Zibusiso Mkhwanazi and Neo Mothlabane were18 and 20 years old respectively when they started Csonke.com. Between themthey had nothing but their IT and accountancy skills, R2 000 start-up capitaland a dream to be in the top five IT companies in the country within fiveyears. “We didn’t have a car so we used to take taxis to see clients. On thedays that it rained, we’d have to cancel meetings because we’d get so wetwalking in the rain,” remembers Mkhwanazi. But, as John Barry, founder ofAdcorp, says in his interview at the back of this issue, South Africa is one ofthe last great countries where, if you put your mind to it, you can achieveanything.
This was their thinking exactly. In Januarythis year, Csonke.com bought 30% of Krazyboyz Digital, for an undisclosed sum,forming one of the largest African digital agencies. Mkhwanazi is ExecutiveChairman and Mothlabane Managing Director of the Johannesburg office.Csonke.com also has the option to acquire a further 21% of Krazyboyz Digitalwhich will, in future, allow it to attain majority shareholding. The rise and rise of Mkhwanazi andMothlabane is a story that’s nothing short of remarkable. Mkhwanazi relates howit all began: “With the little capital we had we needed to focus on one thingthat would land us a big client.“ They scanned the market and decided that webdevelopment was the way to go. But, there was one small problem. Neither ofthem was a designer. Refusing to be discouraged, they approached designstudents at the former Technikon of the Witwatersrand and asked them to submitexamples of web design work. “We took the work and started selling it andlanded our first significant client, Mazwai Securities, now Barnard JacobMellet,” explains Mkhwanazi.
It was a taste of things to come. Blue IQfollowed, then Lotto and then Thebe Investments. “We just grew and grew – itjust exploded,” he remembers, “And importantly it gave us the confidence weneeded. Because as a small start-up you have to first convince a giant that youcan deliver what they need, and then you have to actually deliver it. It’s areally big challenge.” In both instances, the pair proved successful and incomeslowly started coming in, eventually funding the company’s growth. But, ever aware that IT was a high-riskmarket, particularly at that time in the aftermath of the dot.bomb, Mkhwanaziand Mothlabane made an important strategic decision to keep overheads as low aspossible. “We were very clear on one thing: the only salaries we were going topay were our own and a secretary’s,” he recalls. They bought one car to shareand instead of taking on staff, continued to outsource the design work on acontract basis, a practice that remained in place right up until Csonke.combought into Krazyboyz Digital.
Mkhwanazi explains the thinking behind themerger. “We needed new markets and to expand our services for the existingclients that we had grown with. We were strong on web design but we weren’tstrong on things like presentations and digital signage. And we wereapproaching that five year mark and still weren’t in the top five!” Theystarted scanning the market but in the end Krazyboyz, which was also lookingfor a partner, found them at a serendipitous tender briefing. The deal waseventually financed through assets and cash. The merging has presented Mkhwanazi and hisnew team of directors with an array of challenges. “When you combine twocompanies there is always the risk that you will get two separate camps. Therewas the perception that people would lose their jobs and be replaced becausethere was now empowerment in the business. You have to get people to trustyou,” he says, adding that communication and a united group of leaders whopublicly come out in support of each other has made all the difference. Todate, not one staff member has resigned. “It’s all about leading by example,”concludes Mkhwanazi. Small wonder then that Krazyboyz is at an all-timehigh.
Watch List: 50 Top SA Small Businesses To Watch
Keep your finger on the pulse of the start-up space by using our comprehensive list of SA small business to watch.
Entrepreneurship in South Africa is at an all-time high. According to Global Entrepreneurship Monitor (GEM), total early-stage entrepreneurial activity has increased by 4.1% to 11% in 2017/2018. This means numerous new, exciting and promising small businesses are launching and growing.
To ensure you know who the innovative trailblazers are in the start-up and small business space, here are 50 of South Africa’s top establishing companies to watch, in no particular order:
- Livestock Wealth
- The Lazy Makoti
- Mimi Women
- AfriTorch Digital
- Akili Labs
- Native Décor
- Quality Solutions
- EM Guidance
- Kahvé Road
- HSE Matters
- VA Virtual Assistant
- Famram Solutions and Famram Foundation
- BioTech Africa
- Brand LAIKI
- Plus Fab
- Lenoma Legal
- Benji + Moon
- Brett Naicker Wines
- Legal Legends
- The Power Woman Project
- Aviro Health
- AnaStellar Brands
- Data Innovator
- Oolala Collection Club
- Empty Trips
- Vula Mobile
- The Katy Valentine Collection
- Pimp my Book
- ART Technologies and ART Call Management
- The Sun Exchange
How 28-Year Old Entrepreneur Adam Fine Is Leveraging The Global Phenomenon Of Five-A-Side Football
Adam Fine of Fives Futbol discusses how he leverage a global phenomenon and the value of strategic partnerships in business.
- Player: Adam Fine
- Company: Fives Futbol
- Est: 2011
- Visit: www.fivesfutbol.co.za
Nothing about Adam Fine is by-the-book. The 28-year-old entrepreneur describes himself as a slightly big child. He’s the CEO of one of the most exciting start-ups in South Africa, having leveraged the global phenomenon of five-a-side football to start a business that has grown almost as fast as the game itself. Not bad for a venture that was launched with the princely sum of R85 000 — Fine’s life savings at the time.
He started it in 2011, with a strong focus on corporate social investment and making a positive social impact. It was by forming strategic partnerships that Adam really managed to grow Fives Futbol. He’s opened pitches in prime locations that serve both the school and corporate markets, while still being accessible for social impact interventions in local communities.
Pivoting at the right time is key to growth
In the last 18 months, Fives Futbol has trebled in size, and achieved some amazing milestones — it now employs 50 full-time staff, and 80 part-timers. It’s one of the factors that drives Adam, as many of his employees support up to eight family members. It’s now also represented in four provinces and 15 locations around the country. By September, there will be 18.
Quick growth means you have to be able to pivot quickly when things do not go according to plan, and mostly they don’t, Adam says. “If things are not working you should be able to ‘pivot’, to shift your focus. And do it fast. It’s not a sign that things have gone wrong by any means, on the contrary, it means you have the insight to recognise that there is a problem with the assumptions on which you have built your business model. The decision to pivot is a big one, and not something to be taken lightly. It requires you to take a hard look at your reallocation of resources, and to do it with an open mind.”
In Adam’s case, construction delays, councils taking their time to approve, or having to put money into rolling out sites as opposed to marketing, means the promotion of a new site will slow down, for example, because the business does not yet have a large marketing budget.
“When we run behind on the construction of a new site, R40 000 can suddenly become R100 000 — but here’s the thing: If a deal comes along that will probably harm your business in the short-term but enable significant long-term growth, sometimes you have to juggle what you have so you can make it work.”
The Lesson: Choose your investors carefully
Fine says he’s lucky to have a solid group of investors that he has cultivated over six years. “Their input is invaluable. They’ll say, ‘slow down’ or ‘have you thought of this?’, ‘have you factored in that?’ The ability to develop a good relationship with our investors has had a significant impact on the success of the company. Over and above money, they provide wisdom, guidance and connections.”
His relationship with his investors is key. While many entrepreneurs make it just about the money, Adam understood something else — he has a pretty cool brand with a great cause behind it. So, while investors are asked for money all the time, he was able to offer something more than just a business idea — alignment. He generated enthusiasm for the ‘why,’ behind the business. Like most of us, it makes investors happy to know that they are helping to make a positive difference.
And while it’s easy to bandy about the word ‘partnership’, Adam has worked hard to make that a reality. He set out to find like-minded people who are passionate about the business and the cause, which is why they are able to serve as great resources for advice and insight.
Related: Richard Branson’s ABCs Of Business
“The best way to ensure that you and your investors have a valuable and lengthy partnership is to make sure that everyone is aligned on the vision.”
This includes Adam’s team. The internal culture of an organisation is vital to its strength and growth. “Without our team we don’t have a business for investors to support — our people are critical to our success. They’re the executors of the vision at the end of the day.”
The Lesson: The value of strategic partnerships
Much of the growth of Fives Futbol has been fuelled by finding the right sponsorship partners in key industries. To overcome the challenge of a limited marketing budget, Adam has secured sponsorships with big brands like Adidas, Total Sports, Debonairs, and Klipdrift, allowing Fives Futbol to use their access to communities as a marketing platform to derive income as well as scale. And it works both ways.
“Because we have a national footprint and a team of people, we run activations for our partners, which also provides us with an ancillary revenue stream,” he says. “Knowing how to join forces with other businesses has been a key factor in making the business successful. Our strategic partners have enabled the business to leverage their brand to give us more exposure. When it works well, a strategic partnership can be just what you need to speed up the growth of your business.”
Watch List: 15 SA eCommerce Entrepreneurs Who Have Built Successful Online Businesses
The advent and advancement of the online marketplace has led these entrepreneurs to successfully build and grow their ecommerce empires.
South Africa’s ecommerce market is worth R10 billion per year. By 2021, the number of online shoppers is expected to have reached 24.79 million.
“Our recent research on SA shows people are browsing three hours or more on their mobile phones and 25% shop online. They trust local brands,” says Geraldine Mitchley, Visa senior director for digital solutions in sub-Sahara Africa.
These entrepreneurs have cashed in on ecommerce and launched successful online stores that have either established their dominance in the market, or are taking the e-tailing world by storm.
Here’s how these 15 ecommerce capitalists are making money using the Internet:
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