The burst of the dot.com bubble in the early years of thenew millennium wiped out many technology companies. It was a brave time tokick-off a new venture, but that’s what the founders of Intelleca did in 2000,launching the self-funded start-up and defining it as a diversified businessdevelopment company. The business subsequently changed direction and was acquiredin 2008 by Bytes Communication Systems for R120 million.
Intelleca MD Michael Renzon was a founder member of InternetSolutions’ e-commerce business and had much experience in taking South Africa’sbanks and blue chip companies online during the Internet boom. In 1997, Renzonwas appointed to the board of I-Net Bridge when IS bought a stake in thecompany. Two and a half years later he hooked up with three people who had twodecades of experience on him, as well as a combination of in-depth financial,business and IT skills.“We went into the Internet business and started takingadvantage of the convergence that was happening in the market,” says Renzon.“Voice over Internet protocol was taking off and a standard called Voice XMLhad appeared. People were beginning to use Web services technology to drivevoice interaction.”
Renzon’s plan was really to extend the web presence ofcompanies which had gone onto the Net by voice-enabling their services. Thatmarket literally dried up before him as cash-strapped companies closed the dooron the Web.“I learnt then that entrepreneurs have to be both flexibleand sensible in responding to the environment,” Renzon says. “Ask yourselfwhether you are targeting your services at the right market. Is your technologythe right one for the moment? Are you taking it to market properly?” He attributes Intelleca’s success to “expeditionarymarketing”, or building and dominating fundamentally new markets. It’s apractice that business thinker Gary Hamel calls “escaping the tyranny of servedmarkets”, and which focuses on leading customers rather than simply followingthem. Expeditionary marketers think about needs and functionalities instead ofmarketing’s more conventional customer-product grid and they challengetraditional price/performance assumptions.
Creating new markets is a risky business. To counter that,low-cost, fast-paced market incursions can bring the target quickly into view,which is what Intelleca did. “It took us two years to perfect the recipe,”Renzon says. “It was an iterative process that had us focused on finding theright technology.” Renzon took another risk. “Technology businesses tend to gofor products which are in the analysts’ magic quadrant when they should ratherhome in on rising stars with strong vision low execution costs. We havesuccessfully developed the company on our gamble with a range of relativelyunknown but excellent products.” The advantage of this approach is that smaller technologyproviders are more flexible and open to the needs of their partners than thelikes of a Microsoft or an HP would be. One of Intelleca’s overseas partnerswas even prepared to rewrite its solution on an alternative operating system.Other advantages included pricing flexibility, speed of movement, and an attitudethat in many ways shares risk.
“To survive and grow, a business has to differentiate itselfstrongly and not be afraid of failure. Without strategic advantage, you willeventually lose. We have always aimed to be at least three years ahead of thecurve and we spend on innovation for that reason.” Renzon recalls that Intelleca’s early competition in thevoice recognition sector was one of South Africa’s IT giants. “The organisationput a huge amount of money into speech recognition, but rand for rand and personfor person, we put in more. It’s vital to invest heavily in your core area.” For its network-based speech systems to work, Intelleca hadto develop its own South African language. The company now owns the IP forlocal language packs which it distributes to competitors too.
The deal with Bytes was the result of a solid partnershipbetween the two companies. “Bytes wanted a contact centre specialist and wewere ready to take the business to the next level. As part of the Altron group,the company is built on entrepreneurial behaviour and its federated model meansthat you have a group of entrepreneurial executives running the business. Thedeal gives us the space and the capital to grow Intelleca while keepingbureaucracy to a minimum.” The deal signifies the start of a new chapter for Intelleca.“Our core business remains the same, but our potential in the contact centreindustry is limitless.” Contact: +27 11 442 4242; www.intelleca.co.za
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