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Demographica: Warren Moss

Sometimes even the best ideas don’t pan out, but as Warren Moss, founder and MD of Demographica discovered, that just means you need to find a new way of using what you have to pave a path to success.

Nadine Todd

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Warren Moss

Today, Demographica’s SA Consumer Initiative (SACI) has a database of 3,5 million users. That’s 3,5 million of the 14 million Internet and mobile phone users in South Africa. It’s an impressive opt-in database, and most definitely worth its weight in gold. After all, what would you pay to be able to target your exact consumer in terms of sex, age,
demographics and income level?

“Direct marketing is the most efficient form of marketing there is, particularly if you are able to target your exact consumer bracket,” says Warren Moss, founder and MD of Demographica. “Our database has huge value, especially because it’s entirely opt-in. Members of the SACI have given us permission to send them direct marketing emails, which our clients can then use to reach their clients.” Demographica’s clients currently include Shoe City, Telesure, Nissan, HP, Look & Listen, Marmite and the AA.

Demographica’s success in this space is nothing short of very impressive, but the business today looks very different from what Moss and his then-partner, Marc Pozniak, set out to do in 2006. Some hard lessons needed to be learnt first, and business plans needed to change
before the SACI came into being.

Taking the plunge

In 2005 Moss was working at Digital Planet, an online retailer. He was given R100 000 and tasked with growing the company’s small database of 80 000 people. To achieve this, they struck on the idea of ‘refer a friend’ viral give-aways. Anyone who joined the database and referred Digital Planet to as many friends as they could was eligible for a prize. Within two weeks they had grown the base from 80 000 to 800 000.

“It got me thinking about what could be achieved with an investment of R1 million,” says Moss. “Information is incredibly valuable in today’s consumer-driven world, and I started wondering what companies would pay for that information. For example, what would one bank pay for all the customer information of another bank? I had discovered how to create permission-based lists, where people opt-in to databases and share their details, and was determined to use that.”

So, in 2006 Moss approached his best friend, Marc Pozniak, and asked him if he was interested in starting a company together. Pozniak agreed and Moss resigned from Digital Planet. They raised R300 000 from friends and family and called the company Global Acquisition, but the partners soon found that R300 000 did not get you very far. “We were running out of cash, so we approached my old bosses at Digital Planet and asked them if they wanted to invest in us. They believed in us and our idea and ended up giving us a facility of R4 million, for which we gave them a 50% equity stake and immediately paid back our first investors.”

With R4 million available to spend, the partners were able to give huge giveaways to generate databases. “Everyone we pitched the idea to loved it. We spent money developing lists, but we made a lot selling them too — and then we discovered our problem. We had no repeat customers. The lists were expensive and when we went back to our clients, we discovered they weren’t using them. By this stage we had spent R1,8 million and our investors were insisting that we not throw good money after bad.”

Changing direction

It was at this point that Moss and Pozniak went back to the drawing board. “We were bringing in around R40 000 a month. Without touching what was left of the original investment, we needed to cut our expenses and re-evaluate our business model.”

Moss and Pozniak gave up their lease, sized down and started working from home and coffee shops. “We had no expenses, and could use the money coming in to grow the business, but grow what?” he says. “All we had were 40 000 email addresses. What could we do with that? And then we realised that what we were good at was growing databases. Instead of selling them, we could grow a database for ourselves.”

The partners used the 40 000 addresses they had to start selling advertising contracts. They would send emails to the people on their bases who suited client requirements and contracts would ensure a steady income. They created the South African Consumer Initiative and their first clients were delighted with the service: they didn’t own the list themselves, but the service was far more affordable and the work was done for them.

By mid-2008 the company was growing again — the database was bigger and there were now four divisions: lead generation (the corporate lists), CRM, social media and email advertising. The partners got new offices and began hiring a team.

But change was soon in the air again. “We were now doing too much, and Marc and I had different visions for what the company should be. We just weren’t clear on what direction we should take,” says Moss.

The solution gradually worked itself out. Two divisions, lead generation and CRM, were closed and the social media contracts were handed over to Cerebra. The company turned its focus completely to database marketing. “It was at this point that Marc and I mediated a buy-out of his shares. We were headed in different directions.”

Hello Demographica

Now the majority shareholder of the company, Moss changed its name to Demographica and began concentrating on growing the SACI. “Our biggest expansion took place in 2010,” he says. “We grew the database from one million to 3,5 million in under a year.” According to Moss, reaching 2,5 million through promotions was easy — and then they hit a wall. “Again we had to change strategy and start doing joint ventures with other companies with their own databases to grow our own, but the risk paid off.”

Today Demographica’s list includes 25% of all email accounts in South Africa and the company has paid back its financiers. It’s 100% debt free and offers to buy the list are rolling in from big corporates — but as Moss says, he’s not selling.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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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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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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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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