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7 Lessons Elevator Learnt When Partnering With Their Competitor For Next Level Growth

Merging your company with another is never an easy decision to make, but for the founders of Stretch and Point Blank it was the right move.

GG van Rooyen

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Vital stats

  • Players: Trevor Bernberg, Bongani Chinkanda and Mike Silver
  • Company: Elevator
  • Established: 2017
  • Combined turnover: R50 million
  • About: Elevator was created earlier this year when Trevor Bernberg of Point Blank and Mike Silver of Stretch decided to merge their advertising agencies and create a R50 million below the line company called Elevator. The two founders are now joint CEOs, and Bongani Chinkanda has been appointed as business and strategy director to form a new leadership triumvirate.
  • Visit: www.elevator.co.za

Having both been around for about eight years, agencies Stretch and Point Blank needed a change to take their businesses to the next level.

“We were out of the start-up phase and business was okay, but it felt as if we had hit a plateau. A big change was needed to take the business to the next level,” says Point Blank founder Trevor Bernberg.

When your competitor becomes your partner in growth

“Stretch had reached the same place. I knew Mike, and in many ways I had viewed Stretch as Point Blank’s biggest competition, but I also realised that the cultures and ethos of the companies were similar, so a team-up could be very successful.”

It was a realisation that Stretch founder Mike Silver had also come to, which was why he invited Trevor for dinner one evening in 2016. While discussions were furtive and purely exploratory at first, it quickly became clear that a merger was the right way to go.

Fast forward to 2017, and the companies have become a new entity called Elevator. Entrepreneur spoke to Trevor and Mike, as well as Elevator’s new business and strategy director Bongani Chinkanda about the lessons they learnt from this exciting but tumultuous process.

Related: How Mike Silver Became The Next Best Brand And Marketing Guy

1Next-level growth often requires a new way of doing things

Trevor Bernberg: We enjoyed some terrific growth for the first five years, or so, but then things started to slow down. To keep that same level of success going, we had to grow the company, and that meant more investment.

There are a few ways in which you can bring more money and resources into the company. You can be acquired by a large corporate, or you can opt for a big buy-out. You can also perhaps find a new outside investor. But none of these appealed to me. Profit was too much of a focus.

I didn’t want someone else to take over and simply look at how profit can be maximised. I wanted to play a significant role in taking the business to the next level, and that’s why a merger was appealing.

By combining the forces of Stretch and Point Blank, we could both continue this journey in a meaningful way.

2You need a good fit

elevator-south-african-agency

Mike Silver: There were a lot of similarities between Stretch and Point Blank from a culture perspective, which is why the merger worked so well. A merger is very difficult if the companies are fundamentally different. Two companies can’t become one if they operate completely differently.

Trevor: Mike and I also had the same aims with this merger, which is very important. If you don’t want the same things, merging is a bad idea. We settled on the name Elevator, for instance, because we wanted to elevate our clients, our employees and South African society in general. It wasn’t just about profit for us. If one of us had just been after profit, the merger would have been a disaster.

3Mergers are always (really) hard

Bongani Chinkanda: I always say that managing a merger is like building a car while you’re driving it. Even though you’re busy with this huge internal process, you still need to deliver the same level of service to clients.

In many ways, it’s business as usual. You can’t drop the ball. A merger will demand a lot of operational resources, and you can’t allow it to impact clients. Also, a merger will often require more work after it’s happened than before. It’s like an organ transplant. You don’t want the body to reject the organ after it’s been transplanted, and that requires work. A merger requires work daily.

Mike: Mergers are hard. Initially, things went so well during the planning phase, and the two companies were so similar in terms of culture that we thought the merger would be easy. It wasn’t. Things crop up, especially when it comes to systems and processes. Point Blank had more of a start-up culture, while Stretch was very systems-and-processes driven.

Both benefitted from the integration, but it wasn’t easy. There is what you think will happen during a merger, and then there’s what will actually happen. It is not a process that can be measured in weeks or months, but in years. Give yourself two to three years to get everything bedded down properly.

Related: Can a small business have it’s say about a merger?

4Employees will have plenty of opinions

Bongani: As management, you might think that the benefits of a merger are obvious, but don’t assume that employees will see it that way. Change is hard, and people don’t always respond well to it.

Communication is incredibly important. Make sure that you explain the process to employees. There is no such thing as too much communication. You need to be patient and have an open-door policy.

5Get outside advice

Trevor: We were lucky enough to find an outside advisor who could help us navigate the process. If you’re going to enter into a merger, you need an external advisor. We all have blind spots — things we don’t even consider until it’s too late.

Someone who is neutral can help you look at the situation in a more objective manner. As the founder of one of the companies, you’re too close to the merger. You can’t see all the angles and focus on everything. In fact, you often won’t even know what the right questions are, never mind the right answers.

6It’s about synergy

Mike: The aim of any merger should be to create a company that can offer clients more than previously possible. It’s about synergy – leveraging the capabilities of the other company to create a more rounded offering. As Elevator, we can now offer clients more services than Stretch or Point Blank ever could. Our clients benefit more than anyone through this merger, which is what makes it a success.

7A name is important

Trevor: Name recognition and brand building is important, of course, but we ultimately decided that we needed to let go of Stretch and Point Blank. If we kept one of those names, the merger wouldn’t have felt equal. One of us would have felt as if we’d been absorbed into someone else’s company. It took a while, but we finally decided on Elevator as the name for the new company. It’s a name everyone can get behind and feel excited about.

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Lessons Learnt

How Kevin Hart Went From Being A Comedian To The Guy Who Owns Comedy

He’s one of America’s most famous funnymen, but here’s what most people don’t see: Kevin Hart is often in his office, running a far more ambitious comedy machine.

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Considering how proud Kevin Hart is of the headquarters of his company, you’d think the place would be downright palatial. But it’s not. It’s simple, almost austere. It’s a series of small offices, a reception area and a conference room, and it takes up a floor of a non­descript building in downtown Encino, Calif., on Ventura Boulevard, across from a Korean BBQ joint.

The rooms are sparsely furnished. There are a lot of photos and posters of Hart, of course, but otherwise there is no expensive art, no designer tchotchkes on the credenzas, no tasteful floor coverings that could fund a motion picture production.

No, the thing about this office that fills Kevin Hart with such pride isn’t its appearance. It’s the fact that it’s still his.

Back in 2009, when he took out a two-year lease on just a small portion of the space to house his startup, HartBeat Productions, Hart was worried he wasn’t going to be able to afford it. This was before his comedy specials became some of the highest-grossing of all time. Before his social media profile grew to near record-­setting proportions. Before Kevin Hart Day was declared in Philadelphia. Before he became one of the biggest stars on Earth.

“When I first got here,” he says, “and this is before the money was where it is now, this was the dream. Every day I get to see this and I get to go, ‘Oh my God, how am I going to do it, man? Shit. I done took out the two-year goddamn lease on this place!’ ’

But he loved the “aspirational” view from what is still his personal office, and he had a plan, drawn from a hard-earned epiphany. Historically, comedians and actors, even very successful ones, are simply cogs in a very large machine.

For all the fame, and the money and the glamour, they are essentially powerless against the whims of that machine. They are the product. They do their best, work their hardest, earn what they can and at the end of the day, they’re left with fading fame and whatever money they were able to bank along the way.

Hart saw this state of affairs early in his stand-up comedy career and decided to try something different. Something risky. The idea was this: Create something lasting. Something that will go on when you’re done. Don’t just show up, do your best and then go away.

Related: 10 Quotes On Following Your Dreams, Having Passion And Showing Hard Work From Tech Guru Michael Dell

Don’t make money mostly for other people. Own what you do. Perfect your craft, of course, but in so doing, create a sustainable, revenue-­generating enterprise that can run profitably long after the world has had enough of seeing your face and hearing your jokes.

In short, the idea Kevin Hart had, as he stood nervously in that office in 2009, was this: Don’t be the cog. Be the machine.

And so he is.

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Lessons Learnt

Can Being Deceptive Help You Build Your Business? It Worked For These 5 Entrepreneurs

We’ve all told little white lies. But what about the big ones? What if telling them would bring your business success?

Jayson Demers

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elon-musk

We all commit little acts of deception, like saying we got stuck in traffic when we were really late to the meeting because we wanted to watch the last five minutes of a favourite TV show. Little white lies? I’ve told them. You’ve told them.

But what about big lies, the kind truly lacking in integrity – like misrepresenting your sales to a prospective investor?

Obviously, there are often severe consequences to lying. Depending on the context, you could lose the trust of a peer, break a professional relationship or even face legal action. Yet, despite these consequences, lying is more common in the entrepreneurial world than you might think.

Just take as an example these five entrepreneurs, who might not be as well known or successful as they are if it weren’t for some clever acts of deception:

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Lessons Learnt

Three Habits That Underpin Entrepreneurial Success

Here are three powerful habits that will help you stay focused, define your entrepreneurial attitude and take your business from zero to hero.

Nicholas Bell

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Successful people and businesses don’t all share the same traits and commitments. Yes they all have managed to break barriers and achieve impressive goals. They’re the leaders, the movers, the shakers and the industry creators. However, not all entrepreneurs are created equal and their recipes for success can differ wildly.

Some swear by a three-hour run every morning followed by a nice salad and the bustle of busy work life. Others need an incredibly early start so they can spend time with their emails and focus on their business. Every entrepreneur has their  own secret tricks that keep them on the straight and successful narrow, but most share a few simple habits that are guaranteed to make a difference.

Here are three habits that will help you become better at business and at leading others towards long-term success:

1. Always be ready to change your assumptions

Many people are unable to change the assumptions they have about their business and its future as it evolves. No business model should be locked in cement and rigidly upheld, it will need to adapt and adjust as it grows and customer needs change. As an entrepreneur you need to understand this concept and be prepared to evolve and change in new directions and markets.

Related: Business Plan Format Guide

This also ties into failure. Do you understand why you failed at something? Are you aware that perhaps your business model is changing? Can you learn from these experiences? Can you adjust your business model, get better research, refine your ideas? If you are ready to take positive value out of these moments and experiences, then you are an agile and inspired entrepreneur.

2. There’s no off switch

Passion and commitment are absolutely key to the success of your business and your own personal growth. You can’t switch off or walk away or just take a sick day because you feel like it, not if you want to stand as an example to your employees or if you want to build a brilliant business.

It may sound trite and tired, but a work ethic is the single most important habit to have as an entrepreneur. You need to always hold yourself to the highest standards, commit to ethical practice and work harder than anyone else.

3. Take it personally

This doesn’t mean gentle sobs in your office when Susan from accounts ridicules your maths skills. If you take your business personally, then you are wrapping the skills learned in points 1 and 2 above into one cohesive whole – you are embedding your passion into every crevice of your company. Care about what you do, be passionate about what it stands for, and be prepared to fight for its life. The route from zero to billion-dollar business isn’t easy. If it was, everyone would be doing it.

Remember, the idea is only 1%. Sweat, work, commitment and focus are the other 99% of the success equation.

Related: 22 Defining Entrepreneur Characteristics

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