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GetSmarter With Sam Paddock And Rob Paddock

Brothers Sam and Rob Paddock believe there’s a lot of luck involved in building a great business – but you need a clear strategy, great people and strong partnerships as well.

Nadine Todd

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Vital Stats

  • Players: Sam Paddock and Rob Paddock
  • Company: GetSmarter
  • Launched: 2008
  • The Deal: Sold to NASDAQ-listed company 2U for R1,4 billion
  • Visit: www.getsmarter.com

How do you build a business that is not only the leader in its sector locally, but attracts the attention of an international, listed company, concluding in a R1,4 billion deal? Brothers Sam and Rob Paddock believe there’s a lot of luck involved in building a great business – but you need a clear strategy, great people and strong partnerships as well.

This is their story

Here’s the fascinating thing about truly successful businesses: Speak to founders that have secured investments, sold their businesses or built high-growth organisations, and you’ll notice they have two things in common. First, they have a strong purpose other than money motivating them. Second, their focus is on building a robust, high-impact business, and not on how they’re going to find a funder or sell their company. Interestingly, by not focusing on these factors and working on the business instead, funders, buyers and success are often the end result anyway.

GetSmarter is a perfect example of these laws in action. Co-founders Sam and Rob Paddock’s purpose is to improve one million lives through online education by 2030, and even though they’ve just concluded an incredible deal (believed to be the biggest in the South African edtech landscape to date), they actually had no intention of selling until Christopher ‘Chip’ Paucek, CEO and co-founder of 2U, contacted them in 2016.

“We’ve been approached by interested parties over the years, but we’ve never seriously considered selling the business,” says Sam, CEO of GetSmarter. “It’s flattering, but we were focused on achieving our internal goals, and didn’t see the value in selling some or all of the company.”

Related: How GetSmarter Got Smarter

So why was 2U’s offer different? In a nutshell, because the deal will actually help the brothers accelerate their objective of improving one million lives by 2030. In other words, it directly taps into their purpose — and it’s that purpose that made the business attractive to 2U in the first place.

“It was a chance meeting,” says Sam. “Chip was surfing Facebook and came across an advert for an MIT course we were running. It was our first international programme, and since 2U is in the online education space, he immediately wanted to know who we were. He called me, and when we realised how aligned our businesses and philosophies were, it kicked off a series of face-to-face conversations around what we could achieve together.”

“Both of our target markets are working professionals, but while we offer non-accredited short courses, 2U offers fully-fledged degrees,” says Rob. “So, while in many ways the businesses are almost identical, they are also not competing with each other. 2U offers degrees from highly ranked institutions such as Yale, the University of California Berkley and New York University. We offer short courses from UCT, Wits, Stellenbosch, MIT, Harvard, UChicago, Oxford, Cambridge  and the London School of Economics. We realised that if we worked together we could service both ends of the market, and our combined reach would be incredible.”

Sam and Rob have built a solid, sustainable business that has enjoyed incredible growth over the past few years, but what really attracted 2U was a shared sense of purpose. “

There’s real cultural alignment between our two businesses,” says Rob. “Culture has given us a real competitive edge, and it’s the guiding force behind the principle and values we’ve built the business on.”

The lesson is a simple one. If your values and purpose are clear, you’ll naturally attract like-minded people to your organisation, from employees to investors and even potential partners and buyers.

Strong partnerships

A shared sense of purpose gets the conversation started, but it doesn’t secure the deal. 2U is an international company that’s listed on the New York Stock Exchange (NASDAQ), and has a fiduciary duty to its shareholders to purchase businesses on more than an emotional whim.

GetSmarter had to go through a rigorous due diligence process before the deal was concluded. The foundations that Sam and Rob have put in place over the last decade have ensured that they’ve created more than just a vision: They’ve built an asset of value that isn’t dependent on its founders, and offers a strong value proposition to a listed business.

That value proposition began in 2008 when the brothers got their first partners on board: The University of Stellenbosch and UCT. The partnership with UCT started with Rob and Sam’s dad, Graham Paddock, one of South Africa’s top sectional title lawyers. Graham had collaborated with UCT’s Law Faculty to build an online course that could be accessed across the country, with a final in-person workshop component. The course was one of the most profitable activities that Paddocks, Graham’s law firm, was involved in.

Sam had designed a virtual campus while completing his degree in business science, and the success of Graham’s online course cemented the impression that there was a real business opportunity in online education that could also add real value to the South African market place.

“I love tech and marketing, Rob is passionate about education, and has a background teaching music, and Paddocks already had a great partnership with UCT’s Law Faculty,” says Sam. From the beginning, both he and Rob clearly recognised that the success of any online education venture lay with the partnerships they could secure.

“Our courses have been successful because they combine affordability with an attractive institutional brand that adds value to people’s skills and CVs,” says Rob. “We built partnerships with UCT, the University of Stellenbosch and Wits based on this ideal.

“In our sales and marketing collateral, the academic institution’s branding is front and centre, not GetSmarter’s. Our job is to give students the confidence and competence to advance their careers. We do this through high-touch courses that support them throughout the learning process. Those courses are designed with career advancement in mind in collaboration with our partners.”

“The real success has come in the value proposition we offer the universities we work with,” adds Rob. “Essentially, we take on the vast majority of the commercial risk. We take on all marketing and sales activities, course administration, learning technology, student support, technical support, but the courses are very much led by the university in terms of IP, and they have full quality control over the course at all times. The commercial model is that the university receives a percentage of revenue share.

“The biggest lesson we’ve learnt since launching this business is that you need to understand who you are partnering with and what their objectives are. The relationships we have with the universities we work with is at the heart of our business model. How we serve our university partners, students and employees is the foundation of our success — and pulling all three together is what creates an offering that the market both wants and needs.” 

Success is the greatest precursor to further success

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Building up trust doesn’t happen overnight. For Sam and Rob, it’s been a ten-year journey focusing on delivering exceptional online courses that add value to learners and their university partners. This dedication to creating the right formula for online courses has had two distinct results. It’s built solid relationships with the local academic world (and a valuable network that the brothers could tap into when they started investigating international partners), and it’s resulted in an 88% completion rate, which is exceptionally high in the world of online learning.

“We’ve very carefully structured and developed the high-touch style that differentiates GetSmarter courses,” explains Rob. “We focus on the holistic needs of our learners. They need to put in ten hours a week and to help them do that, and get the most from the course, we have success managers who guide them through the process, a 24-hour tech support team, and everyone is placed in small tutorial groups, which creates an intimate and personal learning environment, even if there are 1 000 students taking that particular course. Our learners constantly get the sense that their learning is being nurtured and facilitated. We believe it’s this level of support that has resulted in such a high completion rate.”

Related: 10 Things Successful People Tell Themselves Every Day

Compare this to the extremely low completion rates of MOOCs, often in the range of 3% to 15%. The New York Times named 2012 the Year of the MOOC. The world believed these Massive Open Online Courses would democratise learning, and render higher education institutions obsolete. Everyone jumped on the bandwagon, and some of the most revered names in the higher education space added their courses to the mix of content that anyone in the world could access for free.

And then two things happened. First, although the idea was to find a business model that could monetise MOOCs, while still allowing people free access to the content, this has not yet happened. And second, the completion rate of courses is incredibly low. People sign up for MOOCs, but they don’t finish them.

“We absolutely support the idea of free open content for the world to access,” says Sam. “But we don’t see MOOCs as fundamentally disrupting higher education. A vast majority of the people accessing MOOCs are already highly qualified individuals in the US and the UK.

“More importantly though, making content available gives people access to it, but there’s a big difference between starting a course and completing it. This has been a huge focus for us — how do we get people to complete online courses? These are working professionals with a lot of responsibilities, and our courses typically require an additional ten hours a week. We’ve found that a high-touch framework supports our learners in their journey, guiding them through the content, and resulting in our 88% completion rate.”

This was the value proposition that Sam and Rob were able to present to international universities when they started focusing on international growth in 2015. “Our local growth drives were to increase courses within the verticals we focused on, so that learners could keep increasing their skills, and to build on the number of courses we offer. The greater our portfolio, the bigger the market we can appeal to, across industries and professions,” says Sam. The next step was to go international. “When we started the process, we had a seven-year track record of success in partnering with the top three institutions in South Africa and a high completion rate. We also offer our university partners significant financial returns,” says Sam. “We believed that our proven capability to deliver high quality courses as well as financial returns was a value proposition that international partners would respond to.”

The brothers knew it wouldn’t be a simple process however. “There are a lot of start-ups in the edtech space. Harvard is approached weekly by companies claiming to be the future of education. We needed an additional ‘in’, and that came from the partnerships we had built in South Africa,” says Rob.

“We sweated our networks hard. Luckily, the world of higher education is small and connected. Our networks were able to introduce us to the right people in the UK and the US, and then we worked harder than we ever have in our lives. We did a roadshow in 2015 where we had five meetings a day for three weeks in a row. I checked my passport recently — I travelled to Boston 19 times in 18 months. It takes time and energy to establish the right relationships. The introductions were just a foot in the door. We needed to take that gap and really make it work.”

In February 2016 GetSmarter’s first international course launched in collaboration with MIT. This was followed by courses with Harvard, Oxford, the London School of Economics and Cambridge. Today, GetSmarter’s team of 400 service a pool of learners in 140+ countries from their offices in Cape Town and London.

Using your differentiators to make a difference

Over and above the trifecta of systems, operational support and pedagogy that has made GetSmarter courses so popular in the market, is the strong sales and marketing focus that has been integral to the brand’s growth strategy since inception.

“We have a hybrid sales and marketing strategy that uses Facebook, LinkedIn and Google AdWords to generate inbound leads,” explains Sam. “Our target audience is in their mid to late 30s, midway through their career and upwardly mobile, and we reach them via their digital network. Our inhouse digital marketing agency uses analytics, maths and stats to understand who is likely to sign up for our courses, and what conversations we need to be having with them to make that happen.

“Once a potential learner has shown an interest, they are signed over to the sales team, who begin high quality conversations around whether the course is right for them or not. The process is high touch and very people focused.”

This same high-touch sales and marketing process has also helped GetSmarter to successfully enter international markets. “We’ve learnt a lot from marketing in Southern Africa,” says Sam. “Working professionals in South Africa, while culturally distinct, are similar to working professionals in the EU and US. Local guidelines are also working in those markets.”

The business’s acquisition by 2U will increase this reach even further. “We can now apply 2U’s advanced marketing analytic capabilities to understand how to reach a larger audience. The big markets for us are the US, the UK, Hong Kong, Singapore, the Middle East and of course South Africa, which is still currently our biggest market base, although this will shift in the future.” Interestingly, while the inclusion of international courses to GetSmarter’s portfolio has triggered international growth and the deal with 2U, South Africa’s growing appetite for international programmes is driving local growth.

“In a recent Cambridge business sustainability management course that we ran, 10% of the students were from South Africa,” confirms Rob.

Building on great foundations

The key factor behind the international growth and the acquisition, is the team Sam and Rob have built around them over the past five years.

“Culture has always been a competitive advantage for us,” says Sam. “Our people are GetSmarter’s life-blood. Four years ago, the business’s strategy lived in corridor conversations with ‘Sam and Rob’. We were the funnel that everything in the company ran through. If we wanted to achieve next level growth, that needed to change.

“One of the lenses we view business through is that human performance precedes operational performance, which precedes financial performance. That means in order to achieve any success, you need to first build a higher human capital base. We started by expanding our executive team, bringing people on board who were better than us in their respective portfolios.

By the time we were prospecting with international institutions they were running their divisions without our daily input. We were able to focus on international growth and strategies because we had the right team in place.”

“Without that foundation, none of this would have been possible,” Rob agrees. “We could focus on travelling and building international relationships — and even on the 2U deal and due diligence, because of our executive team.”

Over and above the executive team are 400 highly capable people based in Cape Town, serving students from around the world. “We work with awesome people,” says Sam, “and that’s helped us build this business and work towards achieving our purpose. You can’t impact one million lives by yourself. It takes a strong, cohesive team. We’ve built a company around that, and now we’ve joined an international industry leader based on the same principles.”

Related: 15 Scientifically Proven Ways To Work Smarter, Not Just More

Choosing to Sell

How do you know it’s the right time, and what should you do if you’re considering the sale of your business? Sam and Rob offer the following advice:

  1. Make sure you like and respect the acquirer. Everything starts here. It’s a long, slow, complex process. You need to like each other.
  2. During the acquisition process, you need to rapidly develop a new set of skills, and that’s not always possible. You need a team of professionals to help you navigate the deal. This includes deal advisors and attorneys. Deals of this nature are complex, and you want to set everything up for potential success in the future.
  3. Make sure there’s real synergy between the businesses. What do you offer each other, and how will the acquisition help both businesses grow? If you can’t answer this, you probably shouldn’t be doing the deal.

 


Listen to the podcast

Matt Brown

Matt Brown interviews Sam and Rob and discusses the strategies that have supported GetSmarter’s international growth and sale to 2U for R1,4 billion.

To listen to the podcast, go to mattbrownmedia.co.za/matt-brown-show or find the Matt Brown Show on iTunes or Stitcher.

The Matt Brown Show is a podcast with a listenership in over 100 countries and is designed to empower entrepreneurs around the world through information sharing.

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

Lessons Learnt

5 Steps To A Multi-million Dollar Business Before 30

If you want the multi-million dollar business price tag, you’d better be ready to work for it.

Nicholas Bell

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Turning your idea into a multi-million-dollar business before you hit 30 may sound impossible, but with the right attitude and commitment it’s just a long-term goal that you can achieve with the right mindset. Everything in life, from age to business success, is just a number – it’s what you do with that number and how you get there that really counts. Creating a company that has this hefty price tag isn’t easy, but here are five steps you can take to make it less of a dream and more of a reality…

Passion

This point cannot be emphasised enough. You need to be passionate about your idea and to be prepared to work 24-hour days, seven days a week, 30 days of the month to make it happen. Hard work is pretty much the only way that any business becomes a so-called ‘overnight success’. In fact, a quick Google search will reveal that most companies touted as quick wins and huge overnight success stories have had people labouring behind the scenes for years.

Related: How To Go About Making Your First Million

You also need passion for your customers and clients. This is critical. In fact, passion for your customer should come first, followed by passion for your idea. Don’t forget that your customer is the only reason why your business will succeed.

Scale

It may be that you have the passion for your idea, but you also need to mix in a dose of realism. Is the idea scalable? Will the business grow? Is your idea really big enough that it could achieve a multi-million-dollar success? If your idea has that potential and scale, then you’re on the right track, but you need to be absolutely honest with yourself, set specific targets and be prepared to adapt. Which leads to point three….

Adaptability

The idea that first had potential should not be the one that sees you past the multi-million-dollar finish line. You need to be open to reinventing your business model at each phase of development and growth because each one of these phases will introduce new challenges and demand different approaches.

Stubborn refusal to change your idea may work in movies or on increasingly rare occasions, but the reality is that every idea needs to be polished and refined by customer need, feedback and demand.

Failure

I fundamentally disagree with the idea that failure is a benchmark of success. You don’t need to see your business implode five times to say you’re successful. No. It is the ability to adapt and the willingness to adapt that defines success. Don’t be precious about your ideas – some work, some don’t.

Related: 11 Secrets Of South African Entrepreneurs On Making It To The Top

Just be ready to identify the ones that don’t work because people who cling to their ideas often fail. That level of failure isn’t a sign that you’re on the path to millions, it’s a sign that next time you embark on a new business, you need to redefine your adaptability.

That said, every business is going to have a few failures. These don’t need to be earth shatteringly huge – small failures can be extremely beneficial in fine tuning a product, understanding customer requirements and truly taking advantage of opportunities.

Planning

It may sound tedious and repetitive, but there really is no way of getting around having a plan. You must define where you want to go (multi-million-dollar business), how you plan to get there (the market, the customer, the growth plan), and the measurements that define your success.

The last point is crucial – set short cycle goals so you can regularly determine if your business is still on track. These allow you to plan accordingly, make far more insightful decisions, and maintain a pragmatic approach.

Incremental goals not only refine the overarching strategy, but they give you the chance to recognise the smaller successes. It’s fantastic to have the multi-million-dollar vision, but set yourself short goals that allow you to taste success. The saying that success breeds success isn’t wrong. Allow yourself to build a highlight reel that showcases achievements along the way otherwise you run the risk of losing sight of the vision and the motivations behind it. Your multi-million is the final destination, but there is no reason why you can’t appreciate the moments along the way.

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Lessons Learnt

Striata Founder Mike Wright Gives Top Advice On Going Global

Mike Wright launched Striata in 1999 from his converted garage in Kensington, Johannesburg. He was 30 years old, with limited capital, and had resigned from his job as MD of a leading web design firm to follow his dreams. To get started, he rescheduled his bond and provisional tax payments, and started working on his big idea. These are his lessons in high-level growth, and the do’s and don’ts of international expansion.

Nadine Todd

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Vital Stats

  • Player: Mike Wright
  • Company: Striata
  • EST: 1999
  • Turnover: In excess of $10 million (+-R120 million+)
  • Visit: striata.com

Striata is a R120 million+ business that operates across South Africa, the Americas, Europe from a base in the UK, and Asia. Launched in South Africa in 1999, founder Mike Wright reached a point where the only way he could grow the business further was to go offshore.

Expansion in the US has been extremely successful, and Mike moved to the UK with his family to spearhead European growth. The business’s efforts in Australia have been less successful however, and a second office has since opened in Hong Kong to service Asia Pacific. Here are Striata’s lessons on international expansion — what worked for them, what hasn’t worked, and how to approach new territories to guide your business’s success.

Learning from the ground up

Mike Wright’s first piece of advice to any entrepreneur looking at international expansion is not to rely on statistics. “In my view, statistics don’t work for the individual,” he explains.

“You can be successful and be doing the opposite of what the statistics say should work, or you can do exactly what the stats applaud and still be struggling.

Related: How Travelit Makes Travelling Affordable For Small Businesses

“If you’re thinking of expanding beyond your borders, hopefully you are already successful in your own market. We reached a level of success and maturity in South Africa that led us down this path. Along the way we’ve learnt that when you enter new markets that aren’t in the business landscape you know and understand, all bets are off. Past achievements don’t guarantee future success.

“You need to look at your business, what you offer, your differentiators, strengths and weaknesses, and use those to determine your go-to-market strategy, based on intensive research into the markets you’re entering. You need to know how and why people do business, and who they do it with, in all the territories you’re looking at.”

In each of the three territories they entered (Australia, the UK and the US), Striata sent pioneers — people they knew, who had worked with them or knew them, and who understood who and what the brand stood for — to spearhead the new international offices.

There’s a fundamental choice you have to make when you launch a division in a new territory: Employ a local with an entrenched network, or send someone that you know shares your values and company culture,” says Mike. The most obvious way to tap into an established network is to find a local partner, or purchase a local business. The downside to this strategy is culture. “The bedrock of a successful business is a shared company culture, but fundamentally you can’t change people. If you go the acquisition route, you need to be absolutely sure you have cultural alignment, and too often it’s only once you’re in business together that you realise you don’t.”

Striata opted for door number two: Supporting individuals from within the organisation to spearhead international growth and building networks on the ground.

“Building a network takes time. You need to attend conferences and networking events and make meaningful connections. We saw this in action in the US. Our pioneer was very good at growing his community and leveraging contacts. The US is a large, mature market, and no one cares where you’re from as long as you deliver. We had a product to sell, not just a concept, and a track record. The right person, market, timing and opportunity aligned for us, and our launch and subsequent growth was successful. We didn’t gain traction overnight, but there was a market for our services, which is the biggest hurdle.”

The strategy worked well in the US and the UK — but not that well in Australia. “We learnt the hard way that the Australian business market is built on long-standing relationships, and it’s a difficult market to break into as an expat.”

As a result, Striata invested more in the market that was working. From 2005 to 2008, US growth was a top priority. “We hired more people, attended conferences and ensured we had a good product with exceptional back-up support and account management. Not every decision will be a win — even when you’re accustomed to getting things right. Sometimes you have to cut your losses and focus on what is working.”

Pulling together the threads of success

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According to Mike, Striata’s South African success was based on a simple formula: To successfully run (and grow) a business, you need to keep moving forward — hire the next person, make the next contact, add new partners where applicable, run a good business with a good team that’s focused on execution. You also need a good product, back-up support and account management.

“The minimum level of all these parts working together allows you to service your customer. The maximum level creates a customer who loves you and gives you more business,” says Mike.

“There isn’t one secret to success. You need to get lots of little (and big) things right. A minimum level of service requires repeatability, a focus on service, references, and a good product. The problem is that when you think most of them are ticked, you end up finding one you ignored.”

For Striata, that has not been people. The company’s senior team are all veterans of the business. “A business becomes easy to run — and infinitely more scalable, especially across multiple territories — when your core management team have been with you for a long time. We value our team, offer the right rewards, create wealth for them and give them a career path, and we have the foundation of a phenomenal business.”

However, before you can get your people, systems, processes and service right, you need to start with a product and a business model.

“When I launched Striata I knew I wanted a business based on annuity income. I’d been MD of VWV Interactive, a web design company, and in my 18 months there I’d learnt that when your business is built around projects, you’re either snowed under with work, or scrambling for your next project. I did not want to pursue that business model.”

Prior to VWV, Mike was employed as an accountant at Coopers & Lybrand (pre- PwC), where he was part of their Computer Assurance Services. This was the beginning of computer auditing. “The Internet had come along, and we needed a website. I straddled tech and marketing, so this became my project. Next, we developed eTaxman, a form that calculated your tax return online. It went viral before the term viral even existed. I was on TV, at conferences and on the radio talking about eTaxman. Coopers was at the top of the game and experts in the ‘Internet’.”

The exposure brought VWV knocking. A team of brilliant young designers, they decided they needed more structure in the business. Being 28 and tech savvy meant Mike qualified for the position. “They were the best in the business in terms of creative design, but they needed to build a business around those capabilities as the market shifted to eCommerce,” he says. “It was a fantastic 18 months, but I realised I needed more — I wanted to build something of my own.” At the time, Mike was at the forefront of what corporates could do with tech, and how the Internet was changing the way companies did business and interacted with their customers. “I was looking for a gap, and concentrating on where there were — and weren’t — already players in the market.” Paying attention led the young entrepreneur to a key question: Who was handling corporate focused emails?

Related: 21 Inspiring Quotes About Success, Persistence And What It Means To Be An Entrepreneur

“Corporate South Africa caught on to email quickly — it was an excellent way for companies to communicate with customers and constantly tell them what they were doing, and how they were building a better online experience. The problem was that a corporate exchange server can’t handle 100 000 messages in a queue, particularly when that bulk message could delay the CEO’s very important email. We needed to provide a service that could deliver personalised bulk emails.”

With his idea in hand, Mike’s first move was to ‘take a loan from the taxman’ by delaying his provisional tax payments. “I spoke to SARS, acknowledging the debt, and they charged me interest. I wouldn’t recommend this avenue to everyone. You have to be extremely disciplined to pay it off as agreed, and the interest was high, but it worked for me.”

He also reached out to his network, and secured some corporate funding. It was enough to hire a techie who understood email. “We bought a license for ‘list-serving’ software that allowed for personalisation, and entered the market with our solution.”

Since pre-launch, Mike has consistently asked himself these two questions: What do we do/sell? Is there a market for that? “The secret to any business success is being able to take an idea or concept, put it together, connect the dots and get someone else to pay for it. Then you need to ensure you can repeat what you’ve just done, and that you have access to the resources you’ll need to do so. Build it, sell it more than once, and then iterate. That’s where you create value.”

The foundations of growth

There’s a second set of questions Mike asks himself, and these are the foundations for growth: Where are my constraints? What’s stopping me from getting to the next level? “Within our first year, it became clear that not being able to make changes to the licensed software was constraining us. We needed to be more flexible. If you have your own code, you’re in control. Ninety percent of competing software solutions do the same thing. It’s the 10% that gets you the job — you need that 10% to be exceptional, and you need to own it.”

In Mike’s own words, to create the complex and ground-breaking products that Striata is built upon, you need a ‘serious’ rocket scientist. Luckily, Mike knew where to find one — he just needed to wait out the one year non-solicitation he’d agreed on when he left VWV. The second it was over, he approached Nic Ramage to join the business.

“Start-ups generally can’t afford the top experts in their field, even with VC backing, so you need to get creative,” says Mike. “Nic was up for the challenge, but he also came on as a partner and shareholder. If you really want to attract top talent, you need to give them the right incentives.”

From year two Striata started making money. Mike says, “It may be ‘old school’ but whether you have funding or not — or perhaps even more importantly if you do — I believe you must pay your own way by becoming profitable as quickly as possible.” Trained as an accountant, and growing up with a parent in the financial services sector, Mike admits he’s no gunslinger. His approach to business is conservative, and he hates unnecessary risks. But he’s also very focused on growth. “You need to do the work, bill your clients, pay salaries and then put what’s left into R&D. As our development team grew we needed to fund this from normal operations. Perhaps this constrained our growth, but we built a stable base, which worked in our favour when we started focusing on international expansion.”

Striata has chosen to stay focused and niche. “We’ve built up domain experience. It’s tough to be a mile wide and a mile deep — you have to choose between being a generalist or a specialist. We’ve chosen specialist. But, this doesn’t mean we haven’t added new solutions to our overall offering.

“We recently introduced a secure document storage solution in the Cloud — like a document vault. Online archiving and storage is the second leg of our product set. Our differentiator has always been security. All documents we send or store (such as bank statements invoices and insurance policies), are encrypted and password protected.

“We’ve learnt to listen to our customers. That’s how we grew from emails to encrypted documents. Then we realised they needed a way to store documents, so we built a solution to that. We’re also clear on the fact that we do message delivery — not only email. Our model is being ready for the next mode of communication. We need to have solutions before our customers ask for them.

“Our value proposition is to enable communication as an efficient customer service and an engaging customer experience. There’s more interaction between companies and customers than ever before. The actual protocol might change (email, SMS, WhatsApp), but our product is communication. We can go deep within this niche area of expertise.”

Striata’s plan was simple: Develop the secure attachment market in South Africa, until it become a de facto standard. By focusing on a need and creating the right products to address it, while adding functionality customers could benefit from, this is exactly what happened.

“The first time we offered an encryption service was for Diners Club statements. Their parent company, Standard Bank, also liked the idea and issued an RFP.” And this is where Striata moved up a level — its competitors were IBM, who were going to build a similar solution, but hadn’t yet, and an international company, ACI, who had no track record in South Africa.

“We were ahead of the curve, and this secured us the Standard Bank project. We were local and we sold the hell out of our software and capabilities.” Today, Striata counts a number of South Africa’s top banks as clients.

Related: The Mindset Strategy From The “Rock Star” Coach Can Turn Your Beliefs Into Results

International expansion

From 2004, Mike aggressively sought growth avenues. His five-year-old business was established, and servicing much of corporate South Africa. “There are two ways to grow: Add a product to sell to your current clients, or look at new geographies. We did both.”

There are a few major points that work in Striata’s favour. “Our currency gives us a margin that international competitors can’t match.” That said, many other international tech companies, including Amazon, have set up development hubs in Cape Town to take advantage of local skills and the exchange rate.

Second, South Africa operates in the same time zone as the UK and Europe, so tech support is only a phone call or email away.

“When we started looking overseas, we were a relatively young software company that had a software as a service (SaaS) offering. We knew we had the capability to sell anywhere and everywhere, and we had a cost advantage based on the rand exchange rate. We had the ideal business model for international expansion, we just needed to gain traction.”

By 2008 Striata — and Mike in particular — reached a crossroads. The US was growing, the Australian business was struggling, and the UK presented a fantastic opportunity, yet many deals just didn’t close. “I realised I could make a difference in the UK market. South Africa had a strong, established team. I wasn’t needed there anymore to continue the day-to-day operations of the business.” Mike has spent the past nine years in the UK, and travels between all of Striata’s operating territories. “We’ve got a good base, but we’re just getting started. Communication is shifting so quickly; we have to stay on our toes to ensure we’re the ones spearheading new solutions and growing our markets.”

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The Make Up of Makeup: How One Entrepreneur is Changing the Cosmetics Industry

Energetic, enthusiastic and fun are three words to describe Alina Lucía Imbeth Luna. But her favorite words are organic, vegan and cruelty free. They’re the backbone of her Medellin, Colombia-based cosmetics company, Pure Chemistry. Learn how this chemist and engineer is revolutionizing the cosmetics industry and read about her advice for future entrepreneurs.

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What is Pure Chemistry?

Pure Chemistry is a company that invents, manufactures and sells beauty products directly to the consumer. What makes us stand out is that we are certified organic, vegan, and cruelty-free.

Many companies say they do no testing on animals, but we go one step further. None of our processes or ingredients has any animal components. Ingredients from animals are common in the cosmetic industry but for us it is not an option.

If it’s common, how do you avoid using them?

For virtually any synthetic or animal ingredient, there is an organic, plant-based alternative.

Collagen, for example, is an animal protein that we don’t use because there are vegetable alternatives that give us better results.

As for honey, we don’t take honey away from bees, we use cane honey.

So for whatever reason people have, be it religion, ethics or they just decide not to use a product that has ingredients that come from or are tested on animals, they can come to Pure Chemistry.

Related: Going The Extra Mile With Neil Robinson Of Relate Bracelets

Many companies use the word “organic,” but you are “certified organic.” How is that different?

We are proud to have the Ecocert certification. Ecocert is an international entity that has a standard for the definition of what’s considered organic cosmetics.

To get certified, ingredients need to come from renewable resources, manufacturing must be environmentally friendly, packaging must be biodegradable or recyclable so it’s not just about the product, it’s also the packaging and the production of all our ingredients.

Certification, for us, is very important. I could tell you right now that I am Hillary Clinton, but if I don’t show you an I.D., you won’t believe me, right?

That’s why it’s important to be certified.

How are your products tested?

Our products are tested on people because they are made for people.

We have a testing club at Pure Chemistry. Many are from our University and are chemists and physicists as well friends and customers who volunteer to test our products.

People call all the time about being in our new product test group and we pay no one for testing.  This is very important to us so people are honest about the product and their results.

What is your team like?

We are a company of women and everyone has their own expertise.We all have some authority roles over our own specialties but there are no hierarchies here. The business model is a circle. We all support each other.

We have no set schedule. Our team comes to work when they need to – at the time that they need to work. You don’t have to be sitting here doing nothing if, at that time, there is nothing to do. It works very well for us.

Our customers are also an important part of the Pure Chemistry team. Since 2015, many new product ideas have come from clients’ requests. They write to us, send us messages, and we keep a list.

People started requesting, “Please, we need a toothpaste,” and we said, “Let’s work on a toothpaste.”

Others wrote, “Please, we need a product in a size that can go in a carry on bag at the airport,” so we did.

We mean it when we tell our clients, “Your comment, message, suggestion won’t be in vain.”

How hard is it to develop your products?

As a child, you don’t think about having to make money to do this and that.

For me, product development is like that little girl inside me that wants to experiment.

It’s fun, but not easy. It took us almost six years to develop a shampoo to make sure it did not have sodium lauryl sulfate or sodium laureth sulfate, the quickest, fastest, and cheapest way to make shampoo. It took us that long to get a product that would comply with the organic certification and one that you could use on both babies and adults.

We also have to think ahead. When we started developing nail polish, we also needed an organic nail polish remover, one that was also not flammable so it can easily be shipped internationally. Now we have a patent pending water based nail polish remover.

We are always amazed and encouraged when something that we came up with is working for someone. They write things like “I love this product. I love this company. I love you guys.” It’s very heartwarming.

This is what makes me get up in the morning.

It’s creativity with a purpose.

What advice do you have for other women entrepreneurs?

 Don’t just make a business plan and wait. Entrepreneurship shouldn’t stay on paper.

There should be no excuses. Go for it. Be willing to make mistakes. As long as you are clear about where you want to go, there are many ways to get there.  You can make a mistake, you can fall, a million things can happen.

 Examine and redefine your goals as you learn from your mistakes.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

What advice do you have for little girls?

I would tell any little girl or boy, “Start by writing it.” Write about what you want to do, what you dream about.

As years go by, look to see if that was just a kid thing, a whim, or if it was really a dream. As you grow up you forget that as a child you wanted many things, but if you write them down, it will give you something to look back on.

For me, I can say, “Look, I wanted to be a scientist, and I did it!”

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