Shaking up the status quo
Launching King Price was the meeting of two key desires for entrepreneur Gideon Galloway: Creating an innovative new insurance model, and continuing to pursue his entrepreneurial dreams. It didn’t happen overnight though.
“I spent over ten years patiently saving, not buying the fancier car or house, and putting what I could into growing my businesses and fostering a start-up fund.”
By the time he launched King Price, Galloway had secured R20 million in his own funds, a testament to the power of perseverance and setting his sights on his ultimate goal.
So what makes King Price so different from its peers? It’s simple, premiums decrease month by month instead of increasing. For Galloway, this was the most important factor of his business model.
“The insurance industry is so used to being a grudge purchase, we’ve never questioned this. The average customer switches insurance providers after 42 months, almost always on price. Your car is depreciating, but your premiums increase. Our model allows your premiums to decrease as your vehicle depreciates. If we keep each client for at least another six months after we would have lost them, the business model works – and I’ve based it on a 36 month cycle.”
It’s a world first, and is backed by German reinsurer Munich RE, one of the largest in the world.
Making it work
Galloway faced a number of challenges. As a start-up (even with R20 million in hand), he was going to launch at a tenth of what it usually takes to get an insurance company off the ground. He needed an investor, a reinsurer and an FSB licence.
Unfortunately, the industry is such that each is almost impossible to get alone — it’s a balancing act of aligning all three players, each agreeing that if the other two come through, they are on board. The FSB did its due diligence and granted the licence, followed by the reinsurer and investors.
“From the beginning I needed private investors who shared my vision. The model wouldn’t work if we needed to keep shareholders happy. We’ll take a three year knock before we see any benefits because the profit model is based on client retention.”
Galloway met with a number of potential investors (over 40 to be exact), and even flew beyond SA’s borders, but the fit wasn’t right. And then he met Mertech Group founder and philanthropist, François van Niekerk. “ThinkTank did some branding work for Mertech, and I realised that as an investor François not only had the R100 million I was looking for, but he shares a similar philosophy to mine.
We’re changing an industry, and 60% of our profits go into a trust dedicated to uplifting South Africa.” The third investor to come on board was Nikon South Africa owner, Stefan van der Walt. After less than a year in operation, numerous funders have since approached the team to buy shares, but the three partners are keeping the status quo as is.
Keeping it lean
With a tenth of the start-up capital usually required for getting an insurance business up and running, Galloway got to work.
“I had already developed most of the IT with my own funds. I wanted a totally integrated system which I needed to build from scratch. The rest fell into place with the investment secured, and I started building the right team and devising a fun, eye-catching advertising campaign. We’re shaking up this industry, and we wanted our brand image to reflect that.”
Building a team
To make a lean business work, you need the best team, and Galloway started by employing Munich RE’s ex-financial director as his FD. This was quickly followed by some of the best general managers and sales consultants in the industry.
“It’s one thing hiring the best, it’s another keeping them. We keep our work environment fun and engaging, while focusing on the ultimate goal: Selling policies (23 000 to date, a figure Galloway is extremely proud of) and keeping clients. We have an extremely aggressive commission structure, and a strong focus on client follow-through and communication. If we want to be the best, we need to employ the best, and pay them well.”
- Player: Gideon Galloway
- Company: King Price
- Est: 2012
- X-Factor: A business model that has enabled its founder to launch at a fraction of the industry’s normal start-up cost.
- Contact: www.kingprice.co.za; +27 (0)12 001 0800
Watch List: 11 Teen Entrepreneurs Who Have Launched Successful Businesses
These teens are proving that you don’t need a driver’s licence – or the ability to vote – to create and execute a successful start-up.
In South Africa youth entrepreneurship is encouraged as the best way to build the economy. Teens are no longer relying on tertiary education to jumpstart their careers, as many high school students become budding entrepreneurs. From make-up to confectionary and tech-centred ventures, youth entrepreneurship is taking the business world by storm.
“It’s easier than ever to become an entrepreneur, and technology has a lot to do with it. You’re a tech-savvy millennial, and Internet and mobile technologies make it easier to connect and identify with people, based on shared values and ideals,” says Michael Freestone, founder of the MJF Group. “All entrepreneurs wonder if their companies will succeed, but you don’t really know until you try. So, do it while you’re young and have little or nothing to lose.”
And that’s exactly what teenagers across the country are doing. While being a teenager is stressful enough, without worrying about marketing and your bottom line – these young entrepreneurs thrive on success, which must be their secret sauce to their winning business ideas.
10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets
The future of entrepreneurship has never looked so bright…these young entrepreneurs share their wisdom around building a successful business.
Natural Talent Can Become Your Success
Thabo Khumalo – ToVch
“I learnt to design and sew while assisting my mother who was a seamstress, and that is when I realised that I had a talent to create,” Thabo Khumalo explains. “But I never knew I was an entrepreneur.” Thabo Khumalo started his company ToVch in 2010 and has since appeared in South African Fashion Week, Soweto Fashion Week and Mpumalanga Fashion Week.
Khumalo has a small but engaged audience, who he communicates directly with. “The brand has a dedicated audience, and the social media presence also allows me to continuously scan the fashion environment to keep up with external forces.”
One of the most challenging aspects of launching his businesses was marketing the brand with limited funds. He used social media and word-of-mouth to market. “On social media, people share your brand with others simply because they want to,” says Khumalo. “It’s a powerful platform, and it does not cost anything.” Khumalo built up his company using support from a strong online network, which became his marketing strategy.
For Founder Of National Tekkie Tax Day Having A Higher (Business) Purpose Keeps Her Driving Forward
The NGO space isn’t easy. It’s a constant uphill battle to connect scarce resources with the vulnerable. Annelise de Jager has persevered in this space because she’s tapped into her personal purpose and values.
- Player: Annelise de Jager
- Initiative: National Tekkie Tax Day
- Launched: 2013
- Visit: www.tekkietax.co.za
Use your purpose to drive you forward
Connect your purpose with what you do, and you’ll find untapped reserves of perseverance and the discipline needed to achieve your goals.
Purpose before profit is not a new concept in business. In fact, it underlines the motivations behind some of the most successful entrepreneurs. It’s also not reserved for social enterprises alone.
However, it is in the social entrepreneurship and charitable spaces that living one’s purpose first found a foothold, mostly because without a strong purpose, the work would just be too hard, and many would give up.
Annelise de Jager, founder of National Tekkie Tax Day, unpacks how she’s used living her purpose to drive her forward, even when she’s faced almost insurmountable challenges and disappointments.
Make ‘living a life that matters’ intrinsic to everything you do.
“I was lucky in that I didn’t ever need to sit down and say, ‘I want my life to matter, so I need to do x, y, z’,” says Annelise. “It was intrinsic for me. However, in the past five years I’ve become acutely aware of it, and I’ve seen how important the ability to look beyond oneself is when you’re facing disappointment and challenges.
“It helps you look beyond the now, find a solution and keep pushing on, because there is a bigger goal at stake. The biggest revelation for me has been that anyone can figure this out and use it as a tool to achieve their dreams and purpose — you just need to trigger your intrinsic motivators.
“Figure out what’s really important to you, and then align this with what you’re doing, in both your business and personal journeys. Robin Bank’s Mind Power and Shaping your Destiny courses are a great place to start.”
Don’t be afraid to ask what’s next
Critical to Annelise’s journey has been the realisation that when goals are met, we need to ask ourselves: What’s next? “Too many people achieve their goals and then feel adrift. You should meet your goals. Your ultimate vision should change. That’s growth, and it’s critical if you want to keep moving forward.
“Our experiences inform our knowledge base and world views, and so as you live and run your business, that view should be changing, bringing with it new challenges and perceptions. Don’t be scared of it; embrace it.”
Annelise went to Potchefstroom University to study social work where she joined the university’s musical revue group, the Alabama Student Company. “Alabama was given the opportunity to tour Taiwan, but I was about to graduate. Travel is high on my personal values list, so I started a second degree in communications to stay in university — and — in Alabama.”
New experiences can be the source of great ideas and strength
Studying communications opened Annelise to a new discipline that she loved. “Marketing and communications are so filled with energy — an energy social work didn’t possess. I loved both, and I wanted to find a way to meld them together. This would ultimately shape my business, The Marketing Team, after I’d been a social worker for a few years. Don’t be afraid to adjust your plans based on new experiences; they can be the source of our greatest ideas and strengths.”
No experience is ever wasted
“We spend too much time trying to plan exactly what we should be doing, where and when, instead of following our hearts and instincts,” says Annelise. “No experience is ever wasted. Once I discovered my love for communications, I questioned whether I’d wasted four years studying social work. I hadn’t.
“Both disciplines became the bedrock of how I would assist the charitable space in South Africa. Experiences open our eyes, our hearts, and our understanding. They give us empathy and patience. They allow us to view things from other perspectives. If you want to really make a difference in other peoples’ lives, these traits are invaluable.”
Be open to finding answers in unexpected places
“By 2004 I felt rudderless,” says Annelise. “I’d been running my own business, handling communications and marketing for NGOs, developing campaigns and even assisting NGOs to run more as businesses than under-funded organisations, but it didn’t feel like I was doing enough.
“Part of the problem was that you can only give people the tools to work with, you can’t make them use them. Another problem was under-funding. Corporates spend billions each year on CSI projects but they don’t like to fund salaries and basic operational expenses.
“It’s frustrating because volunteers can’t do what needs to be done — most households need two breadwinners, which limits the availability of volunteers to assist.
“I was looking for a way to add more value. Should I start my own NGO? Where could I make the biggest impact? I’d been offered an excellent coaching position, which would allow me to walk away from the problems this sector deals with daily. It was tempting, but it wasn’t what I wanted.
“At that time I attended the Global Day of Prayer in Argentina on behalf of a client. It was at that conference that I had an almost supernatural experience. I left knowing exactly what my purpose was.
“How these realisations come to you is less important than the fact that you’re open to them. Deep down I knew what I wanted and needed — I just needed the courage and fortitude to follow my path. My experience in Argentina gave that to me because I allowed it to.”
Always find the strength to persevere.
Nothing worth doing is ever easy. In the NGO space, this is particularly true. “I developed the idea for National Tekkie Tax Day because NGOs constantly asked me to help them develop funding campaigns. I developed this fundraising model when I launched Casual Day and ran the project successfully for 18 years.
“But I also believe the NGO space can benefit from a more unified mindset to overcome donor confusion and fatigue. This is my new focus, but it’s difficult to get organisations to shift their mindsets. National Tekkie Tax Day is a step in this direction.
“It encompasses 12 national NGOs and 1 000 regional organisations across five categories — but there’s one product and one national marketing drive. Donors can choose a category to support.
“I’ve needed to persevere to help NGOs see the benefits in working collaboratively, and corporates to see the benefits of supporting the operational costs of NGOs.
“I don’t have a high profile job at a top company. People don’t call you back in my world. And yet you need to keep pushing forward against incredible headwinds.
“I wake up each morning and repeat the mantra that my success helps everybody; my failure helps nobody. There won’t always be easy wins, but with the right purpose you can persevere. You can make a difference.”
Support National Tekkie Tax Day on 26 May 2017
12 national charities | 1 000 local charities | 5 sectors to support
Animals, Bring Hope, Children, Disability, Education
Available at Toys R Us, Clicks and Babies R Us or online at www.tekkietax.co.za
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