Statistics regarding business start-ups in South Africa are sobering. International failure rates sit at around 60%; South African failure rates are pegged as high as 80%.It’s a wonder anyone ever leaves the comfort of salaried employment. The chance of success decreases with lack of start-up capital and if you are entering an industry that is experiencing a glut of operators hawking the same service or product as you are.
Against all these odds, people like Mustapha Baboo, director of Maxxor Business Solutions, still make it. Baboo launched Maxxor into the oversubscribed IT services industry in 2004, without any external funding. Today, the company lists MWeb, the Provincial Government of the Western Cape’s Centre for e-Innovation and the Cape Regional Chamber of Commerce and Industry among its 110 clients.
Maxxor was the overall national winner of the 2005 SAB Kick-Start Competition and has also been nominated as one of South Africa’s Top 300 Emerging Empowerment Companies in the Software sector by Impumelelo. When Baboo left employment after ten years in the IT services sector, he had big dreams, but if he thought that success would come easy, he was in for a surprise.
“I had what I thought was an awesome business plan and I took it to a number of funding agencies but they all rejected it. I got the same response from all of them: it was too generic; there were too many lone IT consultants out there; they couldn’t see how I was going to differentiate myself.” Baboo took what lessons he could from the experience. He changed the business plan, put his savings together and started knocking on doors to drum up clients. “Every day I heard a resounding ‘no’,” he says.
When someone eventually said “yes”, Baboo became yet another among thousands of other independent IT consultants. His challenge now lay in growing something that would go beyond what he could offer as a single operator.
“I quickly realised there was no way I could build the business I wanted on my own so I set about trying to find other like-minded people to join me. The trick was selling them the idea that it’s better to own a smaller part of something big than to own a large piece of something small,” he says. Raj Moodaley and Shana Kassiem joined as partners, each bringing a unique core competency to the business.
Staying very close to clients was an important part of the team’s early success and perhaps a key differentiator is the fact that the company sees its core competency not in technology itself, but in the application of technology to satisfy business needs and solve business problems.
This means the focus remains clearly fixed on what the client needs. Technology is merely the tool used to meet those needs. “Most IT projects fail,” says Baboo, “but professional service, together with highly skilled technical people, have ensured we don’t drop the ball.” “You can’t compete in this industry if you don’t innovate,” he adds.
“Part of that is ensuring you are continually learning. I want our people to learn one new thing every day.” Learning and mentorship are strongly entrenched in the company with project teams made up of highly skilled senior people and juniors who have potential.
He is passionate about developing people, but Baboo has little time for those who expect success to come knocking. “I find it worrying when people who claim to want to run their own businesses start off by asking what everyone else can do for them. You have to start by asking what you can do for yourself,” he says.
“People complain that nothing is being done to help entrepreneurs, but it’s just because they don’t make the effort to find out what’s there and make use of it.” He’s hit on an important point and one that perhaps goes some way to explaining why he has been successful when so many others have failed.
There is simply no substitute for being proactive and taking the initiative. Skills and contacts can only take you so far – what sets the winners apart from the losers is an ability to self-start.
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