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Zinia Achieved Success Using One Principle: Simplicity

Zinia is a local Internet and voice provider that focuses on the B2B market. The company has shown incredible growth over the last few years by making use of something called proposition simplifying. Here’s how Zinia did it.

GG van Rooyen

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VITAL STATS

  • Players: Warren Bonheim and Frank Mullen
  • Company: Zinia
  • Established: 2009
  • Visit: www.zinia.co.za

Richard Koch, best known for his ground-breaking 80/20 principle, recently posited yet another theory that promises to change the way we look at business. And like all great principles, it isn’t really new. The fundamentals of the principle have literally been in operation since the dawn of the industrial age, but they haven’t been made explicit until now.

The simplification principle

For an early example of the principle in action, we can look at Henry Ford and his Model T. In 1906, Ford sold two models:

A ‘cheap’ version for $1 000, and an expensive one for $2 000. The company sold 1 599 vehicles. Then Henry Ford decided to democratise the automobile by creating a vehicle that the average person could afford. He started building a single, simple vehicle on an assembly line.

When this strategy came into full swing in 1914, the company charged $540 for the vehicle and managed to sell 248 307. By 1917, the price had dropped to $360 and 785 432 were sold. In 1920 alone, 1,25 million Model Ts were bought. Compared to the 1906 period, 1920 sales were 781 times greater.

Koch calls this price-simplification, and he argues that a substantial drop in price results in a much bigger spike in sales than one would expect. Dropping the price of an item by 50%, for example, doesn’t double sales, but can cause sales to increase by a factor of ten or even 100.

Related: Organisational Behaviour Expert Siphiwe Moyo’s Insights Into Keeping Your Employee’s Motivated

Make something better not cheaper

But price-simplification can be a dangerous game, especially when you’re trying to compete with manufacturing operations in places like China and India. For many companies, slashing prices simply isn’t a viable option, since you generally need to reduce prices by at least 50% to make a real impact. So, Koch suggests something called proposition-simplification. Here the focus is not on trying to make something cheaper, but to make it better.

“The objective is to make the product a joy to use: First and foremost, easier to use; then, if possible, more useful and more aesthetically appealing,” states Koch in his book Simplify.

A great example is the Apple iPhone. The iPhone certainly isn’t cheap, but its simple, minimalist design and easy-to-use interface has made it the most desirable gadget on the planet.

“As with price-simplifying, there is a common proposition-simplifying formula. It involves hiding incredible complexity through extremely clever product design, and a relentless focus on making the product both more useful and simpler to use,” says Koch. “Whereas price-simplifying is all about making it simpler for the producer, proposition-simplifying is all about making it simpler for the customer.”

The telecoms industry

With the simplification principle in mind, let’s now turn to the local telecoms industry. Go back five or ten years, and price was a major issue. If a business wanted a 4 Mbps premium business Internet line, it could easily pay R40 000 a month. Over the last few years, prices have dropped considerably, but now complexity has become an issue.

Related: Tough Lessons Flume Learnt To Survive Super-Charged Growth

There are so many products (wireless, fibre, voice, MPLS, PBX, etc.) to consider, and so many networks to choose from, that it can all feel a bit overwhelming. And what happens when the service goes down? Who is responsible for fixing the problem? Do you contact your ISP (Internet Service Provider) or the owner of the infrastructure? Then, of course, there are also multiple bills to pay…

Zinia, established in 2009, saw an opportunity to take advantage of the situation. By offering a simplified service, it could attract customers frustrated with the status quo.

“We realised that a lot of people were very dissatisfied with their service providers. They didn’t get the service and advice they needed,” says chief commercial officer and founder Warren Bonheim.

“We also decided to focus on the B2B market, which had very specific needs that weren’t being met. Business needed Internet access, voice, PBX’s, MPLS, firewalls and a way to manage connectivity, and there was no convenient one-stop shop to go to,” says Zinia CEO Frank Mullen.

“So, we came up with a concept of ‘business simplified’. Every customer has a single dedicated contact, one bill to deal with, and proactive monitoring and communication from our side. So, a customer would never have to wonder what was going on.”

Being proactive

Success in proposition-simplifying lies in being able to hide incredible complexity from the customer and provide a seemingly elegant and simple solution. This is certainly the case with Zinia. Making life easy for the customer demands a lot of complexity in the background.

Related: 11 Titans Share Their Advice On How To Achieve Success

“It’s all about efficiency,” says Bonheim. “You need to be able to get to the customer as quickly as possible. This requires a lot of systems and processes, and proactive monitoring is a big part of it. Any reactive service means that the customer has already experienced a problem and is suffering as a result.

“Zinia has invested in state-of-the-art live monitoring and management software, which allows us to monitor every client with exceptional reporting. The reporting proactively notifies us of any changes in service that may require our attention, and most of the time we change the outcome so the customer is unaffected.

“We have all these reports on screens in our network operating centre, being monitored by our entire team of service and technical staff. So, when our staff communicates with a customer, we are informed and able to provide service.”

This strategy has worked incredibly well for Zinia, resulting in more than 70% growth per annum.

“Customer satisfaction is very high, which is why we’ve been able to grow so successfully,” says Mullen. “People want a service that makes life easier, not harder.”

Growth results in added complexity. Unfortunately, it is often the customer who suffers because of this. It’s easy to keep ten customers happy, but what about 1 000, or 10 000? If you want to grow your company successfully, you need to put systems in place that hide complexity from the customer and provide a pleasant and painless experience.

Read this

Simplify: How the Best Businesses in the World Succeed    

By Richard Koch and Greg Lockwood

Investor and successful entrepreneur Richard Koch and venture capitalist Greg Lockwood have spent years researching what makes successful companies—such as IKEA, Apple, Uber, and Airbnb—achieve game-changing status. The answer is simple: They simplify. Their book is filled with fascinating case studies, as well as practical advice on how to simplify your own operation.

http://www.takealot.com/simplify/PLID42674813

 

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Lessons Learnt

Give Your Business The Best Chance Of Success

For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

Gil Sperling

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In my capacity as a business owner and venture capitalist, one of the questions I get asked most often by entrepreneurs is, “how do I ensure my business succeeds?” While there’s no straightforward answer, there are important elements that I believe every entrepreneur must consider to ensure the greatest probability of success.

Firstly, no business will succeed if it doesn’t solve a unique pain point or problem for modern consumers or businesses. However, even if a business is able to carve out that niche, there’s no guarantee that growth will follow. For that to happen an entrepreneur must distil the business’s reason for being and then doggedly pursue that vision.

North Star metric

This principle of having a clear business vision guides all my decisions. Whenever I need to validate a choice or a change in strategic direction, or if I’m trying to determine what to focus on, I always refer back to my vision. If the two are incongruent, then I know I need to change tack.

Elon Musk is a great example of a successful entrepreneur who is guided by his grand vision. Everything he does, from Tesla to SpaceX, pertains to sustainability, both for the planet and the human race. It might be hard to make the connection when you consider his various businesses out of context, but everything he creates fits into a broader ecosystem that in some way moves the needle towards his ultimate objective. Developing Tesla cars that run on renewable energy is but a small, short-term plan that feeds into his grand vision, yet it’s also been the catalyst for the evolution of the motoring industry.

Related: The Popimedia (Mega) Success Story

Be clear, concise

In the same way, every decision an entrepreneur makes should in some way take them a step closer to realising their vision. In this regard, it is also vital that your vision is crystal clear – a murky or undefined vision will divert you off your path to success.

That’s because you’ll tend to focus on the wrong things, especially when scaling rapidly, or when running bigger organisations, because there are many tasks to complete every day. A lack of clarity also leads to poor decision-making, or, worse, decision paralysis, and that’s business suicide – I’d rather make a bad decision than no decision at all, because it prompts action. However, with a clear vision, more often than not, those decisions will be correct.

Defining your vision

So, how do you know if your vision is clear and, more importantly, relevant and consequential? The way I stress test my vision is to evaluate it every day against the decisions I take, and the direction of the business. This daily process helps to sharpen my decisions over time.

The other step is to remain open-minded enough to accept and acknowledge criticism, and take on board advice from trusted confidants and impartial experts. This is important, because you need to craft your vision based on as much information as possible, including valid criticism.

Ultimately, though, your vision for the business should align with your purpose. Forget about money and turnover as points of departure when defining your vision. These are merely metrics that can determine the strength and effectiveness of your business strategy.

For each of my several business interests, be it VC funding or ad-tech innovation, I have different visions. Each are meaningful to me, but in every instance, I don’t wake up every day with the sole ambition of making money.

While I need to make money to grow these businesses, or build something new, having purpose and vision are the ways I pull through those inevitable challenging situations. Having your vision front of mind in everything you do helps you make better decisions, and makes the hardships easier to endure. It helps you see through the turmoil, because you know where the process will lead, and you always know where the ultimate objective lies.

Read next: A Comprehensive List Of Angel Investors That Fund South African Start-Ups

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Lessons Learnt

Jimmy Choo’s Co-Founder Explains Why There Are No Small Jobs

Tamara Mellon shares the strategy that has helped her find new opportunities throughout her career.

Nina Zipkin

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The co-founder of Jimmy Choo, Tamara Mellon, believes that you can find inspiration and opportunity anywhere. All it takes is determination to keep going and a keen eye for observation.

Mellon began her career in the early 1990s working as an accessories editor for British Vogue. Always on the hunt for up-and-coming designers, she came across Jimmy Choo, a cobbler working in London’s East End.

She would commission him to create shoes for fashion shoots. They were so well received by readers that the pair realised they could expand beyond one-of-kind pieces for the pages of the magazine.

This article was originally posted here on Entrepreneur.com.

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Lessons Learnt

6 Habits Long-Time Millionaires Rely On To Stay Rich

It’s a simple fact: Most millionaires have different habits than the average person. However, these habits are far from inaccessible; they improve one’s odds of finding success but can be adopted by just about anyone with a bit of concerted effort.

Timothy Sykes

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To take that idea one step further, once someone has become successful, how do they stay successful? Here, I’d like to take a slightly longer-sighted look at the habits of millionaires, focusing not just on the habits that make them successful but the ones that help them stay successful over time. By cultivating these habits in your own life, you’ll be investing in your own sustained success over time.

Here are six habits of long-time millionaires:

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