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Lessons Learnt

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




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+.


Lessons Learnt

Nicolas Bereng Is Creating An Industry Where None Exists in SA

Nicolas Bereng is a young entrepreneur with dreams of creating not only a new company, but a brand new industry as well. Here’s his advice on pursuing big, audacious (and scary) goals.

GG van Rooyen




Vital Stats

  • Player: Nicolas Bereng
  • Company:Brand LAIKI
  • Est: 2015
  • About: Brand LAIKI aims to combine education and entertainment in order to create an interest in books and reading amongst South African schoolchildren. One of the company’s chief aims is to organise events where reading and learning can be promoted. These events will make use of modern technologies like virtual and augmented reality.
  • Visit:

Nicolas Bereng is trying to create an industry that doesn’t really exist in South Africa.

“We’re trying to establish the concept of edutainment locally,” says Nicolas. “It’s really not something that exists or that people understand at present. Even people who I would define as ‘edutainers’ don’t necessarily call themselves that.”   

So how do you create a new industry?

“It isn’t easy,” he says. “It’s driven me to tears at times, but ultimately, I’m so passionate about the  idea that I’m incapable of abandoning it. If you really care about something, it carries you through the hard times.”

Here is Nicolas Bereng’s advice on cultivating a winning mindset and pursuing audacious goals:

Passion breeds passion

I’ve managed to get buy-in from some large businesses and partners, despite the fact that I’m young and the company is still new. I think the reason people have been willing to meet with me is largely because of my passion. They might not quite ‘get’ the concept of edutainment yet, but my passion is infectious. They can sense that this isn’t a business idea I’ll simply abandon when things get hard. I’m determined to make this work, and people can see this, which increases their passion for it as well.

Related: 3 Questions To Guide You To Success In 2018

Change your perspective

My parents moved overseas in 2006, and after I finished school in South Africa, I spent quite a bit of time with them in Europe. Although I loved South Africa and knew that I wanted to return and build a business here, the experience was still immensely valuable. Travel changes your perspective — it makes you look at things in a new way. It’s easy to get trapped in your own environment and to believe that there is only one ‘correct’ way to do things.

Changing your environment can spark creativity, and can even make you think on a big scale.

In the age of information, ignorance is a choice


Thanks to modern technologies like the Internet, we have access to unimaginable amounts of information, so I always tell kids that there is no excuse for ignorance. We all have the tools needed to gain knowledge, we just need to embrace them.

Reading is everything

To me, reading is one of the most important activities anyone can engage in, which is why Brand LAIKI is focused on inspiring kids to read more using urban music and new technologies. Like travel, reading has the ability to broaden your horizons and to make you look at things in a new light. We might not all have the ability to travel regularly, but we can all read.

After school, I spent about a year just reading. I went through dozens and dozens of books. The knowledge I gained has proved invaluable. As an entrepreneur, you can’t afford not to read. There are so many brilliant books out there that can help you along your journey.

Related: What You Put In Is What You Get Out – Create Your Own Success

Be committed but flexible

I’m very passionate about the business, so I always say that I don’t have a ‘plan B’. I’m completely committed to making this work. However, I still try to be flexible in certain ways. I won’t abandon my dream, but I’m open to change. Business ideas change and evolve over time. You have to be willing to adapt. If you’re too married to your specific concept, you’ll struggle.

Be willing to walk away from opportunities

While it’s very important to be flexible and to adapt your ideas as necessary, you should also be able to walk away from opportunities when they become too constricting. Don’t allow your ideas to be watered down or changed entirely. This often means saying no to short-term success, which can be hard, but it’s important to focus on your long-term goals.

If you understand people, you understand business

When you get right down to it, business is ultimately about people. When you’re doing business, you’re dealing with people. Because of this, it’s important to try to understand people. What are their aims? What are their concerns? How can you help them? I think empathy is incredibly important. You can’t just use people. That’s not how you create a successful business in the long term.

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Lessons Learnt

How To Build A Billion-Dollar Brand

Being an entrepreneur is one of the most difficult tasks you can take on.

Lewis Howes




Being an entrepreneur is one of the most difficult tasks you can take on. In fact, some people find it soul crushing if not done right. When done properly though, it can be the greatest thing you can do in your life.

Starting as an entrepreneur means knowing what you really want to do, what your passion is and how to deliver that to consumers. It’s not about pushing it on them but listening and seeing how you can serve them.

Most entrepreneurs stop as soon as they hit success and sell off their company, but not all of them. On this episode, we are joined by Michael Mente, who has been a massively successful entrepreneur since 2003 when he helped create the incredibly popular clothing company: Revolve.

Michael Mente dropped out of an entrepreneur program at the University of Southern California to become an entrepreneur by profession. He’s Currently the CEO and co-founder of Revolve and is set to bring in $400 million in sales this year. His company is considered the one-stop shop for clothing items designed by some of the hottest emerging designers.

Over the years, Michael began developing organic relationships with bloggers to represent the brand on a more realistic level. To do so, Revolve regularly holds trips for influencers to gather, relax and recreate the lifestyle of an ideal Revolve customer.

Related: How DJ Dimplez Built His Brand And Business From A Passion

Michael saw a gap between affordable and high end items, which provided grounds for him to create an online shopping experience that falls in the middle. Supporting up-and-coming designers and digital influencers has become the core of Revolve’s growth and they decided to expand their digital offerings by launching a sister company, Forward, in 2008. Since then, Forward has grown to become a fashion powerhouse and go-to place for premier luxury fashion.

I loved Michael’s humble wisdom about what it has taken to create this kind of success in such a competitive industry.

Discover all of that and much more, on Episode 583.

This article was originally posted here on

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Lessons Learnt

What Top Venture Capitalists Are Looking For In Your Start-Up

Keet van Zyl, one of South Africa’s top Venture Capital investors unpacks what he looks for in a start-up, what your pitch deck should include, and the red flags that investors walk away from. Would your start-up make the cut?

Nadine Todd



keet van zyl

Vital Stats

  • Player: Keet van Zyl
  • Company: Knife Capital
  • Claim to fame: Keet is a Venture Catalyst with extensive high-growth investment experience. In 2010 he co-founded growth equity fund manager Knife Capital.
  • What they do: Knife Capital is an independent growth equity investment firm focusing on innovation-driven ventures with proven traction. By leveraging knowledge, networks and funding, Knife Capital aims to accelerate the international expansion of entrepreneurial businesses that achieved a product/market fit in a beachhead market. They have offices in Cape Town and London and invest via a consortium of funding partnerships, including SARS section 12J Venture Capital Company: KNF Ventures and Draper-Gain Investments.
  • Visit:

Why would you choose to back Gazelles over Unicorns, and what does this investment strategy mean for start-ups looking for investment in South Africa?

Unicorns are start-ups (sometimes without an established performance record), valued at $1 billion or more, normally pre-public listing (IPO).

Gazelles are young post-commercialisation phase businesses that are able to scale and maintain a high revenue growth rate off a decent base over a prolonged period. In the US, this is usually well in excess of 20% year-on-year for a period of three to four years or more, starting from a revenue base of at least $1 million. My view is that in South Africa this range should be a sustainable year-on-year growth rate of 30%+ for three years or more off a revenue base of at least R5 million.

Related: Is Venture Capital Right For You?

If I could know for sure that a start-up was going to turn into a Unicorn, I would obviously choose to back it over a Gazelle. But that is just the thing: The risk/return ratio of chasing mythical African Unicorns with a very low probability of actually achieving Unicorn status is not necessarily a viable investment strategy. There are enough entrepreneurs out there who are building sustainable high-growth businesses requiring opportunity funding to accelerate growth through access to knowledge and market access networks.

Many South African start-up investors require businesses to have proven traction to de-risk investments to some extent (and many of those who don’t, do so after gaining a few battle-scars). Start-ups looking for investment should first bootstrap to some extent or get enough funding from the so-called ‘three Fs’ (friends, family and fools) to gain some momentum in one or more key traction verticals before approaching the more formal early-stage investors.

As an investor, do profitable businesses that solve real, meaningful problems attract your interest? Why?

Absolutely — profitable businesses that solve real, meaningful problems attract our interest for investment as long as they are still in their growth phase (as opposed to maturity/ harvesting phase). At the core of any successful start-up lies a good product/service and a large addressable market for that product/service. This enables a start-up to grow or scale and become sustainable. Businesses that solve real, meaningful problems have a better chance of aggressively penetrating their identified target market and profitability is a great traction milestone. Too many start-ups focus on building a solution looking for a problem to solve — instead of the other way around.

What separates a good pitch from a great pitch?

I’ve seen thousands of start-up pitches through the years, and unfortunately most of them miss the mark by a long way. The better ones contain all the key components of a pitch, but the really great ones tell a brief but engaging story that follows a ‘Hearts — Minds — Wallets’ narrative in a true authentic way.

This includes first appealing to the ‘hearts’ of potential investors by taking them through a journey to get them excited about the opportunity. Then the entrepreneur has to augment the story with facts and a solid business case to win their ‘minds’, concluding with a clear ‘ask’ of the funding requirements and how this investment could positively affect their ‘wallets’.

How can an entrepreneur determine whether their business is funding ready or not?

Venture capital should not be the go-to funding choice for everyone starting a business. It is an inspirational metaphor at the bleeding edge of entrepreneurship. There are many other credible funding mechanisms out there across the debt/equity spectrum, and entrepreneurs should assess the criteria based on where they are in their business growth cycle, and then gauge their funding readiness.

A venture backable business has a high growth trajectory of at least 30% to 40% year-on-year for the foreseeable future with a clear exit strategy for investors to realise returns of at least five to ten times the money invested (in South Africa this is most likely a trade sale to a large strategic investor that can scale the product, intellectual property or team by utilising its already established distribution channels).

Entrepreneurs have to ask themselves whether their growth goals can be achieved without venture funding — in which case bootstrapping is the way to go. And lastly whether the current founding team can embrace trading ownership (and thereby some element of control) in the business for a financial partner.

In order to facilitate the funding process, it is advisable for entrepreneurs to always have the following elements at hand: A one-page teaser document containing a summary of the business and funding requirements; and a business pitch deck, with a detailed financial model and a virtual data room containing key business documentation for investor scrutiny. (See table)


Related: The Truth About Venture Capital Funding

What do so many start-ups not understand about funding?

The largest deal origination sources of start-up funding in South Africa come through warm referrals. It is simply not good enough to find the email address of a venture capitalist and send through a cold email expecting a positive outcome. Study the investment mandates of potential funders, build an investor universe of preferred partners and do some homework to figure out a way to get referred.

And then: The 8020 principle is as alive in entrepreneurship today as it was in Pareto’s pea garden. 20% of start-ups have 80% of the disruptive solutions and will receive 80% of the funding. One only has to watch one episode of Idols to realise that many people have an inflated sense of their own abilities. There is a very fine line between a tenacious entrepreneur who does not take no for an answer where success is inevitable despite the setbacks, and a lost cause. Start-up entrepreneurs need to figure out on which end of this spectrum they are.

Lastly: Like it or not, at some level all roads lead to the assumptions behind your financial model. We’ve heard it all from the ever-present ‘these projections are conservative’ to ‘real life won’t mimic excel anyway so what’s the point of building a model?’… Build a model! And make it granular. We know there will be pivots, delays, underestimation of costs, corporates who pay late, and so on. But we need to agree on the basic set of metrics that reflect the commercial DNA of the business at this point in time.

Do you believe most businesses can be bootstrapped?

Yes and no — to some extent and at certain stages of the business. The one thing that start-ups who believe in themselves must jealously guard is the management team’s equity ownership in the business. Risk funding will generally result in the start-up founders having to share this equity with outside parties. The more one can bootstrap while increasing value, the better in the long run for the founders — but not to the detriment of the business.

What is the role of bootstrapping versus funding in a vibrant market?

Bootstrapping is a viable option for most lifestyle businesses where growth is slower, but a start-up is a high growth potential company in search of a repeatable and scalable business model. If the business solves a real, meaningful problem and the business model is scalable, it’s a question of time before competitors establish themselves in the market. This means that the window of opportunity for growth and market penetration is closing, and while bootstrapping could be ideal, by the time the start-up gets to ‘Point B’ — the goalposts may have moved. Funding in a vibrant market can accelerate growth and ensure that windows of opportunity are not missed.

Related: How To Get Venture Capital

What red flags immediately warn you off investment opportunities/start-ups?

My number one red flag is a culture clash. Either between us as investors and the entrepreneurs, or subtle politics within the entrepreneurial team. We’ve learnt the hard way that the one thing that you can’t fix with money is a toxic corporate culture. Most other fundamental business gaps can be closed with enough investment. Knife Capital has an internal [subjective] measure for assessing corporate culture in companies called the ‘Speed of Climbing Stairs Index’. The theory is that there is a direct correlation between staff morale/corporate culture, and the speed at which employees will climb a proverbial staircase at the office. If it’s not fast enough, we will not invest.

Other red flags include questionable ethics, lack of product/market fit, cash flow management issues and entrepreneurs betting on a product as opposed to building a multi-product sustainable business.

What specifically do you look for in your investments?

  • A Solid Investment Case: This comprises a good product/ service with a competitive advantage; a large addressable market for that product, a strong management team, a scalable business model, funding to accelerate growth and an achievable realisation strategy.
  • Awesome People: Start-up investment is a long journey to success and we feel that we may as well embark on that journey with amazing people.
  • Strong Culture: The company culture needs to be solid in order to celebrate the successes as well as survive the setbacks.
  • Execution Capabilities: The value of an idea without execution capabilities is zero. So we look for the ability to execute.
  • Proven Traction: There needs to be some element of momentum that can be demonstrated or quantified.

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