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How Netflorist Started as an Experiment

It’s true. Netflorist was started as an experiment because Ryan Bacher and partners wanted to prove to Makro that they could design an e-commerce site!

Nadine Todd

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Vital Stats:

  • Players: Ryan Bacher, Lawrence Brick and Jonathan Hackner
  • Company: NetFlorist
  • Launched: 1999
  • Visit: www.netflorist.co.za 

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NetFlorist launched on Valentine’s Day in 1999. It seemed like the perfect day to test out a flower business, which is exactly what Ryan Bacher and his partners, Lawrence Brick and Jonathan Hackner, were trying to do.

Not because they wanted to start an online floral and gifting company, but because they wanted to prove to Makro that they could design and run an e-commerce site.

Between the three of them they couldn’t name one flower other than a rose, but floral arrangements seemed less complicated than books. They were dead wrong about how complicated it would be, but they were also wrong about the potential of the business. And the rest is history.

Related: Does Your Business Model Lend Itself to an Online Store?

“I was the sales manager at NetActive, an Internet service provider,” says Bacher. “Johnny and Lawrence were the founders of the business, which was listed on the JSE. We were approached by one of our shareholders, who also owned a number of large retail brands, including Makro, about putting their brands online. We were excited by the idea. Online retail was in its infancy, not only in South Africa, but internationally, and it would mean new business for us.

“In order to get the business however, we had to build something to show what we could do. We picked flowers. We thought we’d deliver a few bunches, test it and close the site. We just needed to transact something to prove we knew how to build and run an online retail site.

“We had no idea how to get flowers delivered, so we contacted a florist in Sandton. We told them that we were getting orders (we hoped), and that we’d send them the details, pay them, and could they deliver? We had to fax them the orders because they didn’t even have a PC, let alone email.

“They agreed, and we built the site. It had one page, with 12 floral arrangements to choose from. There was a search bar, because we’d seen that other sites had one, but anything you typed in just redirected you to the same page. The ‘pay now’ button requested your credit card details and then an egg timer would turn on the screen while we captured the details on our side, manually running them through a credit card machine and then accepting the order. Technically, what we were doing wasn’t even e-commerce.

“Our plan was five orders to prove it worked. And then Valentine’s day arrived. We had a lot of email addresses because we were an ISP, so we sent out a mail to everyone on our database, advertising the site and the ability to order flowers online. All you had to do was click on a link, choose an arrangement, order and we’d deliver. The response was unbelievable. We sold R30 000 in one day. At the time, this was the equivalent of a month’s worth of orders for a single florist.

“And so 15 February came along, and we just didn’t turn off the site. I carried on managing my customer accounts for NetActive, and each day I’d also check for orders, fax them through to the florist and swipe credit cards. Orders kept coming in based on the original mailer we sent out.

“What’s really crazy is that people were paying for us to provide a service. We had no stock. We’d never even seen the stock. We knew nothing about flowers! And that’s how our e-commerce journey began. We were way too early in South Africa, but we decided to do it anyway.”

The Lean Start-Up Journey

Netflorist-owners

Ryan Bacher, Lawrence Brick and Jonathan Hackner

Long before Eric Ries coined the phrase Lean Start-Up, Bacher and his partners were following the core ideals of building a lean business.

“Step one was doing research. We needed to know something about the product, and be able to name at least one flower other than a rose. Step two was understanding how consumers were using the Internet in the retail space.

“We knew our best bet was to get the website out, hack it, and keep changing it. We would learn more from the site being out there in the market than we could ever learn in-house, trying to develop a perfect product. It was basically always a work in progress. We incubated the business inside NetActive, which also helped to keep our infrastructure costs down. I was still handling my NetActive work and running NetFlorist part-time until 2003, when I finally moved over full time. Johnny and Lawrence followed later, in 2009, once they sold NetActive to Mweb.

“To date the total investment into this business has been R5 million, and that includes our warehouses and fleets.”

Building a Moat

“Great businesses are the ones where there’s a really high barrier to entry, and that’s what we had. It allows you to build a moat around your business that’s difficult for competitors to cross. Luckily for us, we liked the hard journey. Delivering a perishable good is a real challenge – especially in a hot climate. We initially thought books were complicated. We had no idea! But complicated businesses are harder to copy. This gave us a great opportunity, provided we could get it right ourselves.”

In keeping with their lean start-up approach, for the first few years NetFlorist didn’t touch the product itself, using a network of smaller florists across the country to fill and deliver orders.

By 2007 however, the business had grown sufficiently to invest in warehouses and delivery vehicles.

“This was always in the business plan, but it was a difficult transition because we knew it meant taking business away from our smaller suppliers. We tried to do it in the gentlest way possible. We employed staff from shops that had hired extra people to handle our orders and bought vehicles from those who had increased their fleet size to handle our deliveries. It was painful, but it was also a core part of our strategy – we had always planned to own the entire value chain, because it was the only way we could scale and have the flexibility and margins that the business needs.

“It was also an important ingredient in building and maintaining our moat. Same-day delivery is not easy to achieve. Next day delivery is pretty common, but the fact that we offer same day is a real differentiator, and very difficult to get right. Our gifting is about more than just flowers: It’s about roses, champagne, chocolates and a host of other options.

“We couldn’t do this properly with myriad suppliers. We needed it to all be in-house. We didn’t create the ‘flowers delivered’ category in South Africa, but we did introduce all the non-floral gifts. This didn’t exist before we started doing it, mainly because you need everything under one roof to do it.

“We’ve even gone so far as to open a confectionary operation, from strawberries dipped in chocolate, to cakes – all baked and delivered on the same day. This doesn’t scare us. We’ve had people ask ‘how do you deliver a cake?’ We deliver red roses in the middle of summer. A cake is a piece of cake.

“In order to get this completely right though, we’ve made the decision to keep everything in-house, and that includes managing our fleet. For many businesses, it makes sense to outsource this function. Not for us. You want to always focus on what your core business is, and the delivery of our gifts is core. It’s at the heart of our strategy, and so we wanted full control of our supply chain.”

Brand Building

Even though Bacher is head of marketing today, he had no marketing background when NetFlorist launched. Understanding his limitations, and knowing that start-ups (and even established businesses) should always leverage their networks, he approached a friend, Brett Morris, who was a creative guy at FCB.

“Today Brett’s the CEO of FCB, but then he was just a guy I grew up with who worked at a great agency. He convinced the then-CEO to take a chance on us. We were a small business with no budget, who needed a great partner to help us grow. That chance paid off. Today we’re a major market player, and we’re still with FCB. They helped us grow, and at the same time grew a client within their brand.

Netflorist-advert“I was protected from being ‘dumb’ by Brett. So many business owners are clueless when it comes to advertising. It’s a very specific skill and talent. Thank goodness for Brett. I came up with ideas, and he gave me honest guidance and advice. It gave the brand consistency that fledgling brands often don’t have – and when you’re building a brand, consistency is everything.

“We chose to be a tongue-in-cheek brand. We knew our budget was small, but we still needed to stand out from the clutter. People noticed us because of our cheekiness. Our campaigns led to massive exposure relative to spend. We’re small compared to Nando’s and Kulula, and yet we’re seen in the same light. The association immediately made us look bigger than we were, which has really worked in our favour.”

No brand journey is without its hiccups, and NetFlorist is no exception.

“Between 2001 and 2003 we were just focused on gaining traction in the market. All we cared about was transacting; getting revenue into the business. We’d seen the concept of a white label site in the US in 2001, and so we created an ‘affiliate’ marketing strategy of our own, and offered our services to other brands. For them it was a value-add to their customers, and revenue for us.

We turned so many big South African brands into florists at that time. 083 139 was MTN’s flower business for example. We thought it was great. They were marketing to their customers, which meant we were transacting without spending any money on marketing ourselves, and they loved it because it was a big branding exercise for them.

“It boosted our sales, so from that perspective it really worked, but it was actually detrimental to our brand. In retail, all you are is your brand. You need to be one or the other, the brand, or the company behind the brand. You can’t be both.

“We had loads of orders, but no-one knew who we were. It was an incredibly precarious position to be in. We were reliant on a few big contracts. What happened if those went away? We realised we needed direct control of our market.

“So by 2003 we changed our strategy and took the brand back. Instead of Discovery Vitality Flowers, it became ‘Discovery Vitality brings you NetFlorist.

Related: 7 Ways to Double the Value of Your Online Business in 12 Months

“Many of our clients were fine with the switch, but some weren’t, and we had to make the painful decision to let those clients go. It meant losing revenue, which is hard for a start-up and even established businesses to do, but we needed to stick to our guns.”

The business’s second big mistake came almost a decade later. “The Internet in South Africa really only took off in 2012, but by 2011 we were getting impatient, and so we opened eight retail stores. I still can’t tell you exactly why we decided to go the brick and mortar route, because it ended up being a terrible idea.

“The Internet is really scalable. Retail stores aren’t. We’d have needed 50 stores to make the business work. It was the first time we consciously stepped away from our core offering, and it ended up being a costly mistake. We’ve digested it and moved on, and we still have two signature stores that we’ve kept open, but on the whole it was a bad foray into an area that isn’t our core focus.”

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

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27 Of The Richest People In South Africa

Here are 27 of South Africa’s richest people, but how did they achieve this level of wealth? Find out here.

Nicole Crampton

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Learn the secrets of SA’s most successful business people, here is the list of the 28 richest people in South Africa:

In a world with growing entrepreneurship success stories, victory is often measured in terms of money. The feat of achieving a place on this list is, however, years of hard work, determination and persistence. “One has to set high standards… I can never be happy with mediocre performance,” advises Patrice Motsepe.

From the individuals that made the 28 of the richest people in South Africa list, actual entrepreneurs and self-made business people dominate the list; while those who inherited their fortunes have gone on to do even bigger and better things with their wealth. Over the years, some have slipped off the list, while others continue to climb higher and higher each year.

Related: Albert Van Wyk Of Gazzaroo Gives Top Advice On How To Make Your First Million

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Meet Jan Grobler: Serial entrepreneur, Advocate, And Job Creator

It is the authors’ sincere hope that young South-African entrepreneurs will learn from wiser business men such as Jan Grobler and co-create a vibrant and legacy driven entrepreneurial environment in our country.

Dirk Coetsee

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Jan Grobler has either directly or indirectly created 10 000 jobs and he is not done with forming a lasting legacy. The author can call on various titles in an attempt to describe this serial entrepreneur: Advocate, Founder, Franchisor and Project manager, yet no label can fully embody his unique skill set, experience, and entrepreneurial spirit.

As a highly enthusiastic observer of business leadership traits in others, I noticed Jan’s’ strong willed and passionate intent to create more businesses, ignite exponential growth within them, and ultimately deliver numerous job opportunities to South-Africans, from the onset of the interview.

As an advocate and MBA graduate Jan had a solid academic foundation that served him well on his entrepreneurial journey. “Working back” the bursary he had from Sanlam he values the learning he received from older and wiser entrepreneurs that he had established trusts for. He learnt to be a good listener and increase his emotional intelligence by making mental notes when the older entrepreneurs imparted some of their wisdom and experience and then taking action on the accumulated learnings.

Related: The Anatomy Of Peak Performance

The value of being a “Global Citizen”

coffee2go

Jan is a global citizen and has “back packed in 46 countries” accumulating cultural and business learnings as he travelled. He shared an example of waitresses in a South-American country “doubling up” as secretaries offering additional services such as fax and the recording of minutes of meetings thereby adding more dimensions, services, and income streams to a coffee shop operation.

The words rolled of his tongue with enthusiasm as he described how modern times has provided multi-dimensional opportunities for an entrepreneur such as being in your office in Centurion, South-Africa, purchasing products online from China , and then selling online to purchasers in Italy. Jan sees the future of franchising in South Africa as moving more and more towards “mobile outlets”. He has extensively researched the international “mobile franchising market” and is very excited about the possibilities for growth in South-Africa with regards to this market segment.

He is one of the founders of Fit chef and is currently developing the franchise system “Cafe2go”(Mainly a mobile concept) of which there are currently twenty five outlets. On his entrepreneurial journey Jan has developed eighteen brands of which he was a cofounder and as a contracted project manager he has assisted in facilitating the exponential growth of hundreds more companies.

Channels and revenue streams

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As the aroma and taste of another Cafe2go Cappuccino held my attention Jan elaborated on four more revolutionary franchising concepts that he is co-developing. He said that success in business is highly dependant upon doing things better than others and offering a unique service and product.

Related: Business Leadership: Leading A Culturally Diverse Business Team

Jan pointed out that he sees himself as a “channel creator” and it was clear to the author that through his vast experience and entrepreneurial acumen he has a high vantage point from which to see opportunities for the creation various funding models, sales channels and revenue streams, that combined causes exponential business growth.

This entrepreneur is very proud of his first start-up company of which he is still the CEO called Curator. Curator was started to, and still does assist entrepreneurs to grow their businesses, whether it be through growth interventions or for example raising capital or franchising the business.

Jan has never stopped learning whether it be from learnings accumulated from engaging other entrepreneurs or knowledge obtained from books. More importantly he continues to apply this learning in helping businesses to grow and create more and more jobs. Jan is building a legacy that any entrepreneur can be proud of. It is the authors’ sincere hope that young South-African entrepreneurs will learn from wiser business men such as Jan and co-create a vibrant and legacy driven entrepreneurial environment in our country.

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Bob Skinstad On Making An Impact With The 80/20 Principle

The 8020 principle is one of the most powerful success secrets in the world — provided you implement it. Most people have heard of it, few put it into action. Bob Skinstad is re-energising an age-old principle by sharing a collection of real-life examples from highly successful people of 8020 in action. Here’s how you can start embracing an 8020 mindset today — and see phenomenal results in return.

Nadine Todd

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Vital Stats

  • Player: Bob Skinstad
  • What he does: Bob is an ex-Springbok rugby captain, businessman, entrepreneur, a director at venture capital firm Knife Capital and has recently developed an online course for millennials, 8020 Mindset.
  • Visit: www.knifecapital.co.za and 8020Mindset.com

When Gary Kirsten arrived in India in 2008 as the new coach of the Indian cricket team, he recognised he had a key problem. Many of the players on the team were not only more famous than he was, but more skilled as well. How do you coach Sachin Tendulkar, one of the greatest batsmen of all time, on his stroke? You tell him to keep doing what he’s doing, and get out of his way.

But Gary did need to find a way to build trust between himself and his new team. There were many superstars in Indian cricket, and yet the national team’s results weren’t good, mainly because they didn’t operate as a cohesive unit.

Implementing the 80/20 principle

To really make an impact, he turned to the 8020 principle. What small but significant area could he turn all of his attention towards, to achieve 80% of the results he was looking for?

Related: 8 Lessons Rugby Can Teach Us On Achieving Peak Performance In Business And Life

He realised that the one thing he had that most of the other players on his team did not, was time. Cricket is extremely popular in India, and the members of the national cricket team had a lot of endorsement deals, which meant they were very busy. Whatever happened, Gary knew he could outwork them. For the first 200 days of his contract, he spent every day at the batting nets, from 6am to 6pm. Each time a player came to the nets, he was there, ready to assist them, or simply to show he wasn’t going anywhere. He also spent those 200 days really studying his team members and listening to them.

By leveraging this one key area, Gary built the trust he was looking for, and learnt an enormous amount of information about his players. He found the one place that would make the biggest impact. Three years later, that team went on to win the World Cup.

Game-changing principles

“What’s incredible about the 8020 principle is that it’s relevant in every single facet of life,” says Bob Skinstad, an ex-Springbok rugby captain, businessman and now venture capitalist.

“Gary is just one successful person in his industry who has shared his 8020 experiences with me; there are so many real-world examples. I first discovered it while I was playing rugby in my early 20s, and I read Richard Koch’s book, The 80/20 Principle: The Secret to Achieving More With Less, but I use it in my business development capacity at Knife Capital today, and have applied it in various ways throughout my life and career. It’s an absolute game changer if you understand how to apply the principles, and the success that putting pressure on the right levers can achieve in your life.”

To say Bob is passionate about fostering an 8020 mindset is an understatement. In fact, he believes so strongly in the principle that he approached Richard Koch himself to discuss how he could help millennials to embrace 8020 to lay the right foundations for their own futures and careers.

Sharing and teaching lessons learnt

“Richard has a house in Cape Town. I managed to get his contact details and sent him a long email explaining how we had used his principles in the Springbok rugby team. We were a young team, and we used 8020 to figure out who needed to get their hands on the ball at which times of the game to make the biggest impact. Our game improved markedly once we started applying Richard’s principles, and that led me to implement it in everything I did. Richard loved the fact that we had applied it in such different ways to how he’d laid the principles out in his business management books.

“I really wanted to share all the lessons I’d learnt, and also the experiences of so many other sportsmen, business leaders and entrepreneurs whom I know have used 8020 to achieve success. I didn’t want to write a book though — I thought a course would be more immediate and practical, particularly for millennials, who I believe can really benefit from fostering an 8020 mindset early in their careers. Richard and I collaborated on the course. I wrote the content, recruited a number of my contacts to share their own success stories, and Richard reviewed all the material before it went live. It’s been a great experience, and one I hope will spread the word of how significant a shift to the 8020 mindset can be. Once you understand the principles in action, it becomes the lens you use to make all of your decisions, which has an exponential impact on your life, business and career.”

80/20 in Action

8020-mindset

In all business and personal development theories, there is a vast gap between understanding the theory and actually putting it into practice. Using the 8020 principle on itself, only 20% of the people who are exposed to 8020 will actually implement it, but they will reap 80% of the rewards as a result.

The problem is that reading about a theory is easy. Putting it into practice is hard. It takes discipline, and a real understanding of how the principles work.

If you’ve been exposed to 8020 (also known as the Pareto Principle) before, you know that 20% of a sales team is responsible for 80% of a company’s revenue, 20% of clients bring in 80% of business, and 20% of your actions each day impact 80% of your life. Imagine if you knew which 20%, and could put all of your attention into those key areas. Imagine how you would supercharge your own growth and success, opening hours each day to concentrate on high priority tasks instead of getting sucked into the quagmire of ‘busyness’ we all fall victim to without even realising.

80/20 principle in action

“A few years ago, I was involved in a restaurant in Cape Town. We realised that 80% of the food customers ordered came from 20% of the menu. Through this simple insight, we were able to take a 36-page menu down to two pages. We saved costs on wastage, streamlined kitchen processes, and increased our efficiencies and customer service levels through this one simple change.

“The hardest part is getting started. Once you see success in one area though, you naturally start looking for the 8020 in other areas of your life, and before you know it that’s how you look at everything,” explains Bob.

Related: 5 Things Businesses Can Learn From Rugby

“I see examples of 8020 everywhere, but I also see a lot of what I call ‘2080’ thinking. Take the ‘latte factor’ as an example. A few years ago, the idea took hold in the US (and South Africa) that if you just stopped drinking a latte once a day, you’d save $250 in 100 days. I disagree completely. If you really want to impact your savings, renegotiate your bond with your bank once a year. That will give you a far greater saving than cutting out lattes, and you haven’t deprived yourself of something that makes life pleasant. One key negotiation at the right time will have a much bigger impact on your life — speak to your bank, negotiate a raise — but look at the key area that will have an 80% impact, instead of an almost insignificant impact. That’s where you should be putting your willpower, energy and self-discipline.

“Gym is another great example. We’re told to spend 20 minutes a day at gym. That’s great for your health, and you should do it, but in terms of weight loss and body shaping, it’s negligible if you compare it to changing your eating habits. Gym is 20% of your body. Eating is 80%. Where should you be putting your focus? Instead, we see people gyming and then eating two packets of chips, and wondering why they aren’t losing weight. It’s all about what levers you pull, and where you put your focus.”

Small changes, big results

In 2017, Bob brokered local VC firm Knife Capital’s expansion into the UK. Based in the UK, Bob’s role as a director at Knife Capital is business development — how can Knife Capital assist its investments to build high-impact businesses from a small base?

“Once again, 8020 hits the target every time,” he says. “We’ve recently invested in a Swedish-based business called MOST, which develops environmental monitoring solutions for the transport and shipping industry. An early investor in MOST is King Digital Entertainment, the creator of Candy Crush. We love MOST. It’s tracking really nice numbers, the management team is excellent, the product is next level, the business model allows for recurring revenues — but our aim as an investor is to grow the business. We needed to analyse which areas to concentrate on that will have the biggest impact on growth. Through applying 8020 we realised that 12% of MOST’s current customers are responsible for 82% of the business’s revenues.

“How much energy, time and resources are put into the other 88% of clients who are only responsible for 18% of the company’s revenue? And what can be done to bring more customers on board who are like the 12%, and not the 88% of MOST’s customer base? Focus on the right areas, and you’ll exponentially grow your revenues without increasing overheads or expending more energy — in fact, you could actually do more in less time, with fewer people, if you know where to concentrate your efforts.”

How to apply the 80/20 principle

Bob believes that at its core, 8020 is common sense — you just need to apply your mind to the principles, and ask the right questions: What’s your 8020? Who are your biggest customers, where are you spending most of your time, which actions have the biggest impact, and where are your waste areas? And in each case, can you 8020 the results you’re looking for? What’s the 20% that will generate 80% of your returns, or impact 80% of your success? What’s the 20% that will affect the world and your customers’ lives and businesses?

Local entrepreneur Keith Rose-Innes shares how he increased Seychelles’ fly-fishing tourism industry by 600%:

Keith Rose-Innes built his profile and expertise to become the go-to-guy for building fly-fishing trips around the world. Based on this expertise, Seychelles tourism hired him to increase visitor numbers to their islands.

The Seychelles is isolated and expensive. Keith did his research, and discovered that only 20% of fly-fishing agents were responsible for most of the fly-fishing trips booked around the world. Instead of spreading his efforts, he concentrated exclusively on those top agents, pitching the reasons why they should promote the Seychelles to their clients. Within six months he’s increased year-on-year sales on the islands by 100%. This grew to 600% over the course of four years — simply because Keith focused his efforts where he would have the greatest impact.

Related: Joel Stransky Shares His Insights On What Makes A Great Leader


Take the course

8020 Mindset is a five-hour online course endorsed by Richard Koch and presented by Bob Skinstad. It’s designed to help participants think like results-orientated super-performers.

Visit: 8020mindset.com or email info@mindset.com for more information on the course and corporate talks.

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