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6 Lessons The Founders Of iKhokha Used To Launch An African Fintech Start-up

Local start-up iKhokha now has a secure foothold in a tough industry, but getting there wasn’t easy. Launching a fintech company in a country like South Africa brings with it a unique set of challenges. Here are the founders’ lessons and tips for building a business in Africa.

GG van Rooyen

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ikhokha

Vital Stats

  • Players: Matt Putman, Ramsay Daly and Clive Putman
  • Company: iKhokha
  • Founded: 2012
  • Visit: www.ikhokha.com
  • About: iKhokha is for anyone needing to accept debit and credit card payments from home, work or even on the go. The service can be accessed through a dedicated iKhokha device and smartphone. The company recently also started offering cash advances to entrepreneurs who make regular use of iKhokha.

As a fintech start-up operating in South Africa, iKhokha has climbed a mountain. It has had to devise a prototype of a complex device, navigate stiff regulation, raise money for growth, and educate potential customers on its offering. It was not an easy journey, but the company is now in a good position.

Not only has iKhokha secured substantial funding, but it has also partnered with significant brands such as MasterCard and Game (Massmart). How did it get there? These are the lessons that the founders learnt while launching a fintech start-up in Africa.

Related: How Fintech Zoona Is Solving Customers’ Real Problems

1Look global, think local

Looking for a business idea? It’s never a bad strategy to try and find international ideas that can be brought to South Africa. The founders of iKhokha came up with the idea for a local point-of-sale (POS) solution when they saw Square in the United States.

Even though South Africa and the United States are two very different markets, an American idea can be transplanted successfully to Africa. However, it’s important to remember that each territory offers its own opportunities and challenges.

A fintech start-up in the US often faces intense competition, but it benefits from greater access to investment and a much larger potential market.

2Size of the market

matt-putman-ramsay-daly-and-clive-putman

Compared to many overseas markets, South Africa is fairly small. It’s important to keep this in mind when launching your business. What does your business model look like? What sort of scale do you need? Also, what’s it going to cost you to acquire each new customer?

“You have to remember that in a smaller market like South Africa, the cost of customer acquisition is going to be higher. You can’t compare it with the United States. You are going to work harder and pay more to sign up users,” says iKhokha marketing director Ramsay Daly.

Related: How To Accelerate Your Fintech Start-up

3Local regulations

Local regulations can complicate a business idea. For instance, iKhokha must deal with the Financial Intelligence Centre Act (FICA). Each new customer must go through the FICA process, and while this isn’t an insurmountable hurdle, it does add a layer of complexity to the business.

When launching a company, especially a fintech one, it’s important to consider the regulations involved.

4Can you build a prototype?

Co-founder Clive Putman had a background in engineering and technology, which helped a lot when the first iKhokha prototype was built, but even with this advantage, getting it done wasn’t easy.

“Don’t underestimate the time and money you’ll need to invest when creating a protoype. Chances are, it will take much longer and cost much more than you initially thought,” says iKhokha managing director Matt Putman.

“Also, think about the long-term. How do you scale things? How do you produce 10 000 of these devices at a reasonable cost? Don’t develop the technology yourself if it is already available.”

5Getting funded

“Finding an investor is never easy,” says Matt. “In our experience, both seed funding and growth funding are available, but there is a big gap between the two. So, it can be hard to find the money necessary to scale your business. Be careful of the terms.

“Don’t give away equity cheaply just before you take the business to the next level. Make sure you find a partner who wants your business to grow and succeed. We were lucky enough to join up with Capital Eye Investments, which was interested in a long-term partnership.”

Related: South Africa Is Becoming Africa’s Fintech Hub

6Partnerships are important

When you’re a new company, gaining the trust (and business) of customers isn’t easy. When you’re a fintech start-up that wants to process transactions, it can be especially difficult. So, how do you win the trust of potential customers?

“Education is important. You need to explain your offering to customers, and also show them the benefits of using it,” says Matt.

“Another way you can improve your credibility is through partnerships. We partnered with MasterCard and Massmart, with our devices being sold through Game stores.

“By aligning ourselves with brands that people know and respect, we show that we can be trusted. Of course, it can be hard to establish these partnerships when you’re a new start-up, but don’t assume that larger companies won’t be interested in you. Know your own value and have the courage to approach established businesses.”


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Launching a fintech business in South Africa is not at all like launching it in a tech-hub such as Silicon Valley. There is less competition, sure, but there are also fewer opportunities. 

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Lessons Learnt

Here’s What Jeff Bezos Prefers To Work-Life Balance And Why You Should Live By It

Work-life balance naively suggests working and non-working hours should be evenly apportioned.

John Boitnott

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Amazon is known for building a culture that values hard work. So much so that the organisation has received criticism from current and former employees for having to work on Thanksgiving, or even when ill.

When asked about Amazon’s work-life balance, Jeff Bezos remarked that he ascribed to the phrase “work-life harmony” instead.

Here’s how hard-charging businesspeople can maintain energy at home and at work without burning out by finding work-life harmony in place of work-life balance.

Measure work and home focus as a matter of energy instead of time

It isn’t about how many hours you spend at home or at work; it’s about the energy you bring to both parts of your life. If you enjoy working long hours, and that helps you to feel present while at home, then by all means continue.

This is a fundamental principle in Bezos’s theory of dividing one’s time between work and life. Because Bezos loves what he does, he finds energy from accomplishing his work in a manner that works well with his notoriously high standards.

As many can attest, our emotions bleed into all areas of our life. When you can gain energy from doing good work, it can help to propel you to be more successful in your life outside of work. Conversely, when things aren’t right at home, it can be difficult to find the energy to do your best work in the office. A central precept of work-life harmony is living such that both the professional and personal aspects of our life energise us to be our best at home and in the office.

This does not necessarily mean that we should spend our time in a balanced way, as the phrase “work-life balance” implies. Rather, we should spend our time in such a way that we are our best selves. In so doing, we will be better people on the whole.

Related: Jeff Bezos: 9 Remarkable Choices That Shaped The Richest Man In The World

Build a flexible work-life schedule

Just as different people will amass different levels of energy from work and life outside of work, different people will find they are most productive at different times of the day. The 9-5 work culture that has existed for decades is really shifting now. Most modern offices allow some form of flexible work, which means you have the ability to set your own hours to some degree.

Experiment with working at different times of the day to find the schedule the helps you to be most productive. In so doing, you’ll have more time to do your best work, and more energy to spend with loved ones as a result of increased productivity.

Know when to say “no”

We tend to think that taking on as many projects as possible is a sign of a good professional. But being busy is not the same as making an impact. To do your best work, you’ll need to prioritise projects that you know you can add value to.

Spinning your wheels is demoralising. Look for projects in which you can easily enter a “flow state” where hours melt away. This is the environment in which you are doing your best work, and are happy to be doing the work itself. It is in moments of flow that we often feel most productive, and even fulfilled. Therefore, it is after moments of flow that we tend to feel guilt-free about enjoying quality time with loved ones while unplugging from work.

Related: Jeff Bezos Reveals 3 Strategies for Amazon’s Success

Communicate commitments

If you’re approaching a time-consuming work project, communicate that to the important people in your life. Otherwise, they may think you are avoiding them due to a more insidious reason.

Providing those you love with a glimpse into your professional commitments can also help them to help you. If a good friend knows it will be difficult for you to communicate for a few weeks, they will know to pause conversations so as not to burden you with having to reply to texts or emails.

Similarly, a partner who knows that you are responsible for delivering an important project may be able to rearrange their schedule in order to better support you in the short term.

Conversely, if family commitments will prevent you from working at full capacity for a certain period of time, set the right expectations with colleagues. A good workplace is one that is flexible to the realities of employees’ personal lives. Managers who care about the well-being of their people are usually willing to help employees take care of personal commitments.

Adapting to a changing work life

Work no longer happens between the hours of 9 AM and 5 PM, Monday to Friday. Work happens Saturday mornings, and late Friday nights. It happens on vacation, and during graduations. The idea of work-life balance suggests that there should be an even split between working and non-working hours.

Related: Why It Pays To Be A Jerk Like Jeff Bezos

In reality, those who have undertaken ambitious careers should aim for work-life harmony, a lifestyle in which both aspects of life give you the energy to be your best self as frequently as possible.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

Give Your Business The Best Chance Of Success

For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

Gil Sperling

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In my capacity as a business owner and venture capitalist, one of the questions I get asked most often by entrepreneurs is, “how do I ensure my business succeeds?” While there’s no straightforward answer, there are important elements that I believe every entrepreneur must consider to ensure the greatest probability of success.

Firstly, no business will succeed if it doesn’t solve a unique pain point or problem for modern consumers or businesses. However, even if a business is able to carve out that niche, there’s no guarantee that growth will follow. For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

North Star metric

This principle of having a clear business vision guides all my decisions. Whenever I need to validate a choice or a change in strategic direction, or if I’m trying to determine what to focus on, I always refer back to my vision. If the two are incongruent, then I know I need to change tack.

Elon Musk is a great example of a successful entrepreneur who is guided by his grand vision. Everything he does, from Tesla to SpaceX, pertains to sustainability, both for the planet and the human race. It might be hard to make the connection when you consider his various businesses out of context, but everything he creates fits into a broader ecosystem that in some way moves the needle towards his ultimate objective. Developing Tesla cars that run on renewable energy is but a small, short-term plan that feeds into his grand vision, yet it’s also been the catalyst for the evolution of the motoring industry.

Related: The Popimedia (Mega) Success Story

Be clear, concise

In the same way, every decision an entrepreneur makes should in some way take them a step closer to realising their vision. In this regard, it is also vital that your vision is crystal clear – a murky or undefined vision will divert you off your path to success.

That’s because you’ll tend to focus on the wrong things, especially when scaling rapidly, or when running bigger organisations, because there are many tasks to complete every day. A lack of clarity also leads to poor decision-making, or, worse, decision paralysis, and that’s business suicide – I’d rather make a bad decision than no decision at all, because it prompts action. However, with a clear vision, more often than not, those decisions will be correct.

Defining your vision

So, how do you know if your vision is clear and, more importantly, relevant and consequential? The way I stress test my vision is to evaluate it every day against the decisions I take, and the direction of the business. This daily process helps to sharpen my decisions over time.

The other step is to remain open-minded enough to accept and acknowledge criticism, and take on board advice from trusted confidants and impartial experts. This is important, because you need to craft your vision based on as much information as possible, including valid criticism.

Ultimately, though, your vision for the business should align with your purpose. Forget about money and turnover as points of departure when defining your vision. These are merely metrics that can determine the strength and effectiveness of your business strategy.

For each of my several business interests, be it VC funding or ad-tech innovation, I have different visions. Each are meaningful to me, but in every instance, I don’t wake up every day with the sole ambition of making money.

While I need to make money to grow these businesses, or build something new, having purpose and vision are the ways I pull through those inevitable challenging situations. Having your vision front of mind in everything you do helps you make better decisions, and makes the hardships easier to endure. It helps you see through the turmoil, because you know where the process will lead, and you always know where the ultimate objective lies.

Read next: A Comprehensive List Of Angel Investors That Fund South African Start-Ups

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Lessons Learnt

Jimmy Choo’s Co-Founder Explains Why There Are No Small Jobs

Tamara Mellon shares the strategy that has helped her find new opportunities throughout her career.

Nina Zipkin

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The co-founder of Jimmy Choo, Tamara Mellon, believes that you can find inspiration and opportunity anywhere. All it takes is determination to keep going and a keen eye for observation.

Mellon began her career in the early 1990s working as an accessories editor for British Vogue. Always on the hunt for up-and-coming designers, she came across Jimmy Choo, a cobbler working in London’s East End.

She would commission him to create shoes for fashion shoots. They were so well received by readers that the pair realised they could expand beyond one-of-kind pieces for the pages of the magazine.

This article was originally posted here on Entrepreneur.com.

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