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How Matthew Piper And Karidas Tshintsholo Launched Their First Business From Their UCT Dorm Rooms

Matthew Piper and Karidas Tshintsholo launched their first business in their first year at varsity. They found a niche, but they also realised it wasn’t as sustainable as they’d like, or solving a big enough problem. Their next start-up, KHULA, is through its proof of concept phase and proving that two young entrepreneurs can find big solutions for even bigger problems.

Nadine Todd

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Vital Stats

  • Players: Matthew Piper and Karidas Tshintsholo
  • Company: KHULA
  • Launched: 2016
  • Visit: www.khula.co.za 

You don’t always hit your game-changing idea on your first take. In fact, most start-ups look very different after a few pivots and course corrections.

If you have a real sense of purpose however, and know that ultimately you want to build your own company and hopefully change lives in the process, each of those adjustments will bring you closer to a sustainable business.

Matthew Piper and Karidas Tshintsholo (both 24), have learnt these lessons first hand. The business they launched together while studying finance at the University of Cape Town is very different from the business they’re running today, but it’s the lessons they’ve learnt over the past five years that have helped them to bootstrap an 18-month pilot project proving their business model, and find a solution to a systemic problem that will hopefully change hundreds — and eventually thousands and even hundreds of thousands — of lives.

Related: Watch List: 20 SA Tech Entrepreneurs Making It Big In The Industry

University start-ups

Matthew and Karidas launched their first business, Money Tree, from their UCT dorm rooms. “We recognised the realities of South Africa and that financial inclusion is one of the biggest barriers to any kind of growth facing our country,” says Matthew. The business partners met through the Allan Gray Orbis Foundation, for which they had both been selected.

They wanted to start a business that would solve a real, endemic problem. As finance students, financial literacy seemed the best fit.

“We were both studying finance and interested in investing, and the business actually started out as a hobby,” says Karidas. “We wanted to share what we were learning in class and through our own research with anyone who was interested. We started a website and posted videos and content and shared it with other students.”

Once they had the platform up and running, the budding entrepreneurs strategised how they could take it to other universities and high schools. “We wanted to monetise what we were doing instead of just sharing insights,” says Matthew.

“So, we got our friends together and created a group of about 20 students from all over South Africa. Everyone went home for the December holidays, but universities go back a full month after schools. This gave us four weeks to go on a national roadshow, visiting 50 schools, sharing financial literacy lessons with their students and adding them to our network.”

Next, the young entrepreneurs met with a printing house, and convinced them to print a magazine without an upfront payment. “Our plan was to approach financial institutions who would sponsor the magazine, which was aimed at financial literacy for students,” says Karidas.

But, the magazines arrived before the funding came through, and Matthew recalls writing his first exam and returning to boxes of magazines at his door. “We started getting calls from lawyers and people wanting their money, but we didn’t have any funding,” says.

“We needed to go all out,” says Karidas. “We were calling everyone we knew and going to as many events as possible. At one of those events — hosted at the Reserve Bank — we met someone interested in investing in us. He put up our initial capital, which was how we were subsequently able to do more roadshows and build a network of universities and high schools. We ended up with an incredible network of ambassadors and a quarterly magazine, which ran for two years.”

Lessons learnt and changes made

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It wasn’t smooth sailing though. The magazine’s margins were low, and the young entrepreneurs were aware that the concept was a hard sell: Students didn’t have money and the corporates that were able to pay did so from CSI budgets. “CSI initiatives tend to be project-based, and we didn’t want to base our whole business model on them. We knew it wasn’t sustainable,” says Karidas.

Money Tree had also done some business with Government. “We waited 14 months to be paid.”

By that stage, the business partners had moved from Cape Town to Joburg and had dropped out of UCT. They wanted to focus on their business full-time, but they knew the model needed some serious work and adjustments. Although they would start studying part-time again to finish their degrees, they first gave their business their full attention to pivot it.

So, freewheeling everywhere because they couldn’t afford fuel — or food or rent — Matthew and Karidas took their business to pieces and examined it from every angle.

“The first decision we made was that we weren’t going to pursue any more Government projects,” says Matthew. “We wanted to remove the bad stuff from the business and keep the good stuff, and we needed to be brutal about which was which.”

Related: Watch List: 50 Top SA Black Entrepreneurs To Watch

The magazine had to go — it was a lot of work for low margins with no clear revenue model. The ambassador network that Money Tree had built up on the other hand had a lot of value. “We had two ambassadors at almost every university campus across South Africa, including SRC presidents and the heads of societies — all influential people on campus,” says Karidas. “We packaged that network and started approaching banks. Banks were always on campuses trying to speak to students, but they didn’t have our network. We built a relationship with the Banking Association of South Africa with their start saver programme and closed a deal with Old Mutual. We currently run the biggest funding show and education programme across South African universities.”

The deal wasn’t the ultimate game plan, but it brought money into the business, helped the entrepreneurs pay rent and salaries, and gave them the breathing room to start seriously thinking about what they wanted to achieve.

“We started thinking about our long-term play. Financial education is good, but we were still relying on the budgets and current strategies of banks,” says Matthew. “Instead, we started focusing on what had always been our core, and that’s financial inclusion. This is our highest value, and we wanted a business that solves this challenge for South Africans.”

While they were mulling over this problem, Matthew and Karidas secured a spot on an Ennovate programme to Israel. It was on that trip that they were exposed to the fact that Africa has 60% of the world’s arable land, and yet still spends billions importing food.

“There are many inefficiencies in agriculture,” says Matthew, “and yet half of Africa’s population is dependent on small-scale subsistence farming.”

Determined to learn as much as they could, the partners approached Due Crisp to conduct a project in Pretoria. “We’re just finance guys,” says Karidas. “We needed to understand how agriculture works — and we were shocked. When you actually take the time to look at it, the problems are glaring. There are so many emerging farmers in South Africa, and yet they’re excluded from the market. They can’t fill big orders, and so they have no access to market.”

Suddenly, Karidas and Matthew had a problem they could solve — and they knew the solution would be found through technology.

Creating a proof of concept

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“If we’ve learnt one thing about agriculture, it’s that it’s impossible to solve one specific problem — everything is interlinked,” says Matthew. “Our main aim is to give farmers access to market, and we’ve developed a platform and app to help them do just that, but we can’t work in isolation.”

As a result, the entrepreneurs have partnered with the University of Johannesburg and the City Of Joburg and will continue to look for other partners who are as interested in solving this systemic problem as they are.

In the meantime however, they have launched their new business, KHULA, and self-funded and bootstrapped their pilot programme, proving their concept and solution.

“The farmers’ app can be downloaded on any phone that has whatsapp capabilities,” explains Karidas. “Most phones that can be bought for R100 or R200 work, and in our initial research we realised that farmers are pretty tech savvy.”

Related: Student Investor Built Their Business By Burning Their Ships

Farmers go to the app store, download the app and sign up. They then need to provide all their details: Who they are, where they are geolocated, what they grow, and when they expect to harvest different produce. Matthew and Karidas then do a site visit to verify

them and accept them onto the platform.

“Our pilot has been mainly focused on Gauteng and the North West, but we’ve driven 17 hours to Jozini,” says Matthew. “Some of these farms are incredible,” adds Karidas. “One of our farmers in Magaliesburg has this incredible farm in the middle of a dump site. You can’t even believe it’s there. No one knows about them though — which is exactly what we’re trying to solve.”

Through their partnerships, the system has been tweaked and honed throughout the proof of concept phase. “UJ has a farmers’ school that meets every two weeks, and they became our focus group for the app’s beta version,” says Matthew. “We had a focus group of 300 helping us fine-tune the look, feel and usability of the platform.”

The business has also partnered with government. “Government needs data on emerging farmers, but they collect it through extension offices, and it’s often old and irrelevant by the time it’s collated — our data is real-time, so this could make a huge impact to them.”

Key to the success of the platform is the ability to link farmers with customers, which is where KHULA’s key focus has been.

“We have 104 farmers on the platform, and 26 customers, including Rocomama’s, Munching Mongoose and the Michaelangelo,” says Karidas.

The solution is simple: Farmers can click on product and show exactly what they currently have available and what they will be harvesting and when. Customers can then either browse the produce, follow their favourite farmers, or put in orders that farmers can then elect to fill. In some cases, multiple farmers might fill a large order, which is one of the key solutions the aggregated platform offers, giving small-scale farmers access to large customers. In addition, KHULA has one of the biggest organic offerings available, and the platform offers complete transparency.

“Our customers love knowing exactly where their produce is coming from, and the fact that they are supporting small-scale local farmers,” says Matthew. “The entire system is geolocated, so you can put clear parameters in place. If your carbon footprint is important, you can select farmers within a 10km radius for example.”

The platform has also revealed how much high-end produce is locally available. “Elderflowers are niche and typically imported, and yet there are quite a few farmers in Joburg who grow them,” says Karidas. “Through KHULA, there is now supply and demand for this product.”

The market incentivises farmers to update their data weekly because they see orders coming in. “If they don’t update their data they aren’t able to contribute,” says Matthew.

Related: Khula SME Fund

Creating systemic change

During the pilot phase Matthew and Karidas handled packaging and collections and deliveries — going so far as to don jerseys and jackets and turn their Polo into a refrigerator with the aircon cranked up to ensure fresh deliveries.

Today they have partnered with a delivery and logistics service company on an uber-type basis. “Mospa Logistics has 30 trucks, but at any given time, ten are in the parking lot,” says Matthew. “We’ve created an app that triggers a pick-up when needed. The whole system is designed for a just-in-time service for both the farmers and our clients.”

In fact, the entire business is focused on finding solutions — for their clients, farmers, and in streamlining their solutions. “We need to mitigate the risk of non-delivery to ensure our clients are satisfied with the platform. We have had instances where a farmer has disappeared on us and we had to deliver, so we went out onto the network and another farmer in the area could fill the order. It’s important to have a large network to ensure this is possible.”

The solution is also based on a win-win-win model. Farmers, clients and KHULA all need to benefit from the platform. “From our side, we need to provide value. This means giving the farmers access to market, but also providing real value to our clients,” says Matthew.

“We have different types of clients and farmers, and it’s important to classify the produce they offer and are looking for. For example, Rocomamas chops up their jalapenos, so how they taste is far more important than how they look. The Michaelangelo on the other hand requires tomatoes that look perfect, while Spaza Sun is concerned with edible produce that is available at wholesale prices. These gradings and classifications give an added — and valuable — dimension to the platform.”

The pilot project has performed so well that in 2017 a large telco offered to purchase the platform for R5 million, but the entrepreneurs turned them down. “This is our business, and we want to see how far we can take it, and how many lives we can change,” they say.

In fact, the more time they spend in the market, the more solutions they are finding to endemic problems. “Emerging farmers often aren’t bankable because they don’t have track records,” explains Karidas. “Our system tracks everything; we send out invoices, collect payments and make payments to our farmers, which means they have banking records and a guaranteed market. This, in turn, makes them bankable.”

“Our system tracks everything; we send out invoices, collect payments and make payments to our farmers, which means they have banking records and a guaranteed market. This, in turn, makes them bankable.”


Top Tips

  1. There is nothing more important to a start-up’s success than word-of-mouth. Build your network — the more people who know about you and what you’re doing, the more people will share your story. This is particularly true if you’re solving a need. We would also suggest only relying on word-of-mouth at the beginning and not marketing — this will tell you if you’re on the right path. If no one is talking about you, you might need to adjust your business model.
  2. Partnerships lead to more partnerships. Most communities are small; the more you’re doing, the more people will hear about you. Every one of our partnerships grew from a previous partnership.
  3. Start by solving a problem. We didn’t start with an app — we started with an idea. We used paper to record everything and called farmers directly to get them onto our books. We had already traded close to R50 000 before we built the app, and by then we had some experience and knew what the app needed to include.

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

Lessons Learnt

How We Went From 0 To A Million In Sales In 6 Months

It became a numbers game. How Version Eight is winning 2018.

Jandre de Beer

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In November 2018, I left a very cosy position at a flourishing retail company in order to pursue my own destiny. Version Eight was born on 1 February 2018.

Everyone told me starting a business in today’s economic climate will be tough, and boy were they right. However, through a bit of luck, some hard work, and out of the box thinking, we managed to turn over our first million rand in sales within our first six months.

Now, for the record, hitting the seven figure turnover mark in six months is nothing to write home about, and that is certainly not the purpose of this article. The purpose of this article is to share our key ingredient with you so that you can possible achieve the same growth within your business, whether it’s an existing, new or business you are still dreaming about.

So, How Did We Do It?

The answer is quite simple, we did it through digital marketing.

Well, to be honest, not having had capital to spend on our own digital marketing at first, our first few clients were signed through cold calling as mentioned on the Big Small Business Show with Allon Raiz.

Only after signing our first three clients did we have some money to spend on online marketing services like Google Ads.

In Aug 2017, I wrote an article on this very website named “Beginners Guide to Digital Marketing in South Africa”. In the article I talked about the four fundamental pillars and how they form part of an effective digital marketing strategy.

We only incorporated three of the pillars, as one of them was more aimed at B2C businesses, and being an digital advertising agency meant we were B2B driven.

Related: There Is No Silencing The ‘Chatter’ Bots

1. Search Engine Marketing

If you read the guide, you will notice that search engine marketing was the number one pillar on the list, and with good reason.

In a nutshell, we knew that 90% of all online sales and enquiries started with a search engine and that is why it’s something we started implementing as soon as we could. In the beginning organic traffic was slow, so we spent a very small amount on search engine ads.

Having the knowledge and understanding how Google AdWords work, I strategically bid on keywords that indicated that someone was looking for digital marketing help.

We made sure to find keywords that got a decent amount of searches per month but didn’t have a lot of competition, and yes, these kind of keywords do exist, you just need to know how to find them. This meant that we ended up paying very little for leads that enquired about online marketing services.

2. Social Media Marketing

Next up was to start working on a social media strategy.

Again, not having had a lot of cash floating around, we thought LinkedIn would be the best place to start. The professional network is amazing for connecting with potential prospects and that is exactly what we did.

By connecting with the right people, being active on the platform and sharing knowledge on a weekly basis, it was only a matter of time before we started getting private messages of people and companies looking for digital marketing services.  Not to mention, this strategy was completely free.

3. Email Marketing

social-media-planAnother pillar I mentioned in the guide was email marketing. After cold calling prospects and finding the emails of key decision makers it became a numbers game. We knew that no one would know who we are and therefore we had to provide some form of value up front if we wanted to build some credibility.

Soon after we launched we created a Social Media Advertising Guide and all it was a 90 page PDF and 40 min video talking about social media advertising and how one can go about advertising on all the different platforms.

You can download our amended 2019 Social Media Ad Guide Here for Free.

As expected most recipients found it interesting but didn’t feel the need for our services, however, for every 50 people emailed, 21 would reply. And out of every 21 replies we about 1-2 meetings. Like I said, it became a numbers game.

Related: How Blockchain Will Disturb The E-Commerce Industry In The Next Few Years

WRAPPING IT UP

As mentioned earlier in the article, we did not end up using all four pillar (SMS Marketing), however, we’ve had great success with the above three.

In six months we did over a million rand in sales, and by the grace of God we are still growing, and you can too! I truly hope this article has opened up your mind to the power of digital marketing and if used correctly, and consistently, it can most definitely change your business for the better.

I do understand that not everyone is a digital marketing wiz, and for those I want to say, read, learn and experiment with online marketing as much as you can.

For those interested I would recommend doing a digital marketing course. Not only is it affordable, but it will allow you to scale your business.

Make sure to visit the Digital School of Marketing if you want to learn more about some of the best and accredited digital marketing courses around.

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Lessons Learnt

Blood, Sweat And Tears – The Journey To Becoming Emerging Entrepreneur Of The Year®

You see the awards, the magazine features and the highlight posts on social media. But building a successful business from the ground up is a really tough journey behind the scenes. Outsourced CFO co-founder Louw Barnardt opens up to Entrepreneur Magazine about what it actually takes.

Louw Barnardt

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I can tell you about all the exciting successes. I can mention things like two to twenty-six professional staff in under five years, more than R500 million in growth funds raised for SMEs, some notable awards and many other things that make the headlines. This is a part of the story and we do try to stop and celebrate the successes as we go…

What I would rather share with you are the trials and tribulations, the challenges and heartaches of the process of building a company. It is in this trail by fire that one learns the most about being a good entrepreneur. The most challenging of times often determine your path and hold the best lessons.

Blood

For me, blood represents the big losses. Bleeding financially is definitely a part of the journey. Very few companies have started up without some months or years of bootstrapping, of keeping it lean. For us, that meant continuing on articles salaries for more than a year after we had qualified. It took years to get to and exceed market salaries. This has been a painful sacrifice, but one that all founders need to make in order to get out of the rat race. Live a few years like no-one would so that you can live the rest of your life like no-one else can.

Relationships are also often counted among the losses. Many a time we have invested a lot into a staff member only to see them jump for a better deal. Many times people close to you try to steal ideas or copy direction. It hurts, but it has definitely been a reality.

Sweat

Sweat represents hard work. Outsourced CFO was built on many long hours of hard, focused work. We’ve made this fun by working from coffee shops on weekends or from the beach for a day. But hard work has definitely been a part of getting things to where they are today. Nothing worth building is easy. Don’t start a business if you want to work less!

Sweat also means stretching. Coming from a finance background, there are dozens of core skills that you need to teach yourself in order to be successful at business. Sales, marketing, public speaking, networking, people management, technology. It is a process of continuously stretching your mind and your abilities. Treat learning like a superpower!

Related: Seven SA Star Entrepreneurs Recognised At Premier Competition

Tears

Tears just refer to literal tears. I have yet to meet an established founder who has never come home after a ridiculously tough day to a good cry in the dark. The journey has massive emotional asks. Disappointment, rejection, temporary defeat (which feels like failure in the moment) and other experiences are a part of the game. You have to learn how to dust yourself off, refocus and keep moving forward. But sometimes it’s okay to just shed that tear. Heaven knows I have.

Fate has a cruel sense of humour

entrepreneur-of-the-year

The funny thing is that our biggest successes have very often been followed in quick succession with our biggest disappointments. The week we received the Premier’s award as one of the top two Emerging Companies in the province is the same week we had to postpone paying our own salaries. The month I came back from honeymoon early in our second year of business is the same quiet April that we had to seriously consider if we should continue with business. The list goes on! Business teaches you in a very real way to hold both the extremely high and extremely low moments at the same time.

Pivotal moments and the grind

In every young company’s story there are pivotal moments. Things that happen that change the game. I’ll share two of ours with you. At the end of the very April month mentioned above, we won the contract to become the national financial service providers to Microsoft’s BizSparks Program, allowing us to work with the top 10% of a pool of one thousand tech start-ups being incubated by Microsoft. This set us on a course to become the leading authority in the country on finance for tech start-ups.

Another such moment was the Fundraising Readiness Program that we ran with Investec, where we helped over a dozen private companies prepare for and pitch for growth capital. The brand association and fundraising processes that came from this also changed our trajectory. These pivotal moments change your game – but don’t take anything away from the weeks and months of hard grind in between them.

Entrepreneurship is a team sport

No great company has ever been built by one person. It takes a village to build a business. I have been blessed with two co-founders that I have been friends with for over a decade. Their work and support as well as that of our team (which include my sister Dore too) has been the secret sauce to our success. Don’t try to go it alone. Surround yourself with likeminded people who share in and contribute to your vision.

In summary

The road to building a successful company is a steep and rocky one. It is scattered with high mountains as deep valleys. You will need patience, dedication, willingness to sacrifice and a sincerely, fierce belief in your vision for the road. But if your why is big enough, you can get up every morning and make that dream a reality!

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Lessons Learnt

SA Entrepreneur Takes First-Of-Its Kind Business To An International Level

Jo Farah shares some insights on his entrepreneurial journey as Global Entrepreneurship Week (GEW) gets underway.

Entrepreneur

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South African-born entrepreneur and creator of the world’s first environmentally friendly sneaker care product – Jo Farah says entrepreneurship has always been part of his DNA, and making a valuable contribution to society his ultimate goal.

The founder of Sneaker LAB – an innovative business that’s managed to create a first-of-its-kind, biodegradable sneaker care product, delivered his sentiments on entrepreneurship and his entrepreneurial journey as Global Entrepreneurship Week (GEW) kicked-off in 170 countries around the world this week.

Farah, who’s been mentored and groomed by his entrepreneur father, says developing a successful business has always been part of his life’s plan. And while he managed to establish a few start-ups during his entrepreneurial journey, which includes founding a guerrilla marketing agency in South Africa, and producing ads for the likes of Adidas, New Balance and Puma it still wasn’t enough.

After returning from the United States in 2008 with just one thing on his mind – to help cure South Africa’s conundrum by creating jobs for the unemployed, and in-turn fostering economic growth, Jo invented a one-of-a-kind sneaker care product, and put shoulder to the wheel to establish his business in 2013.

Related: How Lorenzo Escobal Bootstrapped His Way To Competing With Titans And Attracting Top-Tier Clients

sneaker-lab-founder-jo-farahStarting a sneaker care product range was a natural choice, especially considering Jo’s passion for sneakers, street wear and urban culture. He also wanted to create a complimentary product to accompany the list of sneaker brands that has inspired him over time. Jo’s work behind the scenes commenced in earnest and in no time he conducted enough research to support his theory – there was a gap in the market for branded sneaker care products. He knew that he was on a good wicket.

“There already was a range of non-branded products on the market, but my research revealed there was a healthy appetite for branded, environmentally friendly sneaker care products. That spoke directly to my business model,” he says.

Today, Sneaker LAB has placed Cape Town on the map with its premium global status – it’s the only sneaker care product range in the world to be Green TAG certified, environmentally friendly and biotech driven. Its products are water-based, readily biodegradable, and the packaging is suitable for recycling. The business also operates internationally, in 50 countries across Africa, with an experiential brand store in Braamfontein Johannesburg; as well as downtown Los Angeles in the USA; Asia and Europe.  The business is growing by the day, with a store in Tokyo set to open soon.

As an entrepreneur he’s grown in leaps and bounds, and despite many changes along the way, his sentiments on entrepreneurship remain.

“Inspiring potential entrepreneurs to develop an entrepreneurial mindset and embark on an entrepreneurial journey is one way of solving some of the world’s most critical problems, and freeing the economically marginalised,” Jo says.

Related: Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

He urges young aspiring entrepreneurs with an entrepreneurial mindset to take the plunge and to channel time and energy into developing their business ideas into something tangible and workable that could generate good long-term financial returns.

“People will tell you that it can’t be done, but believe me, it can. All you have to do is to believe in your idea and to work hard and smart and you’ll reap the benefits,” Jo says.

 

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