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OpenTenders And The Art Of The Pivot

How OpenTenders learned the art of the pivot and lean start-up basics, all while building their business-to-business social network and tender portal.

Nadine Todd

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Vital stats

  • Players: Mnive Nhlabathi, Sivu Maqungo and Madoda Khuzwayo
  • Company: OpenTenders
  • Est: 2013

How did the idea for OPENTENDERS come about?

Like most business ideas, it was the product of our own frustrations. Joburg is very competitive, especially for hosting companies and branding; you’re competing against major players and agencies.

We wanted to find markets where we would be the only company pursuing the business; areas where resources were scarce. The problem is that you never know what tenders are available. They get posted on notice boards at municipalities, so there’s a lot of driving involved. In 2006 we put 120 000kms on Madoda’s car, which completely messed up the motor plan. That’s how much we drove.

We-recommend-tickWe recommend: Paycorp Saw an Opportunity… and Took It

The whole time we kept thinking that there had to be a better way to access tender notifications, and that there were probably a lot of companies that would love access to those lists. And the idea for OPENTENDERS began to take shape.

What was the big idea?

National departments have to tender any jobs that are worth more than R500 000, municipalities R200 000, and state-owned entities like Transnet generally tender jobs above the R2 million mark.

Anything less than that and it’s a simple quotation system. That was the bulk of our business – smaller quotes, but more of them. You’d know within seven days if you got the job, and all of your eggs weren’t in one big job. The problem was finding out about the work.

We knew there had to be a better way. After years of driving around the country, we knew how the system worked, we’d built up great contacts across the country, we knew how to build websites and we understood branding and marketing. What did that amount to? There are 660 entities in South Africa all doing their own thing. What if they were all in one place, on one website? And that’s how OPENTENDERS started.

Did the idea immediately gain traction?

It took eight months to build the first platform, and as soon as it was live we realised that some of the key assumptions we’d made were wrong. Our first idea was to create the website, get all calls for tenders and quotes onto it, and charge SMEs R500 per month to access it. It didn’t work. Entrepreneurs don’t like spending money. It’s that simple.

So what was your response?

We needed to learn from our market and adjust our product accordingly. We pivoted, and our second iteration was a subscription model of R99 per month. Now we had a new problem – you wouldn’t believe how many debit orders bounced – and that cost us money.

We went back to the drawing board and evaluated what we had. There were SMEs on the site, and we knew from our own experiences that we looked for smaller opportunities as well as bigger ones. SMEs are other SMEs’ best opportunities. What about a business-to-business social network?

A place where smaller businesses could market to each other? Madoda created a social network platform where business owners could set up a profile, explain what they did, ‘friend’ each other, and potentially do business.

The site now has two layers: A tender portal and procurement opportunities, and a business social network. It’s also a freemium model. As a business owner you can sign up for free.

How do you make money?

We realised that the real value in the site was how many people we could get signed up and creating profiles. We’d learnt that the only way to build a large community was to make access to the site free. However, as it grows, it becomes an incredibly valuable database, and so our revenue model now focuses on advertising.

To create a profile you need to fill in exactly what you do and the industry you’re in. Our algorithms are targeted. So, for example, an insurance company can target construction companies only, if they so wish.

We also send out notices every time a tender comes up, and those have an advert on them as well – push notifications that are tailored to your industry sector. It’s targeted, niche and automated. We’ve also made the rates affordable enough for SMEs, and because they are so targeted, you can choose exactly who you spend your 1 000 or 10 000 impressions on.

We-recommend-tickWe recommend: How Innovo Networks is Landing Big Corporates

How have these pivots helped the business?

We’ve had between 80 and 100 new members per day since we switched to the freemium model. It’s been an incredible lesson in the lean start-up methodology. In start-ups it’s all about what works and what doesn’t work, and often you’ll only know the answers to those questions once you’re out in the market, testing your product.

You learn and unlearn things at pace in a start-up. You need to be shifting and pivoting all the time, learning from and responding to the market.

How else has the business offering grown?

We now have four key channels to the business. The first is our original core offering – a place to access all tender information; the second is funding – Sivu is involved in an investment house that funds between R70 000 and R2,5 million on a per-project basis.

The third is a B2B social network, and the fourth is training. We’ve developed a six-month online course that SME owners can complete in their own time. We noticed a big gap for many SMEs was a lack of business skills. We’ve created a ‘business in a box’, with training and all the templates SMEs need.

A meeting of minds

Madoda Khuzwayo was always good at maths. So good that it landed him an Eskom bursary to study electrical engineering.

“I was a rural boy, and so the first time I ever touched a computer was my first semester at varsity. It changed my world.”

From that moment he wanted to switch degrees, but Eskom didn’t need IT professionals, and Khuzwayo needed the bursary. As soon as he finished his degree, he packed his bags and headed for London. His plan was to work and save enough to study IT.

“I arrived willing to do anything, from picking potatoes to working at Tescos. I eventually found my way to Oxford, where I got a job as a dishwasher. This was the worst job I’d ever had, but my English wasn’t good enough to be a waiter, and I couldn’t understand British accents. It was me and a Serbian guy in the kitchens.”

And then he saw a sign for engineers wanted at the local BMW/Mini plant. “My engineering degree got my foot in the door to study IT. It’s funny how these things work out.” For the next few years, Khuzwayo worked weekends at the plant and studied during the week.

“By 2003 I had my IT degree and I was ready to come home. We’d won the bid for the 2010 FIFA World Cup, and I thought there’d be some great business opportunities around the event.”

Khuzwayo’s idea was simple: Tourists would need accommodation, and locals had rooms to rent. He designed a website that matched prospective rentors with rentees. “The idea won me the Gauteng SAB Kickstarter title, but by then FIFA had changed the rules, and all accommodation had to be accredited.”

Undeterred, Khuzwayo looked for a way to pivot his idea. “I’d been working on a free mail plugin for the site, and realised this was a business in itself. I called the business MyNextMail and began focusing exclusively on that.”

Mnive Nhlabathi has been an entrepreneur since age 22. “I’ve only worked for someone else for three years of my life,” he says. “My background is IT and brand development, and in 2006 I also entered the Kickstarter competition with my branding agency.”

That was to be the year Khuzwayo won, and although Nhlabathi didn’t walk away with the prize money, he’d made a new friend. “We worked from coffee shops together, and gradually the idea grew that we should be working together.”

Yet another pivot

Khuzwayo was working on MyNextMail — a hosted email solution — but he was hitting brick walls trying to secure funding. “We both believed that in the future, IT would move from the work place into the cloud, but MyNextMail was competing with Yahoo and Gmail.” Gradually, the idea developed that together they could offer website and hosting solutions, as well as branding solutions.

We-recommend-tickWe recommend: Yolanda Sing from Chloé Consultants on Leading by Example

Joining forces, they targeted municipalities — not in main centres, but off the beaten track.

Sivu Maqungo joined the team immediately upon being approached by Khuzwayo with his idea for OPENTENDERS. A lawyer who had closed his practice to join the Department of International Relations, Maqungo had wanted to travel the world from a young age. When the opportunity to do so presented itself, he grabbed it with both hands. By the time Khuzwayo and Nhlabathi met him, he was back in South Africa running the East Africa desk, which consisted of 14 ambassadors.

“There’s a high level of appreciation for South African products and talent across Africa. Few companies realise this, so I started running seminars. I’d invite ambassadors from various countries, and they would pitch to local companies about the opportunities available in their countries.”

Khuzwayo attended one such event, introduced himself to Maqungo and explained OPENTENDERS. Maqungo was the third partner they’d been looking for: He was involved in an investment company that funded SMEs, he had contacts across Africa, and he understood training and SME needs. For Maqungo, here was an opportunity to re-enter the entrepreneurial world. With his desire to travel sated, he was ready for the next chapter.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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Lessons Learnt

The Law Of Attracting Your Success

Once you discover your who, you automatically discover your why, which in turn allows you to lead with your heart rather than your head. Discover that energy source, and the world is your oyster.

John Sanei

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From the teachings of Buddha to the concept of karma, the Law of Attraction has been expressed in many ways by both ancient and contemporary thinkers. In its most simplistic interpretation, the Law of Attraction states that ‘like attracts like’.

Your ability to Magnetiize exists whether you are aware of it or not, whether you are positive or negative. You make daily decisions to choose whether you want to attract success or failure (however you define them), whether you want to live a more conscious, elegant and curious life or whether you want to keep your head down and stick to the old rules.

We are constantly Magnetiizing in every aspect of our lives, whether we’re running a business, interacting with friends or simply walking into a room. Changing how you do it can be a scary prospect, but it will move you from a stagnant space to one in which you can develop with meaning.

When you are in a space of positive magnetism, the momentum builds and your access to energy is incredible — it feels like electricity running through your body, with your ideas in focus and creativity flowing.

Magnetiize in 3 Steps

To Magnetiize is to take control of your own future and, in so doing, transform from a state of panic to a state of calm; from chasing ambition to seeking meaning.

  • The first step is a process I call Micro Inspection: How to confront the obstacles in your mind and start making decisions that are led by your heart.
  • Then comes Mega Exploration: Examining the qualities of future-forward and conscious businesses.
  • Finally, you need to bring it all together into your own reality, with the Macro Perspective: Understanding new technology and trends, and embracing the future.

Related: Global Speaker John Sanei On ‘What’s Your Moonshot?’

This holistic approach allows you to Magnetiize into your life the right type of people, appropriate access to opportunities, and the money and power you need for sustainable success. To truly achieve, you must combine Micro Inspection, Mega Exploration and Macro Perspective.

When you learn how to Magnetiize, you attract a tribe of people who you can work (and socialise) with in harmony. Your tribe should consist of elders, advisers and friends who complement your skills and personality and bring out the best version of you — the best ‘I’ behind your ‘I’. You’ll find that the tribe changes, for the better, the type of decisions you make and the discussions you have.

And as a result, your ability to Magnetiize will rub off on those around you, encouraging them also to step out of their comfort zone and to participate in shaping the future.

GET IT

Magnetize is circulated through all good book sellers and at www.johnsanei.com

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Lessons Learnt

Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Have a plan in place for your money, no matter how much you earn.

Christopher Tracy

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Seven-figure pay cheques are enough to buy a lifetime of financial security, right? Well, not exactly. Despite making millions, seemingly wealthy celebrities often have a tough time keeping their heads above the financial waters.

Johnny Depp spending $3 million to fire Hunter S. Thompson’s ashes out of a cannon, or Nicholas Cage shelling out $150,000 for a pet octopus, are both prime examples of how lavish lifestyles can quickly lead to debt. The two A-listers are part of a long list of actors, musicians, athletes, etc. – including Floyd Mayweather, 50 Cent and Curt Schilling – who have all experienced financial troubles.

While there’s nothing wrong with celebrities enjoying their earnings, a little budgeting can go a long way. Just take a look at Tori Spelling. After failing to pay a balance of more than $35,000, the actress was taken to court by American Express. Another example is 80s movie star Corey Haim. He became so desperate for cash after filing for bankruptcy he tried to sell his own tooth on eBay for $150, which didn’t get any buyers.

Avoid falling into any of these situations by keeping a close eye on your spending. Regardless of how much you make, the following few budgeting tips promise to help you practice safe and responsible money management.

Put a plan in place

mike-tyson-tigers

Nearly everyone lose sleep over their finances. Get a good night’s rest by figuring out where your money should be going long before it’s in your bank account. Spending without a plan, even if it’s only splurging on a one-time event, can have unintended consequences.

Related: 6 Money Management Tips For First-Time Entrepreneurs

One example of this is former NFL star Vince Young – after dropping $300,000 on his own birthday party he was forced to file for Chapter 11 bankruptcy. Another example is Mike Tyson, who went into debt after overspending on Bengal tigers, 110 cars and a $2-million bathtub.

That doesn’t mean you can never treat yourself, but make sure you’re not spending money faster than you can earn it. Set up a series of “fun funds” each month to splurge on nonessentials. Depending on what else you have going on that month, each fund should be adjusted accordingly.

If, for example, you’re heading out to a friend’s wedding, there may be a little less left over for eating out. Stay up to date on your spending by downloading a budgeting app. The easier it is to see where you are for that month, the better chance you have of staying under budget.

Carry around some cash

Credit cards are becoming the most common payment method among consumers. The average American currently carries around three credit cards at any given time. While they may be more convenient, credit cards can easily lure consumers into a false sense of security.

After all, a simple swipe or tap is often all it takes to complete a purchase. However, it’s important to take time to research any costly items thoroughly and ensure you won’t regret them like Nicholas Cage. He learned this lesson the hard way when he blew $276,000 on a dinosaur skull that he was forced to return after it was discovered to be an illegal import.

Curb some of your impulse spending during a night out by bringing enough cash for the occasion. In addition to avoiding spending money you don’t have, you’ll also sidestep costly ATM fees at establishments that only accept cash.

Whether it means stopping by your bank on the first of every month or getting cash back at the grocery store, do whatever it takes to have a little bit of cash on hand. As you cut back on credit card purchases, your chances of falling into debt should begin to dwindle.

Lean on an expert

hugh-jackman

When it comes to your finances, take a lesson from the likes of OprahTyga and Hugh Jackman, who invest in financial and life coaches. Many celebrities, including Oprah, attribute their success to their coaches helping put them on the right path. Even celebrities are human and can find it difficult to stick to budgeting goals.

Personalised features of a comprehensive coaching programme, such as daily check-in texts and bi-weekly budget reviews, promise to provide you with the encouragement needed to remain accountable even as the going gets tough.

Better yet, a financial coach can take your individual goals into account. Say you decide to start a family or need to make a cross-country move. Instead of wondering what that might mean for your budget, you can work with a financial coach to modify your spending habits and investments long before a change comes to fruition.

Related: 15 Wise Money Quotes From Millionaires And Billionaires

Budgeting goes beyond class. No matter how much you make, responsible money management has shown itself to be a necessity. Avoid following in the footsteps of celebrities who face serious financial trouble by keeping a close eye on where your money is going.

As we’ve seen all too often, failing to do so can mean losing millions. Simple steps – including creating a spending plan, occasionally relying on cash and reaching out to an expert – can help you achieve financial security sooner rather than later.

And if you plan carefully enough, you might just end up with the funds you need for that pet octopus.

This article was originally posted here on Entrepreneur.com.

Related: 6 Habits Long-Time Millionaires Rely On To Stay Rich

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Lessons Learnt

The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

The most successful people on the planet are also the people likeliest to devote an hour a day to reading and learning.

John Rampton

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You just walked in the door from an exhausting day at work. You’re hungry and spent, just wanting to catch your breath for a minute. You grab something to eat and then veg out in front of the TV. Next thing you know, you’ve just binge-watched five episodes of “Jessica Jones.”

While that’s OK occasionally – we all need ways to decompress and shut down – this isn’t a healthy habit. That’s why the most successful people in the world spend their free time learning.

It’s not exactly breaking news. During his five-year study of more than 200 self-made millionaires, Thomas Corley found that they don’t watch TV. Instead, an impressive 86 percent claimed they read – but not just for fun. What’s more, 63 percent indicated they listened to audiobooks during their morning commute.

Productivity expert Choncé Maddox writes, “It’s no secret that successful people read. The average millionaire is said to read two or more books per month.”

As such, she suggests everyone “read blogs, news sites, fiction and non-fiction during downtime so you can soak in more knowledge.” If you’re frequently on the go, listen to audiobooks or podcasts.

Related: 6 Leadership Lessons From Bill Gates On His 60th Birthday

Maybe you’re thinking: Who has the time to sit down and actually read? Between work and family, it’s almost impossible to find free time. As an entrepreneur and a father, I can relate – but only to an extent. After all, if Barack Obama could fit in time to read while in the White House, what excuse do you have? He even credits books to surviving his presidency.

President Obama is far from the only leader to credit his success to reading. Bill Gates, Warren Buffett, Oprah Winfrey, Elon Musk, Mark Cuban and Jack Ma are all voracious readers. As Gates told The New York Times, reading “is one of the chief ways that I learn, and has been since I was a kid.”

Breaking down the five-hour rule

The five-hour rule was coined by Michael Simmons, founder of Empact. The concept is wonderfully simple: No matter how busy successful people are, they always “set aside at least an hour a day (or five hours a week) over their entire career for activities that can be classified as deliberate practice or learning.”

Simmons traces this phenomenon back to Ben Franklin. “Throughout Ben Franklin’s adult life, he consistently invested roughly an hour a day in deliberate learning. I call this Franklin’s five-hour rule: One hour a day on every weekday,” Simmons wrote.

For Franklin, his learning time consisted of waking up early to read and write. He established personal goals and tracked his results. In the spirit of today’s book clubs, he created a club for “like-minded aspiring artisans and tradesmen who hoped to improve themselves while they improved their community.” He also experimented with his new information and asked reflective questions every morning and evening.

The three buckets of the five-hour rule

five-hours

Today’s successful leaders have embraced Franklin’s five-hour rule by breaking the rule into three buckets.

1. Read: 

Self-made millionaires including Mark Cuban and Dan Gilbert, owner of the Cleveland Cavaliers, read between one and three hours daily. Elon Musk learned how to build rockets, which lead to SpaceX, by reading.

Besides expanding your knowledge, Jack Ma, co-founder of Alibaba, says that “reading can give you a good head start; this is often what your peers cannot obtain. Compared to others, readers are more likely to know other industries’ strategies and tactics.”

Related: 20 Crazy Things We’ve Learned About Alibaba Billionaire Jack Ma

Even if you can’t commit to an hour or more of reading every day, start with 20 to 30 minutes. I always have a book with me so when I’m waiting for a meeting to start or in the waiting room of a doctor’s office, I can read instead of waste time on my smartphone. You could also try audiobooks during your daily commute or when exercising.

So how do they find the time to read daily? They adhere to the five-hour rule.

2. Reflect: 

Other times, the five-hour rule includes reflecting and thinking. This could be just staring at the wall or jotting down your thoughts. Jack Dorsey and LinkedIn CEO Jeff Weiner are well-known thinkers, while entrepreneur Sara Blakely is a longtime journaler.

Focusing on the past gives you a chance to learn from mistakes you’ve made, as well as assess what you did correctly. As a result, you’ll be better suited to achieve your goals and improve your life. The University of Texas also found that mental rest and reflection improves learning.

Need help getting started? Schedule reflection time in your planner. I’ve found blocking out 15 to 20 minutes after lunch is ideal because I’m coming out of that post-lunch slump. But start small: Allocate five or 10 minutes per day, and then work your way up so you’re not overwhelmed.

Know the questions you want to ask. Stick with just two or three questions focused on that specific day. For example, if you attended a conference, ask, “What were the key takeaways?” and “How can I apply this to my business?”

3. Experiment: 

The third and final bucket is rapid experimentation. Ben Franklin and Thomas Edison became leading inventors and thinkers because of their experiments. We have Gmail because Google allowed employees to experiment with new ideas.

The reason experiments are so useful is because you have facts, not assumptions. Experiments show you what’s working. You can learn from your mistakes and obtain feedback from others. Best of all, experimentation isn’t that time-consuming. Most of the time, you’re testing through the same activities you’d perform without testing.

Jack Ma even recommends applying the knowledge you’ve learned to a real-life scenario. For example, after reading a book about collaboration and teamwork, you could take on new volunteer work to put that knowledge to use.

When you make learning a habit, you’ll be more successful and productive in life. By investing in a reading habit, you can ensure you’re growing yourself – and your company – every day.

This article was originally posted here on Entrepreneur.com.

Read next: What Elon Musk Can Teach You About Getting Funding for Your Start-up

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