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.
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.
Jason English On Growing Prommac’s Turnover Tenfold And Being Mindful Of The ‘Oros Effect’
Rapid growth and expansion can lead to a dilution of the foundational principles that defined your company in its early days. Jason English of Prommac discusses how you can retain your company’s culture and vision while growing quickly.
- Player: Jason English
- Position: CEO
- Company: Prommac
- Associations: Young President’s Organisation (YPO)
- Turnover: R300 million (R1 billion as a group)
- Visit: prommac.com
- About: Prommac is a construction services business specialising in commissioning, plant maintenance, plant shutdowns and capital projects. Jason English purchased the majority of the company late in 2012, and currently acts as its CEO. Under his leadership, the company has grown from a small business to an international operation.
Since Jason English purchased Prommac in 2012, the company has experienced phenomenal growth. At the time he took over as owner and CEO, it was a small operation that boasted a turnover below R50 million.
Today, Prommac is part of a diversified group of companies under the CG Holdings umbrella and alone has grown it’s turnover nearly ten fold since Jason English took over. As a group, CG Holdings, of which Jason is a founder, is generating in excess of R1 billion. How has Prommac managed such phenomenal growth? According to Jason, it’s all about company culture… and about protecting your glass of Oros.
“As your business grows, it suffers from something that I call the Oros Effect. Think of your small start-up as an undiluted glass of Oros. When you’re leading a small company, it really is a product of you. You know everything about the business and you make every decision. The systems, the processes, the culture — these are all a product of your actions and beliefs. As you grow, though, things start to change. With every new person added to the mix, you dilute that glass of Oros.
“That’s not to say that your employees are doing anything wrong, or that they are actively trying to damage the business, but the culture — which was once so clear — becomes hazy. The company loses that singular vision. As the owner, you’re forced to share ‘your Oros’ with an increasing number of people, and by pouring more and more of it into other glasses, it loses the distinctive flavour it once had. By the time you’re at the head of a large international company, you can easily be left with a glass that contains more water than Oros.
“Protecting and nurturing a company’s culture isn’t easy, but it’s worth the effort. Prommac has enjoyed excellent growth, and I ascribe a lot of that success to our company culture. Whenever we’ve spent real time and money on replenishing the Oros, we’ve seen the benefits of it directly afterwards.
“There have been times when we have made the tough decision to slow growth and focus on getting the culture right. Growth is great, of course, but it’s hard to get the culture right when new people are joining the company all the time and you’re scaling aggressively. So, we’ve slowed down at times, but we’ve almost always seen immediate benefits in terms of growth afterwards. We focus heavily on training that deals with things like the systems, processes and culture of the company. We’ve also created a culture and environment that you won’t necessarily associate with engineering and heavy industries. In fact, it has more in common with a Silicon Valley company like Google than your traditional engineering firm.
“Acquisitions can be particularly tricky when it comes to culture and vision. As mentioned, CG Holdings has acquired several companies over the last few years, and when it comes to acquisition, managing the culture is far trickier than it is with normal hiring. When you hire a new employee, you can educate them in the ways and culture of the business. When you acquire an entire company, you import not only a large number of new people, but also an existing organisation with its own culture and vision. Because of this, we’ve created a centralised hub that manages all training and other company activities pertaining to culture. We don’t allow the various companies to do their own thing. That helps to manage the culture as the company grows and expands, since it ensures that everyone’s on the same page.
“Systems and processes need to make sense. One of the key reasons that drove us to create a central platform for training is the belief that systems and processes need to make sense to employees. Everyone should understand the benefits of using a system. If they don’t understand a system or process, they will revert to what they did in the past, especially when you’re talking about an acquired company. You should expect employees to make use of the proper systems and processes, but they need to be properly trained in them first. A lot of companies have great systems, but they aren’t very good at actually implementing them, and the primary reason for this is a lack of training.
“Operations — getting the work done — is seen as the priority, and training is only done if and when a bit of extra time is available. We fell into that trap a year ago. We had enjoyed a lot of growth and momentum, so we didn’t slow down. Eventually, we could see that this huge push, and the consequent lack of focus on the core values of the business, were affecting operations. So, we had to put the hammer down and refocus on systems, processes and culture. Today Prommac is back at the top of it’s game having been awarded the prestigious Service Provider of the year for 2017 by Sasol for both their Secunda and Sasolburg chemical complexes.
“If you want to know about the state of your company’s culture, go outside the business. We realised that we needed to ‘pour more Oros into the company’ by asking clients. We use customer surveys to track our own performance and to make sure that the company is in a healthy state. It’s a great way to monitor your organisation, and there are trigger questions that can be asked, which will give you immediate insight into the state of the culture.
“It’s important, of course, to ask your employees about the state of the business and its culture as well, but you should also ask your customers. Your clients will quickly pick up if something is wrong. The fact of the matter is, internal things like culture can have a dramatic effect on the level of service offered to customers. That’s why it’s so important to spend time on these internal things — they have a direct impact on every aspect of the business.
“Remember that clients understand the value of training. There is always a tension between training and operational requirements, but don’t assume that your clients will automatically be annoyed because you’re sending employees on training. Be open and honest, explain to a client that an employee who regularly services the company will be going on training. Ultimately, the client benefits if you spend time and money on an employee that they regularly deal with.
“For the most part, they will understand and respect your decision. At times, there will be push back, both from clients and from your own managers, but you need to be firm. In the long term, training is win-win for everyone involved. Also, you don’t want a client to become overly dependent on a single employee from your company. What if that employee quits? Training offers a good opportunity to swop out employees, and to ensure that you have a group of individuals who can be assigned to a specific client. We rotate our people to make sure that no single person becomes a knowledge expert on a client’s facility, so when we need to pull someone out of the system for training, it’s not the end of the world.
“Managers will often be your biggest challenge when it comes to training. Early on, we hired a lot of young people we could train from scratch. As we grew and needed more expertise, we started hiring senior employees with experience. When it came to things like systems, processes and culture, we actually had far more issues with some of the senior people.
“Someone with significant experience approaches things with preconceived notions and beliefs, so it can be more difficult to get buy-in from them. Don’t assume that training is only for entry-level employees. You need to focus on your senior people and make sure that they see the value of what you are doing. It doesn’t matter how much Oros you add to the mix if managers keep diluting it.”
When Jason English purchased Prommac late in 2012, the company had a turnover of less than R50 million. This has grown nearly ten fold in just under five years. How? By focusing on people, culture and training.
Who’s Leading Your Business Billy Selekane Asks – You Or The Monkey On Your Back?
You’re either a change-maker, or someone who is influenced by the shifting conditions around you. The truly successful know how to determine their own destinies. Here’s how they do it.
- Player: Billy Selekane
- Company: Billy Selekane and Associates
- About: Billy Selekane is an author, internationally acclaimed inspirational keynote speaker, and a personal, team and organisational effectiveness specialist.
- Visit: billyselekanespeaks.com
We live in a world of disruption. We live in a world where Airbnb’s valuation is $31 billion, but the Hilton’s market cap is $30 billion. Airbnb doesn’t own one square kilometre, and yet they’re worth more than the world’s biggest hotel chains with enormous assets. We live in a world where things have been turned upside down.
In this brave new world, you can either thrive, or fight to survive. As a leader in your organisation, the choices you make, the mental mind-space you occupy and how you engage with those around you, will determine your personal success, as well as that of your entire organisation.
“The business of business is people. You can’t just pay lip service to the idea that they are your most important asset. You need to live it. Leaders must be intelligent and honest. You can’t just push people to meet the numbers,” says Billy Selekane, personal and business mastery expert and international speaker.
The problem is that great leaders need to first find balance within, before they can successfully lead their organisations.
“Things can no longer be done the same way,” says Billy. “Success today is defined by people who are driven, are inspired by their own lives and goals, and have the power and capability to inspire others.” But before you can achieve any of this, you need to rid yourself of the monkey on your back.
Related: Billy Selekane
The monkey on your back
“If I continue doing what I’m doing, and thinking what I’m thinking, I’ll continue to have what I have,” says Billy. “That’s the definition of insanity. Are you doing things by default or design?”
Billy’s analogy is a simple one. It’s something we can all relate to, and it’s the single biggest thing stopping us from clearing our minds, focusing on the positive and achieving success. He calls it the monkey on our backs.
“Every one of us is born with an invisible monkey on their shoulder,” says Billy. “Your monkey is always with you. Sometimes they’re the one speaking, and you need to be careful of that.” What you need to be even more aware of than your own monkey though, is everyone else’s monkeys.
“Every interaction we have is an opportunity for what I call a monkey download. You have an argument with your spouse before work, and you end up getting into your car with not only your monkey, but theirs as well. Your irritation level has doubled thanks to the extra monkey. Now you get irritated with a pointsman, another driver or a taxi on your way to work. You’ve just added three monkeys.
“By the time you walk into the office, you’re bringing an entire village of monkeys with you. They’re clamouring, clattering, arguing with each other, and the noise is deafening. Not only does everyone get out of your way, but you can’t hear yourself think. And the more your mood drops, the more monkeys you download from the people around you. This is not the path to focus, achieving your goals or being happy. It’s certainly not the path to great leadership.
“Great leaders know how to keep all those monkeys out. They know how to control their moods, and regulate their own positivity. They understand that they are the architects of their own success.”
Getting out of the monkey business
To be a great leader — and personally successful and happy — you need to start by getting out of your own way, and as Billy calls it, ‘getting out of the monkey business.’ You need to not only shake your own monkey, but everyone else’s as well.
According to Billy, there are four simple areas you can begin focusing on today that will help you become the person (and leader) you want to be.
First, honesty is the foundation of everything else you should be doing. “Be clear and straight. Speak to people simply and honestly, but with respect. Connect with them, not through the head, but with the heart. Don’t play tricks.”
Next, be authentic. All great leaders are authentic, and recognised as such. Aligned with this is integrity. “This is sadly out of stock, not only in South Africa, but the world,” says Billy.
“There is nothing as disturbing as a leader without integrity, and on a personal level, you won’t achieve emotional stability if you aren’t a person of integrity.”
Finally, you need to embrace love. “Wish your employees well. Wish your family, friends and connections well. When we are given love, and trusted to perform, we take that and pay it forward. In the case of business, this means your employees are giving the same love to customers, but if everyone showed a little more love, the world would be a better place. When people feel cared for, they show up with their hearts and wallets, and they pay it forward.
“Great leaders understand this. They don’t only focus on making themselves better, but adding to everyone around them. Remember this: In every business, there are no bad employees, just bad leaders. Employees are a reflection of that.”
If you want to build a better future, business or life, you need to start with yourself.
Stop letting negative thoughts and minor irritations derail you. You are the master of your moods and thoughts, so take personal responsibility for them.
Shark Tank Funded Start-up Native Decor’s Founder on Investment, Mentorship And Dreaming Big
Vusani Ravele secured offers from every single Shark in the first episode of Shark Tank South Africa, eventually settling on an offer from Gil Oved from The Creative Counsel. Entrepreneur asked to him how this investment has changed his business.
- Player: Vusani Ravele
- Company: Native Decor
- Established: February 2016
- Visit: nativedecor.co.za
- About: Native Decor creates visually pleasing products from sustainable timber. The company’s designs are innovative and functional, with its creations mostly inspired by South African cultures, landscapes and wildlife.
It all started with a cordless drill. In February 2015, Vusani Ravele received a drill from his girlfriend as a Valentine’s Day gift. He immediately became obsessed.
“I couldn’t stop drilling holes in things,” Vusani laughs. “I just loved working with my hands.”
Unlike most people, who lose interest in a Valentine’s Day gift by the first day of March, Vusani’s passion for his cordless drill didn’t dissipate. Instead, it had reignited a spark. Thanks to that cordless drill, he rediscovered a love for design he’d first felt in high school. And one year later, he had started a company called Native Decor.
As a start-up he then made the bold move to enter the inaugural season of Shark Tank South Africa. He was funded by Gil Oved on the very first episode. It was a life-changing experience, but Vusani is keeping a level head. The money helps, but he’s trying not to let it change his approach too much.
I’m doing my best not to think of Native Decor as a funded start-up. The money has allowed me to do certain things, like buy a new CNC machine, but I still try to think like a founder without money. Once you have a bit of money in the bank, the temptation exists to throw it at every problem, but that’s not how you create a successful business.
You need to bootstrap and pretend that you don’t have a cent in the bank. With a bit of lateral thinking, you can often come up with a solution that doesn’t require money. It might require more effort, sure, but I believe it creates a stronger foundation for your business. If a business can carry itself from early on, its odds for long-term success are much higher. You also need to fight the urge to spend money on things like fancy premises or extra staff. The longer you can keep things lean, the more runway you create for yourself.
I didn’t enter Shark Tank just for the money. The money was important, of course, but there was more to it than that. Looking purely at money versus equity, Gil Oved’s offer wasn’t the best, but I knew that I wanted to work with Gil. Stepping into the room, my primary aim was to attract him to the business.
He wanted 50% equity for R400 000 of investment. I wanted to give away 25% for the same amount. We settled on 40% for R400 000 with an additional R3 million line of credit. It was more of the company than I initially wanted to give away, but I was okay with it, since I saw it as the cost of Gil’s involvement, which I knew would add bigger value to the business than just the cash injection.
Investment comes in many forms. I wanted Gil to invest in the business because I realised that investment isn’t purely about money. I didn’t just want him to invest his cash in Native Decor, I also wanted him to invest his time and energy. You can get money in different places. You can create a business that funds its own growth, for example, or you can get a loan from a bank.
What an investor like Gil offers, however, is knowledge and access to a network. Money can help a lot with the growth of a business, but a great partner can help even more. By giving Gil 40% of the business, I’ve ensured that he has skin in game. He has a vested interest in seeing Native Decor succeed, and that’s worth more than any monetary investment.
True mentorship can be a game-changer if you’re running a young start-up. A great advantage that often comes with investment is mentorship from someone who knows the pitfalls of the entrepreneurial game. With a new business, it’s easy to be sidetracked or to chase an opportunity down a dead end.
Gil is visionary, and he has helped me focus on the long-term goals I have for Native Decor. He has also helped me to think big. As young entrepreneurs, I believe we often think too small. We don’t chase those audacious goals. Someone like Gil, who has seen huge success, can help you push things further and to dream bigger.
You need to dream big, but act small. It’s important to have big dreams for your business, but you should also chase those easy opportunities that can help you build traction. When I started, I wanted to try and get my products into large retail stores, but the fact of the matter was, as a start-up, I didn’t have a strong negotiating position.
There was a lot of bureaucracy to deal with. Gil advised me to focus on the ‘low-hanging fruit’ — those small gift stores that would be keen to carry my products. By doing this, I’m gaining traction and building a track record for the business. Also, I realised the importance of aligning myself with the right kind of stores. Perhaps being in a large retailer isn’t a good idea, since this is where you typically get cheap items produced overseas. Unless you’re purely competing on price, that’s probably not where you want to be.
Funding is great but it’s not all about the money. If that’s what you’re chasing you’re doing your start-up an injustice.
Watch the Shark Tank investment episode here:
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