and the ins and outs of the insurance industry.”

Once there, Sithole soon proved his flair for selling policies. Under Moseu’s guidance he gained enough of an understanding of the insurance industry to become a partner in the business, an arrangement that would last for almost five years. By the late 1980s, the business was doing well, but Sithole knew it would never reach the heights he was ultimately aiming for. And then an opportunity presented itself: local insurance company African Life opened a ‘black’ branch to target the burgeoning working class in the city of Johannesburg. “African Life needed black consultants to sell the policies, and I was approached to join them.”

It was an interesting choice for Sithole. He had now been running his own business with Moseu for almost five years. African Life was not offering him a managerial role. He would be a sales consultant earning commission only and working with Khehla Mthembu.

Many people would have seen this as a step backwards. Not Sithole. “I saw an opportunity to increase my skills base and learn from the best. I would be working in a large corporate firm, and if I worked hard I would move up through the ranks.

“I started at the bottom. I thought I understood my industry, but it didn’t take long to realise how little I knew. I hadn’t been formally trained as a salesman either, so I needed massive growth in that area as well. But I also knew why I had made the move. The whole point was to learn where my shortfalls were and to fix them.”

It wasn’t an easy process. “I was on commission only. I had just gotten married and I actually took a pay cheque home one month worth zero Rands. Policies had lapsed or been cancelled and the returned
commission meant I earned nothing that month. It was an important lesson: don’t sell something to someone who doesn’t want it, or can’t afford it. Their cancelled policies meant I took no money home that month.”

Sithole’s perseverance paid off though. Over the course of nine years he worked his way up the ranks, learning from each position. “I was a consultant, field manager, branch manager and finally area manager for Johannesburg before the BEE insurer Afgen approached me to join them.

It seemed like a good next move.” After a few years at Afgen the opportunity to join Hollard through a subsidiary presented itself. It was the early 90s and Sithole was a hot commodity. He was an experienced black man in the insurance industry at a time when political change was paramount. His future in the industry seemed assured. But still the dream of owning his own company persisted. He was simply biding his time, waiting for the right moment to present itself.

One of Sithole’s strengths is the discipline and patience to lay excellent foundations. By the early 1990s he had come a long way from the youth who was fired on his first day for being a lazy employee. He is a firm believer that the best things in life are earned, and his business success is a prime example of this philosophy.

“By the time I bought LPC I knew my industry inside out, mainly because I had held virtually every position the industry offers. I knew what it took to sell insurance policies, and conversely the administration behind receiving and honouring policies. I knew where things went wrong, and how successful underwriters operated. I had learnt the business from the ground up, and I didn’t make my move until I knew I was ready.”

Creating NestLife

After so many years of preparation, one would think that finally owning his own company would be the end of Sithole’s journey. In fact it was only the beginning. The decision to buy LPC once again took Sithole backwards before he went forwards.

The first challenge was buying the company.  Once he managed to pull the money together though, he still needed to take the company from insolvency to making enough money so that he could raise R10 million in cash to buy the national licence. “I planned to take the company from Mafikeng to Johannesburg from the beginning. I knew there were no real growth possibilities in Mafikeng. As a life insurance underwriter my clients would be big companies, and those were all in Johannesburg. But, unlike Capital Alliance, I didn’t need huge clients in the North West to make LPC viable.”

In order to make LPC a sustainable company, Sithole needed to secure new clients and grow his existing client base. He also needed to run a tight ship, because although he would save money from his own salary, he needed to make the business profitable. “At that stage LPC was a tiny underwriter.

We couldn’t compete with large players in the industry on price, so we needed to differentiate ourselves in another way.” That way was superior service. Sithole shared his vision of growth with his employees and how they were going to get there.

Everyone was invested in his vision. He trained them in the art of customer service, and together they started growing the business, pulling it out of insolvency step by painful step. It took Sithole four long years to secure the national licence, which he achieved through the business’s profits, and by raising capital on the back of his own assets.

Four years of driving from Joburg to Mafikeng each week. Four years of wondering not only if and when he would reach his goal, but whether there would even be enough money to pay the company’s bills at the beginning of each month.

Sithole’s determination, intimate understanding of the insurance industry and support of his staff won out though. The company became ready to secure a national licence, which did not mean Sithole could rest on the success of achieving his goal; more work was ahead.

“When I bought the national licence from the FSB in 2000, I bought out Capital Alliance, changed the company’s name to Nestlife and moved the main office to Johannesburg, but I kept the office in Mafikeng. That was where our clients were, and we needed that business. But moving to Joburg presented its own challenges. After working as hard as I did for four years to achieve my first goal, I was now quite literally a one-man band again. I was making contact with the people I knew in the industry to pitch my business to them. I don’t think I slept for months.”

And then the tipping point came. Sithole had risked everything on being able to secure big clients if he managed to get a national licence, allowing him to sell insurance policies to companies across the country, and not just in the North West province.

His faith in himself and his reputation in the insurance industry were well founded. “I carried the differentiator we had used in Mafikeng through to Johannesburg with me. Even today, as a R150 million company, our differentiator remains service. Never underestimate the power of looking after your clients.”

His strategy was simple. He would use his reputation to secure a meeting, investigate what areas his potential clients were dissatisfied with in terms of their current providers, and find a solution for them. Success lay in following through on any promises he made to deliver those solutions. While doors opened slowly, they did open, and Sithole used every inch to gain a mile. “I approached insurance companies that I knew held big accounts, like Eskom, and I pitched our business as their underwriter.

I didn’t try to get everything at once. Instead, I convinced them to give me a small percentage of their business so that I could prove myself. Here my reputation in the industry definitely played a role. They knew me, and they were willing to give me a chance.

I wasn’t an unknown.” 5% of a company’s business soon grew into 10%, then 20%, until in many cases Nestlife now holds 100% of its clients’ business, all through an unwavering focus on service.

In 2006, Nestlife closed the year with R30 million in premium income, and has experienced exponential growth ever since. In March 2011 the company closed on R150 million, and Sithole aims to grow the business to R1 billion by 2015.

“One of the most interesting things I have learnt on this journey is that you never stop learning. Running a R30 million company is different from running a R10 million company, or a R150 million company. Each time the business has grown, I have had to grow with it, and expand my own horizons.”

Sithole recently completed an MBA degree, which took him four years to achieve on a part-time basis. “If I don’t keep my eye on the ball at all times, I won’t achieve my 2015 vision, or the goals I have set after that. I need to stay on top of everything happening in my company and the insurance industry.”

The human factor

Sithole does not attribute Nestlife’s growth to himself alone. “One of the biggest mistakes I have made is letting excellent employees leave the business without fighting for them. Without skilled staff there is no business, and if there is one piece of advice I can offer other business owners, it’s hold on to the people who make your business great.”

Nestlife employs 100 people across its four offices in Johannesburg, Bloemfontein, Durban and the Eastern Cape. The Mafikeng office was closed in 2006 and its employees relocated. 2011 will see further expansion with offices opening in Cape Town, Nelspruit and Limpopo province.

“Excellent service starts in-house. If employees understand and buy into a company’s vision, they can support that vision and the business’s overall values. We call it our 2015 vision, and it’s something that everyone, from the cleaning staff to our top brokers, lives and breathes from the moment they walk through the doors each morning.” Interestingly, this is one area that any business can achieve at no cost. Clients appreciate good service and follow-up support. Every business owner can foster this attitude in their staff.

Sithole has worked hard to earn the respect and dedication of his employees. He is particularly focused on helping each individual under the Nestlife banner grow. “We have data capturers and clerks that started as cleaning or gardening staff. If we recognise potential we will open every door we can for that individual to achieve what they are capable of.”

This isn’t ‘bleeding heart’ altruism on Sithole’s part. Netslife’s growth is testament to what employees can achieve if they believe in where a company is headed. “People are not productivity tools. They have personal and career aspirations. As a business owner I have worked hard to never stifle those aspirations, but encourage them instead.”

Future vision

The discipline needed to take an insolvent company and turn it into a major player in an historically competitive industry cannot be downplayed. Sithole lives his life according to three strict pillars: physical, mental and spiritual. He is a firm believer that both the mind and body need to be maintained and worked out for overall health and success, and that spiritual awareness completes a healthy balance.

His passion gave him the drive to not only create a dream, but doggedly pursue it, even when he thought he couldn’t go any further. His discipline has allowed him to realise his vision.

“I want to create a legacy for myself, my family and even South Africa. I’m proud to say that Nestlife isn’t the product of a BEE deal, and I think it’s important for South Africa that companies like mine exist. I want to show our youth that if you put your mind to it, you can achieve anything.”

Growing businesses

One of Nestlife’s goals is supporting people, particularly the historically disadvantaged. Sithole has watched people start their companies from scratch, and if he has believed in them, he has used Nestlife as a tool to give them business and support them, through mentoring and resources. One such story is a man who started a small local insurance broking firm. Nestlife supported him, and his insurance company has grown from strength to strength.

Four years since Sithole started supporting him, he has grown to the point of being able to place R11 million worth of business with Nestlife. “At our broker awards earlier this year, he came up to me and said, ‘Mr Sithole, I owe my company’s growth to you. A quarter of that R1 billion company that you are planning for 2015 will come from my business.’ That’s the commitment and the passion we share with the people we have walked our journey with,” says Sithole.

Naming Nestlife

When Vusi Sithole bought a national licence in 2000, he had the perfect opportunity to rebrand the company. The name Life and Pensions Insurance Corporation (LPC) did not actually reflect what the underwriting firm did, as the company no longer sold pension policies. “I got the whole company involved. We had a staff competition to see who could come up with the most appropriate name.”

As it turned out, Sithole himself came up with Nestlife. “I was in the bush watching birds build nests. They were building their homes so patiently and deliberately, piece by piece. I started musing about what we did, helping people build their futures and support their families. The symmetry was perfect. Nests for eggs and protecting baby birds, Nestlife for security for people.”

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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2 Comments

2 Comments

  1. Mangaliso

    May 5, 2013 at 19:16

    One of the successful entrepreneurs I know.He gives me motivation on being sucessful in life

  2. Moe

    Aug 23, 2013 at 09:28

    Great piece, worth every read. Well done bra Vusi, adding more fuel to my business journey.

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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.

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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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john

“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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