Finance for a new business is almost impossible to secure, which is why Metacom founder Réan van Niekerk went the bootstrapping route when he launched his communications business in 2002. The technology architect and serial entrepreneur had to sell a stately house in Constantia and move to a much more modest home to fulfil his dream of providing machine-to-machine and business-to-business communication services for the South African market.
“It was my sincere interest in making people and machines talk seamlessly to one-another in an interconnected world that helped me get the business off the ground,” he says. “There’s very little venture capital available and financial institutions won’t even talk to you if you can’t show a few years of actual cash flow. I started the business alone, with my money, and grew it slowly at a controlled, regulated pace that was enabled by bigger and bigger deals.”
Van Niekerk secured his first big customer 18 months after starting Metacom. He had brought in a number of small contracts over that time, but the first major deal was a specialised communication system designed for Eskom. Today that system is installed across South Africa and enables the monitoring, control and supply of electricity distribution throughout the country. It’s been so successful that Namibia’s national power utility Nampower also signed with Metacom to install the system last year, enabling a level of visibility and control that would be impossible otherwise.
Although Metacom was originally built on cell-based communication, today the company integrates all forms of communication into a single cloud. Customers have direct high speed access to its cloud and from there they can communicate with any of their locations anywhere in the world, utilising Metacom’s VPN, through any device, irrespective of how it connects to the VPN.
“What sets us apart from competitors is that we do our own product development and engineering,” says Van Niekerk. “That means the IT belongs to us and we are able to adapt it according to the needs of very specific business, financial and industrial niche markets, which make up the bulk of our clients. Even when there is competition, we can sit across the table with our clients and say to them that we are the organisation and engineers behind our products, and that we are directly responsible for the operation and functionality of each solution. There are no third parties to deal with. That gives clients a high level of confidence in our systems.”
Metacom focuses the bulk of its efforts on existing clients. They buy products and pay a monthly fee for the use of the communication infrastructure and the services offered on top of that. It’s this regular annuity-based
revenue that has enabled the business to grow every month for the past eight years, says Van Niekerk. “Recurring income has been critical to our growth. Economic slumps can hit entrepreneurial business hard, but we have managed to escape the effects of the recession.
Our revenue goes straight back into the business, with an additional amount going into product development and engineering to ensure we are always ready for the future.”
One of the challenges of the local market is that although it’s small, customers expect first-world solutions and products. Van Niekerk says this requires entrepreneurs to think very cleverly and smartly when they take solutions to market. They have to do more with less.
The company achieved its 30% year-on-year growth target in 2011 and looks set to do it again this year on the back of new products and services. Van Niekerk is also planning to expand Metacom’s footprint in Africa where it currently operates in 10 countries.
He attributes much of the company’s success to extremely careful financial planning and meticulous execution, as well as the ability to adapt to external factors. “Entrepreneurs are known for having the ability to fly by the seat of their pants,” he says. “This is an important skill, but it’s equally important to plan to perfection and then execute according to the plan. That way you are always able to measure and monitor progress.”
As the business has grown, people have become Metacom’s most important asset.
“Being an entrepreneur is incredibly hard work. You are on your own, so you must have enormous belief in your own capabilities and those of your team. It’s crucial that you employ extremely selectively and build an environment in which people can work and thrive. We made a few mistakes when we had to get people on board very quickly. For the past three years we have had an HR manager who has fine-tuned our recruitment process. It includes psychometric testing, and multiple interviews to enable us to properly assess the character and personality of every prospective employee.”
Slow and steady does it
A predictable, growing revenue stream creates loyal customers and helps sell products and services for Metacom.
In today’s climate, technology businesses are always looking for ways to create a continuously growing revenue and profit stream, also known as annuity revenue, while creating loyal and engaged customers.
Annuity revenue is a predictable stream of revenue and profits derived from a wide variety of sources. They are a part of the company backlog, are generated from an increase in customer satisfaction and loyalty, and in many cases they differentiate one company’s products and services from the pack.
Here’s how discrete product revenue compares with annuity revenue:
Discrete product or service – a stand-alone sale to either new or repeat customers and unlikely to be repeated for a number of years.
Annuity revenue – a predictable revenue stream from new or existing customers who buy products and services associated with new or previously purchased products. Many times this term is used in conjunction with value added services.
Annuity sales have a number of significant advantages:
1. Some annuity services can be included with the initial purchase:
- Solution selling makes the overall sale easier.
- Financing may make the sale possible.
- Value added services can become a competitive lockout differentiator.
2. Lower selling costs, since the prospect is already your customer, or will soon become one. There is therefore no need to begin establishing a relationship.
3. Your total revenue stream will be more predictable or consistent.
4. Your customer relationships move to a higher level and your business therefore enjoys the benefits of increased recommendations, repeat purchases and higher margins.
Player: Réan van Niekerk
Contact: +27 (0)21 531 9900
25 Of The Most Successful Business Ideas In South Africa
Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.
“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.
South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:
- I Am Emerge Provides An App For Township Spaza Bulk Purchasing
- Tuluntulu Offers High Quality Video Streaming On Low Data Speeds
- SSG Consulting Developed KEY360: A Cloud-Based And Web-Enabled Platform For Managing Large-Scale Construction Projects
- Pargo Solving Last-Mile Distribution Challenges
- HouseME Is A Digital Real Estate Platform
- Olympic Paints Has Developed A Built-In Paint Tray Causing An Unexpected Industry Shift
- Passion4Performance Developed A Recognition of Prior Learning Assessment Concept
- NewSpace Systems Delivers High Quality Components At Lower Costs
- My Online Presence Creates End-To-End Solutions For Online Brand Presence
- Skynamo Offering Insights To Sales Teams In The Field
- RecruitMyMom Creating A Platform For Job-Seeking Moms
- GAAP Provides A Hardware And Software Point-Of Sale And Enterprise Solution For The Hospitality Industry
- HeroTel Bringing Wi-Fi To Low Income Communities
- Saryx Engineering Offers Digitised Compliance and Safety For Companies
- BrightBlack Is An Energy Providing Innovative Solar Energy Solutions
- Howler Is An Event Technology Platform
- execMobile’s PocketWifi Keeps Business Travellers Connected
- Rhino Africa Provides Online Touring Assistance
- Snapplify Is Offering Students Access To Textbooks
- GoMetro A Commuter-Driven Mobile App
- Domestly Connecting Cleaning Professionals and Homeowners
- NMRQL Using AI To Deliver Consistent Returns
- Colony Live Connecting Users Across Multiple Platforms
- codeX Is Growing The Work Experience Of Coders In Africa
- This Is Me – Disrupting By Offering A Unique Business Model
Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’
People pay first who they feel pressure from, so people will pay you when they feel pressure from you.
Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.
Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform
The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.
- Instagram: https://www.instagram.com/mergeconnect/
- Facebook: https://www.facebook.com/mergeconnect/
- Website: http://www.mergeconnect.co/
- Email: Hello@mergeconnect.co
- Number: 072 458 2182
It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.
“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.
Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.
From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.
The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.
“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.
Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.
“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris
Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.
Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.
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