- Player: Nicholas Haralambous
- Company: NicHarry
- Launched: 2013
- Visit: NicHarry.com
When Nicholas Haralambous launched his online men’s sock store, NicSocks.com, his plan was to build a lean, online start-up. It worked. He built his e-commerce site on WordPress, an open source platform. It took him R5 000, 30 days to build, and six weeks to find traction.
That’s the beauty of tech. You don’t need to be a tech company to make use of all the free and inexpensive tools available to start-ups today. Haralambous understands the difference. His previous business, Motribe, was a tech company. It took over a year to develop the tech, and VC funds were required prelaunch.
His latest business has been very different. But while the magic of online and modern technology allowed Haralambous to launch his idea inexpensively, he’s achieved real growth by moving out of the digital sphere and into traditional retail.
Related: From Telecoms to Socks and Back
A Growth Path
In a world of tech and e-commerce, why is Haralambous finding his next level growth by blending an online presence with a traditional retail footprint?
“We’re five to ten years away from e-commerce becoming a real thing in South Africa,” he says. “Germany’s ecommerce market is $74 billion per year. Ours is R10 billion.
“My goal is to be a R100 million company in the next three to five years. That’s never going to happen as an online company. Even if we capture the entire market of people shopping for socks we won’t make it.
“There’s no doubt that tech has lowered a lot of barriers to entry. Everyone wants to build an app, and many businesses have been incredibly successful on that front. It’s also simple and cost-effective to open an ecommerce site. All you need is R400. But then how do you get found? After you’ve sold to your friends and family, and tapped into your entire social network, what then?
“SEO, Google ads, social media, cost per conversions — this all becomes important, and it’s an art form. I’m a savvy e-commerce user and builder, and I’m still so far behind the major players because I haven’t spent enough time in this market, and I don’t have the volumes that Superbalist, yuppiechef and takealot have — and all of those sites have spent a lot of time in the market paying their dues. We’re a niche player. I have 400 products.”
Choosing A More Traditional Route
Once he was set up, Haralambous chose a different growth path. He found stores in Cape Town and Joburg who would carry his range, and then he started branching into other men’s fashion accessories, including pocket squares, scarves, ties and tie clips.
He rebranded his online store as NicHarry.com to encompass the ideal of a luxury men’s fashion brand, including but not limited to stylish and colourful bamboo socks.
And then he made the big move into traditional retail himself. This is the exact opposite of e-commerce: High barriers to entry, much higher set-up costs, and much more to lose if it doesn’t work out. But Haralambous had already tested his market, and discovered that he most definitely had a product range that customers would buy — if they knew his brand existed.
“80 000 people walk through the V&A Waterfront every day,” he explains. “When I opened our second store there people asked me why. ‘The Waterfront is so expensive,’ they said. Yes. But 80 000 people. Imagine if 80 000 people visited your website a day!
“The first day 9 000 people walked past my store. I counted. That’s 9 000 people who probably didn’t know about NicHarry before that day. Imagine how many have walked past since then.
“Retail has travelled a journey the last few years. We’ve gone from retail stores, to online, to a multichannel blend. The swing is coming. People still value the experience of retail. There are some things that suit online well: Books, music and throw-away products. But if it’s something you want to touch and feel, then retail still has a big role to play.”
The Best Of E-Commerce And Retail
This doesn’t mean Haralambous has abandoned e-commerce entirely. Quite the opposite in fact. He’s created a model where his online and physical stores form part of the same NicHarry experience.
“I believe an online presence is essential, but it takes years to build a community. Yuppiechef has taken ten years to develop its brand and presence. Wine of the Month Club has thousands of active wine subscribers who purchase wine every month, with an additional tens of thousands who are once-off buyers, but it took them 30 years to build those volumes. It takes time.”
On the one hand, Haralambous and his partner, Jen Wynne, are in no rush. This is a minimum ten year project for them. But they’ve also realised that real local market awareness will be built through their retail stores, and not a purely online presence.
“We’ve linked the online and physical store experiences in small but significant ways though,” says Haralambous. “For example, we use a branded scent in all of our stores. It’s a unique fragrance that our customers associate with us. When you purchase an item from our range online and open the packaging, the scent is the same. We want to tap into all of your senses, whether you’re an in-store or online shopper.
“We want to be crisp, clean, accessible and fun. That’s our focus, and it needs to be clear and distinctive in our retail stores and our e-commerce site. Our customers must have one brand experience.”
NicHarry’s sales are currently 70% offline and 30% online, with five retail stores situated in Cape Town and Pretoria.
Haralambous’ eventual growth goal is the European market, however. “92% of retail spend happens north of the equator. That’s the big market. My growth focus is on Europe, but first we need to build a solid foundation in our local market.”
Retail Lessons From Nicharry
1. Your staff will break rules, so be careful what rules you set
I’ve found it’s better to educate my team on a few base judgement calls. For example, if you’re in a store and the music is too loud and full of swearing, does this make you want to purchase socks? When everyone agrees it wouldn’t, you have consensus, and it’s much less likely that they’ll break the rule you ‘didn’t’ set.
2. Just in case, remember that staff also get bored
I subscribe to Google Play Music for R50 per month and I’ve created an extensive play list. In-store staff can pick anything they want to play, as long as it’s off that list. This may sound pedantic, but it’s important. Staff get bored of the same music day in and day out. We have a range of 4 000 songs.
3. Listen to your employees
When we hire people in this sector we often hear that they’re leaving their current employer because ‘no one hears us or listens to us’. Besides losing trained staff, there’s a bigger issue at stake here: Listen to the people who sell your products. They are the ones interacting with customers day in and day out. They know what stock people are interested in, and what isn’t doing well and why.
4. Create a strong team spirit
When you have dispersed retail stores and your staff work shifts, a lot of people don’t know each other. We wanted to create a strong team dynamic, so we use the app Slack, which is basically whatsapp for teams. It’s an amazing app.
It’s allowed us to get rid of email, and to create groups for different themes: Ideas, what happened in the stores that day, and so on. The more your staff know and like each other, and the better they get on with each other and enjoy their work environment, the more they sell.
5. Use tech to create a better in-store experience
We use iPads to run everything in our stores, from the music to paperless invoices.
6. Content is king
This is true no matter what industry you’re in, but especially in retail. We want our sales staff to be able to have interesting conversations with our customers that aren’t all just sock-related. Everyone has to read a book a month and give me a one page summary. We’re all becoming the best versions of ourselves, together.
If you want to grow you need to adjust your business model to suit market needs.
7 Cannabis Industry Millionaires Making It Big In The Marijuana Business
These entrepreneurs have capitalised on a new market set to continue to grow rapidly as more countries legalise marijuana across the world.
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!
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.
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