- Players: Brian Timperley and Louis Jardim
- Company: Turrito Networks
- Established: 2010
- Visit: turrito.com
As senior account managers in a major ICT company during the 2000s, the corporate accounts that Brian Timperley and Louis Jardim serviced enjoyed substantial support, but smaller customers were falling through the cracks.
Everybody wanted the huge incomes from the really big organisations, so SMEs were largely neglected.
They also realised that Internet connectivity had become a commodity, so Timperley and Jardim opened discussions with potential investors and suppliers to launch their own start-up. They accepted an investment offer and launched a company. It did not go well.
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A clash of cultures
There was a massive culture clash with the investors, and the entrepreneurs admit candidly that they had been seduced by the idea of being business owners, without considering the responsibility that went with it.
Their initial investors got into financial difficulties, so Timperley and Jardim ensured that all the staff were paid and supplier invoices settled, and then put the operation behind them.
They didn’t quit and go back to their corporate jobs though. Instead, they immediately set about refining their business model and finding a new investor, having learnt valuable lessons.
With a new business model in hand, they started looking for a more compatible investor. They came close to hitting the wall and quitting after 14 consecutive pitches to various investment companies, until pitch number 15 to the MICROmega group, who agreed to invest almost immediately.
Finding a niche
“We focused exclusively on the neglected SME sector, defined as 10 to 300 users. This focus has proved very successful,” says Timperley. “We wanted to make our customers feel as important as the big blue chips by giving them preferential support, pricing and service delivery.”
The second key differentiator stemmed from the realisation that bandwidth and network connectivity had become a commodity, so Turrito was set up to be a network aggregator, with the rights to resell products from all significant network suppliers. Customers are able to purchase all available solutions from a single provider.
The ‘halo’ effect of being backed by a large and successful listed technology investor also gave the business credibility. MICROmega provided capital as required, and the entrepreneurs admit that it was easier to grow using investor money.
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Targeting the SMEs
The SME market can be difficult and costly to break into. What challenges did Timperley and Jardim face in marketing to SMEs?
“At the start, we canvassed extensively and focused on what was in it for the potential customer. We learnt what the customers wanted, and what they didn’t care about. In the early stages, it was all about growing the business. Our approach was consultative and all about addressing customers’ pain points. To be considered by prospects (and retain existing customers) we have to boast technical excellence in products and abilities.”
“Almost 80% of our new customers are now referrals by existing customers, so providing really top-class product, support and service has proved a better marketing strategy than many traditional strategies. Thankfully, we have great sales people, so we were able to develop the initial customers fairly quickly,” says Jardim.
How to manage growth
MICROmega might have been footing the bill, but that didn’t mean that expanding the operation was necessarily easy. It took hard work and a clever approach to doing business.
So how did the company manage to scale so quickly and effectively?
“We targeted a large market of SMEs, designed the company to support them well, and secured the products they wanted, so we had a great offering. We also delegated decisions to where they were best made, enabling us to respond rapidly.”
The partners are very different. Timperley is the entrepreneur, building the strategic initiatives to grow the business, with strong industry knowledge. Jardim describes him as a ‘people magnet’. Jardim, meanwhile, is the ‘make-it-happen man’, a problem-solver with a talent for operational excellence.
Leading as a team
“We use each other’s strengths to manage the company. We have never had a serious dispute,” says Jardim.
“The management style is best described as agile chaos — it is highly decentralised decision-making, especially when it comes to the sales teams. For example, if a customer needs a facility for which Turrito Networks is not a registered supplier, employees are expected to use their initiative to motivate new suppliers to management, or find alternatives.
“We don’t make lengthy to-do lists in meetings. When a decision is made, the responsible party must just do it — often from right inside the meeting. We cannot tolerate procrastination, being right or wrong is much less damaging than indecision. It’s okay to fail and learn fast, but it’s not okay to do nothing.”
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Decentralised decision-making has been instrumental in rapid growth. “This process has allowed us to grow, because, as directors, we don’t need to focus on the day-to-day running of the company as much as we otherwise would need to. We can focus more on strategic issues such as customer-care standards, target markets and suppliers.
Hiring the right people
Of course this approach has created its own set of problems, especially when it comes to hiring employees.
“We’ve found that track record in a corporate organisation is irrelevant when it comes to hiring staff. Corporate people do not fit into this environment, so instead we look for agility. We reward high performance well and punish underperformance. We’ve also stuck to our two core strategies of selling only to SMEs and being network agnostic, and this means stability for staff, suppliers and customers,” says Jardim.
Although company growth has been impressive, the staff complement has remained fairly small. When Turrito started, there were four people. Today, there are 31.
“We are still growing, and should do more than 50% year-on-year growth this year. There’s a lot to do in the SME market. It’s a huge segment that will keep us growing rapidly. We have some customers in other African countries, so the rest of Africa offers a lot of potential as well. We are well organised to manage rapid growth and it’s great to have a large and resourceful company like MICROmega backing us,” says Timperley.
Don’t abandon your niche
“Many of our competitors have established their own network, selling their own bandwidth. This is profitable, but we’ve resisted the temptation. We believe this erodes the value of being product agnostic and places doubt on whether we benefit from one of the specific products we offer,” says Jardim.
“We’ve been tempted by large corporates that have heard about our services and wanted us to bid for their business. We stick to our guns – we’ve taken on small business units within a large corporate, but entire networks that exceed our SME definition are not for us. If we try to manage large corporate businesses that we’re not geared to scale to, we ruin our long-term strategy for a short-term windfall.”
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1. Nick D’Aloisio Wrote a Million Dollar App At Age 15
At the age of 15, Nick D’Aloisio wrote an app while sitting in his parent’s bedroom in the UK. At the age of 17, D’Aloisio sold his app Summly – a mobile news summarisation app to Yahoo for a staggering USD 30 million.
As one of the youngest millionaires, D’Aloisio is also the world’s youngest entrepreneur to be backed by venture capitalists – having secured seed funding from Sir Li Ka-Shing, Hong Kong’s billionaire, as well as raising USD 1.23 million from celebrity investors, including Yoko Ono and Ashton Kutcher.
“The number one thing I did that I think was wise was to get, through some of my advisers, was a Chairman; basically someone who was a very experienced business person, an industry veteran — Bart Swanson, who had been at Amazon and then Badoo. Then, myself and Bart really started finding people and growing the team.”
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1. Brendan Kennedy
- Company: Tilray
- Website: https://www.tilray.com/
Brendan Kennedy worked on job sites as a carpenter to pay his way through university, with his eyes set firmly on becoming an architect, until the allure of Silicon Valley changed the course of his direction. While working at technology start-ups Kennedy began thinking about the possibilities that medical marijuana provided.
“I was really sceptical of medical cannabis,” he says. “It took a year of having conversations with patients and physicians and hearing the same story, repackaged but essentially the same, over and over and over again, where my scepticism eroded and I became a believer.”
In 2013, Kennedy and his partners applied for a licence from Health Canada and launched Lafitte Ventures, which was later renamed Tilray. Today, the company is a global leader in medical cannabis research, cultivation, processing and distribution.
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!
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