NicSocks was a side hustle for me. It stayed that way for nearly two years. I was building a consulting firm that was earning me significantly more money but was becoming increasingly more complicated with new partners.
The business began to grow nicely. I focused on expanding our subscriber base. Initially I wanted to meet our customers so I set up a pick-up point in Woodstock, Cape Town.
Every week between 10am and 2pm I would sit at a tea shop with customers’ orders and wait for them to come and pick them up. I’d meet the customers, get an understanding of exactly why they purchased a subscription, who it was for, how they heard about us, what they thought about our socks and so on. It was a fantastic way for me to gain insights into my customer base, but ultimately that kind of engagement is unsustainable as you scale. Our ecommerce sales were really starting to take off.
This was mostly driven by traditional media, if you can believe that. I discovered that the more exposure I received in magazines and on radio and TV shows, the better our website did. There was a direct correlation. So, I started to work my way into as many shows and publications as possible.
I was interviewed on 5FM, 702 and Cape Talk, tons of local radio stations; I appeared on Top Billing and did interviews for countless magazines (online and offline). The Top Billing feature just about made our sales numbers for that year. The incredible response was surprising because I honestly believed that TV was dead. It is not dead in South Africa.
I was getting recognised at the airport when I was travelling within the country. I am a dark skinned, heavily bearded and heavily tattooed man. When people stare at me at the airport I begin to worry. I start to get twitchy. Eventually after a group of people had been staring at me in the check-in queue for about ten minutes I asked them what the hell was up. They kindly explained that they had seen me on Top Billing the week before. I stopped panicking that someone was about to arrest me and decided to bask in the hype for the time being. That TV spot boosted our online sales by more than 200%. Traditional media isn’t dead, it just needs to be used in the right way.
I was desperate to change the status of NicSocks from side hustle to full-time focus, but like many entrepreneurs I was unsure about when to make the full-time leap. There was a very consistent feeling that kept nagging at me. The feeling that I was neglecting the most important thing that I was building. I would be sitting with Resolve Mobile clients in Kenya and sneaking in work on NicSocks.
I would be talking to the biggest mobile networks on the continent and thinking about the customer support request I had left unanswered for too long about how to wash bamboo socks. My focus was always on NicSocks. That was the feeling. That was the indication that it was time to devote my attention to my tiny sock start-up. Even as I write these words, I completely understand how nuts this is. I left a consulting firm that I started and that was paying me a six figure salary to build a sock company in Cape Town.
What could I do? I was dreaming about socks. Surely that’s motivation enough to dedicate your waking hours to your next adventure? My answer to the question ‘When do I focus on my side project?’ is that you focus when you can think of nothing else but your side project.
Raising money again
Raising money for NicSocks.com was the right decision for the business when I started to look for funding. I put my feelers out to my network of investors and high-wealth individuals who might be interested. I met with angel investors and VC funds locally and abroad and realised that there was interest.
This fund-raise was a bit different. The key to raising money this time round was my track record as an entrepreneur, the traction that NicSocks had and the story of how we hustled to build out version 1 of the business. My network played a key role in helping me find the investors I needed. Never underestimate the value of your network.
I’m not talking about your Facebook feed or your LinkedIn connections. These are false networks that make you feel good but don’t have any material effect on your life. I’m talking about the network of people that you groom over many years. People you trust, people who trust you and people who you believe you can call on when you need help, advice or, in my case, funding.
Nurturing this network of people has probably been my single biggest accomplishment over the past 15 years of building businesses. I have made a lot of enemies but I believe that creating enemies has led me to find the people who I would lie in a foxhole with. In my experience, you cannot build a meaningful network if everyone is your buddy. Sometimes you have to break a few connections to create new and more important ones.
Never underestimate the value of the people you surround yourself with and how you treat them. With absolute certainty, I can say that you will need to call on this network as you progress in your life so don’t abuse people, don’t use people, be genuine and offer up value as much as you ask for it.
I wanted to raise funding for NicSocks because I wanted to focus. I was getting increasingly frustrated that I was working part-time on my start-up, and in my experience the way to focus is to raise funding.
After a few months of continued growth and building our customer base and range, a few things started to click into place. Jen, my co-founder and partner was an ever-present force in the growth of NicSocks.com. She kept me focused, kept me on strategy and really helped the business become what it is today. At this stage NicSocks.com was operating out of the spare bedroom in our house in Cape Town. We were both working fiercely to keep up with growth and scale things effectively. We were busting out of the spare room at a rapid rate. Every wall was lined top to bottom with socks. We needed to move out of our house and into a bigger place with more space. We needed more space because we were ordering much more stock for the website and had to start planning for scale and the next phase of the business. Not only were we starting to think about the business but we decided that it was time that we became a couple who works together.
That was a big decision, but one that I think defined the success of the coming years. Without Jen managing operations, NicSocks.com would never have grown the way it did.
The first thing that clicked in relation to funding was a conversation with an old friend of mine, Adii. Adii had just exited his business and was keen to start investing in local start-ups. He and I began discussing what that might look like and how he could be involved.
Adii and I met when I was building my blog, SA Rocks. I had built the site using WordPress (WP) and Adii was quickly establishing himself as a rockstar in the WP community. I approached him cold to see if he’d help me redesign the SA Rocks theme. He and I struck up a relationship that would last over a decade. Adii did not end up building the new theme for SA Rocks but, funnily enough, Adii’s future business partner Mark did help me with the SA Rocks redesign. The two of them would go on to build one of the world’s leading ecommerce platforms, WooCommerce. It’s incredible to me that I met both of these guys more than ten years ago and I’m still great friends with both of them.
It’s incredible how quickly a chance meeting can turn into a ten-year friendship and how those chance meetings help to grow your network.
Adii agreed to become the very first NicSocks investor. I wish it was more complicated than that, but it wasn’t. Adii and I had a good relationship; he knew me as an entrepreneur and trusted that I would do everything I could to turn his initial investment into more money.
My network would again play an integral part in helping me find my next investor for the business.
Danillo is a friend of mine. He’s a fantastic photographer who was starting up his own side hustle ecommerce company. Danillo’s dad Ricky had been to hotel school many years ago and met a guy named Rolf. Rolf had moved from South Africa to Australia and had success investing in, and assisting, an ecommerce company there, so Danillo and Ricky met up with Rolf to talk about their ecommerce project. Rolf did not end up investing in Danillo’s business, but Danillo had mentioned that they were stocking socks from NicSocks.com. Rolf was interested in what I was doing and we were introduced.
I met Rolf for the first time at the Cape Grace Hotel. This kind of investor meeting is my favourite kind. It’s where I shine. I know my business. I know the pressure points, our analytics and have a good memory for numbers and figures that can really show that I am paying attention to my industry, competitors and my own business. After just one tea (Rolf rarely drinks coffee at our meetings) I had cemented a relationship with Rolf that led to him investing in NicSocks.com.
If you’ve ever gone into an investor meeting wondering what you should prepare beforehand, here are some quick-fire tips:
- Know your subject matter. It’s imperative to know what your business is about and to understand the intricacies of what you do and how you do it.
- Understand the competitive landscape. Don’t go into a meeting with a potential investor thinking you’re the only company in the world doing what you do. That’s naive and very rarely true.
- Be honest. You will not have all the answers and the investors don’t expect you to. They expect you to be willing to admit you don’t know and to learn as fast as you can.
- Know what you need. Do you need funding? A network? Dealflow? A mentor? Pick something. If it is funding that you need then it’s probably a good idea to know how much you are looking to raise and what you plan to do with that money. ‘Salaries’ is not a good reason to raise money. ‘Growth’ might be but even this is too broad and vague. Where are you spending the money to grow? How much growth do you need? Is the growth sustainable or backed by the investment? It’s complex so don’t oversimplify this part.
- Do not expect it to go well. The chances of walking away from a first meeting with a handshake deal is probably less than 5%. My meeting with Rolf was an absolutely stunning exception to the rule that you need to have 500 meetings to close a single deal.
The intended use for the money that I raised was for ecommerce growth, product expansion, marketing and hiring of a team. In my experience, it is very rare for money to be used exactly as you plan. The nature of a business is that it’s tumultuous and ever-changing. You have to be able to adapt. Our money would end up being used to open physical retail stores.
Let me ask you a simple question: What are the things that you love about your business? While you think about the answer, let me ask a follow-up question: Do you think that raising funding is going to enhance the things you love, or detract from them? This is a key question that I have learnt to consider after raising money for NicSocks.com, Motribe and StudentWire.
Raising funding changes everything. You think it doesn’t. You hope you’re different. You believe your investors are not like everyone else’s investors. You can hold your breath and believe this stuff until you are blue in the face but you’d probably be wrong and out of breath.
Do you want a slow burn business or a fast growth business? You cannot be both. You can’t take on investment and then decide that you want to take 20 years to give your investors a return on their money. It just doesn’t work like that. Not for most of us, anyway. If you’re Jeff Bezos then maybe you’re different. But even Facebook had to give their investors a return and to do this they listed on the stock exchange.
Raising money is not an achievement. It is not a goal to aspire towards or aim for. Raising money is a strategic move to help you reach your next goal or grow your business or achieve the next milestone. Raising money is not something to be proud of. You might feel like it is. I felt like that each time I’ve raised funding in the past but ultimately when you raise money you enter an entirely different business.
Your business becomes very focused on administration and operations. You focus on returns and managing a board and your investor relationships. At NicSocks.com we instituted a board of directors, formalised our accounting practices, had monthly report back sessions and things became very serious very quickly. I was definitely not prepared for these things, but at the time it all felt right so I ploughed ahead.
Rolf came on board and joined the funding round with Adii. NicSocks was rocking and ready to go. We had some traction in a difficult market and went from selling 4 000 pairs of socks in year one to selling nearly 100 000 in a year. The growth was banging on and we had our sights set on global sock domination! Keep in mind, we’re still just a sock company selling online in South Africa out of the spare room in my house.
Scaleup Learnings From Our Top Clients – What The Most Successful Entrepreneurs Do Right
So, how do our successful clients move through these constraints to scaling up? We see four key drivers of success, and they are: people, strategy, flawless execution and finance.
You’re out of your start-up boots, staff is increasing, your client base is growing, revenue is up and you’ve proven your case to the market. Now it’s time to scale up. The challenges of this vital growth phase are different and it’s a time that demands different mindsets and different actions. In a world littered with small business failures, it helps to be well-prepared for scaling up using a proven methodology. At Outsourced CFO, we get an inside look at the success factors of our clients who are mastering the transition.
On the one hand, scaling up is a really exciting phase; this is what moves you into real job creation and making an impactful contribution to economic growth. On the other hand, it is really hard to scale up successfully. We see three major constraints that limit companies’ transition from start-up to scale-up:
The business has to have the leadership that can take it to the next level. When you start scaling up, especially rapidly, the founders can no longer do everything themselves. The team must grow and include new leadership talent that can take charge and execute so that the founders are working on the business instead of in the business.
The processes, procedures, networks, systems and workflows of the business all need to be scalable. This is imperative when it comes to your infrastructure for the financial management of your business. You’re only ready for growth when your infrastructure can seamlessly keep pace.
Scaling up demands more innovative marketing and storytelling so that you can more easily connect and engage with the new employees, clients, network partners, investors and mentors that need to come along with you on your scale-up journey.
Businesses that build a market conversation and a compelling brand narrative during their start-up phase are better positioned to have this kind of market access when they need to scale up.
It is critical to have the right people on your team. Our successful entrepreneurs have what it takes to attract, inspire and retain top talent. A strong team of smart, ambitious and purpose-driven people who love the company and want to see it succeed contribute greatly to a world class company culture. They are adept at communicating a compelling vision and establishing core values that people can take on. These entrepreneurs are tuned into the aspirations of their people and focus on developing leaders in their teams who can in turn develop more leaders.
It is planning that ensures that the right things are happening at the right times. At successful scale-ups strategies and action plans are devised to ensure that the most important thing always remains the most important thing.
Strategy includes input from all team members and setting of good priorities for the short, medium and long term. Goals are clear and everyone always knows what they are working towards. The needle is continuously moved because 90-day action plans are implemented each quarter to achieve targets and goals that are over and above people doing their daily jobs.
Top entrepreneurs are not just focused on what operations need to achieve, but how the business operates. They have the right procedures, processes and tools in place so that everyone can deliver along the line on the company’s brand promise. Frequent, quick successive meetings ensure the rapid flow of effective communication. Problems are solved without drama. There is no chaos in the office environment. Everyone is empowered to execute flawlessly to an array of consistently happy clients.
Everyone knows that growth burns cash. A rapidly scaling business faces the challenge of needing a scalable financial infrastructure to keep the company healthy. Our successful entrepreneurs pay close attention to finance as the heartbeat of the business, ensuring that everything else functions. They look at the tech they are using for financial management and for the ways that their financial systems can be automated so that they can be brought rapidly to scale. The capital to grow is another vital finance issue.
The best way to finance a business is through paying clients on the shortest possible cash flow cycle. However, when you are scaling up and making heavier investments in the resources you need for growth, it is likely that you will need a workable plan for raising capital. Our scale-up clients know the value of accessing innovative financial management that provides high level services to drive their business growth.
Navigating the scale-up journey of a growing private company is one of the hardest but most rewarding of careers to pursue. Having people in your corner who have been through this journey before helps take a lot of pain out of the process. No growth journey looks the same, but there are tried and tested methods that will – if applied diligently – lead to definite success. Happy scaling!
That Time Jeff Bezos Was The Stupidest Person In The Room
Everyone can benefit from simple advice, no matter who they are.
When you think of Jeff Bezos, a lot of things probably come to your mind.
You likely think of Amazon.com, a company he founded more than twenty years ago, that’s completely disrupted retail and online commerce as we know it. You probably also think of his entrepreneurial genius. Or the immense wealth that he’s built for himself and others. You may also think of drones, Alexa and same-day delivery. Bezos is a visionary, an entrepreneur, a cutthroat competitor and a game changer. He’s unquestionably a very, very smart man. But sometimes, he can be…well…stupid, too.
Like that time back in 1995.
That was when Amazon was just a startup operating from a 2,000 square foot basement in Seattle. During that period, Bezos and most of the handful of employees working for him had other day jobs. They gathered in the office after hours to print and pack up the orders that their fast-growing bookselling site was receiving each day from around the world. It was tough, grueling work.
The company at the time, according to a speech Bezos gave, had no real organisation or distribution. Worse yet, the process of filling orders was physically demanding.
“We were packing on our hands and knees on a hard concrete floor,” Bezos recalled. “I said to the person next to me ‘this packing is killing me! My back hurts, it’s killing my knees’ and the person said ‘yeah, I know what you mean.'”
Bezos, our hero, the entrepreneurial genius, the CEO of a now 600,000-employee company that’s worth around a trillion dollars and one of the richest men in the world today then came up with what he thought was a brilliant idea. “You know what we need,” he said to the employee as they packed boxes together. “What we need is…kneepads!”
The employee (Nicholas Lovejoy, who worked at Amazon for three years before founding his own philanthropic organisation financed by the millions he made from the company’s stock) looked at Bezos like he was — in Bezos’ words — the “stupidest guy in the room.”
“What we need, Jeff,” Lovejoy said, “are a few packing tables.” Duh.
So the next day Bezos – after acknowledging Lovejoy’s brilliance – bought a few inexpensive packing tables. The result? An almost immediate doubling in productivity. In his speech, Bezos said that the story is just one of many examples how Amazon built its customer-centered service culture from the company’s very early days. Perhaps that’s true. Then again, it could mean something else.
It could mean that sometimes, just sometimes, those successful, smart, wealthy and powerful people may not be as brilliant as you may think. Nor do they always have the right answers. Sometimes, just sometimes, they may actually be the stupidest guy in the room. So keep that in mind the next time you’re doing business with an intimidating customer, supplier or partner who appears to know it all. You might be the one with the brilliant idea.
This article was originally posted here on Entrepreneur.com.
How Sureswipe Built Its Identity By Building A Strong Company Culture
Culture is unique to a business, it’s the reason why companies win or lose.
A company’s culture is its identity and personality. Since this is closely linked to its brand and how it wants to be viewed by its employees, customers, competitors and the outside world, culture is critical. The challenge is understanding that culture contains unwritten rules and that certain behaviours that align to the culture the company is nurturing should be valued and cherished more than others.
At Sureswipe, the core of our culture is that we value people and what they are capable of. We particularly value people who are engaged, get on with the job, take initiative, are happy to get stuck in beyond their formal job descriptions, and who sometimes have to suck up a bit of pain to get through a challenge.
We include culture in everything we do, so it’s a fundamental element in our recruitment process. In addition to a skills and experience interview, each candidate undergoes a culture fit in the form of a values interview. We look for top performers who echo our core values (collaboration, courage, taking initiative, fairness and personal responsibility) and have real conviction about making a difference in the lives of independent retailers. If we don’t believe a candidate will be a culture fit, we won’t hire them.
If we make a mistake in the recruitment process, we won’t retain culture killers, even if they are top performers. This is such a tough lesson to learn, but it liberates a company and often improves overall company performance.
Culture should be cultivated, constantly communicated and used when making decisions. At Sureswipe, we often talk about what it takes to win and have simplified winning into three key elements: A simple, yet inspirational vision; the right culture; and a clear and focused strategy. The first and third elements can be copied from organisation to organisation. Culture on the other hand is unique to every business and can be a great influencer in its success.
Catch phrases on the wall are not the definition of culture
A strong culture is purposeful and evolving. It’s what makes a company great, but also exposes its weakness. No company is perfect and it’s important to acknowledge the good and the bad. Without it, we cannot ensure that we are protecting and building on the good and reducing or eradicating the bad.
Mistakes happen. That’s okay. But we are very purposeful about how mistakes are handled. Culturally we’re allergic to things being covered up or deflected and have had great learning moments as individuals and as an organisation when bad news travels fast. It’s liberating to ‘tell it like it is’ and almost always, with a few more minds on the problem at hand, things can be rectified with minimal impact.
Culture should be built on values that resonate with you and that you want to excel at. In our case, some are lived daily and others are aspirational in that we’re still striving for them. In each case we genuinely believe in them and encourage each other to keep living them. This increases the level of trust within the team, as there is consistency in how people are treated and how we get things done.
We are always inspired when, after sitting in our reception area, nine out of ten visitors will comment on the friendliness of staff. We hear their remarks about how friendly the Sureswipe team is or a potential candidate will talk about the high level of energy and positivity they experience throughout the interview process.
These are indicators that our culture is alive and well. It’s these components of our culture — friendliness, helpfulness and positivity — that cascade into how we do business and how we treat our customers and people in general. Being able to describe your culture and support it with real life examples is a great way to communicate and promote the type of behaviour that is important and recognised within the organisation.
Culture doesn’t just happen
We are fortunate that culture has always been important to us, even if it wasn’t clearly defined in our early days. As we grew it became important to be more purposeful in the evolution of our culture. About four years ago, the senior leadership team and nominated cultural or values icons were mandated to relook all things cultural.
A facilitator said to us, “You really love it when people take the initiative, and get very frustrated when they don’t.” That accurate insight became core to our values. We love to see people proactively solve problems, take responsibility for their own growth, initiate spontaneous events, change their tactics or implement new ideas. It energises us and aligns to the way we do business.
We celebrate growth and love to see our staff getting promoted due to their hard work and perseverance. We recently had one of our earliest technicians get promoted to the Regional Manager of Limpopo. It was one of the best moments of 2018.
Be purposeful with culture, describe it, communicate it and use it in all aspects of business. Culture should change. Don’t allow phrases like ‘this is not how we do things,’ or, ‘the culture here is changing,’ to stifle the growth and development of your culture. When done correctly change is a good thing. Culture is driven from the top but at the end of the day it’s a company-wide initiative. Design it together with team members from different parts of the organisation to get the most from it. And then make sure everyone lives and breathes it.
The best ROI is achieved when you stop wasting money.
Peter Drucker once said that businesses have two main functions — marketing and innovation — that produce results. “All the rest are costs.”
If you agree, that means that the average business has a lot of fat to trim. Obviously you can go overboard trying to cut costs too. My philosophy has been to look at some of the general areas where you can add some efficiency but not at the expense of impairing your most valuable resource — your focus.
The following cost-cutting measures will do that. Think of these as adding value to your company, whether it’s time, creativity or a closer connection to your consumers.
Uncover inefficiencies in your process
This is where I begin. In fact, it was analysing the inefficiencies of legal communication and knowledge sharing that led me to create Foxwordy, the digital collaboration platform for lawyers. I noticed that attorneys in our clients’ legal departments were drafting new documents from scratch when they could pool their knowledge and save time by using language that a trusted colleague had employed in a similar document. Business is all about process. When you create a new process, or enhance an existing process, you will drive cost efficiency.
Refine your process, then automate
If existing processes are lacking, it is time to create process. If you have processes, but they are not driving efficiency, it’s time to redefine your process. Either way, a key second step is refining processes that are needed in your business. Only then can you go to automation, since automating without a process will result in chaos — and won’t save time or money. Similarly, automating a poor process is not going to give you the cost-saving results you are looking for.
Thanks to the Cloud, there are very accessible means of automating manual processes. For instance, you can automate bookkeeping functions with FreshBooks and use chatbots to interface with clients — for very basic information. If you’re a retailer, a chatbot on your site can explain your return policy or address other frequently asked questions. Automating such processes allows you to spend more time focusing on clients and customers. Technology alone isn’t a panacea for all business functions, but if you find something you’re doing manually that can be automated, take a look and consider how much time and process definition automation would save you.
Rethink your outreach
Marketing and outreach are usually big and important challenges for an organisation. In my experience, there are two main components to successful marketing — knowing your customers and using the most effective media to spread your message. For the first part, I recommend polling. There are various online survey services that offer an instant read on what your customers are thinking. You may think business is humming along, but a survey could reveal that while consumers like your product, a few tweaks would make it even better.
For the second part — marketing messaging — once you have a firm idea of your marketing messaging, Facebook is a great vehicle for outreach. The ability to granularly target customers and create Lookalike audiences (from around 1 000 consumers) can help grow your business.
Scrutinise your spend history
There are tools that can help you assess spend history and find cost-cutting opportunities. For example, you might be able to take advantage of rewards or loyalty programmes to reduce common business expenses, like travel, or consolidate vendors for a similar function. If you have a long-standing relationship with a vendor, negotiate better pricing.
The most important elements to keep in mind are resources that make your company special. Your company may be built on one person’s reputation and expertise. Guard against tarnishing that reputation with inappropriate messaging in advertising or social media. If your company’s special sauce is intellectual property, protect that too. But everything else — ranging from physical property to salary and benefits — are costs and should be considered negotiable. — Monica Zent
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