Connect with us

Lessons Learnt

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

Published

on

elevator

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.

Lessons Learnt

Taking It To The Malaysian Market – Karl van Zyl Of Antipodean Café

Karl van Zyl approach has always been logical and simplified and he highlights three principles that he believes to be critical in the food and beverage industry.

Dirk Coetsee

Published

on

karl-van-zyl-interview

Karl van Zyl has a 17 year history in the food and beverage industry in South-Africa and now applies his skills and knowledge in the extremely vibrant and competitive Malaysian market. I had a very interesting conversation with him to explore both similarities and differences of both markets and to share his accumulative learning of this industry to those entrepreneurs considering to open a restaurant or café.

He has a history working for the Mikes’ kitchen and Fishmonger groups in South-Africa fulfilling a range of roles from being a General Manager to Operational Manager. Currently he both manages an well-known Café called Antipodean and facilitates the opening of new cafes’ in Klang Valley, Malaysia.

Karl shared that his approach has always been logical and that applying sound basics has always served him well. Would you eat the food served at your restaurant and really enjoy it? Posing questions such as the aforementioned to yourself as a restaurant owner or manager helps you to be aware of the quality of your operation and to always keep the customer in mind when making decisions.

One of the key learnings that he shared was to get a very good and experienced team of waiters together that has previous restaurant or hospitality industry experience. He strongly advises quality over quantity when it comes to waiters and fondly remembers one of the waiters that he managed whom could take orders from a group of twenty people and remember each order from the top of his head.

It is not only about quality of service to the customer but also when there is a small but quality team of waiters operating then their earnings are much higher and they will feel valued and happy as opposed to a large group of waiters competing for relatively small rewards.

Related: What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

Karls’ approach has always been logical and simplified and he highlights three principles that he believes to be critical in the food and beverage industry:

  1. Quality of food
  2. Quality of service
  3. Pricing.

He adds that in addition to the above principles your location should of course be in area with very good ‘foot traffic’.

When the entrepreneur venturing into the food and beverage market considers the right suppliers it is a critical factor to go and visit their facilities, thoroughly check their quality and enquire which other quality brands they are supplying in addition to buying at good prices.

In his view comparing the Malaysian food and beverage market to the South African market there are a lot more Malaysians eating at restaurants than in South Africa. One of the reasons for this is that there are a lot of ‘street café/restaurant’ options with quality food at a very low price due to the restaurant not being air-conditioned and making use of for example plastic chairs and tables.

Personally the author has found much more twenty four hour food options and countless varieties of food compared to the South African market. If you are awake and hungry at 3 am in the morning in Kuala Lumpur, no problem! You also will not be limited to only 24 hour fast food options, almost any type of food that you desire will be available that is if you know where to go off-course.

Related: Don’t Be ‘Outside Standing’ On Your Own Exponential Growth Says Serial Investor, Jimmy Phoon

As a matter of interest Karl regards the prices of restaurants in general in Kuala Lumpur to be better than in South Africa and holds the service levels in KL in higher esteem due to it being more ‘personal’ and customer orientated. He believes that South African food matches the quality of Malaysian food but that there is however much more variety of food available in Malaysia.

Karl pointed out that it is possible to have people from all five continents represented in one night at a restaurant as the food culture in Malaysia is very diverse and so is the cultural phenomenon in general in Kuala Lumpur.

Continue Reading

Lessons Learnt

What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

Zac Liew was offered to be CEO and Co-founder of Curlec at the age of twenty six and took up the offer knowing that he would be engaged in a steep learning curve. Curlec is a FinTech company that is redefining the customer experience for Direct Debit.

Dirk Coetsee

Published

on

zac-liew

Botanica Deli, Bangsar South, Malaysia a vibrant environment where a number of entrepreneurs and office workers go to meet and have great food and coffee. I walked into the Deli to meet a man that might just possess the ‘entrepreneurial gene’ if indeed that gene exists.

Zac Liew always wanted to venture onto the exciting yet challenging playing field of entrepreneurial ventures having his dad and mother as examples. His father a lawyer, whom ventured into property development and his mother whom started the first chain of liquor stores in Malaysia.

His parents’ ventures interested him from a very young age and helped to ignite the entrepreneurial fire in this very young CEO and co-founder of Curlec. Zac is a qualified lawyer whom also did a stint in the banking industry but at all times he had a burning desire to do something entrepreneurial and always had an interest in tech.

To him tech was always logical and simply made sense within this ever changing business environment within which we as entrepreneurs launch our start-up ventures. He also enjoys the challenging demands that the tech environment places upon his problem solving skills.

Related: Brian Tan Of FutureLab.my – Bridging The Knowledge Gap Through Social Learning

The Creation of Curlec

curlec-malaysia-mobile-appZac Liew was offered to be CEO and Co-founder of Curlec at the age of twenty six and took up the offer knowing that he would be engaged in a steep learning curve. Curlec is a FinTech company that is redefining the customer experience for Direct Debit. They are the first Malaysian software company to enable online Direct Debit payments in Malaysia. One of the core principles that Curlec was founded upon is to Build great tech that solves a basic need.

Zac together with his co-founders Steve Kucia and Raj Lorenz found a simplified and effective solution to collecting money on a recurring basis. Normally recurring billing and collections is a big issue for SMEs’ and other options were exceptionally costly and timeous.

Zac pointed out that the size of the issue of recurring collections exceeded all expectations and that is one of the reasons that their start-up phase has been successful and gained very good traction in the market.

Curlec has a razor sharp focus on only two products which enables them to focus on giving a great service and customer experience. Curlec cuts through the normal levels of bureaucracy of big companies and has a laser focus on their customers.

How does this apply to start-up entrepreneurs?

Create a product or a system that is simplified, very user friendly, cost and time effective, and more importantly that solves a very challenging issue within the market place that adds great value to customers. Underpin this by being customer centric.

I asked Zac to enlighten me on the key learnings of his journey thus far and also share success principles that has served him well in business and in his life in general. He pointed out that he believes that every entrepreneur should get comfortable with being uncomfortable and venture outside the boundaries of their own comfort zones.

‘Be comfortable with making mistakes’ he says. Get feedback learn from it and integrate the useful feedback in your thinking and in practically applying solutions.’

As business and life has a natural and general ebb and flow to it persistence is a key factor to your success. Accept challenges as they occur and realise that the mind of the entrepreneur should always have a problem solving focus. As a fan of combat sports, Zac shared the following quotes that resonates with him:

“The more you seek the uncomfortable the more you will become comfortable” – Conor McGregor

And

“I have been training under the dark lights so that I can shine in the bright lights’ – Anthony Joshua

Related:  Zac Liew Channeling The Fire Of Authenticity: Asia’s’ Top ‘YouTuber’, Joanna Soh

As a writer I have always been fascinated by the wisdom imparted by philosophers and masters of their respective fields. I am even more excited and hopeful for our future when I hear wisdom ‘rolling of the tongue’ of a twenty six year old entrepreneur:

‘Be idealistic in your ideas but be pragmatic in actualising them. If things are not working out do not be stuck in that. Take what you can learn from your experiences and move on.’

Tech has the inherent power to reach the far ends of the world seamlessly and when we have more and more tech entrepreneurs solving big consumer issues and thereby making this world a better place we can be more and more hopeful of a better future.

Continue Reading

Lessons Learnt

Don’t Be ‘Outside Standing’ On Your Own Exponential Growth Says Serial Investor, Jimmy Phoon

Serial investor Jimmy Phoon is proud of his and his team at Alps Global holdings in achieving a $300 million valuation.

Dirk Coetsee

Published

on

jimmy-phoon

It was a usually warm and humid afternoon in Malaysia as I walked into the foodbar at Fashion library in Kota Damansara, to meet a man who has a deep understanding of leveraging capital mechanisms in order to achieve exponential business growth.

Serial investor Jimmy Phoon is proud of his and his team at Alps Global holdings in achieving a $300 million valuation. He doesn’t speak to the ‘wrongs and rights’ of investments as he believes there are many ways in approaching an investment opportunity. He does however, firmly believe in the MOC (Miracles of Capital) organisations’ (of which he is a senior alumni member) approach to exponentially grow a company and having a clear exit strategy such as selling at a desired price or publically listing the company.

Jimmy enthusiastically highlighted the difference between them, as he names it a ‘feasible’ and a ‘bankable’ business investment. In offering a simple differentiation between the two terms he explained that ‘feasibility’ simply means that the business is making money, whilst ‘bankable’ means that the business is not only making money but that there is a clear succession plan and exit strategy in place.

As an experienced international entrepreneur and investor he recognises that a vast number of entrepreneurs are very well versed in the market mechanisms of their respective industries yet not equally adept at the capital mechanisms that underpins the exponential growth of companies. He points out that when a company has very good management in place, has a clear and attractive dividend policy to its shareholders, and in addition a well-defined and practical exit strategy it will increase the appetite of investors in general.

Related: Business Leadership – Learn How To Embrace Change

He describes the MOC to be an international platform to teach the mechanisms of Capital to entrepreneurs and investors. The MOC is the trifecta of business incubation, acceleration, and investment. One of the core principles of business investment that the MOC teaches and which Jimmy firmly believes in is collaboration between companies and entrepreneurs.

This means the willingness and openness to merge your unique skills as an entrepreneur, the unique offering of your company, profit and loss, with the skills, products and offerings of other companies with the end goal of exponential growth of a newly formed company. This approach can create a big win for all involved.

But what is ‘Outside Standing’?

The aforementioned discussion led to Jimmy sharing one of his favourite sayings:

“Be outstanding or outside standing” – a tongue in the cheek way of saying that by truly understanding and applying both the mechanisms of the market and capital you can experience the exponential growth of your company or alternatively by not fully applying both mechanisms it is then highly likely that you will be a witness from the ‘outside’ to the exponential growth of other companies and unfortunately not your own.

Jimmy’s’ accumulated learnings allows him to assist his team in building an ‘IPO’ compliant company that is formed with a collaborative approach towards a planned and well executed exit. That is part of his mind-set which is to do ‘big things’ and keep a distance from ‘small things’ for as an investor this man is always after exponential growth. He fosters a creation mind-set which is to create a bigger picture through leveraging and combining market and capital mechanisms.

One of the key ‘take always’ for me as an entrepreneur is to be much more open to collaboration in order to add value to others and in turn receive value such as exponential growth. Understanding the market mechanisms within your industry is not enough to multiply business performance, taking a keen interest in the capital mechanisms at play will take major strides towards actualising your bigger picture.

Read next: Entrepreneurship: How To Develop Your ‘Great Idea’

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending