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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

 

Lessons Learnt

How We Went From 0 To A Million In Sales In 6 Months

It became a numbers game. How Version Eight is winning 2018.

Jandre de Beer

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In November 2018, I left a very cosy position at a flourishing retail company in order to pursue my own destiny. Version Eight was born on 1 February 2018.

Everyone told me starting a business in today’s economic climate will be tough, and boy were they right. However, through a bit of luck, some hard work, and out of the box thinking, we managed to turn over our first million rand in sales within our first six months.

Now, for the record, hitting the seven figure turnover mark in six months is nothing to write home about, and that is certainly not the purpose of this article. The purpose of this article is to share our key ingredient with you so that you can possible achieve the same growth within your business, whether it’s an existing, new or business you are still dreaming about.

So, How Did We Do It?

The answer is quite simple, we did it through digital marketing.

Well, to be honest, not having had capital to spend on our own digital marketing at first, our first few clients were signed through cold calling as mentioned on the Big Small Business Show with Allon Raiz.

Only after signing our first three clients did we have some money to spend on online marketing services like Google Ads.

In Aug 2017, I wrote an article on this very website named “Beginners Guide to Digital Marketing in South Africa”. In the article I talked about the four fundamental pillars and how they form part of an effective digital marketing strategy.

We only incorporated three of the pillars, as one of them was more aimed at B2C businesses, and being an digital advertising agency meant we were B2B driven.

Related: There Is No Silencing The ‘Chatter’ Bots

1. Search Engine Marketing

If you read the guide, you will notice that search engine marketing was the number one pillar on the list, and with good reason.

In a nutshell, we knew that 90% of all online sales and enquiries started with a search engine and that is why it’s something we started implementing as soon as we could. In the beginning organic traffic was slow, so we spent a very small amount on search engine ads.

Having the knowledge and understanding how Google AdWords work, I strategically bid on keywords that indicated that someone was looking for digital marketing help.

We made sure to find keywords that got a decent amount of searches per month but didn’t have a lot of competition, and yes, these kind of keywords do exist, you just need to know how to find them. This meant that we ended up paying very little for leads that enquired about online marketing services.

2. Social Media Marketing

Next up was to start working on a social media strategy.

Again, not having had a lot of cash floating around, we thought LinkedIn would be the best place to start. The professional network is amazing for connecting with potential prospects and that is exactly what we did.

By connecting with the right people, being active on the platform and sharing knowledge on a weekly basis, it was only a matter of time before we started getting private messages of people and companies looking for digital marketing services.  Not to mention, this strategy was completely free.

3. Email Marketing

social-media-planAnother pillar I mentioned in the guide was email marketing. After cold calling prospects and finding the emails of key decision makers it became a numbers game. We knew that no one would know who we are and therefore we had to provide some form of value up front if we wanted to build some credibility.

Soon after we launched we created a Social Media Advertising Guide and all it was a 90 page PDF and 40 min video talking about social media advertising and how one can go about advertising on all the different platforms.

You can download our amended 2019 Social Media Ad Guide Here for Free.

As expected most recipients found it interesting but didn’t feel the need for our services, however, for every 50 people emailed, 21 would reply. And out of every 21 replies we about 1-2 meetings. Like I said, it became a numbers game.

Related: How Blockchain Will Disturb The E-Commerce Industry In The Next Few Years

WRAPPING IT UP

As mentioned earlier in the article, we did not end up using all four pillar (SMS Marketing), however, we’ve had great success with the above three.

In six months we did over a million rand in sales, and by the grace of God we are still growing, and you can too! I truly hope this article has opened up your mind to the power of digital marketing and if used correctly, and consistently, it can most definitely change your business for the better.

I do understand that not everyone is a digital marketing wiz, and for those I want to say, read, learn and experiment with online marketing as much as you can.

For those interested I would recommend doing a digital marketing course. Not only is it affordable, but it will allow you to scale your business.

Make sure to visit the Digital School of Marketing if you want to learn more about some of the best and accredited digital marketing courses around.

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Lessons Learnt

Blood, Sweat And Tears – The Journey To Becoming Emerging Entrepreneur Of The Year®

You see the awards, the magazine features and the highlight posts on social media. But building a successful business from the ground up is a really tough journey behind the scenes. Outsourced CFO co-founder Louw Barnardt opens up to Entrepreneur Magazine about what it actually takes.

Louw Barnardt

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I can tell you about all the exciting successes. I can mention things like two to twenty-six professional staff in under five years, more than R500 million in growth funds raised for SMEs, some notable awards and many other things that make the headlines. This is a part of the story and we do try to stop and celebrate the successes as we go…

What I would rather share with you are the trials and tribulations, the challenges and heartaches of the process of building a company. It is in this trail by fire that one learns the most about being a good entrepreneur. The most challenging of times often determine your path and hold the best lessons.

Blood

For me, blood represents the big losses. Bleeding financially is definitely a part of the journey. Very few companies have started up without some months or years of bootstrapping, of keeping it lean. For us, that meant continuing on articles salaries for more than a year after we had qualified. It took years to get to and exceed market salaries. This has been a painful sacrifice, but one that all founders need to make in order to get out of the rat race. Live a few years like no-one would so that you can live the rest of your life like no-one else can.

Relationships are also often counted among the losses. Many a time we have invested a lot into a staff member only to see them jump for a better deal. Many times people close to you try to steal ideas or copy direction. It hurts, but it has definitely been a reality.

Sweat

Sweat represents hard work. Outsourced CFO was built on many long hours of hard, focused work. We’ve made this fun by working from coffee shops on weekends or from the beach for a day. But hard work has definitely been a part of getting things to where they are today. Nothing worth building is easy. Don’t start a business if you want to work less!

Sweat also means stretching. Coming from a finance background, there are dozens of core skills that you need to teach yourself in order to be successful at business. Sales, marketing, public speaking, networking, people management, technology. It is a process of continuously stretching your mind and your abilities. Treat learning like a superpower!

Related: Seven SA Star Entrepreneurs Recognised At Premier Competition

Tears

Tears just refer to literal tears. I have yet to meet an established founder who has never come home after a ridiculously tough day to a good cry in the dark. The journey has massive emotional asks. Disappointment, rejection, temporary defeat (which feels like failure in the moment) and other experiences are a part of the game. You have to learn how to dust yourself off, refocus and keep moving forward. But sometimes it’s okay to just shed that tear. Heaven knows I have.

Fate has a cruel sense of humour

entrepreneur-of-the-year

The funny thing is that our biggest successes have very often been followed in quick succession with our biggest disappointments. The week we received the Premier’s award as one of the top two Emerging Companies in the province is the same week we had to postpone paying our own salaries. The month I came back from honeymoon early in our second year of business is the same quiet April that we had to seriously consider if we should continue with business. The list goes on! Business teaches you in a very real way to hold both the extremely high and extremely low moments at the same time.

Pivotal moments and the grind

In every young company’s story there are pivotal moments. Things that happen that change the game. I’ll share two of ours with you. At the end of the very April month mentioned above, we won the contract to become the national financial service providers to Microsoft’s BizSparks Program, allowing us to work with the top 10% of a pool of one thousand tech start-ups being incubated by Microsoft. This set us on a course to become the leading authority in the country on finance for tech start-ups.

Another such moment was the Fundraising Readiness Program that we ran with Investec, where we helped over a dozen private companies prepare for and pitch for growth capital. The brand association and fundraising processes that came from this also changed our trajectory. These pivotal moments change your game – but don’t take anything away from the weeks and months of hard grind in between them.

Entrepreneurship is a team sport

No great company has ever been built by one person. It takes a village to build a business. I have been blessed with two co-founders that I have been friends with for over a decade. Their work and support as well as that of our team (which include my sister Dore too) has been the secret sauce to our success. Don’t try to go it alone. Surround yourself with likeminded people who share in and contribute to your vision.

In summary

The road to building a successful company is a steep and rocky one. It is scattered with high mountains as deep valleys. You will need patience, dedication, willingness to sacrifice and a sincerely, fierce belief in your vision for the road. But if your why is big enough, you can get up every morning and make that dream a reality!

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Lessons Learnt

SA Entrepreneur Takes First-Of-Its Kind Business To An International Level

Jo Farah shares some insights on his entrepreneurial journey as Global Entrepreneurship Week (GEW) gets underway.

Entrepreneur

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South African-born entrepreneur and creator of the world’s first environmentally friendly sneaker care product – Jo Farah says entrepreneurship has always been part of his DNA, and making a valuable contribution to society his ultimate goal.

The founder of Sneaker LAB – an innovative business that’s managed to create a first-of-its-kind, biodegradable sneaker care product, delivered his sentiments on entrepreneurship and his entrepreneurial journey as Global Entrepreneurship Week (GEW) kicked-off in 170 countries around the world this week.

Farah, who’s been mentored and groomed by his entrepreneur father, says developing a successful business has always been part of his life’s plan. And while he managed to establish a few start-ups during his entrepreneurial journey, which includes founding a guerrilla marketing agency in South Africa, and producing ads for the likes of Adidas, New Balance and Puma it still wasn’t enough.

After returning from the United States in 2008 with just one thing on his mind – to help cure South Africa’s conundrum by creating jobs for the unemployed, and in-turn fostering economic growth, Jo invented a one-of-a-kind sneaker care product, and put shoulder to the wheel to establish his business in 2013.

Related: How Lorenzo Escobal Bootstrapped His Way To Competing With Titans And Attracting Top-Tier Clients

sneaker-lab-founder-jo-farahStarting a sneaker care product range was a natural choice, especially considering Jo’s passion for sneakers, street wear and urban culture. He also wanted to create a complimentary product to accompany the list of sneaker brands that has inspired him over time. Jo’s work behind the scenes commenced in earnest and in no time he conducted enough research to support his theory – there was a gap in the market for branded sneaker care products. He knew that he was on a good wicket.

“There already was a range of non-branded products on the market, but my research revealed there was a healthy appetite for branded, environmentally friendly sneaker care products. That spoke directly to my business model,” he says.

Today, Sneaker LAB has placed Cape Town on the map with its premium global status – it’s the only sneaker care product range in the world to be Green TAG certified, environmentally friendly and biotech driven. Its products are water-based, readily biodegradable, and the packaging is suitable for recycling. The business also operates internationally, in 50 countries across Africa, with an experiential brand store in Braamfontein Johannesburg; as well as downtown Los Angeles in the USA; Asia and Europe.  The business is growing by the day, with a store in Tokyo set to open soon.

As an entrepreneur he’s grown in leaps and bounds, and despite many changes along the way, his sentiments on entrepreneurship remain.

“Inspiring potential entrepreneurs to develop an entrepreneurial mindset and embark on an entrepreneurial journey is one way of solving some of the world’s most critical problems, and freeing the economically marginalised,” Jo says.

Related: Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

He urges young aspiring entrepreneurs with an entrepreneurial mindset to take the plunge and to channel time and energy into developing their business ideas into something tangible and workable that could generate good long-term financial returns.

“People will tell you that it can’t be done, but believe me, it can. All you have to do is to believe in your idea and to work hard and smart and you’ll reap the benefits,” Jo says.

 

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