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Softline: Ivan Epstein

Ivan Epstein and his partners founded Softline in 1988, introducing South Africa to accounting and payroll software, a market which the company leads to this day. More than 250 000 businesses in South Africa use Softline products and 5,4 million people are paid with Softline payslips. In 2003, the company was acquired by Sage Group and Epstein became CEO of Sage Southern Hemisphere, comprising Softline and Sage Australia. Since then, Softline has more than quadrupled in size. Epstein is responsible for formulating strategy for his region in addition to being on the group’s global management team, a role he fulfils by continuing to look five steps ahead of the competition. He tells Entrepreneur how he did it.

Monique Verduyn

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Ivan Epstein of Softline

I had always dreamed of starting a business that would enable me to earn a good living and gain financial independence, and allow me to build something that was tangible.

At 26, I was about to go into accounting, when I stopped, took stock, and realised that I wanted my own business. I did not come from a wealthy family. My dad owned a small import business and I had been exposed to the ups and downs he went through. I think that’s what drove me to succeed. When you grow up with limited resources, it makes you want to be able to afford the things that come with money. After school I did an accounting degree. Because I had limited resources I studied part-time through Unisa and was employed as an articled clerk at Pricewaterhouse. I completed the degree, but I did not write the board exams. I was not comfortable in accounting. I’m not saying I was too clever, but I looked around me and realised that I could never fit into that type of controlled and structured environment. It was too restrictive for a young, ambitious guy.

I knew even then that you don’t start a venture unless you are absolutely sure it will consume you. That is the only way to come close to any guarantee of success. And Softline has consumed me. From the start, I have been 120% committed to the business. People say that I am all about work, work, work, and it’s true, although I’ve probably become better at balance over the years. In the beginning I worked six days a week at the office and took my job home on Sundays. That’s a big sacrifice to make, but it’s been worth it. It’s quite hectic to be an insecure overachiever like I was then, but there were definitely some advantages to that too – I just never stopped. That’s what it’s like to be an entrepreneur who is truly consumed by the business. When you work for someone else, you have the opportunity to switch off, no matter how hard you may have to work; when it’s your business, there’s no chance of doing that. But it gave me a lot of fulfilment.

I was too driven to let anything stop me and I knew that I was creating something amazing. If you have a good business idea, get it off the ground, build your reputation, and grow your business by creating a satisfied client base. If your idea is so brilliant, the best thing you can do is invest in it yourself. That’s exactly what Allan Osrin and I did. He was my mate from school and varsity and today he’s the MD of Sage Software Australia and HandiSoft Software Australia. We had no set agenda, but we had a vision – we wanted to build a global company. Allan and I had grown up together. We came from similar homes and were great friends. Because we’d had to make do without a lot of things, we were equally driven to make something of our lives and we had many similar motivators. One of them was the fact that we wanted to make money. Back then, we didn’t have any lofty ideas about giving back to the community; we just wanted to see cash. That was why we agreed to build a business together, and then someone suggested that we go into software support because it was becoming quite popular.

We took a gamble and went to the bank. It was 1988, and the maximum they were prepared to loan us was the princely sum of R5 000, only because we had degrees. We certainly weren’t in a unique situation. Some 90% of entrepreneurs around the world struggle to get funding. There was no thinking about things too deeply; we had to go ahead and work with what we had. We were extremely careful about what we did with that small bit of money because we had to make it work for us, or fail. And failure was just not an option. That’s why it’s vital to have a vision and big ideas. We positioned the company for growth from the start. If you want to be the greatest company, you have to start acting the part from day one. I believe that nothing is impossible if you don’t know your limits. There was no great business plan.

Quite frankly, I did not believe in creating a five-year plan. But we were always chasing the same dream and we were always on the same page. We approached each challenge together as it arose. Because we knew each other so well, it was easy to communicate and to talk informally about problems and opportunities, especially as we were so determined to make the business work. We would discuss our course of action every day, make the strategy changes or adjustments needed to take the company forward, and re-adjust the business model along the way. Although we had no written document, our discussions provided us with a living, breathing roadmap for the business that guided our every move as we went from start-up to an established company. It’s essential to remember how important it is to revisit and re-evaluate your plan – whether it’s on paper or in your head – because that’s what enables you to execute it.

Early successes

There was a computer distribution company which distributed an accounting package called TAS. They sold a lot of product, but there were few people around to set it up and where there is mystery, there is margin. So we went to them and said, “We know about accounting. You sell the product and bring us in to install it.” We had to work really hard to extract leads out of them, often promising clients that we would do the job for nothing and that they could pay us if they were happy with the outcome. You have no idea how important it is to be convincing. You need to find that one guy who will let you do the work, just so you can get the next one. Eventually, that company became convinced that we were doing a really good job, and we became contracted as their support outlet and installation and training organisation. But from our point of view the business was always vulnerable as we were entirely dependent on them. We had nothing that we ourselves could sell.

Six months after we started the business, Allan and I liked what we were doing and seeing. Sure, we were stressed out and working too hard, but it’s easy to work long hours when you are young. And you have to do that in the early years if you want to make a go of it. That was when we knew it was time to develop something ourselves – a solution that we owned and controlled. We employed a developer and eventually we got a product written for us that we branded Brilliant Accounting (and which later became Pastel). It was an entry-level, off-the-shelf solution that sold for around R1 000, and it complemented the more high-end installations we were doing. We took it to the few stores that had started opening. This was the time of the emergence of the computer retailer – they sold computers, printers and some software, including ours.

We built our reputation slowly, through good work, solid installations, and holding the client’s hand throughout the process. I remember sitting next to clients, one-on-one, teaching them to use the system. We’d bill them as soon as it was up. There was no 30-day invoicing – we had to collect the cash then and there, because we were bootstrapping the business. Within two years, Brilliant became the number two accounting product in the country. We set up branches in Cape Town, Durban and Bloemfontein. None of us were great technologists by any means, but we built the business through marketing. I can’t tell you what a kick it still gives me to see the brand we grew on billboards around the country. Then my brother-in-law Steven Cohen (today the MD of Softline Pastel) joined the business as our third partner in 1990. He’s an accountant who also has a great love for software. He really became the architect and glue behind our solutions. He was always looking at features and functionality, and we always believed that he would build a great product. We had such faith in each other; we did not do anything like a SWOT analysis or any of those other analyses that the business schools recommend.

In my experience, entrepreneurship is natural. People can learn the principles of entrepreneurship, but I think it’s very hard to train someone to be an entrepreneur. To really understand how it works, you have to do it yourself. It’s OK to have a mentor, but I think the most important thing you can do is trust your own gut. That’s what we did. Sometimes we got it wrong, but mostly we were right. I don’t read business books that tell you how to succeed because I don’t think they have any value for me, although many people find them motivational. I enjoy reading the biographies of successful people from around the world. That’s what I find inspirational.
I believe business is one part strategy, nine parts execution. We simply ran the business together on the basis of trust. Whatever we made or lost, we split three ways. There was rarely any jealousy or resentment of any kind. It’s one of the reasons why I cannot emphasise enough how important it is to choose the right partners. It would have been a lot more difficult had we not done so.

Allan handled sales – he was really good at that – he could convince a client to buy just about anything. I was constantly the one marketing the company. My vision for the business has always been five steps ahead of where it actually is at any moment in time. I always keep a close watch on what competitors are doing and I read about what is happening in my own industry and in the broader technological, economic and social environment. It’s critical to observe the world around you and to let those observations inform your goals for the future. You should always continue to build on your vision, but don’t forget that vision without execution is hallucination.

Some good fortune in the mix

Then we had a windfall: VAT was introduced in South Africa in 1991 to replace GST and every one of our clients had to buy our new system. That gave us some capital inflow and enabled us to finance the business going forward. The power of the upgrade has always been a big factor for Softline – when you have thousands of users who have to be upgraded, you automatically have access to cash flows.

At the same time, awareness of the computer was growing, and that worked in our favour too. Those were the formative years of computing. When we started the business, big corporates had huge mainframe systems and their software was developed in-house by their own engineers. For smaller businesses, technology then was mostly about hardware, DOS and word processing. The move from manual to automated accounts was largely by word of mouth – customers would tell their friends that they had bought a computer for their business to run their accounts and they would go, “wow, maybe I must do that too.” The client base just grew and grew. It was a fantastic combination of people and personalities, because we all drove and inspired one another in different ways. I used to be careful about phoning Steven on the weekend because I knew that once I got him going on the business, there was no way he would be able to switch off again. On one occasion during the change to VAT Steven stayed at our office right through the night to make sure the software was bug-free. That’s what you do when you are consumed by the business; there were a number of occasions where we worked through the night.

Together, we aspired to build a great, global company. We were doing extremely well in South Africa and we believed that our solutions could travel. Local technology development in general has been very successful and South African developers have a good reputation overseas. But even more important than that was the drive to build something global. We started with Australia because of the language, and because it was a place in which Allan was particularly keen on setting up a business. We found someone in Australia to sell our products there, but it was a failure as he was not committed and we did not really know how to set up the venture properly. But the important thing is that we always had a vision that we would do something huge. That’s vital – if you can’t see it from the start, there’s no way you’ll get it going. We had lots of ups and downs, and many tough times, but that dream helped us to keep it all together. The fact that we started as a team and we are all still here today as good friends who have built a hugely successful accounting and payroll solutions business is amazing.

We subsequently learnt that the best way to infiltrate an overseas market is to buy existing businesses which already have an established client base. We wanted to be sure, though, that we were able to do something different and better to improve the companies we bought. One of the first businesses we eventually acquired in Australia had a 35% market share. In addition, we were able to develop the next version of its software product far more cost-effectively from our South African research and development resources. The Australian market has turned out to be very good for us, but we made sure that we filled our management teams with Australians, as they understand the mentality and the business ethics of that country. The culture in Australia is very different from ours. It’s a far more regulated society which I find quite controlled, but Allan loves it.

Listing on the JSE

When we listed the company in 1997, I was 34. The technology boom was in full swing and companies everywhere were clamouring for IT stocks. It was a technology gold rush. As Softline’s customer base grew, so too did the industry we were creating in the country.  I knew that to achieve real growth and global reach, we had to start buying other companies. To do that, we had to list so that we could get some cash into the business.

I didn’t realise what I was letting myself in for. The listing brought tremendous success to this business. It made Softline what it is today. But with listing comes other hurdles. I think that the JSE should run courses so that companies know what to expect and what will be expected of them. It’s unbelievably hard to move from the private into the public sphere. It’s not solely your company anymore – it has public shareholders and other stakeholders. I recall the time when a Merrill Lynch analyst came to see me; he was asking me about all sorts of facts and figures and I gave him most of what he was looking for, but there were some things I refused to tell him until he pointed out that I had no choice in the matter.

The listing and acquisition strategy worked brilliantly. By 2000, we had bought 35 companies – our policy was generally to buy 100% or nothing – and 60% of our revenues were generated offshore. One of our most successful competitors was a business called Pastel, which we acquired in 1999 for R220 million. It is now hugely profitable and successful under Steven’s leadership. Then in March 2000, the dotcom bubble burst. According to the Los Angeles Times, this wiped out $5 trillion dollars in market value for tech companies.

More than half of the Internet companies created since 1995 were gone by 2004 – and hundreds of thousands of skilled technology workers were out of jobs. Softline’s share price plummeted – even though our profitability kept going up, we were trading well, and the business was growing. We were a great company with great potential and we could not see the benefit of being listed anymore. To give you some indication of the situation we were in, Softline stock had been trading at R12,80 at the height of all the IT hype, but had fallen to between 85 cents and 95 cents by 2003.

The delisting debacle

A management buyout was considered because we felt the market had lost its appetite, and attitudes toward our sector were negative. Two unexpected things happened. First, our shareholders refused to sell their shares back to us. Although we offered a 35% premium to the share price at the time, they were not prepared to accept it because they felt it was not enough, even though the market was not recognising the value of the company. Maybe it’s true that we did not offer a good enough premium, but how was anyone going to measure that? With hindsight, it’s possible that our offer was too opportunistic.

We lacked commercial maturity in the context of the delisting. Second, a hostile takeover bid was launched against Softline by a company based in the Netherlands which was in cahoots with a former employee of ours. They saw the value of the company and that showed that we had become attractive to an international business. To give you an idea of how bad it was, they already owned 15% of Softline and we did not even know it until we learnt of the takeover bid. I had to think about what would be the best thing for Softline. Sage, which supplies business management software to SMEs, just like us, was a much better fit and would also give us global reach. I flew to the UK and met with the CEO of the Sage group. Our businesses were almost identical. They were decent people and had a great management team.

Sage was formed in 1981 and floated on the London Stock Exchange eight years later. They knew all about us and had heard what was going on. They saw value, good products and an equally great management team and so Softline was acquired by Sage in 2003. Although we were unsuccessful at the buyback, we weren’t prepared to give up. We had to make the best of the situation and selling to Sage turned out to be a very positive move for us, something we only fully appreciated later. So we went from being private, to being listed, to being part of a global group. The Sage business model is unique because it could be likened to a federation of companies. It allows individuals to take ownership of the business so that they achieve great results. People need that level of autonomy and independence to thrive – I know I do. But don’t ever believe that selling your company is easy, no matter how much money is involved.

After we closed the deal with Sage I was highly emotional and at first we felt a deep sense of loss. Thankfully, because we had already been listed, it was easier to get used to the idea of being a company that’s part of a worldwide group. Compromises are necessary sometimes in the best interests of the business. Today the Sage group has more than six million customers and 13 400 employees worldwide; it operates in 24 countries including the UK, Europe, North America, South Africa, Australia, India and China. All of our overseas business is under the Sage name, but our South African business continues to operate as Softline because we had already built such a strong brand. The biggest challenge to the group as a whole is how to collaborate better. There is duplication because we are spread so wide. If we manage to get that right, our profits will be even higher.

What the future holds

What drove me in the beginning was the desire to have financial freedom and security. When I started out I wasn’t driven to change the world like some entrepreneurs claim to be, but now that I have achieved some success I like to give back where I can.  I continue to look ahead and to see beyond where the business sits today. Your interest should always lie in the future. That is, after all, where you are going to spend the rest of your life.

Softline recently bought 100% of Netcash, which provides secure, online transaction processing services for SMEs in South Africa. The potential synergies between our two businesses are clear. We both serve SMEs and the addition of Netcash’s transaction services to Softline’s products will enable our customers to have access to a broad service offering under a single banner. In addition to that, we have launched Pastel My Business. It’s an online accounting package built on the software-as-a-service model. We have 2 000 users and we are not making any money on it at the moment, but it’s the future of accounting. When the kids of today go into business, they are not going to buy software in a box, they are going to download it from the Net. We are getting ready to take advantage of the fast-growing Internet user base in this country and we will be ready for SMEs when they turn to cloud computing to manage their businesses.

It’s about continuing to focus on what your customers want, which is something we have done really well. It’s what we did to differentiate Softline from the start – always innovate to create new revenue streams and make more money. It’s important to be a visionary like Richard Branson. As a leader, I’ve learnt that you must have the power to inspire others to believe in the same dream – and that the only limit to your impact is your imagination and commitment. Our experience has also shown that to build an industry as we did, you must enlist the help of trusted partners.

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

Entrepreneur Profiles

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

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

Nadine Todd

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priven-reddy

Vital Stats

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

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

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

Code 1: Find your inner drive and keep feeding it

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

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

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

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

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

Related: 30 Top Influential SA Business Leaders

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

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

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

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

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

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

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

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

Code 3: There’s no substitute for hard work

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

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

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

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

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

Code 4: Perseverance always pays off

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

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

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

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

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

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

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

priven-reddy-expert-advice

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

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

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

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

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

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

Code 6: Believe in your product, always

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

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

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

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

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

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

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

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

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

Code 7: Mindpower is real

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

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

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

Code 8: Never stop learning

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

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

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

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

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

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

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

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

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

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


Lessons learnt

priven-reddy-of-kagiso-interactive-media

Put the right foundations in place

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

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

Collaborate with key stakeholders

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

Always put your users first

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

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

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

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

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

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Entrepreneur Profiles

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

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

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Vital Stats:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related: Funding And Resources For Young SA Entrepreneurs

Family life

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

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

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

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

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

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

What mantra do you live by?

Dream it. Believe it. Achieve it.

Where do you see yourself in five years’ time?

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

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Entrepreneur Profiles

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

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

Nadine Todd

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Vital Stats

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

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

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

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

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

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

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

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

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

2. Price and solution go hand-in-hand

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

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

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

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

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

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

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

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

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

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

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

appanna-ganapathy-art-technologies

The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”


Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

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