- Player: Quinton van der Burgh
- Company: Quinton van der Burgh Investments
- Turnover: In the billions
- Launched: 2008
- Visit: quintonvanderburgh.com
Quinton van der Burgh Investments is the holding company that owns equity shares in 32 businesses. Eight of those businesses are mining concerns co-owned with his two brothers. The mining and prospecting business (Burgh Group) was launched in 2002.
Van der Burgh currently focuses the majority of his time on growing Innovatec Africa, a start-up he bought 85% of in 2013. Van der Burgh is also the creator of reality show Clifton Shores.
The entrepreneurial mindset
I was a terrible student at school.
I didn’t listen, I was ADHD, and I didn’t like to attend class. To be honest, I’m not even sure how I passed; I tend to think I was lucky. But school was a great place to sell things, because I had a captive market with lunch money to spend.
I almost got kicked out twice because of my little side businesses. As long as I was trading, I was alive.
My dad owned a number of supermarkets, and on weekends my two older brothers and I would work in the stores doing stock take, pricing goods and counting tills.
It gave us a strong feeling for figures, but it was also an opportunity to work and save, and to buy things like Ghostbuster stickers which I then sold at school.
My dad was successful, but he taught us to work for the things we wanted. It was also a great introduction to the basics of trade. And that’s what entrepreneurship is – trading. Money in and money out, buying and selling. Cash flow.
Heart of a trader
That’s what drives me. I love a challenge, and I want to be involved across the whole value chain.
My passion is business, and I love all aspects of the market – I enjoy learning about new sectors that I know nothing about. I want to look at new industries and touch it all.
I haven’t succeeded in everything, but that’s where the real learnings happen. All industries are different.
What succeeds in one doesn’t necessarily work in another, but it’s so rewarding figuring that out.
Follow your passion
Succeeding at something I’ve never done before is what drives me and gets me up in the morning.
I like guiding from the sidelines. I manage, run, strategise. I need to be a part of the success, not just invest money. But, you can only do so much.
I’ve built a team of experts to assist me, and I believe in hiring the best. When we invest in a business, we look for the loophole – that thing that we can take, tweak and triple the company’s valuation in a few short years.
It’s not about the money
I could retire right now. But it would bore me to death. And I wouldn’t be giving anything back. I don’t build businesses to have a good life. I build businesses because that’s what drives me, and what I live for.
I just didn’t want to be there anymore. By this stage the family business had grown, and included supermarkets, car dealerships and cellular stores.
I had a colleague at one of the car dealerships who had contacts at Eskom. He knew what their needs were, what they were purchasing and how they chose suppliers.
We decided to start a business selling filters to Eskom. This was the mid-1990s and I was 17 years old. I had R50 000 saved up, and used it to buy stock.
The money was saved up partly from working, and partly from buying, suping up and then selling cars. I had access to scrap yards, and was always on the lookout for parts.
I made a profit each time, which I saved, and also used to invest in my next car. I eventually saved enough to buy a BMW 318.
A complete disaster
We didn’t need R50 000. We needed a few hundred thousand. It was a great idea, but it couldn’t sustain itself. We couldn’t run without cash flow. It was a big lesson to learn.
I was 18 and my first business had failed. And so I went back to working for my dad, first as a salesman at an Autopage Cellular store he owned, then working my way up to becoming area manager.
And then my oldest brother and I had an idea for a side business. At the time, the big mobile companies in the UK had a policy that second-hand phones and 14-day returns were all stored in warehouses, and then packaged and sold in bulk to other markets.
We started importing these – 1 000 phones per package. We’d buy them, unlock them, package them and sell them. I’d go over to the UK to get them, and then we’d literally drive around Witbank and Pretoria selling them. I’d pack 500 phones into my BMW and head to Pretoria. We were a completely turnkey operation.
There were eventually five of us trying to sell 15 000 phones a month. Our little operation got my dad’s attention, who decided that we weren’t ready to be running a side business of the size it had grown to. He put a friend of his in charge.
Just like that, I’d been circumvented in my own start-up and I realised that if I ever wanted to build something that was really my own, I needed to leave and actually go out on my own.
I believed the only way to do that was to go to the UK. I made contact with the broker who sourced and sold the phones. I wanted a job in London.
He agreed, but said he’d pay me commission only, no basic salary. Meanwhile, my dad said that if I left, I was leaving with nothing. I did it anyway. This was my chance, and I had enough faith in myself to believe I’d make it work. I had no idea.
I shared a room with four guys. It was a whole new experience for me. I was used to people doing stuff for me. This was a whole new way of life. It was also unbelievably liberating.
I wanted to make a name and career for myself, and this was my chance. I’m never happy. I never will be. Things are just things; they come and go. I care about achievements. It was time to start shaping my future.
I began working immediately. I opened the office at 5am each morning (we traded internationally, so had to start early), and then I sold phones. My agreement was 10% of the gross profit on each phone, which was £1. The first month I sold 30 000 phones.
The next 60 000 and the third 80 000. In rand value, I’d made R3 million. Not that it mattered, because he never paid me. He was shocked and completely unprepared for how much I sold, and decided he wanted to review the agreement. Since I was earning on a commission basis, this meant I was earning nothing.
In month two my dad came to visit. I had to borrow cash from a housemate so that I could take him out to lunch. I didn’t want him to know I had no money. By month three things were getting desperate. By this stage my boss had a new partner who promised to sort things out. It never happened.
They gave me £100 pounds to tide me over, and that was the last cent I saw from them. I learnt a lot about taking people at their word, and how quickly someone will go back on their promises.
A new opportunity
And then a new opportunity presented itself. By this time, I’d built up real relationships with my clients. They knew me. They trusted me.
They knew I stuck to my commitments, even if that sometimes meant going head-to-head with my boss. They wanted to do business with me, but they didn’t want to do business with my boss.
They told me they would give me upfront cash, I could find the stock, and they’d deal directly with me. It was my first introduction to the power of OPM – using other people’s money to fund your business.
I did it. I was now working even harder than before. The money would get transferred into my bank account, and I’d wait at the bank for the funds to clear, and transfer them immediately to my suppliers.
With a money order in hand, I would then go and fetch the stock, and get it loaded by the end of the day. I worked from 5am to 10pm each night. Missing my targets and deadlines was not
And then I made my next big mistake. I found an amazing deal. A company in China was selling Nokia phones at 20% below market. I’d built up profits, and I had a South African client who I told about the deal. He sent me £300 000 (about R6 million at the time) and I put all my savings into the deal as well.
We were going to buy up stock and test the waters. I paid, and then the guys (whom I’d vetted) disconnected and disappeared with the money. Just like that. Everything I’d saved, gone, but even worse, my client’s money was gone too.
I knew my only option was to be completely upfront with him about what had happened, and to promise to pay him back within six months. I managed to pay him off — everything I made went to that debt. It was worth sticking to my word.
He’s still a client of mine today, almost 20 years later. Money comes and goes. Your reputation doesn’t.
I’ve lost a lot of money over the years
It wasn’t the first time I’d lost money, or the last. But through it all, I’ve built up an unshakable belief in relationships. They come first.
When markets shift (as they do, particularly in the import/export game), I take the hit. Over the years I’ve taken a lot on the chin. These principles are so important to me.
Too often I’ve seen markets dip, and people start panicking, which leads to cutting corners and doing shady deals. That’s how you burn bridges. It might be a short-term solution, but it’s not a long-term one, and I always look long-term.
Don’t rip people off and jump ship
In tough times people want to milk the system. It’s a short-sighted, big mistake.
I’d rather go broke, back to nothing and build myself up again than do that. Today’s failure could be a much bigger opportunity down the line.
After six years in London I started looking back to South Africa. I’ve maintained business interests overseas, but it was time to come home.
By this stage, my brothers had shifted into the industrial sector, focusing on belting, earthmoving and hydraulics. They were still involved in the family business though. They were also very interested in coal mining.
They’d been researching prospecting and development of coal assets in South Africa. It was a very risky play, and would involve all of our collective savings, but if it worked, the rewards would be huge.
Taking risks with big rewards
At 26, I was given the opportunity to buy my way back into the family business with a 25% equity stake. I decided to do it, and moved back home.
Their prospecting idea was incredibly risky – and incredibly exciting, which is what I live for. I’m the cowboy of the three brothers. I’m the gambler and highest risk-taker.
My middle brother, Stanley, is the most conservative. He’s a hard worker, likes things simple, and isn’t afraid to get his hands dirty. He’s built an earthmoving business from scratch, going from one machine to 300, and he’ll change a tyre himself if needed.
He’s a tradesman who always haggles for the best price. He’s grounded, not flashy, and all about family. My oldest brother, Wayne, is more like me. He’s a networker and a dealmaker. He’s willing to take risks, although not quite as aggressively as I am.
As a trio we work well together. Stanley covers earthmoving, I’m the numbers and strategy man, and Wayne focuses on operations. We support and complement each other. But we’re also very different – I always look a few years ahead. Wayne and Stanley like to focus on the now.
Boardroom meetings have been known to get heated, with three brothers who want to end up punching each other. We don’t back down. We’re all opinionated. And yet it works. This big risk we took has paid off – tenfold.
Becoming coal miners started with a big gamble. My brothers had found land in Mpumalanga to prospect. It was risky.
Mining for opportunity
Experts told us that while it could be a very lucrative seam, it might also not be what it appeared to be. It was a 50/50 risk, and it would take almost everything we had to find out.
If it worked, it would be like striking oil. If it didn’t, we’d all be back to square one. I was 26, but my brothers were older, with families to support. We decided to go for it.
It was two years of digging holes before we found the seam, and four years of making no money, while pouring money from our other ventures into prospecting and development. We all refused to take a loan. We’d rather do it slowly, and debt free, or not at all.
Every year we had the same discussion: Should we carry on doing this? Is it worth it? We’re not the majors. We’re not a big mining house. What the hell are we doing? But persistence pays off. We stuck to it.
Our reputations were on the line, and a stubborn streak was evident in all three of us. We wanted to prove we could do it, and that this wasn’t rocket science. We could make this work.
This is true of everything – you can do anything. And if you don’t have the knowledge or expertise, get stronger people than yourself into the right positions, and put your heads together and work – hard! And learn, learn, learn every day.
Today, that business’s turnover is in the billions, and it all started on a calculated gamble, and a desire to build a legacy.
Currently, van der Burgh spends most of his time on Innovatec Africa, a start-up he bought 85% of in 2013. “Real innovation is happening in the tech space, and I’m chasing the opportunity that will make me a global brand,” says van der Burgh.
“I want to be in the top ten futuristic tech companies in the world. That’s what I’m aiming for, and so I’ll never stop looking for the next big thing.”
Van der Burgh believes Innovatec Africa is the vehicle for that. “We have very talented teams here; lots of innovative development is taking place. We look for ideas that are in concept stage that we can run with.”
Innovation is expensive though, which is why van der Burgh is concentrating on building a sustainable brand that can support that innovation.
“There are 12 companies under Innovatec Africa; we’re aggressively acquiring companies and distribution rights for large brands. There’s a huge opportunity for us to develop these brands in markets they haven’t previously dominated, particularly in Africa.
“Through our acquisitions, which are all companies that excel in their fields, with excellent teams at the helm, there’s very little that we don’t do that corporates need, from software and hardware integration, to consumables, boardroom outfitters, landline and VoIP connectivity, integration of data solutions, cloud services, servers, and even training.
But at our core, while we’re building this big machine, we have an amazing innovation arm, which is sustainable because of all the other areas we focus on.”
The show Clifton Shores was the result of a bee in my bonnet. Two things were happening simultaneously. I wanted to be involved in TV, and I also wanted to give my personal brand some exposure. I’ve got big plans for who I want to be, and where I want to go.
Elon Musk, Mark Shuttleworth and Richard Branson all have something key in common – they’re been very savvy at building their brands. People know them, and as a result, they’re trusted, and entrepreneurs bring them ideas. They make a difference.
I saw a reality show as a way of both satisfying my desire to create a successful TV show that could be distributed in the US, and growing my personal brand. I have an eventing and marketing business, Quintessential, and this became the vehicle for the show.
We had four US girls and three South African girls, all based in a house on Clifton beach. The US element was important – US audiences love seeing other Americans and what they’re doing, even if it’s not in the US itself.
It was a ‘fish out of water’ idea. They ran my company for me and put together glitzy events, and we filmed their interaction, and dealing with daily challenges.
I was a secondary character. It was unscripted, but of course we had to add some drama, so we’d pair up people who we knew didn’t get along, or wouldn’t work well together.
The show cost more than we made, but the exposure was incredible. We really got the message out there that if you’ve got a business idea or contact, come to Quinton.
We’re currently getting ready to launch the second season, now rebranded as The Shores for the US market. I took two years to be ready to do it again.
It takes a lot out of the participants. This time we’re going online only. Each episode will be available free on Youtube.
This is where TV is headed anyway. I’ll make money on the clicks, but the idea is to really build up a subscriber base for future projects. I’m looking long-term here.
Right now it’s costing money, and I’m having a blast. In the future though, I’ll see real returns with a dedicated subscriber base. That’s the plan.
They’re very, very passionate about global access to water. I met Jordan on a movie project in the US two and a half years ago. I loved his story.
Our partnership works perfectly: He’s the NGO guy, I’m the business guy.
Generosity already had a lot of celebrity endorsements before I came on board. The big idea is to solve the water crisis, step by step.
The NGO has already built 570 wells globally, giving communities access to clean water.
But there’s always more to be done, and ultimately, in order for an organisation to be sustainable, it needs to produce its own income rather than relying on donations. This is where I came into the picture.
Generosity needed a ‘for-profit’ arm that would give the NGO an annuity income and create a business around a water brand.
We’ve spent two years developing the best technology for the healthiest drinking water possible, bottled in BPA free bottles. This is not spring water — we don’t want to take more resources from the ground in poor areas.
It’s government water, treated with reverse osmosis. The result is a level ten water that is not only extremely healthy for you, but tasty as well.
All bottles have a QR code, so the consumer knows which well that batch of water is funding, and where it’s being built. 20% of every bottle goes to the project. In the US, bottled water is a $10,8 billion industry.
We’d like to see some of that going towards solving the global water crisis. We’re also targeting the corporate market because they’ll get tax rebates, and high volumes mean we can lower the price, although this is a premium product, and it’s packaged and marketed as such.
We’ve already made plans to enter the Australian and New Zealand markets. The idea is to eventually have Generosity everywhere — you can launch your own company in your country — we’ll give you the product as a turn-key operation.
You do the marketing and sales to corporates and throw a big yearly event. We’re looking for well-connected JV partners who also want to give back.
John Holdsworth Founder Of Tautona AI Shares 4 Disruptive Strategies That Are Changing The Insurance Industry
What can we do now that we couldn’t do before, thanks to changes in technology?
“Disruption isn’t just doing things in a different way which doesn’t resonate or go any further — it’s about changing the game. Being disruptive means taking a look at an industry and finding a way to do it differently, giving you an advantage over the incumbents.”
- Player: John Holdsworth
- Company: Tautona AI
- Est: 2016
- Visit: www.tautona.ai
Disruptive innovation is the catchphrase that defines the last 20 years. New technologies, business models and media have disrupted the way we do just about everything. Conventional wisdom has it that the new kids on the block are the ones who are going to own the market at the expense of industry stalwarts, but this innovative South African disruptor is showing them how it’s done.
1. It’s the experience economy, stupid
Regardless of how the world changes, organisations that consider their customers’ emotions and experience first, win. That’s exactly what Tautona did. They put themselves in the customers’ shoes and asked one key question: ‘What’s wrong?’ Few industries are as ripe for disruption as insurance. When John Holdsworth co-founded cognitive automation business Tautona AI in 2016, he knew that there had to be a better way for insurers to handle client claims.
Tautona AI emerged out of a consulting engagement John had with a large insurance company. With a background in IT, he is a highly experienced technology executive and entrepreneur who has started a number of successful companies. He says he loves the energy and adrenalin associated with start-ups. He pioneered the use of digital signatures in South Africa, founded mobile payments company PAYM8, and converged voice and data provider ECN, which he sold to Reunert for R172 million in 2011. The experience acquired over this time meant he was ready to take on a massive challenge.
“When a policyholder submits an insurance claim, that action should trigger an instant decision, with the outcome immediately communicated back to the policyholder,” John says.
“Customers want swift claims handling, communication, and compensation. They want the same instant gratification that they get from online banking. So that’s what we set out do — to revolutionise the entire claims process. We have made traditional claims processing a thing of the past by pioneering a cognitive solution that is making the claims process faster, smarter and more efficient.”
2. Automating judgment tasks once reserved for humans
Tautona’s claims automation solution uses artificial intelligence to instantly approve or refer claims for further investigation. By using machine learning algorithms to identify patterns in the data, Tautona’s solution identifies fraudulent claims, enabling insurers to halve fraudulent claim losses.
Tautona also uses Robotic Process Automation to integrate to legacy systems, removing the need for traditional programming techniques. This means that Tautona’s claims automation solution can be implemented with minimal disruption to a business. By automating decision-making, communication, and compensation, Tautona enables insurance companies to take a major step towards becoming true digital insurers.
3. Ditch the legacy systems, start from scratch
Disruptive innovators invest in digital strategies so that they can find new ways of responding to their customers’ evolving needs. The founders of Tautona AI agree on several principles, but one that stands out specifically because it goes entirely against traditional thinking, is the importance of starting from scratch.
“You cannot take a non-digital business model and expect it to work online,” says John. “Instead of using old methods, you need to start from the beginning. Ditch the legacy systems, take a leader mentality and imagine the art of the possible.”
This iterative, modular approach typically begins with defining the strategy and programme plan upfront, delivering a core capability fast so it can provide benefits immediately, and then continuously improving with regular, incremental capability improvements to achieve the objectives of the strategy. It’s an approach that fosters closer collaboration between stakeholders, improved transparency, earlier delivery, greater allowance for change and more focus on the business outcomes.
4. Shaking up an industry
How do you launch new solutions and educate customers who are used to doing things the way they have always been done? John says resistance to change is inevitable. That’s why you need more than good technology.
“When you introduce something ground-breaking to the market, you encounter many different types of personalities asking diverse questions. That demands an approach that is client-centric and entirely customer focused. It also means you have to spend time developing a sound business case to present to decision makers.”
A solid business case documents the justification for the undertaking of a project. It’s the way you prove to your client and other stakeholders that the product you’re pitching is a sound investment. You need to justify the project expenditure by identifying the business benefits the innovation will deliver and that your stakeholders will be most interested in reaping from the technology.
“Essentially, it’s about proving you can deliver,” says John. “When you have an entirely new proposition, the only way you can hope to get your foot in the door is with a value proposition so profound that clients are forced to take a look at it.”
Tautona has convinced a number of South Africa’s top insurers to implement their AI-powered claims automation solution. The results to date have been ground-breaking, with insurers dramatically reducing turnaround times and processing fees. As a result, Tautona’s sales pipeline is full to the end of the first quarter of 2019.
“But there’s no rest for disruptors. Nokia and BlackBerry crumbled because they were slow to react to market changes, and they underestimated the challenge from Apple and Samsung. The only way to retain leadership is with relentless innovation, that is, a constant flow of new versions and features. That applies in any industry today.”
Tim Hogins Started Out As A Security Guard, Today His Has A Turnover Of R150 Million And Has Self-Funded Three Huge Lifestyle Parks
As a poor township kid, Tim Hogins watched kids pile into buses heading to Sun City every weekend, knowing he couldn’t afford to join them. He was a youngster, but he made a promise to himself. One day he would build parks that anyone could visit — especially underprivileged kids like himself.
- Player: Tim Hogins
- Company: GOG, formerly Green Outdoor Gyms
- Est: 2012
- Turnover: R110 million
- Projected Turnover: R150 million (2018)
- Visit: gog.co.za
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that – I want to employ people, develop them, push boundaries and see where we can take this.”
“Poverty can be a good thing, because growing up poor makes you creative, and that’s an incredible power if you know how to use it.”
Seven years ago, Tim Hogins drove out of an office park and pulled onto the side of the road because he was having a panic attack. His car was closing in on him, he couldn’t see and he couldn’t breathe. After months of hard work, it was all over. His dreams were shattered.
Tim isn’t the first entrepreneur to find himself here, and he won’t be the last. What separates him from countless other aspiring business owners is that despite a massive setback, he didn’t back down. He sat in his car, phoned his wife, and told her what had happened. Instead of telling him it was time to move on and find a job, she asked him how they were going to cobble together the money he needed to start again.
And that was the beginning of Green Outdoor Gyms, a vision Tim had been nurturing for almost two years. A business idea that had led to his retrenchment and was almost ripped away from him by his business partners and investors.
But he didn’t quit. He pushed on. And today his business has a projected turnover of R150 million and has self-funded three huge lifestyle parks that Tim hopes will impact the lives of thousands of underprivileged children while providing jobs for hundreds more.
The in-built art of tenacity
To understand Tim, you need to understand where he came from. As a township kid growing up in Randfontein on the West Rand of Johannesburg, Tim always helped his parents to sell stuff. They were traders. His dad had a small café selling burgers and chips, and his mom baked. While other kids in the area piled into buses for Sun City on the weekends, or visited a local bird park, Tim had to work or the family didn’t eat.
“I matriculated in 1996, and even though I had an exemption, tertiary education wasn’t on the cards for me,” he says. “We just couldn’t afford it.” But Tim had a plan. His cousin told him about a free four-week course to become a security guard, and Tim aced it, securing a position at one of the firm’s top industrial sites.
Here’s the first secret to Tim’s success. Instead of seeing a dead-end job, Tim saw an opportunity. If he did his job well, he would progress to a driver, and then a cash-in-transit guard. From there the plan was management. Becoming a security guard wasn’t his fate because he couldn’t get a degree — it was step one to the rest of his life.
“I was raised to be the best version of myself. Everything is what you make of it. In primary school I was head boy, and in high school the head of the SRC. There’s always a way to grow and improve yourself.”
Two years into his career as a security guard, Tim heard about another opportunity — a free programming course teaching COBOL, a back-end system used by the financial services industry.
“I grew up 500 metres from Stafford Masie, who would go on to become the first head of Google South Africa and is one of our country’s greatest tech entrepreneurs,” says Tim. “I had zero programming experience — I’d never touched a computer — but I knew how valuable these skills were, and here was an opportunity being handed to me.”
It wasn’t quite as easy as Tim imagined. He failed the aptitude test and had to take it again. Once he was on the course, he failed that too — it was a programming course after all, and Tim needed a far more basic introduction to IT. He didn’t give up though. He’d quit his job and needed to make this work while he was still living with his father and didn’t have financial responsibilities, so he begged the course administrator to let him retake the programme. This time he passed, and found a job at a small IT firm.
Once there, Tim built up his IT acumen. Over the course of his IT career Tim worked for Dimension Data, EOH and SITA. In his final three years he applied for an account management position and moved into sales. His goal was to become a business owner, and so he diversified and learnt what he could about business.
He also paid attention to the world around him, looking for a business opportunity or problem he could solve. He dabbled with some ideas, but the one he kept coming back to was outdoor gyms.
“I saw kids in parks doing sit-ups, push-ups, pull-ups on trees, and kept thinking there must be a better way than this for them. I knew that a proper solution would be good for the whole community — giving kids and parents a safe and free environment to play in and focus on their health. I focused on poorer communities, where gym fees weren’t an option, and kids needed safe places to play and keep out of trouble.”
The more Tim unpacked the idea, the more he began to believe in it. And then his employers found out, and made it clear that they did not like Tim’s attention divided between his job and his business idea. Despite this, Tim continued to focus on his entrepreneurial play, and within a few months he’d been retrenched, ostensibly due to a restructuring of the business, yet Tim was the only person let go.
It was October 2010 and Tim had no job, two-months’ salary and he was about to get married. But it was the best thing that could have happened to him. “That retrenchment catapulted me into business. From then on, my full focus became outdoor gyms.”
Winning and losing
Tim had approached Joburg City Parks who where interested in the idea. He had also met with an engineer and they had begun to design the equipment. There was just one small problem: Money.
“I knocked on doors, approaching anyone who would listen. One investor laughed at me. He said I’d gone from IT to playing with steel — what was wrong with me? A contact at SITA said flat out that she wouldn’t help me. Looking for funding can be incredibly demoralising. I had an idea and a letter of intent from Joburg City Parks, and it still wasn’t enough.”
And then Tim was introduced to a group of investors who wanted to instal kids play areas in municipal parks. Tim had the City Parks connection; they had the funding. They entered into a business partnership and built a prototype together. This was when Tim’s wheels fell off.
“I was invited to a meeting by my three business partners, and when I arrived there were five people in the room — my partners and their two lawyers. We’d entered into the agreement as 50/50 partners, and they wanted us to all be 25% shareholders. I couldn’t agree to that. This was my idea, my connection, my baby.”
By the time Tim left the meeting, he had no funding, no partners and no prototype and he knew City Parks was getting impatient. All he’d done was create competitors — and they had a demo model.
Tim had spent most of 2011 looking for funding and then building the prototype once he found his partners. He wasn’t just back to square one, he was behind where he’d started months ago. Hence the panic attack.
It was a pivotal moment. Give up or push on? Tim chose to push on. That night, Tim and his wife, Rona Hogins, sat down and came up with a plan. They would sell one car and Rona would apply for a bank loan. Together, they managed to come up with R200 000. Tim approached a friend who was interested in a side business and they launched LXI, an importer of screens for media companies. LXI brought in enough to pay the bills while Tim concentrated on getting Green Outdoor Gyms off the ground.
Then luck stepped in. “I drove past a warehouse and saw some play equipment. Instead of driving on, I pulled in and pitched my business idea to the owner.” The owner, Neta Indig, agreed to build Tim’s prototype at cost, in exchange for a long-term partnership. Tim agreed. His R200 000 would be enough to get the business back off the ground. Green Outdoor Gyms was officially launched in February 2012.
Here’s the thing about luck though. Unless you’re open to opportunities, paying attention and willing to step out of your comfort zone, luck alone will get you nowhere. By the time Tim drove into Neta’s parking lot, he’d spoken to countless investors, had doors shut in his face, lost a partnership and his prototype, and was still willing to look for any opportunity that might present itself. Through sheer will and tenacity, he found it.
After the first outdoor gym was installed, two things happened. The competition Tim had feared from his old partners didn’t materialise. It was Tim’s first real lesson in the power of passion. He’d doggedly pursued his idea for over two years. His partners, who didn’t share that passion, did nothing with the prototype they’d acquired. Tim was still — at that stage — in blue ocean territory.
The second was how quickly an idea can take off once the foundations are in place. GOG’s turnover was R3 million in its first year, and orders were flooding in from municipalities throughout South Africa.
Tim was invited to present his solution in parliament, and it was included in the National Development Plan. “Everything escalated faster than I could have imagined,” he says.
“The reality is that we’re an obese nation. It’s a real problem. On top of that, 90% of the country can’t afford commercial gym fees. Under the National Development Plan, every community was earmarked for an outdoor gym. Government saw my vision and they bought into it.”
Tim had to tender for each new site, but he had a first-mover advantage. By the time other players entered his space he’d already built up a track record. His team’s turnover times are impressive and the business doesn’t only design and instal the equipment, but can also overhaul a derelict park. The quality of his products ensures that equipment lasts at least eight years with no maintenance, although once an outdoor park is installed, the community takes ownership of it, cleaning it regularly and maintaining the area.
In six short years, GOG has installed over 1 000 outdoor gyms for local municipalities around the country, and there’s still room for growth. There are currently between 5 000 and 10 000 sites available, and while Tim doesn’t believe they will get all of them, the business will continue to expand. “I believe we still have a ten-year run with government-funded outdoor gyms, but this is no longer our core business.”
In fact, GOG has grown and changed considerably since that first outdoor gym was installed in February 2012.
“I’m an opportunist. I pay attention to developments around me and am always on the lookout for where we can add value,” says Tim. As a result, GOG is now developing its own sites and supplying equipment to the industry — across private and public sectors.
“You need to know that competitors are coming,” says Tim. “When we started out we had a niche with outdoor gyms and government, but someone will always want to eat your lunch. If you know that someone’s paying attention to what you’re doing and that everyone needs to diversify, you can stay ahead of your competitors.
“Our business is centred around health, fitness and family, and this understanding has allowed us to grow into lifestyle spaces that support our core focus.”
As a result, GOG has expanded to the installation of play areas and outdoor gyms for hotels, private and public schools, beach parks and lifestyle estates, including Steyn City.
“We also have a registered landscape company,” says Tim. “We can take vacant land and transform it into a park with grass, trees, water and pathways. We have a Geotech division that does soil testing and environmental studies.”
None of this happened overnight. It takes time to build a reputation, but if you’re focused on four key things, you can build a sustainable business. “You need to diversify your product range, diversify your customer base, nurture relationships and push outbound sales,” says Tim.
Tim has geared the business for scale, which is critical in a production and manufacturing context. “We have always outsourced our manufacturing, first with Neta, and later to a Chinese manufacturer who has become integral to our success.”
Tim’s relationship with Neta was critical in the start-up phase, but after two years the manufacturer decided to focus on his core. “We were too big — it wasn’t a side project anymore, and Neta wanted to remain in construction,” says Tim. “I needed to either find another manufacturing partner, or move into that space myself.”
Tim visited manufacturing facilities in China and sourced samples until he found a plant that could handle GOG’s volumes and quality. “Chinese manufacturers value loyalty and they’ll do whatever you want at the price point you ask. If you want a cheap product, you’ll get it — and the quality to match. Good quality costs more. I have an excellent relationship with our supplier — so good that he flew out to South Africa to see our operations, because he was impressed with the volumes he produces for us.”
It’s this relationship and the capacity available to Tim that has allowed him to take the next step towards his ultimate vision for GOG: Lifestyle parks.
Living the dream
GOG’s first lifestyle park stemmed from Tim’s need for a showroom and his life-long dream to give underprivileged children access to entertainment parks that he couldn’t afford when he was a child.
“We were manufacturing outdoor parks and I started thinking about other ideas in this space that aligned with our vision and niche. I needed a showroom that could showcase everything we can do, from ziplines to climbing walls, swimming pools to spray pools and outdoor gyms. A lifestyle park was the natural answer to everything I wanted to achieve.”
GOG Lifestyle was opened in November 2016 and is situated off the N14 near Lanseria Airport. It’s close to a number of townships, including Diepsloot and Cosmo City. “The revenue model is corporate team building events, family days and launches, which allows us to run specials for kids, the elderly, and CSI projects for schools and churches.”
The next lifestyle park, GOG Gardens, was opened in Soweto in December 2017. Bigger than the first lifestyle park, GOG Gardens caters for picnics, outdoor events and concerts. It’s a multi-purpose venue with seven venues in one, and also focuses on corporates, the general public and events, with CSI projects that support children.
“We have launched some smaller projects, such as GOG Kids at Chameleon Village in Hartbeespoort and a play area in Vilakazi Street, but our next big project is Happy Island, a 36 hectare water park off Beyers Naude Drive in Muldersdrift.”
Happy Island is GOG’s first joint venture with an investment partner, Tim’s Chinese supplier. Unlike the other lifestyle parks, which GOG self-funded from cash reserves, Happy Island is a multi-hundred million rand project with large capex needs. “The idea came to life when the chairman of our manufacturing supplier visited our operations in South Africa. There are no water parks in South Africa similar to those I visited in China. We are doing something completely new and exciting, and we broke ground in April 2017.”
All of GOG’s lifestyle parks have required high capex investments and have not yet reached break-even, unlike the smaller projects that will reach break-even within a few months. “Our projection for the lifestyle parks is three years, and five years for Happy Island,” says Tim.
“My long-term goal is to have ten lifestyle parks across South Africa, one in each region, and that’s what I’m investing in. We want to make a difference, give kids access to these parks and employ people.
“I’m here today because of my childhood experiences, but before I could invest in this dream, I needed to start small and build up my reputation and cash reserves. To achieve my ultimate dream will take a lot of investment, so that’s the focus.
“I’m a visionary, and I’m not scared to invest in my vision. I’ve lost millions, but I’ve made more because of that. Business is about making money, but I’ve grown beyond that — I want to employ people, develop them, push boundaries and see where we can take this. When someone says something is impossible, I want to know why, and then try anyway. That’s how you achieve great things. That’s how you realise your dreams.”
In 2016, GOG launched its first lifestyle park, GOG Lifestyle. Since then, two more lifestyle parks have been added, GOG Gardens in Soweto, and GOG Kids in Chameleon Village in Hartbeespoort. The company’s biggest venture, Happy Island will soon be open to the public as well.
GOG’s genesis was outdoor gyms, and the company continues to grow from these original roots: Catering to a growing focus on healthier lifestyles, from public parks to beaches, corporates and residential estates.
How Fever-Tree Is Burning Up The Mixer Market With Their Unique Selling Point
When it comes to targeting the mixer market, Charles Rolls and Tim Warrillow of Fever-Tree, have hit the nail on the metaphorical head. Their unique selling point, drive for quality and passion for innovation has put the business into a prime position to grow their business – with a little help from well-sourced ingredients.
- Company: Fever-Tree
- Launched: 2005
- Founders: Charles Rolls and Tim Warrillow
- Visit: fever-tree.com
What is Fever-Tree’s Unique Selling Point (USP)?
For us, it’s always been about putting the quality back into the mixer category, from the packaging, imagery, even style of serve but nowhere more so than the ingredients themselves. When creating Fever-Tree, the mixer category was dominated by a couple of multinational conglomerates that had become driven by manufacturing efficiency, rather than quality or flavour.
Our meticulous focus on quality resulted in a very different approach to product development – we delved into the history books to find the most authentic and highest quality ingredients we could, then we went out into the field to track them down, spending time with specialist producers and experts to create our products.
There’s no other company going to the lengths we do to source these fantastic ingredients.
Watch the video below on how it all began …
Since it’s listing on the London Stock Exchange, Fever-Tree has seen an impressive 20x increase in the share price. Can you expand on the some of the challenges that were faced, as well as how you overcame them, when listing Fever-Tree?
The listing was a great opportunity to attract long term investors in the business as well as enabling the Company to reach a wider consumer audience as we discovered lots of our shareholders are also advocates of our products!
What do you wish you had known before starting the business 13 years ago, or what advice can you give to entrepreneurs?
My advice to any entrepreneur is to do your research, but also listen to your instinct. There were definitely some nay-sayers for us in the early days, and it’s fortunate we did our best not to listen to them.
When it comes to ingredient sourcing and packaging – where do you begin?
Within a couple of months of meeting my co-founder, Charles Rolls, we set off on a pursuit to find the very best ingredients, literally travelling to the ends of the earth.
Our initial research took us to the British library, where we learned that quinine, the core ingredient in tonic water, comes from the bark of the cinchona tree – colloquially referred to as the ‘fever’ tree. In search of the best quinine in the world, I discovered the last remaining plantation in the Eastern Democratic Republic of Congo, one of the most dangerous parts of Africa. So I travelled there to meet with the growers and to this day, this is where our quinine is sourced.
The journey continues to this day, whether it’s our fresh green ginger from Ivory Coast, Cochin ginger from India or closer to home, our lemon from Provenance or hand-picked elderflowers from Gloucestershire.
Similarly for packaging, from the very beginning we would not compromise on quality, using single serve glass packaging to premiumise the mixer category in every way we could.
We see you’ve launched a new ‘Aromatic Tonic Water’ – what is your key to innovating and creating a product?
With any product innovation, it is key to listen to your consumers, look at the trends, find out what people are talking about, what they are buying, what they want more of. This is how it all began when creating Fever-Tree. Charles and I had noted, from different ends of the sector, that premium spirits were driving the growth in spirits category. Consumers were increasingly seeking out craft ingredients and flavours in place of commoditised, mass produced products, but this movement towards premiumisation had passed the mixer category by. There was a clear opportunity to put quality, choice and excitement back into a long-forgotten, stagnant category.
The whole company is built on innovation and we are constantly developing new mixers, new flavours, new ideas and in doing so, creating an array of flavours to pair with the myriad of premium spirits out there.
Our unique Aromatic Tonic Water is a great example of this – it is perfect to mix with gin to create the ultimate pink G&T, a hugely popular drink amongst consumers. This tonic water is made using angostura bark from South America and pimento berries from Jamaica to create a sweet, spicy flavour with a wonderful pink hue.
Where do you see Fever-Tree in 5 years?
What’s so exciting, is that we’ve only scratched the surface! Whilst G&T consumption is still in strong long-term global growth, the spirits category is not just about gin; and the mixer category is not just about tonic. The trends that we identified at the outset are only accelerating. We’ve seen that quality has broad appeal – people are wanting to drink better quality spirits in greater numbers.
Here in South Africa, the same trends that drove the G&T revolution in the United Kingdom are beginning to emerge. There’s a real ‘gin explosion’ in South Africa, with the emergence of an abundance of craft and local gin brands, as well as more established premium brands becoming ever more present. We’re already seeing some great opportunities for co-promotional activity both in retail but also across hotel, bars and restaurants and we believe there is a significant opportunity to increase our footprint and visibility across South Africa, capitalising on this revival of simple, long mixed drinks such as the gin & tonic.
But Gin only accounts for 6% of global premium spirits, presenting a significant opportunity for us with other spirit categories. Dark spirits, for example, accounts for 10 times as much as gin, and we are the first company to develop a full range of mixers specifically designed to address this very notable opportunity.
What is Fever-Tree’s mantra?
Charles and I created Fever-Tree with one simple premise, which still holds true to this day, that if ¾ of your drink is the mixer, use the best.
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