- Players: Tom Goldgamer and Danny Aaron
- Company: 3 Way Marketing and Benater Production Group
- What they do: Data, analytics and performance-based marketing
- Est: 2008 and 2012
- Turnover: R200 million+
- Visit: 3waymarketing.co.za
When Danny Aaron and Tom Goldgamer launched their business in 2008 they had no grand strategy, five year plan or a physical product. But they did have an idea, a few business philosophies they planned to develop as they went along, and a willingness to take on a lot of risk as they built their company. They wanted to make it as easy as possible for clients to take a chance on them, and their focus was on big blue-chip companies.
“We operate in an industry that changes frequently, so strategising too far ahead is difficult and often counter-productive,” says Goldgamer. “But we knew we needed strong foundations if we wanted longevity and growth, and so we focused our energy on developing business philosophies that we could implement across our various companies.”
As philosophies go, they’ve worked. Turnover is over R200 million, with staggering year-on-year growth.
1. Leverage a great partnership
Local investor and dragon on SA’s Dragon’s Den, Vusi Thembekwayo, believes that the best businesses are run by partners. ‘Great entrepreneurs often come in pairs,’ he says. Ex-Accenture COO and venture capitalist Clive Butkow agrees. He will rarely — if ever — invest in a business with a sole founding partner. He believes that running a business alone is too hard, as no-one embodies all of the characteristics required to successfully run a high-impact business.
Goldgamer and Aaron are a perfect example of this simple rule in action. With a fluid management philosophy and roles that change with the business needs, Aaron manages the business development and Goldgamer is more focused on operations.
“Because 3 Way Marketing’s clientele leans towards the financial services sector, the business is regulated and must adhere to strict corporate governance guidelines and KPIs,” says Goldgamer.
“This means we need to be incredibly familiar with the regulations that our clients are subject to. It also means that we’re very hands-on with all of our customers, who interact with both of us depending on their needs. No client is either mine or Danny’s. We’re a single unit with almost interchangeable parts.”
It also helps to be good friends. The lines between business and personal aren’t just blurred, they’re non-existent. “We’ve spent hours and hours on the business during non-business hours,” says Aaron.
“This is our passion, and so it can’t be confined to an 8-to-5 day. Thank goodness our wives get along as well as we do. A business partnership requires a huge amount of trust and respect.”
Aaron and Goldgamer lived next door to each other for the first six years of setting up the company, which also helped to ensure that all of their focus and time was invested in the business.
2. Hire people you like
Conventional business practice says hire for skill. Goldgamer and Aaron have done the opposite. Most of their early hires were friends or friends of friends with strong referrals and they only hired people they liked. Today 3 Way Marketing has grown to more than 180 employees, with over 300 people in the Benater group, but they still follow this basic principle.
“We hired people who we thought could help us grow the business, not necessarily because they possessed the right skills — those could be learnt — but because they had the right attitude,” says Aaron.
Today, those early hires are managers, instilling the company’s values in their own teams, hiring based on values and continuously focusing on upskilling.
The partners met at Hollard. Aaron was a data analyst in the marketing, insurance and risk management sectors, and Goldgamer was a GM. “Hollard has an excellent corporate advancement project,” says Goldgamer.
“Every new graduate has a line manager and a senior person overlooking their development, so training and mentorship continues on the job. You don’t need to hire for skill if you’re willing and able to upskill internally.”
Aaron and Goldgamer work in such a niche industry, it’s almost impossible to just hire someone who does what they do. “In our early days our core focus was hiring people who shared our values, were driven and who we knew we could teach our industry to. Above all we knew these people could be trusted. We then did a lot of informal mentoring, both during and after office hours. We had a small team, but everyone was engaged and hungry for success,” says Goldgamer.
“This was how we found great people at the beginning,” adds Aaron. “We’d call guys we knew, who we’d gone to school with or were our mates. Greg Canin, who runs the call centre business, went to school with me. Tom and I wanted a numbers guy, not a traditional call centre guy, and he fitted the profile. We gave him his own budget, bank account and created an environment where he has autonomy. Most importantly, we gave him the trust and space to create something amazing. With zero experience in call centres, he’s almost single-handedly built this into a very successful business.”
Canin is not a unique example to the group of companies. Dov Slowatek, previously a serial entrepreneur with a BSc in mathematics, now runs Benater’s operations environment. Kirill Levchenko started his career working in a call centre, and now heads up the group’s account management team, and Devin Karpes, who joined as 3 Way Marketing’s first designer, now forms part of the group’s exco.
So, how do you make something like this work?
“You need to accept that in a relatively new industry there are going to be a lot of growing pains. It’s important that you and your teams are open and transparent, and you give them a chance to learn from their mistakes. You’ll not only create an environment where everyone wants to try new things and find innovative solutions, they’ll treat your business like their own,” says Goldgamer.
“With friends this can be a bit trickier. It forces you into a more meaningful discussion with give and take, because you want to maintain the relationship. This has always worked for us, and if we’ve parted ways with friends, it’s been on a business level only, and on good terms because we’ve approached the relationship from a place of respect.”
“We learnt this lesson from friends in the private equity space who told us that you never fight over money, especially if it’s in your circle. That’s rule number one,” adds Aaron.
3. Find big clients and build loyalty
Goldgamer and Aaron’s first entrepreneurial venture was called Web Smart, and it focused on SEO for the SME market. “We had a third shareholder who bought us out within 12 months,” says Goldgamer. Although the company was a success, the partners learnt that they would rather focus on fewer clients with mass volumes. In this way, their time, energy, systems and funds would go a lot further, with more focus placed on each client.
“Our idea was to start with our core and then expand into different verticals,” says Aaron. That core was 3 Way Marketing, a data-driven lead generation business.
“Our first client was Hollard,” says Goldgamer. “I’d spent eight years with the organisation and we had a good relationship with them. They were open to our ideas, and had encouraged us to pursue our entrepreneurial dreams with our first business. Now we had a product that they could benefit from. Securing Hollard gave us traction to approach other blue-chips with a track record.”
Since Goldgamer and Aaron were determined to work with a select number of corporate clients and not hundreds of SMEs, they needed a way to get corporates to give them a chance, and they needed it fast.
To achieve this aim, they embarked on a business model and sales pitch where they carried all the risk.
4. Carry the risk to make the sale as easy as possible
“Businesses find it difficult to quantify the value of a lead,” says Goldgamer. “How qualified is the lead? How warm is it? And if no sale results from it, is it worth anything at all? Since our business starts with lead generation, we realised that we needed to put our money where our mouth is.
“Instead of asking, what is a lead worth to you, we now ask potential clients, ‘What is a sale worth to you?’ This is a completely different discussion, because it’s something they can quantify.”
Armed with this insight, Aaron and Goldgamer created a business model that is largely risk-based. “Clients only pay us for a pre-agreed result,” says Aaron. “This makes it much easier to close the sale, but it also means we only make money if we deliver. Until that point we’re actually running at a loss.”
“To make the business model work, we fire ourselves before a client can fire us,” adds Goldgamer. “We evaluate if we can come in with the numbers we need to make a client contract worthwhile. If we can’t, we’re not doing the client or ourselves any favours by continuing with the contract. Occasionally we’ll run at a loss if we can see long-term value, and of course we need to make provisions for poor response cycles and bad data patches, but on the whole it means that we only chase clients and businesses where we are sure we can deliver value and meet our targets.”
“The value to our clients is two-fold,” says Aaron. “First, they only pay us for hot leads and sales. Secondly, irrespective of the result of a campaign, they get brand awareness and exposure, which is a by-product of the lead generation process — and something they aren’t directly paying for. It’s win-win for them and it gets our foot in the door.”
In order to generate leads, 3 Way Marketing uses a wide range of digital channels including email marketing, sms, social media, search engine marketing, affiliate marketing, foot soldiers and content marketing.
“Typically each channel is tested separately and the ones that yield the best results in terms of client sales delivered will be focused on, with the poorer performing channels stripped out,” says Goldgamer.
“This is an important process because we can’t afford to spend time or money on channels that don’t work, so we measure everything. After this filtering process, which typically takes three months, the platform is set for our clients to receive leads from only the top converting channels.”
5. Don’t spend cash on anything until you know it works
Start small, test quick and measure to see if the yield is there. Every new idea, product or service must follow this path. “The upside is that we only invest significant funds on ideas that have already been market tested,” says Goldgamer.
“The downside is that we often have many processes running at the same time. We build something simple to see if it works. We then evaluate if we can make it profitable, or if it adds significant value to something else that we are working on. It’s a piecemeal and patchwork system, but it’s really worked for us.”
This philosophy directly impacts a value that everyone in the organisation embraces, which says that nothing is ever finished, complete or the best it can be. There’s always more: Another solution, a faster way of doing something, a smarter way to reach a better result.
“We’re continuously revising our system,” says Aaron. This means the team needs to really listen to their clients’ needs. “We’re always ready to make tweaks and adjustments. That’s how you keep improving. We know that systems never work like you think they do, or how you plan for them to work. You need client feedback, and then you need to adjust your systems accordingly.
“For example, we originally had one lead channel. We collected leads, sent them to our client. Because we get paid per lead or a sale, and their sales weren’t as high as we’d expected, we were able to determine that they weren’t receiving all the leads we sent. The problem was that we didn’t know why. So we built a component that tracked and pinged each lead.
“It worked incredibly well, except that now the client felt like they were being flooded with leads. They only wanted a set amount of leads per day. No problem, we adjusted the system for that too. The end result is that you’re providing a service or product that meets your business objectives as well as those of your clients, and that leads to longevity. We’ve lost only one client in eight years.”
6. Cross pollinate once you have scale
Today 3 Way Marketing has close to 60 blue- chip clients, so its risk is spread out, but this wasn’t the case in the early days. “Having only a handful of large clients meant that losing one of them would have a significant impact on our sustainability,” says Aaron. This was the driving force behind developing different but related verticals.
“We wanted a business model that spread our risk across multiple clients and verticals.”
It’s a solid growth strategy: Determining what else you can do based on your core product, service or expertise. Goldgamer and Aaron have done this particularly well. “We started as an intermediary matching affiliates with brands,” says Aaron.
“Then we realised we could create our own site and push leads through it. Today, we own thousands of comparison site domains. Our ‘engine’ is constantly profiling and running data analytics, and whether this is for 100 000 people or one million makes no difference to the system.”
“We then started looking at the lifecycle of a lead,” continues Goldgamer. “First, a lead is collected. Next it’s converted. How can we get involved there? We can make them warmer by asking qualifying questions. This led to the development of our call centre.”
“Next we looked at industries that worked in a similar way to the industry we knew from the inside out: the financial services sector,” says Aaron. “The pure risk model works just as well in automotive, travel, accommodation and education. For example, we generate hot leads for vehicle test drives for some of South Africa’s most prominent brands. We take this one step further by actually pre-qualifying every lead in our call centre and booking test drives on the client’s behalf. In this model our clients only pay once a test drive has been booked.”
As the business grew and diversified however, 3 Way Marketing was no longer an appropriate name for all the businesses Aaron and Goldgamer were involved in.
“3 Way is the golden thread that runs through everything we do,” says Aaron. “But it’s now just one business in a group of companies we launched in 2012.”
This has allowed new verticals and divisions to be added without diluting each business unit’s focus, team or skills.
The founders liken the group to a venture capitalist model. “The group and its companies were built from internally generated funds. Each new company begins as a lean start-up within the group. If we don’t have the specialised skills necessary for the business, we’ll find the right partners. We understand the power of dedicated leaders for each company within the group. This gives us the necessary skills and focus in each vertical, but it also frees us up to concentrate on overall group growth and strategies,” says Goldgamer.
7. Invest in people, processes and clients upfront
“From launch we decided to spend money on client campaigns before we made cash. This meant investing in people and processes, and following the risk model philosophy. We did it carefully, testing and measuring everything each step of the way, but it was a philosophy integral to our growth,” says Aaron.
“For example, we place conversion managers on-site at each client’s office. This is an upfront cost for us, and it’s one we shoulder before they’ve paid for a single lead. Our team member assists the manager with analytics, and best practice to ensure all leads are converted into sales.
“We also know that in sales, there are crucial touch points that ensure higher conversions, such as the time it takes to touch a lead, scripting, closing techniques and so on. An on-site resource makes the likelihood of successfully addressing these principles much higher.”
8. Embrace agility and openness
“Our industry is constantly changing,” says Goldgamer. “Technology and channels continuously morph, which means we need strong individuals to grow within our organisation, and they’re hard to find. Once we have them, we need them to stay. We’ve found the best way to keep talent is to align them with the company’s performance. This incentivises them and aligns us all to the company’s goals. Our numbers and performance are transparently reported to our teams, which allows and empowers our employees to treat the business as if it were their own.”
Goldgamer and Aaron are the first to admit that it’s an important part of their business model. “What we do isn’t for everyone. It’s a tough, busy working environment. It’s full of daily lists, requires laser focus and you’re pretty much always on. But the rewards are great, both monetarily and from a growth and autonomy perspective.
“As a start-up we looked for passion and made a lot of promises to attract and keep rising young stars. As we’ve grown we’ve needed to deliver on those promises. Part of this is finding the right people who want to work within an organisation, but are also entrepreneurial enough to want to be exposed to deals, run budgets, and see a direct impact on what they do. Our senior managers have been with us since the beginning. They’ve earned their positions, and they run each business unit as their own. They go out and sign deals. Create a trusting environment where people can grow and feel in control, and they will flourish.”
The Benater Production Group
Since the Benater Production Group was formed in 2012, 3 Way Marketing’s role became the marketing engine for 14 other businesses within the group.
- Phonefinder, South Africa’s first mobile aggregator.
- Fix My Life, an online portal that allows you to virtually connect and transact with service providers for your home. The service includes plumbers, painters, electricians, handyman and builders.
- Hudlr, a data mapping software tool that allows marketers to easily pinpoint and send instant direct messages straight to their target audience.
- BMI, one of South Africa’s largest AVM (automatic voice recording) businesses, backed by a 6-seater call centre that pre-qualifies each lead before it hits a client’s environment.
In Place Recruitment, created to service the recruitment functions of the group as well as other blue-chip companies with a strong emphasis on financial services and digital.
The Make Up of Makeup: How One Entrepreneur is Changing the Cosmetics Industry
Energetic, enthusiastic and fun are three words to describe Alina Lucía Imbeth Luna. But her favorite words are organic, vegan and cruelty free. They’re the backbone of her Medellin, Colombia-based cosmetics company, Pure Chemistry. Learn how this chemist and engineer is revolutionizing the cosmetics industry and read about her advice for future entrepreneurs.
This article originally appeared on FedEx Blog.
What is Pure Chemistry?
Pure Chemistry is a company that invents, manufactures and sells beauty products directly to the consumer. What makes us stand out is that we are certified organic, vegan, and cruelty-free.
Many companies say they do no testing on animals, but we go one step further. None of our processes or ingredients has any animal components. Ingredients from animals are common in the cosmetic industry but for us it is not an option.
If it’s common, how do you avoid using them?
For virtually any synthetic or animal ingredient, there is an organic, plant-based alternative.
Collagen, for example, is an animal protein that we don’t use because there are vegetable alternatives that give us better results.
As for honey, we don’t take honey away from bees, we use cane honey.
So for whatever reason people have, be it religion, ethics or they just decide not to use a product that has ingredients that come from or are tested on animals, they can come to Pure Chemistry.
Many companies use the word “organic,” but you are “certified organic.” How is that different?
We are proud to have the Ecocert certification. Ecocert is an international entity that has a standard for the definition of what’s considered organic cosmetics.
To get certified, ingredients need to come from renewable resources, manufacturing must be environmentally friendly, packaging must be biodegradable or recyclable so it’s not just about the product, it’s also the packaging and the production of all our ingredients.
Certification, for us, is very important. I could tell you right now that I am Hillary Clinton, but if I don’t show you an I.D., you won’t believe me, right?
That’s why it’s important to be certified.
How are your products tested?
Our products are tested on people because they are made for people.
We have a testing club at Pure Chemistry. Many are from our University and are chemists and physicists as well friends and customers who volunteer to test our products.
People call all the time about being in our new product test group and we pay no one for testing. This is very important to us so people are honest about the product and their results.
What is your team like?
We are a company of women and everyone has their own expertise.We all have some authority roles over our own specialties but there are no hierarchies here. The business model is a circle. We all support each other.
We have no set schedule. Our team comes to work when they need to – at the time that they need to work. You don’t have to be sitting here doing nothing if, at that time, there is nothing to do. It works very well for us.
Our customers are also an important part of the Pure Chemistry team. Since 2015, many new product ideas have come from clients’ requests. They write to us, send us messages, and we keep a list.
People started requesting, “Please, we need a toothpaste,” and we said, “Let’s work on a toothpaste.”
Others wrote, “Please, we need a product in a size that can go in a carry on bag at the airport,” so we did.
We mean it when we tell our clients, “Your comment, message, suggestion won’t be in vain.”
How hard is it to develop your products?
As a child, you don’t think about having to make money to do this and that.
For me, product development is like that little girl inside me that wants to experiment.
It’s fun, but not easy. It took us almost six years to develop a shampoo to make sure it did not have sodium lauryl sulfate or sodium laureth sulfate, the quickest, fastest, and cheapest way to make shampoo. It took us that long to get a product that would comply with the organic certification and one that you could use on both babies and adults.
We also have to think ahead. When we started developing nail polish, we also needed an organic nail polish remover, one that was also not flammable so it can easily be shipped internationally. Now we have a patent pending water based nail polish remover.
We are always amazed and encouraged when something that we came up with is working for someone. They write things like “I love this product. I love this company. I love you guys.” It’s very heartwarming.
This is what makes me get up in the morning.
It’s creativity with a purpose.
What advice do you have for other women entrepreneurs?
Don’t just make a business plan and wait. Entrepreneurship shouldn’t stay on paper.
There should be no excuses. Go for it. Be willing to make mistakes. As long as you are clear about where you want to go, there are many ways to get there. You can make a mistake, you can fall, a million things can happen.
Examine and redefine your goals as you learn from your mistakes.
What advice do you have for little girls?
I would tell any little girl or boy, “Start by writing it.” Write about what you want to do, what you dream about.
As years go by, look to see if that was just a kid thing, a whim, or if it was really a dream. As you grow up you forget that as a child you wanted many things, but if you write them down, it will give you something to look back on.
For me, I can say, “Look, I wanted to be a scientist, and I did it!”
Communication Skills To Succeed In Business
Article by Nicky Lowe, Wits Plus Lecturer in Business Communication.
A Scientific American blog about the role of luck in success mentions the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur and argues that we can learn to be successful by reading about successful people:
There is a deep underlying assumption, however, that we can learn from them because it’s their personal characteristics – such as talent, skill, mental toughness, hard work, tenacity, optimism, growth mindset, and emotional intelligence – that got them where they are today. This assumption doesn’t only underlie success magazines, but also how we distribute resources in society, from work opportunities to fame to government grants to public policy decisions. We tend to give out resources to those who have a past history of success, and tend to ignore those who have been unsuccessful, assuming that the most successful are also the most competent.
While not discounting the role that luck, or family inheritance and reputation might have in success, consider the massive role that good communication skills play in success. For example, if you cannot express yourself well, your proposal will be unsuccessful. If your business plan is full of grammar errors, then even if the financials add up, and you can show a past history of success, you are less likely to get the funding you’re after.
There are many daily examples where stronger communication skills would have made the difference between success and failure. If a junior data processor bypasses her line manager to ask another manager for help with entering a batch of data in a different format, but is not clear about the batch names, she is unlikely to be successful in getting her job done. Jumping ranks will not go down well in corporate hierarchies, for starters. Moreover, if she lacks the corporate know-how to avoid this faux pas once, she is likely to blunder several times, thus generating the impression that she is disloyal to her own line manager and not a valued team-player. On the other hand, the lack of clarity in her emails can very effectively be overcome by improving her business communication skills.
Effective business emails need to be short and to the point, with very specific detail, especially if a request or instruction is given. The reader cannot be expected to do anything if they do not know what is actually being requested. It may be a simple case of giving the label names of the data batches, as in this example, but often managers grumble about staff being incompetent or lazy when the problem is their own poor communication skills and inability to use email effectively.
The best part of this solution is that it does not rely on luck. We all have the innate ability to improve our own communication skills. For those who want to improve their communication skills mindfully, there are short courses that take only a few hours a week for a couple of months that will give them insights into well researched theories and techniques so that they can apply these strategically in their personal and professional lives.
In the reading about luck, talent is defined as “whatever set of personal characteristics allow a person to exploit lucky opportunities” and talent includes “intelligence, skill, motivation, determination, creative thinking, emotional intelligence”. These skills are highlighted in the Wits Plus Effective Business Communication short course to equip our students to make the most of opportunities. Studies have shown that the most talented people are not the most successful in life, but that luck and opportunity may play an unseen role in that success. Excellent communication skills are key to making the most of opportunities and breaking through to success!
Author Of The Little Book of Inspiration Gives Great Advice On Having Direction And Courage
If you can keep learning along each step of the start-up journey, you’ll continue to grow, and your business will be a success, says entrepreneur and author, Matshona Dhliwayo.
- Player: Matshona Dhliwayo
- About: Matshona Dhliwayo is a Zimbabwean-born and Canadian-based philosopher, entrepreneur, and author of books such as The Little Book of Inspiration, 100 Lessons Every Great Man Wants You to Know, and Lalibela’s Wise Man.
- Twitter: @MatshonaD
What is the difference between a ‘learn it all’ entrepreneur, and a ‘know it all’ entrepreneur, and why is it imperative that a start-up strives to be the former?
A ‘learn it all’ is one who is driven by the desire to learn and a ‘know it all’ is one who is driven by the desire to prove how much he knows. It’s imperative that you focus on the former because, in life, we are only as successful as what we know. Knowledge is more than power, knowledge is wealth.
How can someone go about being a ‘learn it all’? First, be humble; humility allows you to learn from others. A humble student is better than a proud scholar.
Energy is a great thing, but it needs direction. How can a start-up entrepreneur calm down, focus, and find their direction?
You find direction from having well-defined goals in a business plan. You keep a tab on those goals by using a daily planner to help you steadfastly execute your objectives. In good times, be cautious; in bad times, be hopeful; and in busy times, be level-headed, never taking your eyes off your goals.
Why is it important to have direction?
A chariot can’t travel in two directions, and when you know where you’re going it’s easier to get there. When you lose direction you lose opportunities, and when you lose opportunities you lose rewards.
What are the pitfalls and limitations of ego?
Ego is an inflated sense of self and is therefore no different from arrogance. The pitfalls of conceit, which shouldn’t be confused with confidence, are endless. You start thinking you are better than others and the moment you do, this means you can’t learn from them.
If you don’t learn you don’t grow, and if you don’t grow, you die. Most experienced entrepreneurs understand the importance of being humble because people buy from people they like, and people don’t like egotistical personalities. Humility opens people up to you, but arrogance drives them away. And the more people an entrepreneur draws the more people he can serve, and the more people he can serve, the more money he can make.
That said, a degree of arrogance allows you to push through the hardships. Where is the balance, and how do entrepreneurs find that balance without getting discouraged?
Only a few people in history like Julius Caesar and Nebuchadnezzar II rose to great heights with arrogance, but their very egotism destroyed them in the end. I prefer courage, not pride, because it rises from conviction; and also faith, not ego, because it rises from hope. These two have helped the weakest of men and women achieve the greatest feats. An entrepreneur must be filled with courage daily and emptied of hubris incessantly. The higher you rise with ego, the lower you will also descend in the end because of it.
Related: How To Build A Disruptive Attitude
Why should you never, ever feel threatened by someone smarter or with more skills than you? In fact, why should you be partnering, hiring or learning from these people?
I am never threatened by people who are smarter and better than me because I see them as gifts, and not as competition. I view them as assets, not threats, so I allow them to do what they do best, thereby benefiting from it. It also frees me so I can do what I do best. We can be Jacks of all trades but we can’t be masters of all disciplines. Partnering with people who are cleverer than you elevates you.
Many entrepreneurs trust the wrong people. Why does this happen, and what is the solution?
People are complex creatures. The best of us can’t always predict human behaviour. Entrepreneurs, like everyone else, make mistakes. What they should shy away from are the avoidable ones. My advice: Take time to get to know people. Do your due diligence. Ignorance is your opponent, fear is your enemy, vice is your adversary, virtue is your friend, and wisdom is your helper.
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