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Silulo Ulutho Technologies Tackles Tech Target Market

The Rani brothers grew their business from one Internet café to 38 stores with a R22 million turnover by creating a market where none really existed.

Monique Verduyn

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Vital stats

  • Players: Luvuyo and Lonwabo Rani
  • Company: Silulo Ulutho Technologies
  • Established: 2004
  • Contact: rani@silulo.com
  • Visit: silulo.com

Luvuyo Rani knows all about bootstrapping — he launched his business selling refurbished computers from the boot of his Corsa Lite in Khayelitsha, on the Cape Flats, in 2004.

Today, he and his brother Lonwabo have grown Silulo Ulutho Technologies into a 38-branch franchised IT services provider for people living in the townships and rural areas of the Eastern and Western Cape. They employ 178 people and provide ICT training for hundreds of people who would otherwise have no access to PCs.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

A (very) blue ocean

“The first thing we did right was to service a market that was completely untapped,” says Rani.

“Our target market had been overlooked and was computer illiterate. We found that people were buying computers from us and putting them on display in their dining rooms because they did not know how to use them. That led us to start our first Internet café. Silulo Ulutho — which means bringing value — offered computer training courses, Internet and business centre services, and IT retail and repair. The demand grew quickly and soon we were building a network of stores throughout the community. In 2007, we added training in mobile devices and social media.”

Lesson: This is a classic case of a ‘Blue Ocean Strategy’. Instead of competing in fiercely-contested markets (Red Oceans), it often makes sense to go in search of those untapped market spaces that are ready for growth. You can read more about this in W. Chan Kim and Renée Mauborgne’s book Blue Ocean Strategy.

The stokvel approach to finance

How does a bootstrapped company tap into a market that itself has no access to funding? By being creative in a way that many South Africans understand. “Our first customers were teachers,” Rani recalls.

“We got them to form stokvels in groups of six, and to contribute R400 per month each. Within six months, they paid for their computers.”

Lesson: In order to be successful, you need to really understand your customers. The Rani brothers had the advantage of understanding the culture of their customers intimately, allowing them to tap into a market that outsiders would have found impossible to penetrate.

A strategic partnership

The next strategically important move was to partner with MWEB to launch a store in Ngcobo in the Eastern Cape, the first to provide computer training services in the area. A further seven stores were launched as a result of the partnership, with Silulo Ulutho having received R3,2 million in funding from MWEB over the last seven years.

At the same time, the partnership has given MWEB access to the Rani brothers’ significant and sustainable growth strategy and grown the service provider’s own business in emerging market communities.

Lesson: The Rani brothers managed to secure considerable funding by not chasing outside capital too quickly. They waited until they had something substantial to offer a large partner. Many companies chase funding too quickly, before they have a proven business model.

Related: Meet The 40 Richest Self-Made Entrepreneurs On Earth

Creating a bridge

“We also provide technology services to companies like Telkom with penetration points in communities that don’t have existing infrastructure,” says Rani.

“This opens up new business opportunities both for Silulo Ulutho Technologies and our corporate business partners, creating job opportunities and new value chains. Essentially, we provide our partners with ‘last mile’ access — the portion of the telecommunications network chain that physically reaches customers.”

From day one, Rani notes, the company positioned itself as the bridge between ICT providers and township and rural communities.

“We said, to reach these customers, come through us and we will make it easy for you to build brand presence and grow your market in partnership with us, because we know these communities. As we developed the franchise system, we appointed people with local knowledge in other areas. Understanding the communities in which you operate is critical to success.”

Lesson: Silulo Ulutho Technologies offered outside partners access to a market that they would otherwise have found difficult to penetrate. By doing this, it became more than a supplier or sub-contractor — it became a strategic partner of immense value.

Customers for life

The brothers plan to grow the business to 100 stores, with expansion into Mpumalanga, Gauteng and Limpopo by 2018.

Related: 10 Dynamic Black Entrepreneurs

Rani points out that the business owes its success to a model that goes the distance with the customer. “We take people who have never touched a computer, we train them and help them to become employable. Once they have a job, they return to buy a PC. When they need Internet access they either use our services or they buy data from our stores. If they need business services, we offer those too. We create customers for life.”

Lesson: Silulo Ulutho Technologies has grown beyond its small native market, but it has retained its customer-centric focus. It is aware of the lifetime value of each customer, and therefore focuses on establishing long-term relationships.

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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Lessons Learnt

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.

Catherine Bristow

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1. Brendan Kennedy

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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.

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Lessons Learnt

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.

Louw Barnardt

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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:

Leadership

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.

Infrastructure

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.

Market access

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.

People

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.

Strategy

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.

Flawless execution

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.

Finance

Everyone knows that growth burns cash. A rapidly scaling business faces the challenge of needing a scalable financial infrastructure to keep the company healthy. Our successful entrepreneurs pay close attention to finance as the heartbeat of the business, ensuring that everything else functions. They look at the tech they are using for financial management and for the ways that their financial systems can be automated so that they can be brought rapidly to scale. The capital to grow is another vital finance issue.

The best way to finance a business is through paying clients on the shortest possible cash flow cycle. However, when you are scaling up and making heavier investments in the resources you need for growth, it is likely that you will need a workable plan for raising capital. Our scale-up clients know the value of accessing innovative financial management that provides high level services to drive their business growth.

Navigating the scale-up journey of a growing private company is one of the hardest but most rewarding of careers to pursue. Having people in your corner who have been through this journey before helps take a lot of pain out of the process. No growth journey looks the same, but there are tried and tested methods that will – if applied diligently – lead to definite success. Happy scaling!

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Lessons Learnt

That Time Jeff Bezos Was The Stupidest Person In The Room

Everyone can benefit from simple advice, no matter who they are.

Gene Marks

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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.'”

Related: Jeff Bezos: 9 Remarkable Choices That Shaped The Richest Man In The World

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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