- Player: Bevan Ducasse
- Company: wiGroup
- Launched: 2008
- Turnover: R100 million+
- Visit: www.wigroupinternational.com
“I had enough belief in myself to be able to get it right, and I could see it in the eyes of my team that they were hungry for it too. The simplicity of it is that either you throw all the money you’ve already put into the business away, give up and go get a job, or you try a new angle.”
It was 2010, and 26-year-old Bevan Ducasse was about to have one of the most painful conversations of his life. He was meeting with his team — five dedicated, passionate people who had been as devoted to his start-up over the past two years as he had been — and they had some difficult decisions to make.
The problem was that the business they had built was based on some key assumptions that weren’t working out. Bevan had a solution. They needed to pivot, and he had a plan for what they needed to do, and how they could do it. But they’d already put two years of their lives into the company, and they all ran the risk of putting in two more, and still having nothing to show for it.
“We’d gone from an absolute high a few months earlier when I’d paid for my first coffee using the mobile wallet we’d built, to realising that our entire revenue model wasn’t going to work,” says Bevan. “We were too early, and we weren’t going to scale quickly enough to break even. It’s soul destroying. We thought we were going to change the world. We shared a sense of failure because we had failed. But there’s also no point in continuing down a path once you recognise that it’s the wrong path.
“We were all in it together though. Our wins were wins together, and so were our failures. That didn’t make the conversation or the decision to pivot any less painful, but it helped. We were all willing to take the risk and carry on.
“I had enough belief in myself to be able to get it right, and I could see it in the eyes of my team that they were hungry for it too. The simplicity of it is that either you throw all the money you’ve already put into the business away, give up and go get a job, or you try a new angle. I wasn’t certain the pivot would work — this business has evolved so many times over the past ten years that you can never be certain until you try something — but I knew it was worth a shot.”
In fact, not only did Bevan believe in the idea enough to keep pushing forward, but he’d learnt a lot of lessons about what didn’t work, and these were as valuable — if not more so — than learning what did work.
“We’d spent two years learning our market from the inside out and the idea wasn’t the problem. The uptake was there, but not at scale — cash flow was beating us.”
Even though uptake was slow, Bevan was spending a lot of time in front of corporates and large retailers, and it was clear that they all wanted to get into mobile apps, transaction software and mobile loyalty rewards, payments and vouchers.
“In every conversation we had, I came up with ideas and gauged their interest and what they would pay for the solutions we could build for them — and the ideas excited them.”
Cut to Bevan’s meeting with his team. “I still needed to meet with my investors and explain that not only was the business not going to work and we needed to pivot, but that I needed more money to make it happen. I couldn’t walk into that meeting without first getting buy-in from my team. We needed to put our heads together to come up with a solution that I could present to the board.
“It’s important to be as proactive as possible. I owed it to my investors to not just give up. They had taken a risk and backed me, and I didn’t take that lightly. I needed to apply my mind, look at it from every angle and come up with a plan.”
This led to the second most difficult conversation of Bevan’s life — convincing his investors to believe in his new vision. “I presented my business case to them; it was a hard sell, but the choice was simple — double down, or write the previous investment off. They decided to double down.”
Today wiGroup’s turnover is just north of R100 million, the company has enjoyed 50% year-on-year growth for the past five years, other key investors have come on board, including Investec UK and Richard Branson, who is a shareholder in the business through Virgin Global.
Oh, and Bevan isn’t just planning on becoming a billion-rand business — he wants to be a billion-dollar business, and is already opening offices in Mauritius, Amsterdam, and the UK to achieve that goal.
Bootstrapping a business
Even though he had funding, Bevan kept the start-up lean. “I still consider this business bootstrapped,” he says. “Our burn rate wasn’t high, and so by the time we pivoted we’d burnt through R3 million, but we still had R1 million left, and I raised an additional R1 million. With R2 million in hand, we broke even in 18 months.”
Before launching in 2008, Bevan had spent four months raising capital. He’d quit his job in 2007 with enough saved up to pay four month’s rent. If he couldn’t make his idea work in that time, or find an investor, he’d need to give up and find a job.
Just as he was about to run out of cash, Bevan’s network came through and a previous manager facilitated a meeting with UCS (now Crossfin Technology Holdings), Bevan’s first investor and a key shareholder of wiGroup to this day.
“Even though I believe we bootstrapped this business as much as possible, we needed capital to build out our solution. Our first idea was wiWallet, a mobile wallet that linked your credit card to your phone. My idea centred around the fact that the thing we do the most is make payments. I also believed the mobile phone would change the way we did everything, so I thought we should combine the two. SnapScan and Zapper are similar solutions today, but in 2008 there was no iPhone, and we were trying to convince South Africans of a new way of paying that had never been done before. We were just too early.”
Joining Bevan was a friend, Basie Kok, who was building the prototypes. “We needed to develop an application that was secure and could integrate to point of sale software, which would take months and would require other developers as well as marketing capital to let people know who we were and what we were doing.”
Although the business consisted of only four people working out of Bevan’s flat, funding was necessary, and the R4 million he raised was enough if they had an incredibly lean operation.
As it turned out, wiWallet wasn’t the solution everyone was looking for in 2009 (or 2010), but it did give Bevan and his team the foundations they needed to build a B2B business that the retail and corporate sector did need.
“At our core, we provide a transactional layer that people can plug into across the retail, banking, telco and insurance sectors. Anyone launching digital rewards can use our software. They also have access to the 85 000 retail lanes integrated into us, which gives them a network to tap into where their customers can redeem their rewards. Consider Discovery’s loyalty programme, or FNB’s eBucks. Customers earn loyalty points through our software, and can then redeem those points through electronic vouchers drawn from other retailers on our network.”
In other words, wiGroup has the software and the network — but it took time and patience to build, and ultimately needed to start with a single retailer.
There is no magic bullet to signing a deal with a major retailer. It takes hard work, perseverance and knocking on a lot of doors. “I cold called,” says Bevan. “I hustled. I had no contact into any of the big retailers, so I started at the bottom and worked my way up. I called a junior person, secured a meeting, got them excited and slowly moved up the chain. On each step of the journey I was selling our dream and the value we could give them. If you sell your vision hard enough and long enough, eventually customers will start to buy in. It took us two years to get Shoprite and Pick n Pay integrated and live, but that was a tipping point for us.”
Bevan knows that there’s no such thing as an overnight success. “We closed deals with forward-thinking brands like Vida more quickly, and that gave us the case study we needed to show people. From there we built on each success, no matter how small.”
Like many start-ups, wiGroup’s early days were all about hustling. “We didn’t have a clear strategy, even after we pivoted. A lot of what I’ve learnt over the last few years is about focus and productisation, but back then we were just trying to keep our head above water and make money.”
And the business was making money. Within a few short years wiGroup’s EBITA (earnings before interest, taxes and amortisation) was 30%, which is a sizeable margin. The problem was that it was extremely difficult to maintain while scaling.
Bevan found himself in a position many entrepreneurs trying to scale get into: The business was growing and making good profits, but the management team was making bad short-term decisions for the sake of maintaining those good profits.
“This meant we weren’t productising properly, we weren’t servicing properly, and we weren’t beefing up our staff for growth. We were trying to do too many things and it wasn’t sustainable.”
It was at this point that Bevan approached the board and made his case. “As much as I appreciated that we were a growing business that needed to make profits, I felt we were building the business on sand. It needed to be rock. I pitched that we needed to raise additional capital to productise properly. We needed to hire the right people to grow as well. If we wanted to become a billion dollar business, we needed to start building strong foundations.”
The board agreed, and an equity deal was struck with Investec Global UK. “We’d had previous investment offers, but the timing hadn’t been right; now it was,” says Bevan. “We’d grown as far as we could organically, and now needed to formalise the business.”
Some changes needed to be made though. After the mobile payment app, wiGroup was operating like a services company instead of the annuity-income business Bevan had always envisioned. “We focused on mobile, but we would change the product based on what our clients needed,” he explains. So, for example, for Shoprite wiGroup powered all their digital couponing, and for Vida it was all about mobile payments.
“We thought we were productising,” admits Bevan. “For every coupon used we’d receive a small fee, which we viewed as annuity-based income. The problem was that we could only use Shoprite’s solution for Shoprite, because it had been built specifically for them — and that’s not productising.”
If you build it, they will come
Over the past four years this has changed in wiGroup. Since the company’s first big pivot in 2011, Bevan and his team have learnt from their time in the market and adjusted the business accordingly — multiple times.
“We needed to be clear on our niche, which is the rewards and digital vouchering and couponing space. That’s our bread and butter, and we’ve productised it as a Software as a Service. We’re no longer custom building — this is what’s available, and our clients plug in.”
Because they operate in the tech space, wiGroup needs to constantly stay ahead of the curve. “You need to embrace a mindset that understands that everything is constantly changing,” says Bevan. “If your board asks you for a ten-year plan, you need to know that it’s impossible to give one. If we try to look ten years down the line, by the time we get there, things will have changed so much we will be way behind.
“Instead, in the tech space, you have to be flexible and learn to hold things lightly. If something fails, you have to learn from that failure and move forward. If your mentality is that a failure means you’re done, you’ll never make it in this space. I’ve read many, many biographies, and every single one of them discusses failure. All the top entrepreneurs and business people have failed — but they’ve learnt from those failures.
“A lot of business is sticking it out and giving it the time it deserves, and always knowing that you haven’t made it — we’re always looking ahead. Our senior team has four strategy breakaways a year. Every three months the 12 of us meet, not to change our strategy, but to see where we are, and to sharpen the sword.
“We started out as a B2C business. Then we became a B2B business that services consumers; in other words, a B2B2C. We need to understand our client’s needs and what their customers want. We get a kick out of seeing solutions in the market that use our software.”
It’s an important distinction because the pivot in 2011 shifted wiGroup’s revenue model. “It’s easier to generate revenue from businesses and leverage their brand and reach than try to get customers yourself. We needed to figure out who would benefit from what we could do, and focus on solutions that added real value in that space.”
wiGroup’s Transformation didn’t end there, which is why regular strategy breakaways remain so important.
“We need to continue to build world-class software and to keep advancing and staying ahead of the game. That means we need to keep coming up with new innovative ideas. Our original idea was payments. Ten years later, we can leverage that, even though we don’t make money from it. It’s a commodity now — but the value lies in customer engagement, loyalty programmes and vouchering, and the payment functionality supports everything else we do.”
It’s an interesting lesson for other entrepreneurs. “No one wants to pay for payments — ten years ago our whole business model was built on paying for payments. It’s still a crucial element in our business, but not in the way we envisioned. Your business will always be different. You need to keep flexible and innovating while at the same time being focused on core product verticals, that’s my motto.”
Rich List: 2019 Richest People In The World
They’re worth billions, and their wealth continues to grow each year. Here’s the top 10 richest people globally in 2019.
10. Jeff Bezos
Net Worth: USD 139,5 billion
Jeff Bezos founded e-commerce giant Amazon in a garage in Seattle, USA in 1994. He also purchased The Washington Post for $250 million in 2013.
Bezos believes in always taking a long-term view and living in the present moment.
“I think this is something about which there’s a lot of controversy. A lot of people — and I’m just not one of them — believe that you should live for the now.
I think what you do is think about the great expanse of time ahead of you and try to make sure that you’re planning for that in a way that’s going to leave you ultimately satisfied. This is the way it works for me. There are a lot of paths to satisfaction and you need to find one that works for you.”
7 Self-Made Teenager Millionaire Entrepreneurs
These teenager entrepreneurs have already made their first million and more. How did they do it and what’s their secret to success?
1. Evan of YouTube
Evan and his father Jarod started a youtube channel ‘Evantube’ to review kids’ toys. The channel was a resounding success with other kids – so much so that today it boasts just over 6 million subscribers.
Evantube brings in more than USD1.4 million a year from ad revenue generated on the channel.
How did it start? With a father-son fun project making Angry Birds Stop Animation videos, and morphed into doing reviews on toys and video games. But Jarod’s dad is aware of the responsibility of Evan’s sudden fame and hopes to teach Evan about the importance of being a good role model for others.
“Most recently, we had the opportunity to work with the Make-a-Wish Foundation, and were able to fulfill the wish of a young boy whose dream was to meet Evan and make a video with him at Legoland,” explains Jared. “It was a really incredible experience. YouTube has definitely opened many doors, and the kids have gotten to do some pretty amazing things.”
Expert Advice From Property Point On Taking Your Start-Up To The Next Level
Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.
- Players: Shawn Theunissen and Desigan Chetty
- Company: Property Point
- What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
- Launched: 2008
- Visit: propertypoint.org.za
Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.
While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.
Risk, reputation and relationships
“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.
So, how do the 3Rs work, and what should business owners be doing based on them?
Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.
“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”
Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”
A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.
“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”
Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”
This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.
“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”
In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”
Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.
“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”
Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.
Building a sustainable start-up
While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.
Shawn and Desigan share the top five areas you should focus on.
1. Align and partner with the right people
This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.
2. Make sure you get the basics right
Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?
3. Understand your value proposition
Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?
4. Unpack your value chain
If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?
8. Don’t ignore technology
Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.
Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.
“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”
Networking, collaborating and mentoring
Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.
“We believe in the power of collaboration and networking,” says Desigan.
“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”
The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.
To find out more, visit www.ettp.co.za
Snapshots1 week ago
How Pepe Marais Went From Bankruptcy To Founding Joe Public And Becoming An Entrepreneurial Success
Company Posts9 hours ago
Changing The Shape Of What’s Possible
Snapshots1 week ago
Ian Fuhr Explains Why He Likes To Launch Businesses In Unfamiliar Industries And How He Made Sorbet A Success
Company Posts4 days ago
Designing Her Destiny
Entrepreneur Today1 week ago
Digital Transformation Should Be A Priority For Small Businesses In South Africa
Entrepreneur Today3 days ago
Why Just Having A Great Idea Won’t Make You The Next Richard Maponya
Marketing Tactics4 days ago
Useful Marketing Tactics For Growing Businesses
Cash Flow1 week ago
Financial Literacy Key To Business Success – Especially In A Tough Economy