- Players: Nadir Khamissa and Shaazim Khamissa
- Company: Hello Group (includes Hello Mobile, Hello Distribution and Hello Paisa)
- Est: 2005
- Seed capital: R6 million quickly turned into R30 000
- Growth: Hello Mobile: 718% turnover growth from 2010 to 2015 ; Hello Paisa: 1100% from March to October 2015
- Visit: hellogroup.co.za
Creative destruction. That’s the cornerstone of everything Hello Group’s founders, brothers Nadir Khamissa and Shaazim Khamissa do. It’s how they’ve disrupted international calling, telecom distribution, money transfer and low cost banking across Africa and Asia.
It hasn’t been easy. R6 million in seed capital quickly turned into R30 000 after some early – and very costly – mistakes. But they persevered, and today Hello Group is changing lives at the base of the income pyramid, and the founders are having the time of their lives doing it.
“What do you want to be when you grow up?” We were all asked this at some point, and no doubt most of us have asked a child the same question. But the world is changing, and today, we ask: “What problem do you want to solve?”
That’s how Nadir Khamissa and his brother Shaazim Khamissa have approached entrepreneurship. It took them a while to get it right. Nadir has lost his life savings twice, but that hasn’t slowed him down.
In 2015 the brothers were named Innovator of the Year and the Medium Business Entrepreneur of the Year at the Sanlam/Business Partners Entrepreneur of the Year Awards. Next they nabbed the coveted EY Southern Africa World Entrepreneur Award 2015 in the Exceptional Category.
Hello Group is clearly doing something right, and it’s happening at the base of the income pyramid, that elusive market that so many businesses try — and fail — to access. So how are the Khamissa brothers doing it? The base of the pyramid is a huge potential market, but the economics of tapping into it are tricky. You need a price point that’s accessible for low income earners, but still turns a profit for the business. It’s all about low margins and high volumes.
The solution wasn’t immediate. It took time, a lot of hard work, and some tough lessons. Emblazoned on a wall at Hello Group’s offices is the Eric Reis quote:
“The only way to win is to learn faster than anyone else.” And that’s exactly what they’ve done.
Lesson 1: Never buy something you can’t afford
Nadir Khamissa loves numbers and the adrenalin associated with risk – high-risk deals, tackling new challenges head-on, being first movers in untapped, untried and untested markets. Shaazim is a coder; the tech backbone of the business. It’s why the brothers work so well together. Nadir is willing to dream big. Shaazim lays the tech foundations to make those dreams a reality.
Dreaming big is a major prerequisite for entrepreneurial success — especially for the business scope that Nadir and Shaazim have envisioned. But it can also land you in hot water, as Nadir discovered when he was 19 years old. “I was studying actuarial science when I discovered trading,” he says. It was 1998, markets were booming, and young Nadir had one goal: To buy a brand-new BMW M3.
“I borrowed R10 000 from my dad and started trading. I thought I was too smart to make a mistake.” For a while he was right. Everything he bought kept going up. He stopped going to university, read everything on trading that he could get his hands on, and in six months turned that initial R10 000 into R250 000. Forget the BMW; his new goal was a Porsche 911. His broker thought he was a prodigy and gave him a big credit line.
“The problem was that I had confused brains with a bull market. It had nothing to do with me.” There was an even bigger problem though. Nadir traded on leverage, which meant he had a line of credit with which to purchase stocks, and he only had to pay for them within seven days. For months everything he bought went up, so he’d already made a profit by the time he had to pay for the initial stocks. And then he made a costly mistake.
“I had read that Parmalat was going to buy Premier Foods. The announcement was imminent, and stocks were projected to rise by 30% to 40%. I bet the house on the deal: R1,5 million on leverage. Then Parmalat pulled out, stocks plummeted and I went from flush with cash, to R16 000 in debt. I was devastated.
“My dad paid the debt, but only after he made sure I’d learnt the most valuable lesson of my life: Never buy something you can’t afford.” This lesson still drives Hello Group’s financial strategy.
“We’ve learnt to focus on cash flow first. A positive cash flow stream means you’re never over-invested in a new idea or business division and it’s an excellent indicator of whether you’re adding value to your target market. If people are willing to pay for your product, you’re on the right track. Cash in the bank should always be your goal. If that’s not happening, something is wrong with your value chain.”
Lesson 2: Always start with a MVP
Ten years ago a revolutionary new technology hit the market: VoIP meant that you could convert an analogue phone signal into a digital signal, provided you had a switch to do so. Digital is much cheaper than analogue, which meant international phone calls across a VoIP line were a game-changer.
At the time, Nadir was working as a derivatives trader at Deutsche Bank in London, and Shaazim was finishing an accounting degree in South Africa. They were both searching for an entrepreneurial opportunity. For Nadir, this was it.
“I saw so many people constantly queuing at payphones in South Africa. The user experience of public phones is awful, but there was a bigger opportunity: Most of those calls were low-income workers phoning family in other countries. It was expensive, and we thought that we could offer a cheaper alternative.”
With his savings, Nadir purchased a switch and set it up in London, where regulations governing telcos were more amenable for new market entrants. He also reached out to a lawyer at local law firm, Safiyya Petel at Sonnenbergs, to assist him pro bono in securing a South African telco licence.
The business idea was relatively simple: The user would buy a call card, put it into a payphone, and dial a South African number. An automated response would ask the caller to hang up. The switch in London would then phone the caller back, ask them to enter a pin code and the destination number and connect the call.
On paper, it was perfect. But, there were problems. Nadir and Shaazim had tied themselves to a payphone by basing the entire business idea around a payphone calling card and it didn’t work.
“On the night we launched, we did a final test. We stopped at a payphone at a garage in Johannesburg and dialled the number. The automated response answered and asked us to hang up. Then the phone rang. It worked! We entered our pin and the number we wanted to connect to…. And then nothing. No connecting call, no additional prompts, just… nothing. It didn’t work.”
What the brothers were not aware of was that while they were getting their business off the ground, perfecting the tech and printing thousands of fliers, Telkom had changed the way public payphones operated, and this destroyed their business model in one swoop.
“We thought we were going to be millionaires. Instead, our very expensive switch became a large paperweight in a matter of minutes, and I lost 90% of my savings.”
It was a hard blow, but Nadir says it was also the best thing that ever happened to them in business.
“We learnt the value of a Minimum Viable Product (MVP) then and there. Today our balance sheet is very different, but we still don’t invest in any new ideas unless we’ve tested them. Create an MVP and make sure your hypothesis is correct. If it’s not, tweak it until it is. MVPs allow you to keep refining an idea without betting the farm on whether your first idea is right — because it seldom is.”
The failure also helped the brothers to distil what it was they wanted to do. “We’d been so excited about the tech and its possibilities that we’d missed a crucial step: Who were we? What did we want the business to be? What problem were we going to solve? And what kind of business could we create based on those answers?”
Lesson 3: Create a partnership where everyone benefits
So what do you do when your first business idea is a failure and you’ve lost all of your money? Go back to the drawing board.
“We needed to make sure we created value, differentiated ourselves and knew why people would buy our product,” says Shaazim. “This meant challenging all of our own ideas and making sure that only the best survived. It’s a process we still follow today and is part of our DNA.”
It’s not an easy process. You need to be able to critically evaluate your own ideas, admit when they’re flawed, listen to other people’s opinions and move on quickly when something isn’t quite right.
When Nadir and Shaazim started from scratch, the user experience of a payphone was poor, and the call back didn’t work. A solution was combining VoIP with GSM or cellular networks. An added bonus to using a WASP (Wireless Application Service Provider) was that you received a rebate every time the number was called. This meant a double revenue stream, and allowed the brothers to keep the call fee as cheap as possible for the user.
While Shaazim worked on the tech, Nadir focused on getting infrastructure in place. He sold his car for working capital, and started looking for a partner with functioning servers and links. A small business owner in Port Shepstone was identified and persuaded to allow them to use his infrastructure on a per minute fee with no fixed opex or capex.
“The idea was to test the product and generate cash quickly to start carrying the costs, so we looked for the low hanging fruit — a target market that we could tap into quickly to prove the tech and generate cash flow,” says Nadir.
What they found was the China Mall. “We had to be there at dawn, handing out fliers,” he recalls. “Our market was illegal immigrants who arrived early and were gone before the cops arrived. We knew they’d want to call home, but money was tight.”
They were right — growth was explosive. And then the cellular network decided to cut them off. “The WASP was the intermediary between us and the mobile network, and he told us he’d been instructed by the network to switch us off. It was massively anti-competitive, but South African telco regulation was in its infancy and could not prevent this from happening.”
Nadir and Shaazim scrambled for a solution. While Shaazim started switching the tech to a different network, Nadir convinced the WASP to give them the weekend before pulling the plug. They used the time well. “We recorded an automated message asking customers to dial a new access number,” says Nadir.
“All prompts on the new number were recorded in Mandarin Chinese,” laughs Nadir. “Because no-one at the network could speak Mandarin, they didn’t immediately realise what we were up to, which gave us the time to approach Cell C and negotiate a partnership.”
Nadir’s pitch was simple and straightforward: Cell C would benefit from their exposure to new markets at the base of the pyramid if they let the brothers plug into their network and collected a small fee on a very large volume of calls. Cell C agreed. “It was a game changer for us. There was no more subterfuge or worrying. We had a fixed Cell C access number with longevity, and we could focus on real growth.”
Lesson 4: Creative destruction, the cornerstone of growth
“I believe in creative destruction,” says Nadir. “An entrepreneur needs to constantly think of ways to kill their own business, because if they don’t someone else will. There is always something — a new product, service or innovation — that could destroy your current model. The trick is to be the first to spot it, and then to implement the change that would have been your downfall if you weren’t the one doing it.”
“In our case, the answer was one stage dialling,” agrees Shaazim. “At that stage, customers had to dial twice, our number and then the number they wanted to connect to. We always put the user experience top of mind: What’s the simplest, most affordable solution out there? That’s what people care about: cost and ease of use.”
The business needed a single-dialling solution, and so Nadir went back to Cell C with a new proposal: A single Hello Mobile branded SIM card that operated exclusively on the Cell C network. Local calls would be routed through Cell C, and international calls digitally through Hello Mobile’s system. While the background was tech-heavy and complicated, for the user it couldn’t have been simpler. In 2010 Hello Mobile SIM cards started hitting the market, with growth skyrocketing due to the single dial solution.
Lesson 5: Find solutions that suit your target market
Hello Mobile quickly grew to the point where the business needed a distributor. But when you’re targeting the base of the pyramid, price is always an issue. “We weren’t distributors so our first solution was to start negotiating with a large distributor that already had a distribution network. But the price point was unviable. We couldn’t pay them their asking price and still keep the product affordable for our consumer base,” says Nadir. The only solution was to do their own distribution, but they had to get it right.
“Adding value had become our mantra,” says Shaazim. “We weren’t going to launch Hello Distribution unless we could use the new division to actively add value to our market.”
What did that mean? “We had to ask ourselves what we wanted to achieve, and what our barriers were to getting it done. We had to evaluate the end consumer, but also who they would be buying from. Where should vendors be located? What hours were most convenient for our buyers? And where were they most comfortable?
“As we answered these questions, a pattern emerged. Vendors needed to be based in rural villages, townships and informal settlements and CBDs. They needed to trade before and after normal working hours, giving people enough time to buy Hello Mobile’s products, and be situated where typical base of the pyramid buyers were comfortable.” In other words, Nadir and Shaazim needed to form partnerships with Spaza shop owners and street vendors.
“The next question was: How could we add value to the vendors?” If we cared about adding real value for customers, we should do the same for vendors who would become our distribution channel.”
The answer was simple. Recruit people from within the targeted communities to become the sales people and account managers for vendors. “Our vision and philosophy is to maximise revenue for merchants. We needed to find a way to help them convert their time into money.”
Hello Distribution offers a business in a box which functions as Hello Mobile’s starter pack, including branding and simple accounting and payment solutions. “If you step into an informal settlement, you see us, Dstv and Coca-Cola; we’re the dominant brands,” says Nadir.
Creating and fostering strong relationships on the ground makes it easy for vendors to sell Hello Mobile goods for a profit, and for end users to access the products easily at times and in areas that suit them. Hello Distribution’s army of street vendors currently earn R30 million per annum in commissions.
“Our top seller went from unemployed to making R30 000 a month,” says Nadir. “That’s what we’re trying to achieve — a way to service our market by creating additional value along the entire supply chain.”
Lesson 6: Always ask ‘what else can we do for you?’
A widespread distribution channel to informal markets created a new challenge: How to pay commissions? “Business boomed, but we’d spend hours each week counting cash into hundreds of envelopes that then needed to be hand delivered,” says Nadir.
So Shaazim got to work building a mobile wallet for Hello Distribution’s vendors. “This sparked an idea, and we went back to the market and asked our customers what other problems we could solve,” says Nadir.
“Once you’re a trusted brand that delivers on its promises, your consumers are more comfortable sharing their challenges with you — particularly those they will pay you to solve.”
As it turned out, transferring money home was almost impossible. “Southern Africa is the most expensive money transfer jurisdiction in the world,” says Nadir. “This dramatically affects the poorest of the poor. We spent two years talking to the South African Reserve Bank (SARB), World Bank and other global organisations, which wanted to see costs declining and low value money transfers being regulated.”
The solution, Hello Paisa, has been a collaborative effort by the SARB, which has designed a strategy to facilitate low value remittances, and the Hello Group, which secured a Financial Services Board licence and created a high-tech solution to bridge technological innovation with rural and informal markets. It’s a game changer.
“This is the solution we’re most excited about,” says Nadir. “If we hadn’t built Hello Mobile and Hello Distribution, we wouldn’t have the capital, on-the-ground know-how and tech platforms to design a solution that’s going to change lives on a global scale.”
Today, Hello Paisa can facilitate an international money transaction from a spaza shop in rural Eastern Cape to a rural village in Ethiopia in 2,8 seconds. “Of the $550 billion annual transfers, $40 billion occur in Africa, at an average transaction fee of 12%. Our aim was to reduce that price by a factor of three and still be profitable. At the base of the pyramid it’s a numbers game; low margins and many small transactions, so scale is important.”
Nadir and Shaazim Khamissa recognise that Africa is not the only continent that needs this type of solution. Millions of migrant workers and immigrants around the world work in one country and send money home to another. They created a global solution for a global problem, and are disrupting a 200-year-old business model in the process. Watch this space.
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.
- 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.
“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
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?
“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.
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.”
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.
This article originally appeared on FedEx Blog.
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.
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.
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!”
Communication Skills To Succeed In Business
Article by Nicky Lowe, Wits Plus Lecturer in Business Communication.
A Scientific American blog about the role of luck in success mentions the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur and argues that we can learn to be successful by reading about successful people:
There is a deep underlying assumption, however, that we can learn from them because it’s their personal characteristics – such as talent, skill, mental toughness, hard work, tenacity, optimism, growth mindset, and emotional intelligence – that got them where they are today. This assumption doesn’t only underlie success magazines, but also how we distribute resources in society, from work opportunities to fame to government grants to public policy decisions. We tend to give out resources to those who have a past history of success, and tend to ignore those who have been unsuccessful, assuming that the most successful are also the most competent.
While not discounting the role that luck, or family inheritance and reputation might have in success, consider the massive role that good communication skills play in success. For example, if you cannot express yourself well, your proposal will be unsuccessful. If your business plan is full of grammar errors, then even if the financials add up, and you can show a past history of success, you are less likely to get the funding you’re after.
There are many daily examples where stronger communication skills would have made the difference between success and failure. If a junior data processor bypasses her line manager to ask another manager for help with entering a batch of data in a different format, but is not clear about the batch names, she is unlikely to be successful in getting her job done. Jumping ranks will not go down well in corporate hierarchies, for starters. Moreover, if she lacks the corporate know-how to avoid this faux pas once, she is likely to blunder several times, thus generating the impression that she is disloyal to her own line manager and not a valued team-player. On the other hand, the lack of clarity in her emails can very effectively be overcome by improving her business communication skills.
Effective business emails need to be short and to the point, with very specific detail, especially if a request or instruction is given. The reader cannot be expected to do anything if they do not know what is actually being requested. It may be a simple case of giving the label names of the data batches, as in this example, but often managers grumble about staff being incompetent or lazy when the problem is their own poor communication skills and inability to use email effectively.
The best part of this solution is that it does not rely on luck. We all have the innate ability to improve our own communication skills. For those who want to improve their communication skills mindfully, there are short courses that take only a few hours a week for a couple of months that will give them insights into well researched theories and techniques so that they can apply these strategically in their personal and professional lives.
In the reading about luck, talent is defined as “whatever set of personal characteristics allow a person to exploit lucky opportunities” and talent includes “intelligence, skill, motivation, determination, creative thinking, emotional intelligence”. These skills are highlighted in the Wits Plus Effective Business Communication short course to equip our students to make the most of opportunities. Studies have shown that the most talented people are not the most successful in life, but that luck and opportunity may play an unseen role in that success. Excellent communication skills are key to making the most of opportunities and breaking through to success!
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