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Skyrove: Henk Kleynhans

Two students attract investors and turn an innovative internet access idea to big profits

Entrepreneur

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Henk Kleynhans of Skyrove

“The idea had been forming gradually in my head and then all of a sudden the entire business plan fell into place at 4 o’clock in the morning before a maths exam. I sat there for about three hours frantically trying to write it all down,” remembers Henk Kleynhans, CEO and founding partner of Skyrove. The idea he’s referring to was for paid shared Wi-Fi usage. The solution he and co-founding partner and fellow student, Allister Kreft, hit upon has attracted local and international investment and earned them numerous awards, including the 2005 Enablis / Business Report Entrepreneur Challenge in the Business Idea Category and the 2006 Technology Top 100 Award for Most Promising Emerging Enterprise.

As a student on financial aid, and a self-confessed internet junkie, Kleynhans realised that he would be able to afford broadband (which then cost R1 400) if he was able to share internet usage with digs-mates and neighbours and charge them for it. “Wi-Fi existed at the time but it didn’t have the capability to allow you to measure how much data people were downloading or how much time they were spending on the Internet. I realised that the best way of going about things was to charge people upfront on a pre-paid basis for the amount of data they were going to use,” he says.

So Kleynhans and Kreft set their minds to creating a solution that would enable them to implement the idea. Their first hurdle was funding – they needed capital to develop the prototype so, true to his techie nature, Kleynhans set up a simple website and a blog with one posting. “I explained that I had this idea about sharing Wi-Fi with your neighbours and getting money back for it, and said that I was looking for engineers, investors and the like,” says Kleynhans. Remarkably, one of the people who read the blog posting was Donald Levy in Texas, founder and then CEO of Ski-Wi. After some discussions, Kleynhans and Kreft had their hands on $20 000 and the Skyrove prototype was on its way.

Skyrove has two groups of customers: the first are business people such as coffee shop and hotel owners, who want to sell wireless internet access to customers, and the second are the end-users themselves. The way the system works is simple, as Kleynhans explains: “The businessperson – who has any type of broadband from ADSL to iBurst or 3G –purchases the Skyrove router at cost price (R595), turning their business into a Skyrove hotspot.

Their customers purchase pre-paid Skyrove credits online which relate to a data amount and then access the Internet via their laptop at any Skyrove hotspot they choose. The end-user is charged about 80c per megabyte used in a particular hotspot – Skyrove retains 30% of the payment and passes 70% on to the business owner.” He adds that while most Skyrove users access Skyrove credits online, they can also do so by purchasing vouchers at Skyrove hotspots. Although the business has grown rapidly, Kleynhans says the biggest challenge has been marketing and branding on a tight budget. As he points out: “The lesson I learned is that you can have a fantastic product but it’s not going to sell itself.” To overcome the challenge, the Skyrove team has been creative about using inexpensive online media, especially blogs, to get the word out there. However, Kleynhans still finds that while many people in the IT industry know about Skyrove, there are still plenty of potential end-users who don’t.

Which is where an undisclosed seven-digit venture capital investment from Lingham Capital, secured this year, will make a big difference. “This will allow us to expand extensively in South Africa and develop the brand significantly,” says Kleynhans. In the long-term, Skyrove plans to go global but, as he adds, “We want to establish a strong footprint in South Africa first.” If the interest already generated among those in the know is anything to go by, it’s a plan that could see implementation in the not-too-distant future. In the meantime, Kleynhans reflects on their success to date.

“I think the thing with starting a business is to scratch your own itch,” he concludes. “If you understand the needs ofyour customers from a personal point of view, you have a better chance of creating a product that will provide them with a solution that will meet those needs, and that’s what we’ve done. We’ve created something that we find value in using.” 

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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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.

Nicole Crampton

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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:

  1. Livestock Wealth
  2. The Lazy Makoti
  3. Aerobuddies
  4. Mimi Women
  5. i-Pay
  6. AfriTorch Digital
  7. Akili Labs
  8. Native Décor
  9. Aerobotics
  10. Quality Solutions
  11. EM Guidance
  12. Kahvé Road
  13. HSE Matters
  14. VA Virtual Assistant
  15. Famram Solutions and Famram Foundation
  16. BioTech Africa
  17. Brand LAIKI
  18. Plus Fab
  19. LifeQ
  20. Organico
  21. 10dot
  22. Lenoma Legal
  23. Nkukhu-Box
  24. Benji + Moon
  25. Beonics
  26. Brett Naicker Wines
  27. Khalala
  28. Legal Legends
  29. The Power Woman Project
  30. Aviro Health
  31. AnaStellar Brands
  32. Data Innovator
  33. Fo-Sho
  34. Oolala Collection Club
  35. Recomed
  36. VoiceMap
  37. ClockWork
  38. Empty Trips
  39. Vula Mobile
  40. SwiitchBeauty
  41. Pineapple
  42. The Katy Valentine Collection
  43. OfferZen
  44. KHULA
  45. Incitech
  46. Pimp my Book
  47. ART Technologies and ART Call Management
  48. Prosperiprop
  49. WAXIT
  50. The Sun Exchange
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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.

Monique Verduyn

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Vital Stats

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.

Related: 3 Local Entrepreneurs Share Their Business Challenges And How They Overcame Them

Pivoting at the right time is key to growth

The challenge:

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.”

The solution:

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.”

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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.

Diana Albertyn

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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:

  1. Aisha Pandor
  2. Andrew Higgins
  3. Kerryn Tremearne
  4. David Davies
  5. Andrew Smith, Paul Galatsis and Shane Dryden
  6. Trevor Gosling
  7. Nicholas Haralambous
  8. Justin Drennan
  9. Neo Lekgabo
  10. Ryan Bacher
  11. Tracy Kruger
  12. Luke Jedeikin
  13. Tarryn Abrahams
  14. Sascha Breuss
  15. Antonio Bruni
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