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Lessons Learnt

Dial-a-Nerd: Staying on Top While the Market Changed

Over the past 15 years Dial-a-Nerd has grown from a novelty concept employing students to a trusted name in IT.

Nadine Todd

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Founder Colin Thornton is quick to point out that the brand’s growth is largely because of the management team’s willingness and ability to keep relearning the basics and adapting to change.

“If we didn’t evaluate who we were and what we do on a regular basis, particularly with market changes in our industry, we wouldn’t still be going,” he says candidly. It’s this ability for self-reflection and above all, change, that marks Dial-a-Nerd’s propensity for success – and continued growth.

One of the biggest lessons we have learnt over the years is to never become complacent. Business is about constantly reviewing what you are doing and how you’re doing it, from your business model and the products or services you offer, to what staff and management structures you have in place.

When we launched in 1998, extending our footprint was the most important thing to me. I wanted a branch in every main (and not so main) centre in South Africa. Our model was based on doing onsite work, and so the more satellite offices we had, the wider our reach.

I concentrated on opening offices and getting technicians within those areas and didn’t even question this logic. We needed to be everywhere to grow our brand.

In hindsight, this was definitely the right strategy at the time. We managed to grow a national brand, and we had technicians across the country. And then the market changed. New technology enabled us to do most of our work remotely.

Suddenly, we didn’t need to be onsite, and we certainly didn’t need offices in far flung places. Maintaining those offices is expensive, and so are travel expenses. It’s far more cost-effective and efficient to work remotely, particularly since in many cases we were sorting out problems remotely anyway, and the offices were just sitting there costing us money.

It sounds so obvious, but if you don’t pay attention to the numbers, you can often miss the obvious.

If I could go back, it would be to have realised this earlier and begin our consolidation sooner than we did. You can’t close offices overnight, and so we are still carrying some unnecessary costs. On the other hand, if we hadn’t realised this at all, we wouldn’t still be going. We’ve gone from 14 to ten offices in the last year, and are aiming for eight.

From budget solution to premium service

The technology changes that affected how we operated also changed our market. For many years the average client needed to see us every three to six months, and our market was 80% consumer and 20% corporate. Over the past year and a half though, technology has improved to such a degree that home-based tech doesn’t need fixing.

Again, this sounds obvious – we all know tech has improved substantially over the past few years – but when your whole business is based on helping non-tech savvy people fix their hardware or instal and troubleshoot software, it’s problematic when the problems go away.

A large part of our business also focused on training, and again, as people have become far more comfortable with technology, this market has also shrunk. We could have stuck to our guns and tried to approach more people, expanded our marketing and sales efforts or simply accepted a shrinking business, but that’s no way to run a sustainable business.

We needed to change our business model instead. There’s no sense in holding on to something that’s no longer working.

Our solution was the corporate market. The consumer market for training and after-sales support might be shrinking, but the corporate market is growing. More and more businesses are using tech – particularly smaller companies that could not previously afford to.

The difficulty for us was understanding the difference between the two markets.

Consumers want to pay less, but they are happy to wait a few days for assistance. The corporate market will pay more, but demands immediate service. Their own businesses are based on their tech – everything needs to be running smoothly, at all times.

We have adjusted our offering accordingly. It’s meant a number of shifts. First, the students we employed for consumer work are not suited to the corporate market. In many cases students have grown with us, and years later are ideal for this market, but it has changed our hiring practices.

We need technicians who are comfortable working in a corporate environment, work well in high-stress, high-pressure situations, and intimately understand bigger and more complex corporate systems.

Our entire model has shifted to 80% corporate and 20% consumer. As a result, we need far more technicians as well. Our corporate clients can’t wait for assistance. We need to be addressing their problem within four to six hours at the most, which means we need a surplus of technicians who are actually sitting around, waiting for a call.

To be able to afford this model and offer this level of service, we need to charge a premium price to take into account the fact that we have capacity that is not being used. Interestingly, this has not been a problem. We originally started out as a budget solution.

Today, we offer a premium service, and as long as we are able to deliver on our client service agreements, it’s a premium price our clients are happy to pay for the value we are adding to their businesses.

Our strategy over the past year has been to grow the business side as quickly as the consumer side shrinks. It’s been a challenge, but because we keep re-evaluating the way we operate, we’ve been able to streamline a lot of our processes along the way, which has alleviated cost pressures during the transition.

Know your profit generators

The trick with both pricing and watching the bottom line is understanding where you make your money. It sounds like a cliché, but in my opinion it’s the single most important part of running – and growing – a business.

Hardware and software have become so commoditised that you need to make your margins on service offerings. Since our model was already based on charging premium prices for excellent service, this could have been the end of it, with an assumption we were making a tidy profit.

Instead, each year we do an extensive overview of where we are making money, and where we’re spending it. We take nothing for granted.

Through the exercise we could clearly see how much the 14 branches were costing us, but also how our system gave a false impression of how well some of the branches were actually doing.

A branch manager would report a profit of R100 000 for example, but not take into account that head office administrative and accounting support cost R300 000. Without balancing the books, you end up with essentially false margins, and branch managers who don’t have a strong picture of how their deliverables are impacting the business as a whole.

Similarly, we needed to determine what was making us money, and these are not necessarily the jobs that offer the biggest margins. Let’s take network cabling as an example. On paper this offers a 60% margin, which is great. What you don’t factor in are the hours of upfront consulting and management hours. These are indirect costs, but they add up.

Compare this to a job that only has a 20% margin, but no additional costs for time and manpower. At the end of the day you end up with a higher profit, even though the margins are lower.

What we learn each year from this exercise is that you can’t assume you know where your money comes from, and that the highest paying contracts aren’t always the biggest profit jobs. As a business owner, I regularly sit down and question how well I know and understand the inner workings of my own business, and I make sure I’m as informed as I can be.

Keep a constant watch

The most important job description that I have though is managing people. Someone from every branch reports directly to me, and although our branch managers are empowered to make their own decisions and manage their own teams, I get regular updates on what’s happening in each branch so that I have a strong handle on where the business is.

It’s my job to motivate my managers, support them, train them and help them solve issues. When we receive a complaint, it’s not about assigning blame. It’s about asking what went wrong, determining the best way to resolve the issue, and then putting systems in place to ensure the same mistake never happens again.

Everyone is involved in the process, and we all learn from it, across the branches.

Customer service is our entire business. If we relax, this starts slipping, so I keep a constant watch on how we are delivering on our mandate and receive monthly reports on client interactions. I am also very conscious of the fact that I need to lead by example.

If a client wants to speak directly to me, I make sure I’m available. One of the things that has always driven me nuts is companies whose MDs are inaccessible. You have a problem and you’re passed from manager to manager and never feel like your issue is being addressed or taken seriously.

This isn’t the business we want to be. Our differentiator is service, and I can’t insist on that with our employees if I’m not willing to follow suit with my own time.

Achieving sustainable growth

  • Never become complacent

If you assume you’re making a profit or your pricing is spot on, chances are you’re missing something. We regularly take a long, hard look at what actually makes us money, and we’ve realised that higher margins don’t necessarily relate to higher profits – sometimes it’s even the other way around.

  • Focus on your market

What previously worked might not work today. Stay on top of market trends and relate them to your business model. If we had stuck to our consumer model because that was the way we had always worked, we wouldn’t be around today.

  • Find your differentiator

It sounds clichéd, but when you are offering a non-commoditised service, the value you offer your clients determines your price point. Understand what value you bring to your clients’ lives or business.

The higher the value, the more you can charge – and no, value is not the quality of your service or product, but what you bring to the client. In our case, we give our clients the gift of minimum down time. They don’t care how great our technicians are, as long as they don’t feel the pain of tech that doesn’t work.

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

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1 Comment

1 Comment

  1. Phillipa Mitchell

    Apr 3, 2013 at 09:57

    Great article on a real entrepreneur with his head set squarely on his shoulders!

    I met Colin back in 1998 when he had just started Dial-a-Nerd, and he was a service provider (him personally at the time) to my business, Red Pepper Books, which had also just started up.

    I always admired his professionalism and expertise, and it’s wonderful to read about how he has grown and he lessons he has learned along the way. These are all lessons that many entrepreneurs face but don’t always address.

    May Dial-a-Nerd continue to grow from strength to strength under the leadership of this great leader!

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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

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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.

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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

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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.

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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

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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’

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